My Open Wallet

Bail-out Bankers' Compensation

2010-01-05T09:44:00.001-05:00

This is a fascinating-- and infuriating-- article from last Sunday's New York Times Magazine:
What's a Bailed-Out Banker Really Worth?

Here's a few outtakes from this story, which details how Kenneth Feinberg went about negotiating (rather than czar-ishly dictating) compensation packages for top executives at companies bailed out under the TARP program:

Citigroup and Bank of America, for example, concluded that everyone in their executive suites [deserved multi-million dollar compensation packages because they were] above average when compared with peers at other giant banks that didn’t need a bailout. Or there was A.I.G.’s behind-closed-doors argument against Feinberg’s directive to pay its top people in large part with A.I.G. stock. The company’s reasoning? That the stock — trading briskly at the time at around $40 on the New York Stock Exchange — was actually worthless.

How does anyone actually say that with a straight face? "I want my $10 million bonus in cash from the US government, because the stock of the company I'm running has no value!"

Here's another gem:

That Dodd led the attacks on A.I.G. when what came to be called the retention bonuses were revealed infuriates [an unnamed friend of the author's, who works at A.I.G.]. He says that his boss asked everyone at A.I.G. Financial Products “to contribute the maximum to Dodd, because he was so important in Washington in terms of regulating the products we sell.” My friend went on to say: “Before he attacked us, Dodd was in our office” — in Wilton, Conn. — “giving a speech telling us how great we were. And our checks were in envelopes stacked up right there.”

Federal Election Commission filings show 31 maximum $2,100 contributions to Dodd during the last quarter of 2006 from employees of A.I.G. Financial Products. My friend’s former boss, A.I.G. Financial Products’ head, Joseph Cassano, who is listed as giving $2,100, did not return calls to his home, nor did his lawyer return calls seeking comment.

Asked about the event, and about checks stacked on a table, Dodd said: “Yes, it happened. I remember having a fund-raiser there. . . . I can’t finance my own campaigns. I have to raise money,” he added. “But what does this guy think? That if they give me money I have to do what they want me to do? That tells you something about them.”

Of course this sense of entitlement isn't just an issue at TARP companies-- almost all big corporations now operate in this rather closed world where all their top executives sit on each other's boards and reinforce the idea that they "deserve" more and more money:

“The boards of these companies just don’t have an arm’s-length relationship with these executives,” says Lucian Bebchuk, a Harvard Law School expert on executive compensation who advised Feinberg. Board members are frequently executives or board members at other big corporations, Bebchuk explains, and therefore are likely to be steeped in the same entitlement culture. Indeed, they are lavishly paid, too; in 2008, A.I.G. board members earned an average of about $300,000 for their work in 2007, the year when apparently unsupervised trading in toxic financial products destroyed the company.
“No director wants to be the skunk at the garden party,” says Sonnenfeld, the Yale Management School associate dean. “And the headhunters, whose compensation, by the way, is based on how much executives make, won’t pick them for boards if they’re going to be dissenters.”

Which leaves us with this stat:

Over the last 50 years, the ratio of top pay to average pay at public companies has multiplied roughly 11 times (24:1 to 275:1). That’s more pay in one workday for the chief executive than his average employee makes in a year.

Are top executives really working that much harder these days? Are they really delivering that much more value to shareholders? I don't think so, and I just don't understand why more people aren't furious about it. Everyone who holds shares in public companies, in the form of stock or through mutual funds in your 401k, is affected by this-- this is millions and millions of dollars that could be paid out in dividends to shareholders, or invested in more workers and new technology to help the company and the economy grow. Instead, it's going into the pockets of a tiny, well-connected group of people who think they can use that money to buy politicians and elections, not to mention an awful lot of personal luxury (not all of which is necessarily stimulating the economy within our borders).

I have no problem with people getting rich. There will always be a small number of people at the top of the pyramid, and many of them will have done something extraordinary to get there, something that will have provided value to millions of other people, in the form of money or convenience or entertainment, etc. But something is seriously screwed up when executives who have destroyed value, destroyed livelihoods and nearly destroyed an economy still think they deserve to earn more every single year than 90% of Americans will ever earn in a lifetime-- even when their big paycheck is coming straight out of taxpayers' pockets.

The article ends on a slightly optimistic note, hoping, as I do, that there's a way to use the ideas of people like Kenneth Feinberg and Warren Buffett and others to more fairly structure compensation on a broader scale, to appropriately reward good performance and encourage innovation while curbing the kind of risk-taking that leaves taxpayers holding the bag when things go wrong. But a lot of attitudes are going to have to change for that to happen.

In With the Old, Out with the New

2010-01-04T22:54:00.004-05:00

Now is the time of year when everyone seems focused on renewal, improvement, and new stuff. And I have a couple of new things myself, but in two particular examples, they made me think about the value of keeping old things.

