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Archive for October, 2012

Financial Truisms

October 29th, 2012 at 05:08 am

A truism is a short statement that is a self-evident, obvious truth. Below are a few I'm pretty much making up on the spot; however, if an oldie occurs to me as I write this list, I'll include it as well. I'm not saying these are original, but I'm not grabbing them off of some internet post somewhere.

1. Debt consolidation means you're borrowing money to get out of debt.

2. A more accurate name for a credit card would be a spending card.

3. Money is like air: As long as you have enough for your needs, it doesn't matter how much extra there is, but if you run short, it becomes very important in a very short period of time.

4. The personal adage is "It takes money to make money." For the government, the saying should be "It takes money then wastes money."

5. I wish the government hated spending my money half as much as I hate paying my taxes knowing they're just going to waste 80% of it.

6. How small does something have to be to be small enough to fail?

7. It's an amazing coincidence that all of the businesses that were too big to fail were also headed by large campaign contributors.

8. The difference between the IRS and a burglar is that a burglar can't take everything you own without a second visit.

9. I could balance the federal budget overnight. I would tell Congress that they have to come up with 1% of the deficit spending out of their own pockets, but that they get to keep 10% of any surplus. Tax increases do not count toward their positive total.

10. If it were true that you can only borrow money if you don't need it, then all of the banks would be out of business.

11. Most of the time, people in financial trouble don't have a debt problem. They have a spending problem.

12. I wish I had put forth one quarter of the effort to stay out of debt compared to the effort it took to get out of debt.

13. I find it hard to seriously commiserate with someone who posts on Facebook "I never have any money at the end of the month. Sent from my iPhone5"

14. If you want empathy from me, I'll show you some. Look in the dictionary between "effort" and "employment." If you get to "entitlement," you went too far.

15. I think most people complaining there are no jobs missed a great self-employment opportunity: They could have made "Help Wanted" signs for fast food places.

16. The easiest way to get a job is to work hard enough that you keep the one you have now.

17. I've never fired anyone who was making me more money than he was costing me to employ.

18. When I was in my 20's, I told everyone that I wanted the rich to pay lower taxes and have more ways to evade taxes as well. Why? Because I wanted to be one of them one day. If more people felt this way, there'd be more rich people (and more opportunities for others to get rich).

19. When I hear talk about "entitlements," I always wonder, "What makes someone else more 'entitled' to the money I worked for than I am?"

20. If everyone in the US stopped buying things that didn't say "Made in the USA," then we wouldn't have exported ANY jobs to China, India, Mexico, or Viet Nam, no matter what law the Congress enacted or the President signed.

21. After seeing the results of the "war on poverty," the "war on drugs," and now the "war on big oil," I think the government should declare a "war on American Jobs." If it works half as well as the other three, we'll be BEGGING Mexico to send us more aliens to fill the vacant positions that are created.

22. The problem with common sense is that it's not very common.

23. With all the money I've flushed down the drain, my toilet should be made of platinum by now.

24. The reason "debt" and "death" sound so much alike is because most people spend their entire lives living in fear of both of them.

25. Why isn't there a word "Fruguy?" Sexism, plain and simple.

Easy Organic Gardening Tips

October 23rd, 2012 at 09:42 pm

My father was an organic gardener back in the 1970s before anyone else had ever heard the term "organic." It was his hobby then, and gardening is still his hobby now as he approaches 80. One of his tricks is to mulch and compost non-pine or -spruce type of leaves over the winter. He makes piles of mulched leaves about 5 to six feet wide.

About once every two weeks in the winter, he turns the piles and puts water on them if it hasn't snowed; if it has snowed, the snow melt is the water for the compost process. You'll know if the material is composting because snow will melt off the tops and you'll have brown mounds among the snow.

Now, in the Spring comes the "secret:" In the piles, plant potatoes throughout the pile of "now dirt," then grow corn in the middle, and tomatoes along the edges. My father puts up 4 inch welded wire "cages" along the perimeter. Just use 3.1 times the diameter for the length, or about 18.5 feet for 6 foot piles; he does about 15.5 feet for his 5 foot piles. The welded wire holds up the tomato plants, and they're going to need the support with all the tomatoes that will be growing on them.

