My Open Wallet

Spring Update

2013-04-30T13:12:00.001-04:00

What a busy few months it has been... for the first time in years, my job has been stressful enough that I started to question whether it was worth the money I make. Sweetie has been feeling the same way, and we often fantasize about ways we could escape the office grind and make a living in some other way... like winning the lottery! We are definitely prisoners of our lifestyle-- we enjoy having certain luxuries, but they have to be paid for, and it's not that easy to find jobs that would make us enough money to continue as we are. We know we could cut out some of those luxuries and still be happy, but they are things we enjoy. When we fantasize about quitting our jobs, it's so we'd have more time to do things like traveling and reading books-- but travel and books cost money. (Books might be obtainable for free at the library, but there is no travel library where you can borrow a plane ticket, unfortunately!) We're both grateful to have jobs in this economy, but when you go from being challenged and entertained by work to feeling like you're stuck in a Dilbert cartoon or just deluged with thankless tasks, it's hard not to question whether there's something better you could be doing.

This is all made more complicated by the fact that retirement seems to get closer and closer. Sweetie is older than me, and will have a nice pension, plus income from a 401k and other savings. I will have to rely on just a 401k and savings. Sweetie's retirement income will actually be pretty good unless the stock market totally tanks, but that would all change if there was less income in the in-between years. I'm still worried about whether my savings will be enough to live on by the time I retire, so the thought of early retirement doesn't seem very feasible. But we need to sit down and do some in-depth analysis and planning, which will be made easier by the fact that I finally got Sweetie set up with Quicken to track expenses.

In other news, one of the little luxuries we've currently been enjoying is a food delivery service. It's a weekly delivery in which you get all the ingredients for 3 meals, plus recipes. All you have to provide is your own pots and pans, salt, pepper, and olive oil. The cost works out to $10 per person per meal (including shipping), and you can pick a meat/fish plan or a vegetarian plan. We've been doing the vegetarian plan, and I love all the new ideas we've been getting for how to eat a well-balanced meal without meat. The portion control is helpful too. Sweetie is someone who can cook creatively and inventively, but I am not, so I love having someone else make all the decisions and just tell me what to do!

As for the cost, I've been thinking it would be interesting to do an analysis on whether this service is "expensive." A lot depends on the specific ingredients included each week, but even without getting too in depth, it's possible to draw some comparisons. Compared to a restaurant meal, $10 per person is definitely cheap. Compared to ordering takeout food, it could be about the same price per meal, depending on what sort of takeout-- it probably works out to be cheaper than most takeout in our area. Is it cheaper than buying our own groceries? Probably not, except in the cases where the recipe requires an unusual ingredient. If I had to buy a whole jar of a spice, it could easily cost $5 or more, so it's nice to get just the exact amount needed and not have to worry about waste. And occasionally the recipe and ingredients make enough food that we have enough leftover for a lunch the next day. When you factor in the convenience factor and the enjoyability of the meals, I would say it's a good value and certainly reasonable in relation to our current financial circumstances. But if we did lose our jobs and have to budget more carefully, I'd probably discontinue it and make more effort to cook at home with cheaper ingredients bought in bulk. (The service is called Blue Apron, if you're interested, and I have not been asked or paid to write about them.)

What else is new? Well, I think my mom is going broke, as predicted. She has had her cable TV service turned off to save money and occasionally says things about money being tight, but I haven't asked for details. It is just too upsetting to get into it with her. It really makes me ill that she couldn't listen to reason a few years ago-- she should have sold the house instead of pouring money into renovating it, and moved into an inexpensive condo. I think she still has a little money left in CDs that haven't matured yet, but I'm sure she'll cash them in soon if she hasn't already, and then she'll be stuck living on just Social Security and the continuing payments she gets from my dad's pension plan, which she'll find impossible to do without running up debt, so she'll end up having to sell the house anyway, and then she'll blow through that cash too. There is no satisfaction for me in being able to say "I told you so."

How about you? What are your financial plans and dreams and worries these days?

Wealth by Age

2013-03-15T09:27:00.001-04:00

I found this chart fascinating-- so much so that I had to take a shaky pic of it on the subway with my phone!

Why did older people's wealth skyrocket then while others were stagnant?

2012 Income and Expenses

2013-01-28T09:00:00.000-05:00

2012 was a great year in terms of income-- I hit another new high:

Salary $106,244
Bonus $18,239
Employer contributions to my 401K $8,119
Dividends $15,977
Realized Gain (from a fund change made in 401k) $11,347
Blogging income $4,402
Gifts received $100
Interest $208
Tax refunds $2,516
Total Income $167,152

Almost all the dividends and realized gains were reinvested, and sometimes I don't really even consider these "real" income. But I love seeing my money work for me-- that is over $35,000 worth of income made not from labor but from my own savings and 401K participation.

The other income I had this year was $10,000 in rent from the tenants in my apartment, but for this year, I am kind of looking at it as a defrayal of my housing expenses. I'll start breaking this out differently next year, as I'll be reclassifying some of my expenses as business expenses for an investment property rather than personal household expenses.

Now for expenses:

Bank Charge	$77
Charity	$1,153
Clothing	$3,062
Dining / Groceries	$11,296
Education	$458
Entertainment	$1,364
Gifts Given	$2,266
Gym	$2,249
Household	$1,792
Housing (net)	$11,974
Income taxes	$34,639
Medical	$1,714
Miscellaneous	$3,434
Newspapers and Magazines	$404
Travel	$8,421
Utilities Internet Access	$360
Utilities Telephone	$953

A few notes:

Charity refers to my personal contributions. I also plan to donate all the blogging income from this site.
Dining-- about $8500 of this is for stuff shared with Sweetie. (I have to admit that we have been indulging in fancier wines than we used to! We buy it by the mixed case and usually 1 or 2 of the bottles is a special treat, i.e. something in the $16-35 range, compared to the $9-12 range for the rest. But at least in restaurants, we tend to stay with whatever's cheapest.) The rest is mostly for my own breakfasts and lunches.
Entertainment was pretty high this year, due to buying more tickets for concerts and theater, including a rather expensive one to see Madonna at Yankee Stadium
Gym-- this covers a membership renewal for 2 years
Household is mainly laundry and dry-cleaning, plus a new armchair for the apartment Sweetie and I now share
Housing-- as noted above, I pulled together my housing expenses such as condo charges, property tax, mortgage interest, rent I pay to Sweetie, and gas and electric charges for my condo, and then subtracted the rent I receive from tenants to arrive at a net housing cost for the year. This does not include about $10,000 in mortgage principal I've paid off, as I view that as a transfer from my cash net worth to home equity.
Miscellaneous included a new iPhone and a lot of art supplies, plus haircuts and all the usual little personal items
Travel includes daily commuting, some family visits, and a 2-week summer vacation in Europe.