First, the butter dish. A couple of months ago, I bought a new butter dish for about $9 at Beth, Bath and Beyond. I had tossed it in a corner and kind of forgotten about it, which was probably the first sign that I didn't really need a new butter dish. I had thought about replacing my old plastic butter dish because it was starting to look a little scuffed up and old... because it IS old: I bought it in 1992 or 1993, when I was moving into my first apartment, and I've kept it with me through a few moves since then. When I moved in with a partner, it came with me, and when that relationship ended, it came with me. Now that's butter dish loyalty, isn't it!
Now I'm thinking I actually might keep using it, even though I've discovered the new butter dish-- I actually use two dishes, and my old one is used for margarine. The real butter is in a glass dish I bought about two years ago, which I've actually hated since the minute I started using it because the lid doesn't fit right. I never would have thrown out my nice old butter/margarine dish for that one, and now I'm starting to think that it's still more worthy of being kept. It probably cost me about $2.99 when I bought it, and it pleases me that something so cheap has done its job for so long.

The other thing is my alarm clock. I was noticing recently that my snooze button didn't seem to be working very well any more-- I am not a morning person, so my snooze button gets used a LOT! And my clock, I'm pretty sure, goes back even further than my butter dish: I'm pretty sure it's the same one I brought to college with me as a freshman, and probably used for a few years even before that. (I won't enumerate all the various ex-lovers who were also awakened by it!)

This time, I didn't have to buy a new clock. One of my father's many quirks was that he was always trying to find the perfect digital clock, and in the last few years before he died, he seems to have purchased about 20 of them. He had them stashed in different places around the house, and their various beeps and bleeps were freaking my mother out, so she gathered them all up and was going to get rid of them until I happened to mention that I could use a new one. In an admirable burst of frugality, my mother put 3 clocks each in my and Sweetie's Christmas stockings, and told us to keep whichever ones we wanted. (This isn't to say that Mom didn't go overboard on other Christmas spending, but that's a story for another day.)

These two examples may be a long and convoluted way of saying so, but it's just nice sometimes to enjoy the things you have and appreciate the value you've gotten from them, instead of only admiring things that are new and shiny. So many people just think "oh, I've had that for a few years, it's time for a new one," whether or not the item actually needs to be replaced. If you start adding up those $9 butter dishes and $20 digital clocks and who knows what else, it can turn into significant money after a while. So in this new year, why not resolve to appreciate the old, and keep it around for a bit longer?

Saving Saves the Day

2010-01-01T17:03:00.002-05:00

Happy New Year everyone! I thought this article from the NY Times was well worth sharing: For Savers, It Was Hardly a Lost Decade. As everyone looks back at the '00s, there will be lots of talk about how the stock market came full circle and at least in terms of overall averages, isn't worth any more than it was 10 years ago-- but as Ron Lieber points out, that doesn't have to mean that investing is a lost cause.

If you invested $100,000 on Jan. 1, 2000, in the Vanguard index fund that tracks the Standard & Poor’s 500, you would have ended up with $89,072 by mid-December of 2009. Adjust that for inflation by putting it in January 2000 dollars and you’re left with $69,114.
But that is not how most real people invest. They don’t pour everything they have into just one type of asset and then add nothing to it for 10 years. Instead, they buy stocks of all sorts, and bonds and perhaps other things, too. And many millions of them dutifully add more money regularly, usually into a retirement account that they won’t touch for longer than a decade.
For those people, it was not a lost decade at all. Even those who started with a low six-figure balance could have doubled their money in the last 10 years.

I don't have accurate data going back 10 years, but I'm sure my net worth was less than $50,000 at the beginning of the 2000s. Today, it's somewhere around $400,000. It's certainly not because I'm an investing genius, and it's not because I saved $350,000 in cash. It's because I spread my investments among different kinds of assets, and made sure to save at least some percentage of my income every month with automatic deductions. If you keep your portfolio balanced and regularly add to it with monthly savings, you can weather pretty much any economic storm.

Should You Pay as Much as a Celebrity?

2009-12-14T13:38:00.003-05:00

From my new favorite website, Not Always Right... as in "The Customer is Not Always Right." If you've ever worked in retail or food service (as I have), you will especially enjoy it!

Me: “Hey there, can I help you out?”

Customer: “Were these products on Oprah?”

Me: “Yes, they’ve been featured.”

Customer: “Celebrities use them, right? So they must be really expensive…like $500 a pop or something, right?”

Me: “No, not at all. This one here only costs $40 before tax, and none of the products exceed $150.”

Customer: “So, when the celebrities buy them, they only cost $40?”

Me: “Yes.”

Customer: “And when regular people buy them, they only cost $40?”

Me: “Yes.”

(A moment of silence passes as the customer glares at me.)

Customer: “COMMUNIST!”

New York Neighborhoods: How Many People Can Afford to Live There?

2009-12-02T17:24:00.003-05:00

Found via Curbed, this is a VERY interesting interactive map of New York city, showing income ranges in different neighborhoods and how many families would be able to afford a certain level of rent. Try it out!

Single Ma Wants Me to Write About Booze.

2009-11-19T09:26:00.001-05:00

It's actually not a bad topic for a post this week...

