Here are a couple of examples that I pulled from videos on the White House website.  I know the lighting is different, but I think if you watch some of the videos, you would notice a difference.  In the latest video, his hair looks completely black, when we know that at one time he was graying.

This picture is from this video on February 19, 2010

This picture is from this video on March 5, 2010

Great, now this site is turning into a political entertainment blog.  We’ll be the TMZ of Washington D.C.  I’m going to have to buy a better camera and a telescopic lens.

Take a look at this archive of last meals requested by prisoners on death row in Texas?
http://web.archive.org/web/20031202214318/www.tdcj.state.tx.us/stat/finalmeals.htm
Although they no longer publish this list, Archive.org has a copy from several years ago.

I’ll admit up front that this post has nothing to do with investing or finance, although I did see an interesting discussion regarding state’s rules for how much can be spent on a final meal.  I started to read the list just out of interest to see what people requested.  Many were traditional meals, though generally larger than standard, such as:

Two 16 oz. ribeyes, one lb. turkey breast (sliced thin), twelve strips of bacon, two large hamburgers with mayo, onion, and lettuce, two large baked potatoes with butter, sour cream, cheese, and chives, four slices of cheese or one-half pound of grated cheddar cheese, chef salad with blue cheese dressing, two ears of corn on the cob, one pint of mint chocolate chip ice cream, and four vanilla Cokes or Mr. Pibb

Many were a bit odd, such as:

One cup of hot tea (from tea bags) and six chocolate chip cookies

Cool Whip and cherries

One pot of coffee

1 bag of assorted Jolly Ranchers

1 jar of dill pickles

Justice, Equality, World Peace

Quite a few requested no meal at all.  As I began to think about it a little bit, I thought I might fall into the “No Meal Requested” category.  What’s the point?  Can you imagine for a moment sitting in a jail cell spending the last few hours of your life contemplating what is about to happen and what your life’s work has resulted in?  It’s very sad to think about.  What do you think their motivation is when requesting some of the outlandish meals?  For some, maybe it is one last cry for attention.  Maybe they are just delaying the inevitable hoping for a last second miracle.  Or maybe they are so hardened that they figure that they might as well enjoy one last physical pleasure before they move on.

Maybe I would order something after all.  I guess for me, it’s a bit difficult to put myself in their shoes anyway.  If I believed in a better afterlife, I probably would be in a fairly good mood and might as well enjoy a meal.  If I believed that I was headed for Hell, I probably would get one last shot at gluttony.  If I believed neither, then “Hey, why not?”

Would you request a meal?  If so, what?

As you can see above, I am very close to reaching my goal for an emergency fund. Early last year, I began a bit of a modified version of the Dave Ramsey Plan and I am currently working on Baby Step 3: Three to Six months of expenses in an emergency fund.

Since I planned to keep a significant amount of cash tied up in a savings account for easy access, I decided that I should find the best place to keep my money as far as interest rates are concerned. BankRate shows that some banks are currently offering as much as 1.4% interest on savings accounts, but I have not heard of many of them and some have fees or minimum deposit amounts. I have heard of many banks offering as low as half of a percent or even less.

SmartyPig
I’ll first talk about a very novel approach to savings that I discovered a year ago when I started this process. The site is called SmartyPig (which I blogged about at the time) and it’s billed as a social networking savings site, although I don’t have any friends there. Basically, you start by creating a goal, say a new  used car for $11,000 and you’d like to buy it three years from now. Once you enter your information, it will recommend that you make a monthly deposit of just under $300. You then link this goal to another bank account and on the day of the month you select, that amount will be automatically transferred to your SmartyPig account every month. Any time you want to make an extra addition, you can do that manually as well. The percentage that you see at the top of this post is displayed in a widget that you can create on their site. You can even link your goals to Facebook or Twitter and allow your friends and family to help with your goal.

When I opened the account a year ago, the interest rate was just over 3%, but with the falling interest rates, it is now down to 2%, which is still significantly above any other bank I have seen. Another benefit is the ability to redeem your money either with a bank transfer, a cash/debit card, or even store gift cards with a bonus up to 12%. Let’s say that you are saving $2,000 for new living room furniture and you plan to buy at Macy’s. You can redeem your $2,000 in savings for a Macy’s gift card worth $2240, an instant 12% bonus. You can even split it between several different cards as well as a deposit to your bank account. Even though they tout that they are a social networking site, they do not offer any referral program, so there is not a strong incentive to get friends to sign up besides the novel idea of it all.

ING Direct
My other online bank account is with ING Direct. I have several accounts with them including multiple savings accounts, CD’s and a checking account. My children have their own accounts set up online here as well. Setting up a new account for each savings goal is not a problem. Once my goal is reached at SmartyPig, I will transfer the funds to ING to be held for the long term. ING’s rate is very competitive and it used to be one of the best available. Two Years ago, it was 3.59% and if I remember correctly, it was around 5% when I started in 2005, but now is down to 1.15%. Although the rates aren’t the highest, very few, if any of the other banks can match the convenience and features of ING. Having been a customer since 2005, I have a high comfort level with their services.