Total expenses for the year came to $85,616. This is also an all-time high. I think the new iPhone, big vacation, 2-year gym expense and new chair account for a lot of that, plus trying to take better advantage of all the culture NYC has to offer.

Net savings were $81,536, of which $10,125 is the transfer to home equity for paying off mortgage principal. This is NOT an all-time high, but it's second only to the year when I received a $25,000 inheritance, so I'm not going to beat myself up about it. I saved about $5000 more than I did last year,
and about $9000 more than I did in 2010 if you back out the inheritance.

As always, I could easily have cut back on expenses and saved more, and I always have these thoughts about how much sooner I could retire if I did, and whether I'll wish I had saved more when there's another economic crisis... but at the end of the day, I am comfortable enough with my savings and net worth so far to allow myself some luxuries. I feel very, very lucky and thankful for the good fortune that has come my way.

A 1968 Children's Book About Money

2013-01-21T09:00:00.000-05:00

If you're not familiar with it, check out Brain Pickings, a source for lots of interesting tidbits, including this one:

In 1968, at the peak of “the century of the self” and the consumerism of the Mad Men era, while Alan Watts was busy bringing Eastern philosophy to the West and trying to convince Americans to seek purpose beyond money, a primary school supplement titled How People Earn and Use Money (UK; public library) — from the same Social Studies Program series that gave us How People Live in the Suburbs and How We Use Maps and Globes — set out to explain to children the basics of economic theory and its implications for everyday life.

Ahh the innocence of it all. Funky illustrations, though!

Food: Local, Organic and Unsustainable?

2013-01-14T09:00:00.000-05:00

As I've detailed my spending on this site over the years, I've sometimes gotten a little flak from people about my food expenses. For quite a few years, the amount hovered in the vicinity of $8,000 a year, covering all my food and drinking, groceries cooked at home and meals bought at restaurants. That works out to around $150 a week, which is about $21 a day.

To most people, that would seem like a lot. If you're careful, you could easily feed a family of 4 on that amount, so it may seem crazy and indulgent that one woman can spend that much on herself. If I wanted to, I could easily spend way less-- but in the context of my financial circumstances and lifestyle, I choose not to. I have always justified this as spending money not just on the necessary calories to survive, but on convenience and pleasure. It costs more to buy a coffee and a bagel at a deli before going to work than to make coffee at home and eat bagels purchased in bulk at a supermarket, but the extra expense is not all that much, and worth it in terms of saved time. The same can be said for buying a sandwich or a salad for lunch vs. making them at home. Dinner in a restaurant is a little harder to justify because it's quite a bit more expensive and it's not in the middle of my busy work day-- but the fact of the matter is that my level of spending actually doesn't include that many restaurant dinners. I might get cheap take out one or two nights a week, and cook my own meals from scratch other nights, eating in a restaurant less than one night a week on average.

I should also point out that I buy pretty average groceries in normal supermarkets most of the time. I occasionally buy something at an upscale shop or greenmarket, but I generally don't go out of my way to buy organic items or fancy prepared foods. But in the last few years, I have been amazed at the increasing variety of expensive artisanal food items available all over Manhattan and Brooklyn. Most recently, I went to a market called Brooklyn Fare-- it's a pretty full-service supermarket, with an emphasis on upscale, products, but what really blew me away was the selection of chocolate bars as you approach the cash registers. There must have been 100 different chocolate bars, maybe more. At prices like $6 per bar, maybe more. Chocolate is just one tiny part of the food universe, but it got me thinking about how these sorts of products have proliferated of late: cupcakes, chocolate, artisanal pickles and other such un-necessaries. Who on earth has enough money to sustain this business?

With all that in mind, I was gratified to read this article in yesterday's New York Times:

The Unaffordable Luxury of Food

Here's an excerpt that pretty much says it all:

Every generation of young New Yorker finds its own way to squander its meager earnings, and this one seems content to spend the money it makes on expensive, curated food with little sense that it is really squandering anything at all.

There is vast cultural support for this exercise, of course. We have long since moved past the vague idea that the personal is political to the notion that the epicurean is essential — for ethical cleanliness, environmental sensitivity and all the rest. Pleasure is mingled with obligation. “I don’t think about what anything costs,” Emily Gerard, a recent graduate of the University of Pennsylvania and a publishing assistant making the requisite salary, told me recently. “I’ll drop $60 once a week at the Greenmarket, which I would never do at a grocery store; I like supporting local farmers.”

We talk a lot about exquisite food but we rarely talk about a corollary to our fixation with it — the financial toll it takes on people who do not in any real sense have the income to afford it. Last week Yaffa Fredrick, who is 23 and a production assistant at MTV, broke down the finances of her passion for me. After taxes, she makes about $30,000 a year, a little over half of which goes to rent. In an especially frenetic dining week before the holidays, she went to Morimoto in the meatpacking district one night, Fig & Olive the next and Spice Market a few nights later, with a drinks evening sandwiched in between at Experimental Cocktail Club on the Lower East Side.

Typically, she told me, she spends about $250 a week eating in good restaurants, which amounts to about $13,000 annually, and this does not include the additional $50 to $100 a week she spends on cooking classes, wine tastings and cheese pairings. Because about half of her salary is given over to food, she works an additional 10 to 15 hours a week tutoring and baby-sitting to supplement it.

It surely comforts modern parents who have spent fortunes educating their children to know that these children are spending money on pork belly and not, for instance, cocaine. But what solace can it offer to realize that $300 a week put into an S. & P. 500 Index fund over the past five years would have provided an annual rate of return of 10.34 percent and grown to $100,354 today? Even saving $300 a week at a 6 percent rate of return would have yielded about $91,000, Mark X. Chemtob, a financial adviser at Ameriprise, said, adding that in both cases, the sums would qualify for a down payment on a starter apartment in New York.

I see these sorts of people in action all the time, yet it still blew my mind to actually read those numbers. These young women are making maybe a quarter or a third of what I make, and they are eating their way into debt! But it's cloaked in this mantle of supporting small local businesses and saving the planet. It's not that I don't believe those are good things to support, but where do you draw the line on how you support yourself first? And of course the fancy restaurants and cooking classes are purely hedonistic, without any real altruistic justification even if they do locally and organically source all their ingredients.

Of course this article focuses on a very thin slice of the world, a certain type of upper middle class New Yorker. There are many more people out there who don't eat this way because they can't afford to or have no interest in doing so. Yet there is a huge amount of mass-cultural attention paid to food right now, on TV, in books, and at least in my world, in store shelves. I keep asking myself if we are in some sort of food bubble, similar to the housing bubble a few years ago, because it somehow feels wrong and unsustainable in a way I can't put my finger on, just as the real estate market did back then.