The other night, I went to see a play at St Ann's Warehouse in Brooklyn (The New Electric Ballroom, well worth seeing. You can get discounted tickets using a code from Broadway Box). Before the show, we went to the nearby Water Street Restaurant. It's a convenient place for a pre-show meal, and they have really good burgers, but we were incredibly disgruntled by the wine!

First of all, the wine list is very limited, especially if you just want a glass-- they have a much better selection of beers. But I knew if I drank beer, I'd be wanting to go to the bathroom during the no-intermission play! So I had one glass of wine-- $8 for a fairly mediocre glass of Argentine Chardonnay. There was no Pinot Grigio or New Zealand Sauvignon Blanc by the glass, which would have been safer. And the $8 Coppola Chardonnay was terrible, and the $7 American Sauvignon Blanc was almost undrinkable.

Even worse, these glasses of wine were small! Some restaurants at least give you a generous glass of perhaps 8 or 10 ounces, but these were probably 6 ounce glasses, and not especially full.
We got into a discussion of what the going rate is for glasses of wine-- $6 is probably a standard amount in New York, for something cheap but acceptable. Sometimes you'll see a $5 house wine, maybe even $4, but it's usually pretty bad. And of course if you go to a place that fancies itself more of a wine bar, you can often choose from a selection of glasses from $7 -10, and even higher. This may seem pricey, but sometimes I think it's nice to be able to sample interesting wines-- I'd rather pay a little more occasionally just to taste something a little unusual.

In many cases, it's better just to opt for a bottle of wine. The price of a bottle will tend to be about four times the price of a glass, though the volume of wine is usually closer to 5 glasses, unless you're in one of these places that pours very big glasses. If you don't want to consume an entire bottle, don't forget that at least in some states, most restaurants are now happy to let you take a partial bottle home with you-- they are required to re-cork it and seal it in a plastic bag along with the receipt, usually-- I think the law varies by state. But boy, were we glad we hadn't bought a whole bottle the other night! (For what it's worth, the Water Street waitress told us they just hired a new manager who was planning to vastly improve their wine list in the near future.)

And if you do happen to go to St. Ann's Warehouse, don't feel you have to get all your drinking done in the nearby restaurants-- they actually have quite a nice little bar area right in the lobby by the box office. And we were quite chagrined to see that they serve Root 1 wine there, which happens to be one of our favorites. And they only charge $6 a glass.

Now Single Ma, you just let me know if you have any other requests! xoxo

Free Water, Expensive Notebook

2009-11-18T09:25:00.004-05:00

I got a kick out of this article from the NY Times yesterday: Commuters Overlooking Free Treasure:

I might not have appreciated the marvel of the Grand Central Terminal water fountain if it hadn’t been for the notebook.

I had run into Posman Books after getting off my train and finding myself without a notebook, and grabbed what Moleskine, the high-end paper packager, calls a reporter’s notebook. I’m a reporter; it spoke to me. Until I got to the counter and learned it cost a cool $17.95 plus tax, a sum no reporter I know would shell out for a notebook, even if it came with the story already written in perfect Pulitzer-worthy prose.

I put the notebook back, and felt a flash of frustration. Now I needed a notebook and a drink of water. For most of my adult life, I’ve either commuted through Grand Central or lived within five blocks of it, but I didn’t know of a water fountain in the place.

I was on the brink of buying a bottle of water along with my not-quite-as-overpriced notebook at Rite-Aid, but balked. It’s not just that bottled water is a waste of money and plastic; I also never need as much as a bottle carries, so it would either go to waste or I’d lug it around all day, with a lot of overpriced liquid weighing down my bag.

Maybe the saleswoman knew where a water fountain might be. She didn’t, but asked someone. There was one right by the Chase A.T.M.’s.

There, just a 30-second walk from the saleswoman, who surely must occasionally feel thirst, was the perfect water fountain. The spout juts out from the cool, beige Botticino marble wall of Grand Central, a handsome basin below it, a marble relief of some natural harvest above. Water was arcing above the spout, so high that I felt reassured no thirsty germy toddler had mouthed the metal at the base. A fluid piece of accessible history, that fountain, I later learned, has conveniently been spouting water almost continually since the terminal opened in 1913.

The reporter ends up observing the fountain for a while, and it turns out that hardly anyone ever uses it, which probably won't surprise you. Americans have become so conditioned to drinking bottled water, and to thinking public things are germy (not to mention socialist).

I remember that at one of my previous jobs there was an old-fashioned water fountain-- I went to drink from it one day, not long after I'd started working there, and someone cried out "eww, don't use that!" I never saw anyone else use the fountain, since bottled water was provided by the company. They later switched to using water coolers to save money.

I've also filled a water bottle from fountains while traveling in Europe. I probably wouldn't do it in other countries but it somehow seemed safe there-- every town square seemed to have a fountain. And once, on a mountain hike, I was running out of water when we came to a pipe just sticking out of the side of the mountain, pouring water into a small basin-- I had my doubts about that, but my friend drank it and said for all we knew it was probably from the best, cleanest mountain spring in France!