They also have another site that I haven’t checked out too much, but it is geared towards teaching children about earning, spending, saving and investing. It is called Orange Kids and looks interesting.

ING does offer a referral program that normally pays you $10 when a friend signs up. Through March 31st, they are having a deal where you get double the bonus ($20) and the friend gets $25 in their account as well. They want to make sure that you don’t spam, so they require you to enter the friend’s e-mail on their site and they will then send a link to sign up. If anyone is interested in getting more information about this $25 bonus and helping me out, send me your e-mail address and I will get a link sent to you ASAP.

If I asked you to name the first 10 millionaires (or billionaires) that come to your mind, who would you think of first?  In my mind, I would probably pick a few CEOs such as Warren Buffett, Bill Gates and Steve Jobs, but after that, I’d likely move on to some of the popular and monetarily wealthy movie stars, professional athletes and music artists.  If I knew their names, I may even throw in a few lottery winners.  I think most of us would come up with a similar list.  But who really makes up the majority of millionaires in the United States? If we were to combine all of the stock brokers, inventors, actors, directors, authors, songwriters, athletes and lottery winners, what percentage of millionaires would you guess that they make up?  10%?  After all, there aren’t that many wealthy out there, and there are quite a few of these people, right?  Wrong! Recently, there has been as many as 9 million millionaires in the U.S. alone. Out of those 9 million, the group I listed above makes up about 1% of these.  Well then, the rest must be doctors and lawyers and other highly skilled professions, right?  Wrong again.

Lets take a look at the breakdown:

• Stock Brokers, Inventors, Actors, Directors, Authors, Songwriters, Athletes and Lottery Winners: About 1 Percent

• Salespeople and Consultants: 5 Percent

• Doctors, Lawyers and Other Professionals: 10 Percent

• Business Owners: 74 Percent

While we tend to focus on the Famous, and strive for our children to grow up to be Doctors, Lawyers or Athletes, the real wealth is in smart business decisions.

On a personal note, it may seem as if I’m focusing here a lot on money.  I want to be clear that money itself is not my motivator for attempting to gain wealth.  Doesn’t compute?  Basically I’m saying that money can buy freedom from the standard work model in today’s society.  That is what I’m after.  200 years ago, you didn’t see nearly as many work environments like the ones you see today.  Sure, there was a wool factory here and there, but most people subsided on what they produced that was of value.  You can argue for that today, but it’s a short argument.  How many people do you work with that are obviously being paid for something other than the value that they bring to the company?  It has become standard practice to pay people for their time whether or not they produce, but not pay well.  The only way to workplace freedom is to actually produce something of value and do it well, and that generally can’t be done within the walls of an office.

Statistics above from No More Mondays by Dan Miller

In the past, I had heard that with the new credit card regulations being handed down from the government, benefits would start to disappear and potentially annual fees would start to come back.  I rarely use a credit card now days and I never carry a balance, so many of the new regulations don’t affect me, but I still enjoyed a few of the benefits of my card.

Up until recently I hadn’t noticed any significant changes to my benefits, but Saturday, I received a notification from Chase that they were upgrading my Chase Freedom card to a new card (the name escapes me at the moment).  Unfortunately with this upgrade came a loss of a few of the main features that I looked forward to with this card.

When doing remodeling work on our house, we often used this card since we were able to earn points that we could redeem for cash.  If we reached 20,000 points, we could get the normal $200 reward, plus a $50 bonus for saving up that many points.  We have taken advantage of this twice over the last few years.  This option is now gone.  The $50 bonus will no longer be available.

The second major benefit that has been removed is bonus points.  It used to be that I would receive double points on my top three purchase categories.  For example, if my highest expenses for the month were groceries, gas and dining out, then we would receive double points for purchases in those three categories.

I guess this is just another reason for me to move away from using credit cards altogether.  As the benefits are reduced, their will be little motivation to continue to utilize this credit source (as long as you have cash).  It’s hard to even imagine that a year or so ago, we used a credit card for virtually all of our purchases.  It was not uncommon to receive a statement that had $2,000 – $3,000 worth of charges in a month while remodeling.  Now that was a difficult balance to keep up with.

Lately, I’ve been reading a book called No More Dreaded Mondays by Dan Miller, although the older version that I’m reading is just called No More Mondays. No, I’m not quitting my job, but I’ve always had an interest in running my own business of some sort. This book basically discusses whether or not you should leave your “traditional” job for something more entrepreneurial.  I have often thought that I have avoided taking a leap into my own business because of I feel like my job is secure.  My wife often tells me that it’s probably not, but I still have the old-fashioned belief that “They’d never get rid of me”.  This book has a great story that you should read if you have any beliefs of job security in your current position.