And not directly related, but here's a book well worth reading on the topic of food, what it costs, and why:

The American Way of Eating: Undercover at Walmart, Applebee's, Farm Fields and the Dinner Table

2012 Year-end Net Worth

2013-01-06T18:54:00.000-05:00

There is a hidden benefit to my recent lax-ness about tracking my net worth-- after not having calculated it for a few months, it was really fun to see the number rise by about $50,000 all at once!
Here's the last few months I'd put into a spreadsheet-- nice jump from July to December!

Part of this is due to my lower monthly expenses now that I'm renting out my apartment. I also saw a nice bump from the increase in value of my investments, and a few thousand dollars worth of dividends that hit at the end of the year. I didn't hit my goal of $700,000, but I had thought that was pretty aggressive all along. Still, my net worth increased by over $100,000 from the end of 2011's net worth of $565,459-- this is the first time ever that my net worth has increased by six figures in a year. My salary and bonus came to just under $125,000, and I haven't been especially frugal lately, which just goes to show you how having money makes more money. The snowball effect!

More details to come soon on my expenses for the year...

The Shoe Repair Guy

2012-12-04T20:39:00.001-05:00

I always love going to my local shoe repair guy. I've used a few different ones over the years, whoever was closest to my office or home at the time. I love their cramped little storefronts full of random shoes, laces, polish, watchbands and other cheap items. These places are usually rather filthy and old-- their cash flow doesn't allow for snazzy renovations, and all the dust and shoe polish settle in and give things a permanent layer of grunge. I've found that the men who run these shops tend to be Greek or Russian, big gruff guys with enormous, permanently blackened hands. It's kind of amazing to me that these big hands can handle tiny delicate things like the pins in watch bands more dextrously than my skinny little fingers can.
I love these shops because to me they represent the epitome of a certain kind of old-fashioned frugality. They are all about re-using things, re-building things, refurbishing things so you can use them for many more years without having to buy new ones. I have shoes that I have been wearing for decades because I've had heels and soles replaced and repaired. Shoes just stay in better condition if you have them polished once in a while, and if you don't let the soles wear down too much. And the better the shoes you start off with, and the better you care for them, the more life a cobbler can squeeze out of them.
I remember having a weird feeling of pride when I handed a pair of loafers over to have new heels put on. The cobbler turned them over and over in his hands, examining them from every angle and prodding at them. He sort of grunted, "huh, English heels," and shot me a look. "You want I replace like that? It's more expensive." I said that was ok, and he asked me a couple of times if I was sure. Then he started scolding me that I'd let the shoes get too creased on the top of the foot. He said I should have been keeping them on wooden shoe stretchers the whole time so they'd keep their shape. I think it was almost offensive to him that someone wouldn't take the very best care of a good pair of shoes.
The other day, I went to a different guy with a watch that needed some links removed from its bracelet. Again, the man took my watch, turned it over and over in his hands, checking it out, nodding. Then he asked if I'd bought it. I said yes, thought technically I hadn't as it had been a gift from Sweetie, though we picked it out together. Then the guy asked how much I'd paid for it. I said a couple hundred dollars, which was roughly true, and represented a pretty good discount off the MSRP. He just grunted and went to work on the band. I was dying to know why he'd asked-- did he think it was nice and I'd gotten a good deal? Did he think it was a piece of crap and I'd gotten ripped off? (It was a Seiko, so not one of these fashion brand watches that just have a name slapped on them, but not a fancy Swiss watch either.)
After that watch was fixed, I also had him change the band on another watch, a cheap Timex I'd bought online thinking its red band would look cute, although it turned out to be ugly in reality. The band was still like new and I asked him to replace it with a black one. After putting the new band on, he asked if I wanted him to put the clasp back on the old band. I said I didn't even want the old band, knowing I'd never wear it. For all I cared, he could keep it or throw it out. But I could tell he really wanted me to take it, and he said, "you never know, you might want it. You could have it dyed black."
It would never in a million years have occurred to me to dye a watch band a different color, but I just loved that "waste not, want not" mentality.
I ended up paying $22 dollars for the watch band and the links being adjusted. That actually kind of seemed like a lot of money, but I haven't bought a leather watchband in a while, so maybe it's perfectly reasonable... but either way, it seemed a small price to pay for a pleasant reminder of a way of life that seems to be disappearing in today's culture of disposability...

I Made $1,000 in 15 Minutes!

2012-11-05T19:19:00.001-05:00

So, did you think Madame X was now shilling for "get rich quick" schemes? Not quite...

On this site, I have always advocated careful financial record-keeping, but I have been a little lax about my own lately. I was updating Quicken and saw that my net worth was about $659,000, but I then realized I hadn't updated my investment account transactions in a few months. So I spent a little time entering various dividends I'd received, and when I was done, voila! My net worth had climbed to about $660,000!

Can't promise it will work for everyone... And if it had been a really bad few months in the stock market, I could have just as easily lost $1,000. Still, a happy thing for tonight!

Sandy!

2012-10-30T18:12:00.001-04:00

Wow, it's been an interesting few days! I am happy to report that I have not personally suffered any ill effects from the storm. Sweetie's cable TV went out for a few hours-- though I lived without a TV of my own for many years, I am glad I live with one now. Sometimes you just want more than a transistor radio!
But wow, a lot of other people have really been whacked. So many homes have been destroyed and lives lost. I walked around one of the zone A evacuation areas that was still showing the traces of 3 feet of flooding. And who knows when all the power will be back and subways running. A lot of companies will be closed for the third straight day tomorrow. But on the other hand, I've heard that liquor stores are going gangbusters! And the clean-up will no doubt create some construction jobs.

How about you, readers? Hope you've all weathered the storm...

Now I'm Really a Landlady

2012-10-03T17:30:00.001-04:00

The latest news: I am officially a landlady now. I have rented out my apartment, furnished, and my lovely tenants have already set up an automatic payment so the rent goes straight into my bank account every month. It exceeds my monthly costs by a couple hundred dollars right now, not counting tax deductions, though that will fluctuate depending on the utility bills. For better or for worse, I decided it would be simpler to keep the gas, electric, and internet in my name and just build those costs into the rent. I did write it into the lease that the tenants would have to pay for usage over a certain level upon my providing them with a copy of the bill. Even when heat and AC are higher, I think I'll still end up with positive cash flow almost every month, and on average for the whole year.
So having given up my apartment, I have officially moved in with Sweetie. Sweetie never asked me for any contribution to the household expenses, though I've tended to buy all the groceries and about half the meals out, but on my insistence, we figured out a fair amount for me to contribute, and I've set that up as a monthly outgoing auto-payment. My net housing costs are now going to be about half what they were, maybe less.