Anyway, one of the first posts I wrote on this site was about saving money by skipping bottled water, and it's still a rule I try to follow. But unlike that Times reporter, I'm still a sucker for nice notebooks, and I've also written about buying Moleskines! However, I've never paid $17.95 for one, and I recently discovered a much cheaper and almost equivalent brand called Piccadilly, sold at Borders for about 1/3 the price of a Moleskine. So whether it's water or high-end notebooks, never think there aren't ways to shave a few dollars off your budget!

October 2009 Monthly Recap

2009-11-16T11:50:00.004-05:00

It's a bit late to be getting to this but here's a look at October's results!
My net worth at the end of October was $383,344, a decline of 1.5% from last month. The decline was entirely due to the stock market being down a bit. Also, my credit card balance was a bit high due to business expenses of over $1,000 that I haven't been reimbursed for yet. But I did okay in terms of saving some cash.

Expenses were as follows:

Condo	$ 1,835	maintenance charge just went up
Bank Charge	$ 71	stupidity: ATM fee and late charges
Business expense	$ 1,060
Charity	$ 100
Clothing	$ 301
Dining/Groceries	$ 828	a very social month, eating out a lot!
Education	$ 26
Entertainment	$ 5	Just Netflix
Gifts Given	$ 55
Household	$ 72
Property Insurance	$ 335	once a year charge
Medical	$ 127
Misc	$ 147
Taxes	$ 2,073
Subscriptions	$ 149	renewed the New Yorker
Travel	$ 76
Utilities	$ 167

If you back out the business expenses, my total outflow was $6,366, so I saved $1,651, or about 20% of my gross salary. We're heading into the home stretch for the year, and I have a holiday vacation planned, plus Christmas shopping, so I may not be saving a whole lot more... but hopefully I can still manage to end the year at or close to my all-time net worth high... we'll see! Onward and upward!

My Great-Aunt Minnie

2009-11-09T16:12:00.004-05:00

I've been thinking a lot about my Great-Aunt. I've been meaning to write about her ever since starting this blog, as I mentioned in this post (I gave my great-aunt a water buffalo.), but for some reason I never have. She's now 95 years old and sadly, her health is finally fading and she won't be around much longer. Maybe this is a good thing, in a way-- it must be hard to live so long and feel the pain of losing so many people before your own time comes. My Dad was her nephew and I'm sure she never thought she'd outlive him. But she's never lost her strong spirit, and she's actually been a great financial role model in many ways.

Minnie has always been a great aunt, and a great great-aunt, probably because she never had kids of her own and never married. (Perhaps she was discouraged from doing so by seeing her sister pop out six babies in ten years!)

Minnie would have been referred to as a "career girl" in her youth. After graduating from high school, she started working. I don't know the full details of her early jobs, but I assume they must have been more or less secretarial, as that would have been the norm for that era. At some point she must have shown that she was very capable and not on the marriage track, so she started to be given more responsibility. I remember her telling me she'd worked for a large corporation in the 1940s and was sent to live in New York for several months to set up a new office there. She spent the last 25 or so years of her career working her way up to the position she held until she retired, a very prestigious job that she was the first woman to hold.
I remember visiting her in that office when I was about 8 years old. Minnie always dressed very casually when I'd see her on the weekends, so it was funny to see her wearing a formal skirt suit, with reading glasses on a gold chain around her neck, and I was very impressed to see her doing these important, business-y looking things. Everyone in the office called her "Miss B." rather than using her full last name. This was back in the days when people tended not to call the boss by his or her first name, so this was actually quite informal, but I think Minnie was the type who could allow that kind of cheekiness while still seeming very authoritative! She is a very warm person, always cheerful and easy-going, but she has a certain sporty toughness about her too-- she always used to like to pretend we were boxing right before she'd grab me into a big hug.

I didn't think much about it at the time, but in retrospect, I think it was quite important to me to see a woman running things as someone's boss. She wasn't anyone's mother, she wasn't a teacher or a nurse or a doctor or a store cashier-- I came of age at a time when women already had a lot more options for careers, but other than Minnie, I wasn't close to anyone who went beyond those roles.

Though Minnie worked hard, she never let the job become her life. She had a group of friends she would take vacations with, spending a week each summer at the beach and traveling all over the world, always bringing back little souvenirs, some of which I still have. She always loved sports, and used to swim and play tennis and golf, and I remember her being really good at bowling too! She also went to Red Sox games and got tickets to the Olympics a few times. Every other weekend, she'd be at my grandmother's house when my family visited, and every Christmas, she'd be have to be dragged out of the kitchen and forced to eat instead of serving everyone else. She moved back in with her elderly parents to take care of them at the end of their lives, and ended up staying in that apartment, which was rented, until a few years ago. I sometimes wonder why she never bought a house or a condo, but I suspect there was so much history there that she never wanted to move, and the rent was quite low. The apartment was full of things that my great-grandparents had owned, including a few items I now have in my own home, like a little handmade stool, and an old Saltine cracker tin.