One day, while soaring through the sky, the Chicken said to his good friend the Eagle: “Let’s drop down and get a bite to eat. My stomach is growling.” “Sounds like a good idea to me,” replied the Eagle. So the two birds glided down to earth, saw several animals eating, and decided to join them. The Cow was busy eating corn, but upon noticing that the Eagle and the Chicken were sitting on the ground next to her, she said, “Welcome. Help yourself to the corn.”

This took the two birds by surprise. They were not accustomed to having other animals share their food quite so readily. “Why are you willing to share your corn with us?” asked the Eagle. “Oh, we have plenty to eat here. Mr. Farmer gives us all we want,” replied the Cow. With that invitation, the Eagle and the Chicken jumped in and ate their fill. When they finished, the Chicken asked more about Mr. Farmer. “Well,” said the Cow, “he grows all our food. We don’t have to work for the food at all.”

“You mean,” said the Chicken, “that Mr. Farmer simply gives you all you want to eat?” “That’s right,” said the Cow. “Not only that, but he gives us a place to live.” The Chicken and the Eagle were shocked! They had always had to search for food and work for shelter.

When it came time to leave, the Chicken and the Eagle began to discuss the situation. “Maybe we should just stay here,” said the Chicken. “We can have all the food we want without working. And that barn over there sure beats those nests we have been building. Besides, I’m getting tired of always having to work for a living.”

“I don’t know about all this,” said the Eagle. “It sounds too good to be true. I find it hard to believe that one can get something for nothing. Besides, I kinda like flying high and free through the air. And providing for food and shelter isn’t so bad. In fact, I find it quite challenging.”

The Eagle flew back to his natural environment while the Chicken stayed on the farm, where food and shelter were free. Everything went fine for the Chicken. He ate all he wanted. He heard the farmer say to his wife that the preacher was coming to visit the next day and they should have fried chicken for dinner. Hearing that, the Chicken decided it was time to check out and rejoin his good friend Mr. Eagle. But when he attempted to fly, he found that he had grown too fat and lazy to get off the ground. Instead of being able to fly, he could only flutter. So the next day the farmer’s family and the preacher sat down to a lovely meal of fried Chicken.

When you give up the challenges of life in pursuit of security, you may also give up your freedom. Has the temptation of security led you into a potential trap in your own life?

If you want to know more about the book, you can click the picture at the top or if you want to know more about the author, click his name in the first paragraph.

Just over 5 years ago, we purchased a brand new Hyundai Santa Fe.  we loved the fact that it came with a 5-year bumper-to-bumper warranty and a 10-year powertrain warranty.  They also offered us oil changes for life, which was a nice perk.  The last nail in the coffin was the 0% financing available at the time.  We were destined to buy a new car. 

After the negotiations were completed, with an air of relief and anticipation, we were prodded on into the financing office to finalize the paperwork.  It will become obvious that we were young, impressionable and naive through the following narrative.  The financial agent made general small talk and made us feel comfortable as he prepared the paperwork.  He asked if we invested and talked a little about how he played around with the stock market.  I dabbled as well, so he got his first hook in me.  We were putting several thousand dollars down on the car since we had it available.  He asked if we had considered putting less down and investing the rest.  After all, the loan was interest free.  At the time it made sense, so we kept a couple thousand for ourselves for “investing”.  I’m not really sure what happened to that “investment”. Net Result: our monthly payment went up a little bit and so did the agent’s commission. 

With his first objective complete, he moved on to the extended warranty pitch.  I don’t think at that time we had any interest especially since we already had the 5-year/10-year option already, but he was talking about extending the 5-year bumper-to-bumper to 10 years.  Looking back, I would have thought that we had zero interest since I had purchased an extended warranty on a previous car and the insurance company went out of business, thus losing me approximately $1,200.  We were under the impression that the warranty was being offered through the dealership, so it would just be an extensions of the existing warranty.  He assured us that there was no concern of them going out of business.  He essentially convinced us that we would be stupid not to get the warranty.  What if the transmission went out on the day after 5 years?  We would be out at least $2,000 to have it fixed.  I don’t remember too many details from that meeting due to the euphoria of buying a new car, but apparently at some point, we signed the dotted line.  Our monthly payment went up a little more and the agent’s commission did as well.  All-in-all, we ended up with a brand new small SUV and a 60-month, $322 a month payment (AKA $19,000+ in debt).