All this is good news in terms of my being able to save more money. I'm not sure what I'll do about my apartment long term-- I'm hoping I can rent it for a year or two and then maybe sell it, as real estate prices seem to be turning around a wee bit. I've actually already had an offer from a potential buyer-- someone who owns one of the other units in my building said he'd be interested in buying it, though he didn't say at what price. But if he's serious, that could be an interesting possibility, as I wouldn't have to pay a real estate agent's commission. But for now, I'm just glad to have that rent money coming in, and it was convenient to be able to leave most of my furniture there too. Since it would be a nuisance to deal with selling or storing the furniture, I may also consider shorter term AirBnB type rentals-- I'd make more money, potentially, if I could keep the place booked. And it would also allow me to block out time for when my family and friends might want to stay there. Sweetie's apartment is bigger than mine was, but we're a bit tight for storage space for all our stuff, and if my sister and her husband and kids come to visit, there will be quite a line for the one tiny bathroom!

It will be interesting to talk all this property rental stuff through with my accountant in the spring. She had suggested that I might need to increase my witholding, as I'll have a lot more income when you include the rent, and my deductions will now include depreciation on an investment property instead of mortgage interest on a primary residence. I'll fill you in in a few months!

Net Worth Updates Jan-July 2012

2012-08-21T09:00:00.000-04:00

I'm trying to get back with the program here. I realized it had been an appalling 7 months since I last updated NetworthIQ (where I am the #5 most viewed profile!) and I don't think I've posted anything here either. So here's a quick snapshot of where my net worth is at:

Whenever I look at this graph, I'm just amazed at what a smooth steady climb it was up until the financial crisis in 2008. My net worth has been increasing at a faster pace since then, but with much more jagged ups and downs. Part of this may just be because as my net worth gets larger, the fluctuations are easier to see. I'm not savvy enough to graph this on a logarithmic scale to see if the percentages up and down have really increased in the last few years, but my guess is that they have. The other thing that is pretty cool is that in the lifespan of this graph, which is about 9 years, I've added about half a million dollars to my net worth. Given that my salary (plus bonus) before taxes has gone from about $73k to about $110k per year in that time frame, with about a quarter of that going to various taxes, I think it's pretty good that I've been able to increase my net worth by an average of over $50k per year. This is the power of living within your means, maxing out your 401k, and investing at least somewhat wisely.

New Car Trade-In and Financing

2012-08-15T09:00:00.000-04:00

Very belatedly continuing the story of Consuelo and her new car:

Once Consuelo had agreed on a price, she was much more relaxed. So was I! She didn't get the best possible price, but she at least got the exact car model and color she wanted and she was buying it from the most conveniently located dealer where she like the saleswoman, Debbie.

The next thing was to bring in her current car for a trade-in appraisal. This seemed to me like just as big a minefield as negotiating the purchase price, as a dealer is going to want to make the biggest possible profit on reselling that car.

So again I suggested Consuelo do some research online using KBB.com and some other sites that estimate trade-in and retail resale prices for used cars. You can enter various details about the model, year, mileage, options and condition of your car to get a range of approximate prices to shoot for either with a dealer or if you are selling the car on your own.

Consuelo's car was 11 years old but in excellent condition. The interior was pretty much immaculate, and the exterior had only a few minor marks on the front and back fenders. No dents, no scratches, no rust, as she'd kept it mostly in a garage and not driven it much. The mileage was extremely low for its age. The only red flag with the car was that the engine light had been going on and off. She'd taken it to a mechanic who'd managed to fix it a couple of times, saying it was just some sensor that was loose and needed to be replaced. It didn't seem like a big deal, but I told Consuelo she should definitely have it fixed before she traded the car in, thinking that the expense of fixing it would probably be less than what she'd lose in the trade-in negotiation. Consuelo didn't really want to put more money into the car at all, but she ended up deciding I was probably right, and 2 days before she was due to bring the car back to the dealer for the appraisal, she went back to her mechanic.

But... she got to the mechanic and found that they were closed. She couldn't figure out why they weren't open, and since she'd rushed over there on the one night she'd have time to do it, the change of plans made her feel rather discombobulated... so discombobulated, in fact, that she wasn't thinking straight and got into a minor fender bender 5 minutes later! Suddenly her excellent condition car had a dent in it, and wasn't so excellent any more. (Fortunately the other car was not damaged much, and the driver didn't want any insurance company involvement, for whatever reason. And the other amusing detail about this story is that the reason the mechanic shop was closed was that it was a branch of Strauss Auto, which had gone bankrupt and closed all its stores only a couple of days before.)

Based on all her research, Consuelo still thought she could get $4-5,000 for the trade-in, so when she returned to the dealership, she was shocked when Debbie returned from a chat with the manager and only offered her $2,500. Consuelo said "that seems really low," to which Debbie of course countered, "well, the engine light is on and there's a dent in the side." Consuelo pulled out printouts of the trade-in estimates she'd found online and showed them to Debbie, who of course played good cop and said "oh, great, this will help me plead your case with my manager." But it didn't help all that much-- the manager's response was that he could go higher only if Consuelo could show a receipt proving that some major part had been replaced recently, because it was required at a certain mileage level if he was to re-sell the car as certified pre-owned, or something like that. He says the value of that part being replaced is $1,000. Of course Consuelo didn't have that receipt, and . And at this point, Consuelo just doesn't want to deal with selling her own car, and she doesn't really know if what they're saying about the part is true. Debbie goes back to the manager and says that they can only go as high as $3,000. Consuelo takes the deal. Afterwards, she does some research online and figures out that the part probably did have to be replaced as they'd said, and it would indeed have cost her around $1,000 to replace the part-- but of course the dealer would only have to worry about his wholesale cost of that part.

So that's all the icky part of the car buying experience. Consuelo didn't feel like it had gone all that well, but she was just glad it was over. And there was a bit of good news at the end: the dealership was offering 0% financing for up to 72 months for qualifying buyers. I couldn't get my head around this at first-- it seems like there must be a catch, but you literally pay no interest for the life of the loan. (The catch is just that the dealership is factoring the lost interest into their other pricing terms anyway-- sometimes choosing an up front credit is better than a loan with no interest, but in this case it wasn't an option they were offering.) Consuelo's credit is really good, so she qualified for the 72 month loan, which is longer than the usual loan terms for a car. 5 years tends to be the max. So when Consuelo sat down with Debbie to draw up all the final purchase documents, Debbie said "so, do you want to do the 60 months?" Consuelo asks if she can do 72 months and Debbie says yes. They compare the two payments. And Consuelo basically says to herself "well, duh! This is free money! No interest! There is no reason not to extend the term for as long as they'll let me. If I ever want to pay it off faster, I can." So she takes the 72 month financing and feels very pleased... at least until she and I were talking about it afterwards and I said "so if the loan was free money... why did you make a down payment of 1/3 of the price of the car?" Her response: "shit. You're right. I guess I was just trying to be good about not borrowing too much money!"