Minnie, of course, grew up during the Depression and like so many others, never lost that frugal mentality. I have no idea what her salary ever was or how she might have invested, but she retired with a pension and I know she must have saved quite a bit of money. Every birthday and Christmas, I'd get $20 or $25 from her, as my many cousins must also have, and I know she gave my father and his sisters larger amounts. When I was in college, I remember her taking me aside once just to give me a $10 bill, "for some pizza," she said. And another time, when I'd gotten a $75 speeding ticket on my way to visit her and my grandmother, she again cornered me secretly to give me the money to pay the ticket-- not that she wanted to encourage me speeding, and not that she was ever the type to spoil anyone-- I guess just because it made her happy to do odd little things like that when you wouldn't expect it.

About 10 years ago, Minnie moved in with my grandmother, and one of my aunts moved in with them. After my grandmother died, her house was sold and my aunts helped Minnie find an assisted living facility. At first, she didn't want to do it-- she was still quite spry and she was horrified at how expensive assisted living was. But as she herself admitted, she was "deaf as a haddock," and she didn't want to become a burden to anyone, so she ended up moving to a lovely community where she dove into every activity that was offered: shopping trips, lectures, concerts, fitness classes... Even a few weeks ago she was still going to tai chi regularly because she knew the instructor would be disappointed if she didn't show up. And here's another thing one of my aunts told me: Minnie recently said that maybe this coming year, she'd finally give up doing her own taxes and have her lawyer do them instead!

As I grew older, Minnie was always interested in my progress. She was very proud of me when I started to work, and when I got my first business card, she was thrilled when I gave her one. Every time I've gotten a new card since, I've always given her one. She has always been far more interested in my career than my own parents, and now that I know her time is limited, I find myself wishing I could reach one more big career milestone, just so I could tell her about it. She also has loved hearing about my travels, and whenever I see a sporting event, I tell her about it-- she's even quite tolerant of my having turned into a Yankees fan! In our family, I am pretty much the only female of my generation who followed in her footsteps as the unmarried "career girl" and it's become a bond between us, something I feel very lucky to have had.

An Avatar's Open Wallet

2009-10-23T14:41:00.003-04:00

Here's an interesting concept: spending virtual dollars to live an online live that is much more luxurious than your real one: No Budget, No Boundaries: It’s the Real You

It may be raining pink slips, and some people may be hard-pressed to make the rent, much less splash out on a pagoda-shoulder jacket from Balmain, but Vixie Rayna is hardly feeling the pinch. Not a month goes by in which she isn’t spending as much as $50,000 on housing, furniture or her special weakness: multistrap platform sandals, tricked out in feathers and beads.

Recession or no, Ms. Rayna isn’t reining in her fantasies, or her expenditures — at least not in the virtual world. In a simulated universe like There.com, IMVU.com or Second Life.com, the granddaddy of avatar-driven social networking sites, Ms. Rayna, an avatar on Second Life, and her free-spending cohort can quaff Champagne, teleport to private islands and splurge on luxury brands that are the cyber equivalent of Prada waders or a Rolex watch. Real-world consumers may have snapped shut their wallets. But in these lavishly appointed realms it is still 2007, and conspicuous consumption is all the rage.

All this is not to say that online spending is purely virtual: people spend real money on this, albeit not as much as these things would cost in real life:

In most virtual worlds, memberships are free, but players trade real money for virtual currencies, used to buy products, save up in an account or eventually redeem for real money. About 70,000 Therebucks on There.com, or 10,000 Lindens in Second Life, each about $40, can buy a choice of simulated wares, from several pairs of thigh-high boots to a plot of land. What’s more, as Mr. Wilson pointed out: “Everything fits; things don’t wear out. The virtual world represents a different value proposition.”

In their day-to-day lives, shoppers like Mandy Cocke, Vixie Rayna’s real-life alter ego, have sharply trimmed their spending. When times were flush, Ms. Cocke, a nurse in Virginia, parted with as much as $1,000 a month on designer shoes and clothing. Lately, though, “pretty much every possible expense makes me ask, ‘Do I really need this?’ ” she said.

But online, their acquisitive lust rages unabated, fueling a robust economy driven mostly by avatar-to-avatar transactions estimated at between $1 billion and $2 billion a year in real dollars. Second Life, the most successful and most familiar of such sites, does not disclose retail revenues. But it reported a 94 percent surge in its overall economy in this year’s second quarter over the same period a year ago.

I've never tried out Second Life and don't really have any desire to, but this has made me very curious about it! What fascinates me is that if these online avatar worlds are booming exactly when the rest of the economy is tanking, it has to be because people need to spend less money in order to buy an equal or greater feeling of spending money! Some people just enjoy the idea of spending money and having stuff, even if it's totally imaginary. They'd rather spend $50 a month on the equivalent of $20,000 worth of virtual clothes than $50 worth of real clothes. Personally, I don't get this, especially with clothing-- to me, half the pleasure of good quality, expensive clothes is how they feel against your skin, not just how they look. If you're just seeing something in pixels, the whole concept of a high-end brand vs. a knockoff is totally meaningless.