Each of those crops pulls different nutrients from the ground so they don't interfere with one-another. He gets bushels of each item from one pile, and normally has about 6 to 10 piles. The size of his harvests is amazing. Also, the weeding is minimal, because the heat from composting and the freeze on the top of the piles from turning kills 99.9% of the weed seeds that make it into the piles over the Winter, and his harvest plants choke out the remaining random weed seeds that make it, with only minimal manual weeding.

He also has an eye for tomato plant "suckers." I don't know how he knows, but he pulls off these baby branches and every branch that remains bears fruit. He says that the "suckers" he pulls off would not have borne fruit. He also finds suckers on his corn plants and removes those, as well, but even I can recognize corn suckers.

The Autumn-Winter compost gives fresh nutrients every year, and he just collects bags of leaves from around his neighborhood in the Fall (now's the time), from houses that don't have anything but deciduous trees such as oaks and elms and suchlike. Just no pine needles is his main goal. Once a guy told my dad that he'd sell his bags of leaves. Needless to say, my dad just drove away and went to the next house. He always asks the owners before picking up the bags of leaves, and will explain to them why if the owner is curious.

Remind me to tell you the story about his plum tree that was so heavily loaded with plums that it fell over.

How to Know You've Turned the Corner

October 23rd, 2012 at 05:31 am

How to know that you've turned the corner on your debt:

1. You look forward to the end of the pay period because you'll get to pay more toward a debt so it will be gone that much faster.

2. You see someone drinking a Starbucks Veinte and think, "How can someone spend over $7 on a cup of coffee?"

3. The phrase "Ramen noodles" no longer brings up memories of your college dormitory.

4. Any animal product for less than $1.00 per pound becomes part of your gym routine as you lift it into your cart.

5. The new car smell now makes you wonder the length of the loan and how high the payments are.

6. You use the past tense as you talk about money problems.

7. You save up for Christmas rather than dread paying for it over New Years.

8. Your kids stop complaining when you say "No," because they realize it won't get them the candy, toy, or new video game.

9. Your kid points out something on sale at the grocery store instead of complaining in the first place.

10. You read this list and say, "He forgot one."

The Deposit made it

October 22nd, 2012 at 07:23 am

Apparently, CITI didn't want me to look for the deposit right away. They wanted me to wait until a new business day. They never mentioned it in the email that told me the deposit had been made and to go check my balance.

The good news is that our US CITI account is now open and ready for business.

Next step: Open the Dubai CITI account and figure out how to do the transfers. I'm waiting until after payday for that one. The last time I tried banking stuff over here, I lost my money for over a month.

The Disappearing Deposit, a new tale

October 20th, 2012 at 09:21 pm

If you read my first "Disappearing Deposit," you know that it dealt with using a broker to send money from Dubai, where I live, back to the US, where I'm going to return. Eventually, I got my money back, and sent it via telegraphic transfer back to the bank in the US.

Well, being cheap, I found that I can get a CITI account here, and a CITI account in the US, and using their online tools, transfer money between the two accounts.

To get a free account over here, I have to keep about $1000 in the account at all times. To get a free account in the US, I have to keep about $1500 in the account at all times. I decided to open the US account first, as it is a bit harder to do from a distance.

I won't go in to all of the problems with CITI and its online account opening algorithm, but I will mention one of them. To sign in to my account the first time, I had to give my account number, which they never sent by mail, by email, or by any other means. I had to call them to get my account number so I could sign in.

When I signed in, the balance was zero. The problem with that is that I had $1600 withdrawn from my Chase account two days ago, and I have an email from CITI telling me that my account deposit has been made and to go check the account.

Another phone call, and all I'm getting is "I'm sorry, but that department is closed." So much for "24 hour service" that they advertise. At least I did get to speak to a human who kept apologizing, but who had no clue what to do.

I'll call back later to see where my money is. Is it any wonder that people hate bankers nearly as much as they hate politicians and used car salesmen?

After I track down this money, I'll be opening my Dubai CITI account. I am not looking forward to my my first attempt to do an online transfer between the accounts. I hope it does end up being free, and I hope that it also is as easy to do as I was told when I asked about the possibility of doing this at all.

Plumbing Problems

October 20th, 2012 at 07:34 pm

Daughter and son-in-law staying at our place in Houston called to say that yet again the kitchen drain had backed up. This is a 1950's bungalow, and the plumbing in the kitchen is still the original. The old bathroom and the new bathroom both have new plumbing - well, 95% of the old bathroom drain is new or refurbished. We still have about 50% of the supply lines to be redone, as well.