Anyway, the whole story is just a comedy of errors. After sharing Consuelo's experience, I've had quite enough of cars and am even more convinced that I'll never buy one of my own!

Negotiation for a New Car

2012-06-10T15:18:00.000-04:00

How do you feel about negotiating prices? I know there must be some people who enjoy haggling, but I am among the many who find it stressful. This applies to all sorts of situations, from buying a cheap bracelet in an Istanbul bazaar to buying an apartment to certain business deals. Now I have discovered that I hate it even when I am not directly involved!

Let me explain. A friend, who I will call Consuelo, is buying a car and I have inadvertently turned into her coach. When she started telling me about her last car purchase, which was her first, we both had to laugh about all the things she'd obviously done wrong. And this was over 10 years ago, when the online resources we have now weren't as extensive. She did research car models via Consumer Reports, and went shopping at a time when dealers would be trying to clear the previous year's models off the lot, but then when she was first offered a price and it seemed kind of low enough, she didn't even try to negotiate further, and then she got bamboozled into paying for some additional options and an extended warranty she didn't need.

I have never bought a car myself-- and as a New York City resident, I probably never will-- but of course I got interested in the topic and offered to use my online Consumer Reports access to help her figure things out better this time around. She already had a specific car in mind so I pulled the pricing info that helps you calculate a reasonable target price to bargain towards. It's not just the dealer invoice price-- you have to factor in incentives and dealer holdbacks to calculate how low the dealer can really go and still make a profit of 1-5%. It's great to have this information, but then you can't help worrying that paying anything over that amount means you are being ripped off.

I gave Consuelo all the numbers and talked through all the sorts of approaches that are recommended when dealing with car sales people. Basically, you want to do all your research in advance, know what you want and what you can be flexible about, and have a target price in mind for the car you want. You should make this clear up front and try to set up a bidding war between multiple dealers who have your desired car on the lot and want to unload it. You want to do as much negotiating as possible over the phone, not in the showroom. You have to go to the showroom to test drive the car, but you should make clear that you are still at the stage of testing different models and aren't there to buy right away. Sounds pretty straightforward, right? Well, it's a lot easier in theory than it is in reality!

I went with Consuelo to a dealership to test drive the car she wanted. We walked in without an appointment and were helped by a nice female salesperson who I'll call Debbie. Debbie sat us down while she made a copy of Consuelo's license and got the car ready. (Meanwhile, who knows what else was going on while we waited those few minutes. They might have pulled a credit report on Consuelo, though they aren't supposed to do that.) Then we went out for a drive. Debbie pointed out some nice things about the car but without any sort of hard sell. Somehow we ended up talking about how female car sales people are becoming more common, and how some female customers prefer to deal with women and some men refuse to. She told us she'd only been selling cars for a few months. When we got back to the showroom, Debbie sat us down and showed us a brochure about the latest model of the car, asked what color Consuelo wanted, etc. She wasn't pushy or high pressure, but she gently drew Consuelo into revealing more about her preferences than she should have. Consuelo said she wanted the previous year's model, in a certain configuration, and Debbie started looking in the inventory system for it. She didn't have the exact one in stock but said she could order it easily, with only a $500 deposit. Consuelo was sitting there biting her lip as if she might just do it, and was only reluctant because she hadn't seen the color she liked best in person. I was the one who had to interject that she could just look around a bit more to see if she could see the car elsewhere, and take Debbie's business card and come back later. In my head I was saying "Snap out of it, Consuelo! You're supposed to be playing hardball here!"

Afterwards, we discussed how things had gone. Consuelo liked Debbie and because the dealership was convenient, she wanted to buy the car there. No discussion of price had occurred. I felt like she'd gotten off on the wrong foot-- she'd let Debbie establish a feeling of trust, and she was allowing herself to be influenced by factors less important than getting a good price, although I could understand that there might be enough value to those other factors that she'd compromise on price a little for them. So the next step was searching other nearby dealers' websites to see if we could look at the right car in person, and start getting some price quotes. I already figured that if Debbie had to order the car from another dealer, the price would probably include two dealers' profit instead of just one, and that a dealer with the car in stock would be much more incentivized to make a good deal. Consuelo emailed Debbie and asked what her price for the car would be-- pretty much just like that: "Hi Debbie, what would your price be for the car we discussed?" To me, this was her next mistake-- she should have put it all in context, saying that based on her research, she was looking for a price of $X, and if Debbie could give her a good price, she was ready to buy. But having left it open-ended, of course Debbie came back to her offering a price of only a few hundred dollars under the MSRP. Consuelo forwarded the email to me and said, "This seems high."

I decided to help her a bit more proactively, thinking it might also be a good idea if some searching was done under my name rather than hers. I found the car at another dealer not far away and submitted a request for a quote, and also sent Consuelo a link to yet another dealer who had the car so she could request a quote herself. The dealer she contacted gave her a very good price, only a little bit more than the target price from Consumer Reports, and specified that it included the destination charge, which was around $800. I told Consuelo to verify that they would not be tacking on a bunch of other fees CR warns you about, and meanwhile, she went back to Debbie with the lower quote, adn asked if her price had included the destination charge. Debbie replied that it had-- though I am sure if Consuelo had accepted that price without questioning fees, she would have been told that the destination charge was additional. Debbie did not offer to match the other price, but instead said something cryptic about how she understood that price was important. We weren't sure if she was just saying she couldn't negotiate further or what-- I suspected that she sensed Consuelo wanted to buy the car from her and was not going to give an inch unless she had to. This time, I had to say it out loud: "Consuelo, Debbie is very nice, but she is playing you like a violin. Don't take it personally-- it's her job."