Readers, I'd love to hear comments from you if you've tried this-- how much money are you willing to spend on an online avatar as opposed to your real self?

Coping with a Pay Cut

2009-10-14T12:08:00.004-04:00

A poignant article from the Times: Still on the Job, But at Half the Pay.

The dark blue captain’s hat, with its golden oak-leaf clusters, sits atop a bookcase in Bryan Lawlor’s home, out of reach of the children. The uniform their father wears still displays the four stripes of a commercial airline captain, but the hat stays home. The rules forbid that extra display of authority, now that Mr. Lawlor has been downgraded to first officer. He is now in the co-pilot’s seat in the 50-seat commuter jets he flies, not for any failure in skill. He wears his captain’s stripes, he explains, to make that point. But with air travel down, his employer cut costs by downgrading 130 captains, those with the lowest seniority, to first officers, automatically cutting the wage of each by roughly 50 percent — to $34,000 in Mr. Lawlor’s case.

But here's some bits that disturbed me:

“I don’t want to be a 50-year-old pilot earning $40,000 a year,” he said, adding that his wife does not want to be married to a pilot with so little earning power.

That seems a bit harsh, don't you think? From the rest of the article, the wife doesn't really seem to be taking that view-- she's worried about their loss of income but she also gives her husband kudos for helping out more around the house when he's working less. They're stressed out, as anyone would be, but it's not sounding like she's ready to divorce him if he doesn't get a raise.

Another quote that bothered me:

Bryan and Tracy Lawlor, who is also 34, have hidden their straitened circumstances from their four young children, mainly at his insistence. But as their savings dwindle, Christmas, a key indicator in the Lawlor family, will mean fewer presents this year. The Lawlors have made a practice of piling on toys and new clothes for their children at Christmas, buying relatively less the rest of the year. That will make a cutback noticeable this holiday season, and the parents are concerned that their children will begin to realize why.
“You don’t want to see disappointment on their faces; that makes me feel horrible,” Mr. Lawlor said. “You can be the best pilot in the airline and make the best landings, and in their eyes, I am not going to be as important as I was.”

I don't mean to criticize this guy-- he's in a tough spot, one that I can't claim to have been in myself. I do know how much fun it can be to give my niece and nephew presents, and I can imagine how my heart would sink if they seemed disappointed. But it's just sad that he seems to place all his self-esteem in his earning power and ability to shower his children with presents. I hope he doesn't really think his kids and his wife only respect and love him because of his rank and salary.

September '09 Monthly Recap

2009-10-06T12:31:00.004-04:00

I can't believe it's October... but here's the dirt on my September spending and net worth. (I tried to post it on Networth IQ but the site seems to be down. Anyone know what the deal is?)

Total Net Worth: $389,166
Cash & bank accounts: $51,248
Stocks/Mutual funds $20,339
Bonds $5,091
Retirement $228,634
Home Equity $85,307
Credit card -$1,453

As always, the credit card is paid in full every month. I moved a few thousand dollars into E*Trade recently, so the increase there isn't just market gains. As for home equity, I reduced the value of my apartment by $10,000, based on a recent sale of an almost identical apartment nearby (it actually sold for slightly more than I paid, but I know the seller paid some of the closing costs). It's a bummer, but it's also reassuring because it could have been worse.

But the good news is that for the first time in ages, I've hit a new net worth high! It's nice to feel like I'm not just trying to pick up lost ground, but actually moving ahead again. My net worth is almost $50,000 more than it was a year ago. I'm still worried about what the next few years will bring, but all is not lost.

And I'm still trying to keep major expenses at bay. Here's this month's totals:

Taxes	$2,056
Housing	$1,805
Dining	$566
Travel	$276
Misc	$184
Utilities	$182
Gifts Given	$158
Medical	$148
Subscriptions	$75
Household	$67
Entertainment	$53
Education	$41

That's it, a total of $5,611. My salary for the month was $8,017, so I managed to save quite a bit of it: 30% of my gross income.

This has been a year of trying to keep expenses under control and adjust to the economic environment without totally killing all the fun in my life-- so this month is very gratifying, because I can finally feel like the efforts have succeeded in bringing my net worth to a new high. That could change any time if the stock market tanks again, but it feels good nonetheless. Onwards and upwards!

The Cost of Being Gay

2009-10-02T16:44:00.005-04:00

The New York Times has a very interesting analysis on the higher costs gay couples (or unmarried heterosexual couples, in some cases, though they of course have the option to marry) may face for things like health insurance for a partner, having a child, etc. Their calculation for the worst case lifetime loss? Almost half a million dollars! Of course the numbers will vary depending on each individual situation, and same-sex couples fare better on federal income taxes because without their marriages being recognized, they aren't subject to the "marriage penalty."
Here's one example:

Health Insurance

In our worst case, the lower earner’s employer did not provide health insurance and her partner’s employer didn’t cover domestic partners. So the lower earner had to buy coverage on the private market, while the higher-earning partner provided coverage for herself and the two children. All this cost the gay couple $211,993 more than their heterosexual married counterparts, who were able to take advantage of the higher-earner’s family coverage.