I’d like to say that we lived happily ever after, which we did for a few years, but the fairy tale is beginning to crumble.  During the first five years, we regularly took the car to have the oil changed.  It was nice to not have to pay, but the hour long wait was a bit of a pain.  Once, we had a light bulb go out, but it was not easily replaceable, so we had to have the dealership take apart the fixture to replace.  We figured this was included in the warranty, but we had to pay for this.  No big deal.  The metallic coating begain peeling on one of the door handles and they repaired this for free under the manufacturer warranty.  Then recently we had a couple of malfunctions.  The overhead light fixture began blinking randomly and then stopped working altogether.  Also, one of the cruise control switch covers broke off.  At the last oil change, my wife mentioned the issues, but they said that they didn’t have time to look at it that day. 

We didn’t pay much attention to the dates since we purchased the car, but the 5-year period expired at some point.  A week ago, we were scheduled for another oil change so we decided to ask about the other issues again since they didn’t seem extremely busy on this day.  They said that they would have time to look at it.  When they pulled up our account, they noticed that our original warranty had expired and that our extended warranty was with a company named Interstate.  This is the first that we remember being notified of this.  We were told that we would have to call this company to get an authorization to get a repair done before they would pay for the repairs.  I called; I waded through the automated menu; I eventually talked to a person.  I asked her about the authorization and was told that the repair shop would have to diagnose the problem and then call for an authorization.  I asked if the issues that our car had would be covered. She stated that they were not excluded, but they would have to have a diagnosis before authorizing.  The repair shop told us it would cost $100 just to open up the light fixture wiring and diagnose.  Neither could tell us if this might be covered by the warranty.  Great!  We pressed our luck and told them to go ahead and fix the issues, hoping that the warranty would cover it.  Several hours later, we called to check on the status and see if they had gotten authoriZation yet.  They said that they were still “diagnosing”.  A little while later they called to tell us that the repairs will be covered, but wanted to make sure that we knew that there was a $100 deductible.  This is another thing that they neglected to point out when they sold us the warranty.  So basically at this point, we would be paying $100 to have our items repaired or $100 for the diangosis and to have them put it back together without repairing.  We opted for the repair. 

I haven’t yet attempted to find our original paperwork, but on Interstate’s website, I found a sample contract which stated that if no deductible was indicated, the default of $100 would apply.  I guess it pays to read the fine print. 

By the way, just out of curiosity, I plugged the $1,200 premium payment into a calculator and find that if I’d put that in the stock market, by now I would possibly have enough to pay for that $2,000 transmission repair.  If we were lucky enough to make it 10 years without a major repair, the account could have almost $4,000.  Not a bad start for a new car savings fund…

Would you call this “A New Era of Responsibility”?

I wouldn’t exactly call George W. Bush a penny pincher, but Barack H. Obama is making him look absolutely like a Scrooge McDuck.  During 2009, I found it very difficult to keep track of all of the spending taking place in the U.S. government.  It seemed like it was a few hundred billion here, a few hundred billion there as if money didn’t have meaning or value.  The money was thrown around so casually almost like me saying that I’m going to give you 700 billion grains of sand.  Sure it seems like a lot, but it doesn’t have a lot of meaning.

Many of the numbers that I reference can be found in the Summary Tables of the United States Budget from the Office of Management and Budget.

Let’s start by taking a look at the budget for 2009.  The government expected to spend 3.938 trillion dollars.  Just so you can envision that better, let’s use real numbers: $3,938,000,000,000. With an estimated population in the U.S. of 304,059,724, each man, woman and child on average was responsible for $12,951.40 in 2009 alone.  If everybody paid the same amount, then my family would need to pony up $51,805.60.  That is insane.  I can tell you that I do not receive $50,000 worth of benefit each year from my government.  But wait, there’s more.  That was the first year in office.  Let’s take a look at the future.  Each year, the outlays grow gradually until in 2019 when the number increases to $5,158,000,000,000.  I don’t know about you, but I believe that the number will be modified to be much higher by the time 2019 rolls around, but for now, we’ll give him the benefit of the doubt.  We will also be generous with the population growth rate at 1% which has been declining continuously. In 2019, the population could be approximately 332,545,642 which brings the responsibility of each person to $15,510.65 or $62,042.60 for a family of four.  Just for reference, the responsibility for each person went up from $9,810.57 in 2008 to the above-mentioned $12,951.40 in 2009 (one year).

Now, where do you think this money is going to come from?  Some of it will come from more loans.  The deficit is planned to increase by almost 9 trillion dollars from 2009-2019.  Yes, that is quite a bit more than the total current deficit (since the birth of our nation), racked up in only ten years.  The rest of the money will come from… yes, you guessed it, directly out of your pocket.  Let’s look at the expected receipts over the same date range.  In 2009, expected receipts were $2,186,000,000,000.  In 2019, $4,446,000,000,000.  Yes, that is over double the current amount.  Since almost all of this comes from some sort of income tax, prepare to have your wallet lightened.

If you want to read the article that got me started chasing this path of research, you can read it at
http://online.wsj.com/article/SB10001424052748704320104575015072822042394.html