Meanwhile, the other dealership replied that there were no additional fees. It was all sounding good, so Consuelo made an appointment to go in and see the car without asking if any further price reduction was available. The earliest she could get to that dealer was a few days later, and by that time, it turned out the exact car she wanted had been sold and they didn't have another one like it. So much for leverage (especially since Consuelo forgot to ask if that dealer would honor the same price when they offered to order her the same car from somewhere else). Another dealer had a price a little closer to Debbie's, but we were starting to worry that since there had been some big sales over Memorial Day, fewer and fewer examples of the model Consuelo wanted were showing up in the inventory at local dealers. I figured Debbie would be well aware of this, so Consuelo had less and less negotiating power.
Finally, after a couple of phone calls with someone at another dealership who sounded like the stereotypical sleazy car salesman, Consuelo just decided she was sick of the whole thing, and by that point, I really was too! I'd been thinking so much about all these negotiating strategies and trying to help Consuelo get the best possible price, but that seemed to be less and less possible, and the idea that her desired car model would sell out in the meantime was adding a lot of pressure. By this point, we knew she wasn't going to be all that close to the target price CR had fixated us on, so we felt like we were somehow failing at the whole thing and getting screwed. I was trying to be a good adviser and coach, but ended up taking it so personally that I got really anxious on Consuelo's behalf and was having nightmares about car negotiations! Ultimately, Consuelo told me she was just going to write back to Debbie and say she wanted a price $1,000 lower than Debbie's original offer and could she do it or not. I told her to ask for $1,500 lower and that Debbie would then come back to her with the $1,000 lower price-- which was exactly what happened, so Consuelo thanked me for reminding her not to negotiate against herself. The price did end up being a few hundred dollars below invoice, so it wasn't a terrible deal-- it was an average deal, an acceptable deal-- but it was disappointing not to get the very good deal I thought she should aim for. To put this all in perspective, the price range we're talking about between best feasible price and MSRP was about $32,000-$36,000, and Consuelo's paying $34,000-- but even when you're buying a $34,000 car, it's painful to think someone might be cheating you out of $1,000!

Of course agreeing on a price isn't really the end of a car purchase negotiation-- it's just a step along the way. But this post is getting long, so I'll write a sequel soon covering the rest of the process, including negotiating a trade-in allowance and financing. Consuelo hasn't actually gotten the car just yet, so there's plenty that can still go wrong!! And I'm learning a lot from her experiences along the way.

I'd love to learn more from all of you too-- have you bought many cars in your life? what price range? How did you negotiate? Did you find helpful information online? How good a deal did you get?

Facebook Stock

2012-05-24T13:25:00.001-04:00

So, did any of you invest in Facebook stock? I have to say, my instinct was that it was over-hyped and couldn't help but go down in the first couple of days. If I was more confident about trading, I would have shorted the stock-- and as things turned out, I could have made some money! But unfortunately I am not that daring an investor...

I'm a Landlady! (For the Next Month)

2012-05-15T21:37:00.004-04:00

I've been agonizing over what to do with my apartment for a while. For all intents and purposes, I live with Sweetie, and my apartment had become a place I'd visit to pick up mail, and a storage place for my books and papers, and only very rarely a place we'd spend the night. This of course makes me sad-- it was only a few years ago that I put so much effort into buying my own place, and then got such pleasure out of living there, after all the years I'd spent in my super-tiny rented studio. But life is full of surprises, and here I am.
When I bought my place, I knew I could afford it, and I budgeted my life around having my own apartment. I could pay all the costs and still save money. But of course, the less I actually used it, the more I started to feel like it was crazy to be paying for it. I knew I should try to find a way to make some money from it, but there has just been such a strong force of inertia keeping me from doing it! If I was to just rent the place out unfurnished, I'd have to pack up lots of stuff, throw out lots of stuff, sell lots of stuff and perhaps pay to put stuff in storage-- all in all, a big pain. And then what would I do when my sister's family came to visit? Sweetie's place has a second bedroom but it's not idea to have a family of 4 visiting-- it's been great to just give my sister's family my place while I stay with Sweetie.
I've thought about trying to sell my place and buy a studio somewhere near Sweetie, but the neighborhood is more expensive, so I might end up having to pay even more for a smaller space I'd only use part time.
I realized that the ideal thing, at least during a transition phase, might be to get a roommate or sublet my apartment on a temporary basis. When I was homeless for a few months before being able to close on my condo, I'd had pretty good experiences with a couple of month long sublets--but I know that I am very neat and clean and respectful of people's belongings, and I wasn't sure I could trust other people to be equally neat and clean and respectful of mine. I was nervous about having strangers in my home.
But as soon as I started talking a bit more to friends about this dilemma, guess what? It's not that hard to find a friend of a friend who needs a place in NYC. I had one potential "roommate" situation that fell through because the person's job offer didn't work out, but soon after, a situation came up where someone needed a place for a month, and this time, it worked out. I've handed over my apartment for a month in exchange for $2,000.
We'll see how this works out, but I'm feeling optimistic. Most of my clothes were already at Sweetie's, so all I had to do was bundle up a few more bags of Goodwill donations in order to empty out my whole closet and dresser so I could give the subletter an empty bedroom. I tidied away a lot of my toiletries and personal items but left all my furniture and posters in place. One whole closet is full of stuff, including some boxes of old papers-- I've realized I'm a bit of a hoarder in some ways-- but I moved all my sensitive documents such as tax returns and financial info.
The $2,000 should be a nice little profit for the month-- my out of pocket costs for the place, including utilities, is only around $1850 or so, and much less if you factor in the tax deduction and the fact that a few hundred of that goes towards my equity.
So unless this turns into some nightmare where these people trash my place, I may have crossed the threshold into being able to do this more often and turn my apartment into a real estate investment. I could list it on sublet.com or airbnb.com and probably make even more than the $2,000 I charged this time. (Though I'd rather have trustworthy people and not get too greedy...)
Readers, have any of you had good or bad experience renting out your home on a short term basis? I'd love to hear any recommendations...

Overheard: Puppy Edition

2012-04-23T19:15:00.001-04:00

I was walking down the street behind a mom with her two daughters, who were maybe around 8 and 10 years old. I guess they had been begging their mother for a puppy and she'd asked them if they were willing to work hard for the money it would cost. One daughter said yes, she would get a job and work hard for the money. The other shrieked very loudly that she was not going to work hard to get money-- instead she was going to SAVE UP lots of money to pay for the puppy!
It was cute-- it got me thinking about how a kid might hear their parents talking about money coming from a job and coming from "saving up," but not understanding that usually it has to come from one before you can do the other!

The Latest News

2012-04-13T13:41:00.002-04:00

Yes, it's been too long since I've posted a net worth update or any other juicy details. And it's not just because I'm in love! I've been really, really busy at work, far more stressed out than I've been in years. One night I came home from work almost feeling like I was having an anxiety attack-- it's times like this that I start to wonder how else I could earn a paycheck...

So with all that going on, I haven't wanted to be on the computer all that much in my downtime. I haven't been blogging much, and hadn't even updated all my financial data in a while. But I did just catch up on some of that a few days ago-- I reconciled all my investment accounts through the end of March and the good news is that after some nice 1st quarter mutual fund results, plus a better than expected bonus, my net worth is currently somewhere around $620,000.