In our best case, health coverage cost the gay couple $28,595 more. We assumed both gay partners were eligible for employer-provided coverage. The higher-earner’s employer also provided domestic partner coverage, which covered her partner for the five years she stayed at home. When she returned to work, she used her own employer’s insurance.

Even though the couple paid nearly $29,000 more in premiums than an identical heterosexual married couple, it was cheaper than using domestic partnership coverage throughout because of the onerous tax implications, according to Mr. Williams of the Tax Policy Center. A nondependent partner’s coverage is taxable income, and she can’t use pretax dollars to pay the premiums, according to Todd A. Solomon, a partner in the employee benefits department of McDermott Will & Emery in Chicago.

But as the article points out, it may not always be about the money: the emotional cost of not having one's relationship recognized and validated is something you can't budget for.

Whaaa?? The Gift that Does NOT Keep on Giving

2009-10-01T08:37:00.004-04:00

Hey, I've got a deal for you! You will lend me $50. In order to do this, you will have to pay me a service charge of $3-7. If I keep the money for longer than a year, I'll owe you $2 less every month. If I don't pay you back in 3 years, I'll owe you nothing at all! Great deal, huh?

You'd think no one would be crazy enough to lend that money, but it's actually incredibly popular to do exactly that: millions of American Express gift cards are sold every year. You give American Express money up front that they don't have to repay to a merchant until later-- essentially you are giving them a loan, but they will charge you for the privilege.

I noticed this story in today's business section-- fortunately, American Express is eliminating the most obnoxious of those fees, the monthly charge for not using your card for over a year. But they still charge a purchase fee of $2.95-6.95. (More info on gift card fees.)

I think I've only been given an American Express gift card once, but I thought $50 was $50-- I had no idea how much of that could be eaten up in fees. If you want to give someone a gift, just buy them an actual present, or give cash.

The Freedom to Ignore Money

2009-09-30T08:57:00.004-04:00

I think part of the reason I haven't been posting much is that concerns other than money have been more prominent in my life lately. This is probably a good thing. The reason I started this blog in the first place was that so many concerns in my life seemed to relate to money in some way-- family, relationships, career, friends, housing, creativity, etc. That is still the case in many respects, but the money stuff has fallen more into the background.

My father's death really highlighted this. In the months before he died I'd really been at a high anxiety level about my mother's spending, their budget, and how ends would ever meet. Then when he went into the hospital, I couldn't help thinking about how my mother's compulsion to spend money fixing up the house related to the cause of his accident. But after he died, it was like my anxiety just evaporated. You'd think I would have been even more anxious-- after all, this means my mother's income is cut in half way earlier than we expected it to be, so she'll be spending down her savings even sooner. But there will be time later to worry about that, and right now we just need to be at peace.

I'm still very conscious of money, of course, but it's like I'm floating above it a bit right now. And this in itself is part of what I've always aspired to in how I manage my finances: the freedom not to worry. Sometimes financial security means you can put things on auto-pilot a bit, at least for a little while. My dad left my mother well-enough provided for that we don't have to panic, even if we will have to be careful and make some changes within the next few years. And my own finances are such that I don't have to be hyper-vigilant about them right now. My income exceeds my expenses, I have a good cushion of cash in the bank, and my investments are muddling along as well as can be expected in line with overall market conditions. I still need to worry about whether I am saving enough money to meet my long-term retirement goals, and ignoring that is definitely not something to take lightly, but right now, I can give myself a bit of a break.

I've obviously been giving this blog a break too! I've been thinking about different ways to approach it, perhaps writing more substantive posts less frequently rather than posting lots of quick links and commentary-- we'll see. Thank you to everyone for all your kind words and sticking with me through good times and bad!

Fancypants Lawyers

2009-09-24T13:49:00.003-04:00

Literally! Here's a nice light-hearted topic for a change:

Women lawyers at City firm Clifford Chance have been given a £90 lingerie allowance. How should they spend it?

Women lawyers at top [London] City firm Clifford Chance are bucking the trend for reduced expenses now that their £90 lingerie-and-blouse allowance, if they work later than 11pm, has been reinstated. Inevitably dubbed the "90 nicker knicker allowance", this may or may not be the most reliable indicator yet that the credit crunch is over.

Now that is a fascinating benefit I've never heard of any other company offering. At current exchange rates, £90, aka 90 nickers, is about $144, which should suffice to buy some very pretty panties. But what about men? Do they get to expense their undies if they work late too?

Still Here...

2009-09-16T16:31:00.003-04:00

For those who have noticed the deafening silence here for the past month, just wanted to let you know I will be back someday soon. As you might have guessed, my father died, and for some reason, it seems to have knocked me out of orbit a bit as far as this blog is concerned, though I'm doing okay otherwise. I guess money issues just haven't been top of mind, but of course they never completely disappear... so bear with me and I'll get back to writing more soon.

Unintended Consequences: 401ks Mean Fewer Jobs for Young People

2009-09-03T10:48:00.004-04:00

Interesting, this is something I hadn't really thought about: when people rely more on private retirement savings, they retire later, leaving fewer openings for younger workers to fill.