We have asked them to get an estimate on the drain. So far, the estimate has ranged from $13,200 to $6,500. We have one more estimate to go. Of course the lower-priced plumber said that the guy who does official estimates was off, and that they should come back with a camera for a fee to look in the pipes. I guess that means that the lower estimate is the estimated estimate.

I told the SIL that we would not pay anything for an estimate. The $13,200 estimator had a boroscope and also cleared the clog while he was there, both for free. Of course, if I was looking at $7K in profit, I'd probably do a 'scope for free, too.

This is going to make Christmas not so cheerful. We had known the plumbing was going to need to be replaced as we had already done two of three areas, but we had hoped to put it off another year or two. There's still the supply to do, too, when this is done. Luckily, I can do the supply myself. I won't mess with drains, though. Too much can go wrong with drains; supply lines either do or don't leak when you're done.

My wife wants me to sell the bungalow. It is in my name from before we got married. I want to keep it as we can get about $1300 to $1500 per month if we rent it to other than her daughter. So, the time has come for us to make a decision. Do we sell it and use the equity to buy another house or do we keep it and use the rent to help pay off another house? The wife believes the former. I believe the latter.

Money Well Spent

October 10th, 2012 at 05:34 am

A while back, while I was still living in the US - don't worry! I'm coming back eventually. - I bought one of those High-Efficiency Washer and Dryer combinations.

This was during my "spend it even if you don't got it" phase, so I'm not even sure what I paid. But that's not the point.

Shortly after I got the pair, the computer went out on the washer. The repairman came and replaced it. He said something to the effect that had I had to pay for it, the part alone was over $500.00.

Five Hundred Dollars!!

So, I went out and bought one of those high-current, appliance-ready surge arresters for about $50 and put it onto my machine. I've had zero problems since.

So, was this "money well spent" or was this "you fell for it, sucker" money? There's no way for me to say definitively, but I'm putting it in to the former category.

Financial Blinders

October 4th, 2012 at 10:15 pm

There are two types of financial blinders. I have used both of them.

The Bad Blinders
These are MUCH more comfortable to wear than the Good Blinders (coming up). These blinders allow you to look at your finances - or not look - and not see the debt piling up. These blinders let you borrow 100% of your house loan, get zero-down car loans, get and run up several credit cards and tens of thousands in their debt.

The benefit of bad blinders is that you get a very good credit score, until you wear them too long or something else interferes. You also get to have lots of cool things like new cars, big houses, the newest cell phone and computer.

The detriment of bad blinders is that eventually your habits catch up with you. The first time you have to decide which bill not to pay because your loans, credit cards, mortgage, utility bills, and Starbuck's addiction add up to more than your income, your eyes open up and you see the result of living beyond your means. Yes, no matter how much you earn, you can spend more than that with very little effort.

At the point where you see "rich people's income" and "poor people's balance" you find out the bad blinders only stopped you from seeing the truth that paying thousands in interest every month only benefits the institutions receiving the payments.

The Good Blinders
A couple of two or three years back (that's Texan for "a while ago"), we threw away the bad blinders and put on some good blinders. We made drastic changes and sold one car for what we owed, gave away another car that I loved (still do, actually) but someone else needed more than we did, sold the vacation home we really didn't need - or could afford - again only breaking even. In short, we first got rid of things we really didn't need.

Now, the good blinders came in to play. These blinders let you ignore income you don't really have. If you make $1200, and have fixed bills of $1000, you only have income of $200 to play with. The old blinders would let you look at the gross income and ignore those medical payments, FICA, and other deductions. Why not? If you can ignore the fact that the amount of the actual check is already accounted for, and more, then why not also ignore the above-the-line deductions that also can't be spent?

So, now, the good blinders allow us to have the wife's check go directly into a stand-alone account that doesn't exist; at least, it doesn't exist on our balance sheet. We also don't have any retirement accounts. What do I mean? I haven't retired yet, so that money doesn't count toward our finances.