I will post more detail about my spending and account balances soon. I actually pulled together some comparisons of my spending by category from 2003 to the present. It was interesting to see that a lot of my expenses haven't increased that much (and those that have increased did not increase as much as my income has, so the net result is that I've been saving more). It gave me an idea for a future post about a financial tipping point-- in other words, if your current lifestyle, or what you consider a minimum acceptable lifestyle, costs X, at what point in your life did you start making enough to pay for X without going into debt? For me, at least so far, I'm pretty far past that tipping point, but for a lot of people it's not a one-way journey-- losing a job could mean you go back and forth across that line of being able to afford certain things you consider "normal."

Another tidbit of recent news-- this is the first time I've not been able to contribute the maximum to my Roth IRA because my income was too high. I guess that is a milestone to celebrate, in a way, but I couldn't help feeling disappointed!

And I will have to write more about it soon, but I highly recommend the book Thinking, Fast and Slow. There is a lot of interesting stuff in there about financial decision-making, as well as actionable tips that will help you check yourself from making errors of judgment.

So, lots of blogging ideas on my to-do list if I can get back into a rhythm of posting more frequently! Thanks for sticking with me and leaving comments that remind me to fill you in! I'd love to hear more from all of you about what's up in your financial lives lately-- what's on your to-do list? What's keeping you up at night? How are you personally weathering this economy?

Paying for Casual Friday??

2012-04-05T22:09:00.001-04:00

Apparently some companies tell employees they can wear jeans on certain Fridays in exchange for a charitable donation. Have you ever heard of something like this? If people in my office had to donate $5 every time they wore jeans, we could probably feed NYC's homeless all year!

Why???

2012-03-06T09:00:00.000-05:00

Why did someone give this to me for Christmas? Found it while gathering items to donate to Goodwill...

Overheard in a Restaurant

2012-03-02T12:03:00.002-05:00

If you want to keep your money conversations private, don't sit next to me! Though in this case, the person was sitting two tables away and talking loudly enough for half the restaurant to hear.

Scene: a Brooklyn eatery on a Saturday night
Characters: a young woman telling a story to 3 of her friends

Here's more or less what she said:

My mother grew up as one of 6 kids and she actually shared a bed, yeah, one bed, with her two sisters until she was like 15... she went away to college but she dropped out... she came back to New York and got a job on Wall Street and did really well... but her mother, my grandmother, always kept complaining about the money they'd spent on sending her to college and what a waste it was since she dropped out. I mean, she just couldn't let it go and literally every time they saw her she'd say all this stuff over and over again, so finally my dad got so sick of it that he just told her to calculate how much money it was, for tuition, travel, everything, and tell him how much it came to and he'd write her a check for that amount if she'd promise to shut up about it and never mention it again... my father had a very healthy attitude about money...

Once I'd heard the end of that story I didn't pay much more attention to her for awhile, until just before I was leaving the restaurant, when I heard her voice rise again with this interesting remark:

Let's just buy $400 worth of scratch-off tickets and see what happens!

I'd love to fill in the blanks in that conversation!

Quicken For Mac

2012-02-21T09:00:00.000-05:00

Here we are in 2012 and it's nice to know that some things never change: Quicken's support for Mac users SUCKS!!

I am still using Quicken for Mac 2006. I forget exactly why I didn't switch to Quicken for Mac 2007 when it came out, but who could have imagined that it would be the last real update of the software for 5 years! I also forget exactly when Quicken Essentials for Mac was introduced-- it made me so angry, I guess I was doing my best to block it out! Intuit actually sent me a free copy to review, which I never did because it would have been such a slam. They basically took a decent financial program with a full set of features and said "oh gee, you Mac users just like things that look pretty and you aren't really numbers people anyway, so here's a financial program that only shows you the big picture and doesn't actually let you DO anything!" If you have any interest in really analyzing and tracking your finances and investments, it's useless. Let me just say it again: it SUCKS!!

At this point, it's almost impossible to buy Quicken for Mac 2007-- you can find it for sale on a couple of websites, including Amazon, but it's $150!! And it doesn't work on the most recent Lion Mac OS. Intuit claims they will be releasing a Lion-compatible update, but I'm not holding my breath. They seem to be more focused on developing iPad and iPhone apps. And while I do use Mint a little bit on my phone just to check balances, I don't consider it a real solution. I need to be able to save all my cash and bank account and investment transactions, categorize them in detail, run reports, export data to Excel for further analysis, etc. My current set-up involves using Pocket Money on my iPhone to enter daily transactions, which I then export to Quicken via a QIF file. I download investment and credit card transactions and enter repeating bills in the Quicken program on my laptop and then export an updated file back to my phone so I can see the most up to date balances.

At some point in the next few years, I'd like to upgrade to a newer Mac-- my current one actually works just fine, so I suppose I should thank the people at Intuit for preventing me from incurring an unnecessary expense. But if they don't release a new version, my options will all involve switching to a new program and losing at least some data. I'm not sure which would be least painful-- switching to Quicken for Windows would probably be the least complicated on one level, but that would involve paying $70 for the Quicken software itself (I think I'd need the Premier version to do the investment tracking I want to do), plus $80 for Parallels software to run Windows on the Mac, plus a copy of Windows 7 for $120. A total of $270 to keep using Quicken on a new computer!?! That SUCKS!! SUCKS, SUCKS, SUCKS!!

Saying that makes me feel a little bit better! :)

What are your favorite financial tracking programs?

Researching Decisions

2012-02-13T09:20:00.000-05:00

I have always been a pretty careful shopper for most kinds of purchases. I'm as guilty as the next person when it comes to the occasional impulse buy of clothing or a book or music, but when it comes to major purchases, I usually slow way down and do a lot of research before I commit myself to anything. I look at Consumer Reports, I check web forums, I ask friends, I delay gratification while deciding whether I really want what I think I want. At least I try to!

So when Sweetie's DVD player broke, I was the one who said "whoa, let's check things out here and not be hasty." First I went to Consumer Reports. I saw that Blu-Ray DVD players now seem to be pretty much the norm, and I was attracted by the fact that they all seem to allow streaming video from Netflix. I'm not a big movie or TV watcher, so I'd been on the 2-DVD-a-month plan from Netflix and was perfectly happy with that, but being able to stream an occasional movie or old TV show appealed to me. So I found a Blu-ray player that had the features I wanted and good ratings and found it at an online retailer for a good price.
A few days later, it arrived, we set it up, and everything was good. We had a little trouble getting the streaming to work at first, but it turned out that all I needed to do was switch my Netflix plan to one that allowed unlimited streaming (duh). We watched a few episodes of Downton Abbey and were happy as clams.

We were so happy, in fact, that we almost immediately decided to get another player for the bedroom when we came across almost the same model for a really good price at Costco. We didn't think too much about it-- after all, we'd already done all that research. But in retrospect, I wish I'd thought things through a bit more! After finishing season 1 of Downton Abbey, I wanted to start watching season 2, but it's not available on Netflix yet, or any of the other services we can access on the Blu-Ray player. But I could buy access to watch the whole season 2, both the episodes already available and the new ones as they come out, via iTunes for $19.99. If I had bought an Apple TV instead of a second Blu-Ray player, we could watch them on the TV. The other cheaper option would be to buy a composite AV or HDMI cable adapter so I could plug my phone or laptop into the TV. Of course, the show is still airing on PBS so we could just try to watch the new episodes the good old-fashioned way, but we've already missed a bunch, and we don't have any way to record future ones if we're not home.

In the scope of life's worries, having to wait a few months to watch more episodes of a guilty pleasure soap opera disguised as high-brow drama is really not a big deal. Speaking as someone who has lived without a TV for most of my life and would usually rather read a book, I can't believe I'm even posting about this issue! But it does go to show that you should explore all options before acting too fast on any purchase. And please let me know if there are any other options I should be exploring to watch this show!!

Net Worth December 2011

2012-02-08T09:00:00.000-05:00

I ended last year with a net worth of about $565,459, up from $523,133 in December 2010. A gain of $42,326 or 8% is nothing to complain about, but it falls far short of my goal of $600,000.
Here's 2011 vs. the previous year on NetworthIQ:

Dec. 2011:

Dec. 2010:

The good news is that I saved money, and I put more of it into investments. But it wasn't a great year for the stock market. The net worth graph really shows it-- it's the least upward-sloping period since the big crash in 2008. Oh well-- not much I can do about that. I just have to keep controlling what I can control, and hoping for better luck with what I can't control!
More details soon on 2011 spending and savings...

The Employee/Employer Relationship

2012-02-06T09:07:00.001-05:00

I've been thinking a lot about this issue lately, for a number of reasons.

I'll start off with a story about a friend of mine who I'll call Karen. She has someone who comes in and cleans her apartment every week. Let's call the cleaning lady Tracy. Karen first hired Tracy about 15 years ago. At the time, she only had Tracy come every other week. As is typical for this kind of situation in New York, Karen paid Tracy in cash. Over the years, Karen raised Tracy's pay a few times, and when Tracy lost some of her other clients, Karen started having her come in every week so she'd have more work. Tracy has rarely missed a week due to being sick, but when she has, Karen pays her anyway. Karen also gives her a Christmas bonus every year. Tracy takes a couple of weeks off every year, which Karen doesn't pay her for, but if Karen is going to be away and doesn't need Tracy to come, she still pays her for the weeks she's canceled.

So is this a mutually beneficial, fair relationship? Tracy offered to do the work on her own terms, and I don't think anyone would describe Karen's treatment of her as in any way exploitative or mean. Of course there's a tax evasion issue-- as you might be assuming, Tracy wanted to be paid cash because she wasn't a citizen-- at first. But now she is a US citizen and could presumably get another job where she and her employer would have to pay taxes. She's already past the age when most people want to retire, and Karen is wondering what to do about it if Tracy does want to stop working-- she's never paid any Social Security taxes for Tracy, so it's unclear what, if anything, Tracy would be able to collect. Tracy's children might or might not be able to help look after her. Karen is thinking about whether she should give Tracy some sort of pension, out of a sense of what's right and also just because she and Tracy have an affectionate relationship and she genuinely cares about what happens to her. That's more than can be said for a lot of people you read about who feel they have to economize by cutting the hours for the hired help just because their mutual funds are down.

Do you think most people feel this sense of responsibility towards those whom they employ? Is this kind of arrangement between two individuals a fair way to decide terms of employment, or should the government always be involved in setting the rules and collecting taxes and providing benefits? Should there always be an obligation to take care of an long-serving employee after the employment has ended?

The other thing that's had me pondering these issues is the TV series Downton Abbey, which everyone seems to be talking about lately. Thanks to streaming Season 1 from Netflix, I can count myself among the fans! It's set at a point when the sun is starting to set on the British empire and the old ways of life for the aristocracy are starting to change. But amongst the servants on this big estate, you have a variety of attitudes towards their situation and the people who employ them. There's a rigid class system, but there's also a sense that master and servant consider each other family, at least in some ways. Of course, sometimes this turns into the masters telling the servants what's best for them, which usually involves their continuing to be servants-- it's a paternalistic relationship where the servants have no real dignity or autonomy or choice.

And then there's what's going on in the US in current times. Some politicians are trying to make laws against collective bargaining, more and more people have to work as "independent contractors" rather than as actual employees of corporations, pensions are underfunded, and some benefit packages have been so aggressively negotiated as to be unsustainable. People are yelling "get a job!" at Occupy Wall Street protesters one minute, and saying Obama doesn't deserve re-election because of astronomical unemployment numbers the next.

If there's anything I take away from all this, it's that ideally, we'd all work for ourselves... but that just isn't possible. How can we best maintain our dignity as equals when some of us have to work for the rest of us? How can people without much power be protected from those who do have power? Would most employers actually treat people fairly if they weren't forced to? What are the best ways for government to be involved? We live in a complicated world, and wishful thinking won't make it any simpler.

And to come back to Karen and Tracy, what would you do? Would you refuse to pay someone cash under the table, employ only legal workers and pay all the taxes so they could collect Social Security? Or would you pay someone cash and just figure they knew benefits were never going to be part of the deal? Or would you feel obligated to help take care of someone who'd worked for you after they'd retired?

Happy Holidays!

2011-12-23T13:22:00.002-05:00

My goodness, it's been a busy month. So much for my good intentions of posting at least once a week! I can't say I've had any exciting financial news to report. Here's some off-the-cuff items!

At Thanksgiving, I got one final check for a couple hundred dollars that was the final settlement of my great-aunt's estate.

I've been finding that my cash balance in Pocket Money /Quicken is often way off, by several dollars or more. I'm still pretty good about tracking every penny of my spending so this is starting to make me paranoid. Is there a bug in the program? Is someone stealing money out of my wallet? It's weird.

My year end net worth goal of $600k just isn't going to happen. I'm still saving a good portion of my earnings, but the stock market has been so up and down this year.

I've done all my holiday gift shopping and probably have spent a bit less than usual, though I haven't totaled everything up just yet. I gave small gifts to a few people in the office. I bought my niece and nephew each a sweater, two books, and some wacky wax stuff you can make little sculptures with. My sister and I will give our mom an iPhone for Xmas. I'm not giving my extended family any gifts as I won't see them this year. Sweetie and I are taking a little trip over the holidays that is basically our present to each other. Though of course there have also been veiled mentions of "a few other little things" that have my all anxious about how little those other things are compared to the other little things I bought! But I guess holiday gifts are no fun if you take ALL the surprise element out of it!

Best wishes to all of you and your families for a happy, healthy New Year!