These new blinders aren't terribly uncomfortable. Sure, every once in a while I check the balances in the accounts, but overall, we keep the blinders in place 99% of the time, and are just waiting until one of the peeks lets us give our jobs their two week notice. I haven't even written one of my Excel spreadsheets to see when we will have enough to retire. We have very lofty retirement goals, so I know we're not there yet. We're throwing every penny at the funds so it really doesn't matter if I know when we will get there before we arrive. There's no way we could send more and still eat.

Yep... these blinders may not be as fun to wear, but the end of month bill payments take up a lot less of our time.

Habit forming and habit breaking

October 1st, 2012 at 07:23 pm

Living in Dubai, I can't listen to radio shows, and TV from the US is non-existent except for prime time stuff on Netflix that I mostly don't watch. My solution is to download and listen to podcasts.

I was listening to one podcast - I don't remember the show, but probably Dave Ramsey or Clark Howard - and the host and author were talking about how we do things by habit. They said that if we can change our habits, we can change the way we do things. There were couple of interesting points that the hosts made that got me thinking.

The first point was that occasional rewards followed by multiple non-rewards actually cause a compulsion to do the action that may or may not be rewarded more than a constant reward or non-existent reward would cause. The author used video games and slot machines as his examples, and stated that cigarette companies vary the amount of nicotine cigarette-to-cigarette, as well, to give the user only an occasional "fix." Whether any of this is true about intentionally doing the occasional reward to get more response doesn't really matter. I think that it makes sense that an occasional reward does cause you to appreciate it more and therefore do it more. We stop playing tic-tac-toe once we realize you can never win against an opponent who plays correctly, or other kids' video games because they are too simple and you never lose.

The second point that caught my attention was that you have triggers that cause you to do the habitual behavior. The author used getting ready for work in the morning as the example. If you're like me, you do your morning routine in order, and if you vary the order, you're likely to forget something. I can remember going to work without a belt on occasion for varying my order of prepping and dressing.

Why am I posting this here? Because I think I can use this to my advantage both to eliminate some of my bad habits, and possibly to develop some good habits.

I drink many too many carbonated beverages. Every morning, I take one out to the car with me. For the last two weeks or so, I've made the effort NOT to take one with me. The first couple of times, it was hard. Now, I don't even miss the drive-time caffeine. Also, I have to force myself not to open one as soon as I arrive at work. This is just a start to get me to change my behavior. I think it would also work to eliminate the "coffee cup cigarette" or "mid-morning sweet roll" or whatever compulsion item one of you readers might be experiencing.

The author mentioned that you need to get a trigger to do a new habit. I'm trying to figure out a way to apply this "habit" to my finances. In reality, though, I think I've already got a good balance where this is concerned. My wife and I have our weekly "date night," which means we go out somewhere and have a nice dinner and drinks, but don't splurge. We've had only one splurge in the nine months we've been here in Dubai. The splurge was intentional and planned weeks in advance, so it really wasn't so much a splurge as a reward. We frankly needed a nice night out with friends, so we set aside a few dollars to enjoy without guilt.

What kind of trigger can I set up to avoid my soda? Or more precisely, can I identify the triggers that cause me to crave the soda and then eliminate the need? Time will tell. Also, what financial behaviors might I be able to develop? I already do the month-beginning transfers, investments, payments, etc. I don't really know if there's anything else I can do on that front.

Another Overseas Hazard

October 1st, 2012 at 06:51 pm

Over here in Dubai, we hear stories all the time about owners who withhold paychecks without reason or warning, and once things are finally said and done, the owner has left the country with sometimes millions of dollars.

Usually, this happens with companies that have very large low-paid labor pools. The laborers sometimes get paid as little as $20 per day for 12 hour days, even in this day and age. Imagine how many people would have to be employed at that rate to make even one million.

What got me wondering about this? My paycheck was not deposited yesterday. Along with last month's extreme hold up on my money, now safely in my account again, I need to get some cash back to the US. I was waiting for payday to include more cash as I'm not charged a percentage for the transfer, but a flat rate. Therefore, the more money I send, the less per-dollar it costs me. I was hoping to send back enough for more than two months this time around.

Our CFO is on "holiday," and he is usually hands-on with the paychecks, so I hope this was just a late deposit transfer, but we'll see tomorrow. The other guy at work at my level pretty much refuses to do anything if his paycheck is late. He's been here longer than me, so has heard more of the horror stories. I think he figures he is always a month behind, so he's not about to extend even one additional day.

I'll update tomorrow.