A Reluctance to Retire Means Fewer Openings

In other parts of the developed world, people are retiring as planned, because of relatively flush state and corporate pensions that await them. But here in the United States, financial security in old age rests increasingly on private savings, which have taken a beating in the last year. Prospective retirees are clinging to their jobs despite some cherished life plans.
As a result, companies are not only reluctant to create new jobs, but have fewer job openings to fill from attrition. For the 14 million Americans looking for work — a number expected to rise in Friday’s jobs report for August — this lack of turnover has made a tough job market even tougher.

All those baby boomers refusing to retire isn't going to help our unemployment situation...

Palliative Care

2009-08-21T09:10:00.001-04:00

There was an article in yesterday's New York Times that is long but well worth reading, about palliative care doctors and end-of-life treatment and counseling. Aside from one amusing quote about whether it's worth it to spend $400 on Victoria's Secret lingerie, the article itself is a little off-topic for this site, I guess, but in relation to my own life, it hit me hard today. I spoke to my mom last night and the latest info is a little vague but it is now sounding like my dad could be going downhill faster than we thought. And what I'm about to say will sound very callous in this context, but the only silver lining to this cloud is that it now seems very unlikely that we'll have to worry about paying for a nursing home for my dad, as he'll probably go into hospice care, which is covered by Medicare.

So now I just have to worry about other stuff for a while-- getting up there to see him, how long I'll stay, what exactly is happening, and how my mom and sister and I are going to deal with all of it.

NYC Saver's Swap Meets

2009-08-20T09:00:00.000-04:00

From the mail bag, here's a neat tip for NYC residents:

8 times a month the ING DIRECT Cafe (968 3rd Ave @ 58th St) hosts Saver's Swap meets. Every Sunday from 1-5pm, anyone can come by the Cafe with gently used home goods, apparel and electronics to swap with other Savers. Every Tuesday all day long we host a Media Edition swap meet where Savers can contribute used books, DVDs, CDs, vinyl records & VHS tapes. All remaining items are donated to the Salvation Army. Here's a link to a NY Post article featuring the Saver's Swaps.

If anyone goes, leave a comment and let us know how it went!

Banks in Poor Neighborhoods

2009-08-19T09:33:00.000-04:00

An interesting story from yesterday's New York Times:

City’s Poor Still Distrust Banks

In 1986, when the Lower East Side had just one bank in a 100-square-block area, the high numbers of residents without bank accounts alarmed the city but did not surprise anyone.

In the years since, the number of bank branches has skyrocketed, with the big names compelled to open in underserved areas. Community credit unions have sprung up from Washington Heights to Bedford-Stuyvesant. Outreach workers have taken to the streets to draw the “unbanked” — many of them the city’s poorest, living check to check — into the system and away from the high-fee world of check-cashing and money orders.

But none of it has worked. In Manhattan, long the world’s banking capital, 12 percent of households still do not have a bank account, compared with the national average, 8 percent, according to recently released data by the Pew Charitable Trusts.

You'd think the reason might often be that banks charge high fees for low balances, but many of the people quoted in the article aren't even thinking about that: they hardly ever have any spare money. If they do, they send it to relatives in another country. And sometimes they just don't trust banks not to rip them off. So instead they go to check-cashers who really do rip them off!

Finances and the Family: The Earlier Generations

2009-08-18T14:53:00.004-04:00

Thank you all for your advice and kind wishes after reading my last post. Obviously the family finance issue is on my mind a lot, and one of the aspects I was mulling over last night was how these things slide from one generation to the next: my mother's finances will affect mine, and mine could affect my niece and nephew. But what about the earlier generations? How did my grandparents' finances affect my mom and dad?

I've mentioned before that my mother grew up quite poor, with parents who divorced when she was a teenager. Her father was a barber-- he died a while back, and I never knew him well enough to know anything about how he spent what little money he made. Her mother is still alive, and seems to live very simply on a small income, I guess from Social Security, plus occasional checks sent by my mother and her 3 siblings. She is remarried, and lives in a small house that her husband bought. The mortgage is paid off. My step-grandfather supposedly has a few thousand dollars saved, but he won't tell anyone where it is-- as in, it's not in a bank, it's just in a coffee can buried in a closet or something. I don't think my mother's parents ever had much spare cash-- but nor did they have debts, as far as I know.

As for my father's parents, I don't think I've ever gotten around to writing much about them, and they are quite a different story.

My father's father was a lawyer. His parents were poor immigrants so he put himself through college and law school. He may have been the only one of their 9 children who got an advanced degree, though one of his older brothers was also successful and was actually in the House of Representatives for a term or two back in the 1930s. Probably because of this government connection, my grandfather ended up working for the Veteran's Administration. I don't know how much money he made-- a decent amount, I'm sure, but nothing like what we hear about corporate lawyers making today. My father has expressed some resentment about the fact that my grandfather volunteered for the Navy during World War II despite being well over the age where he'd have been drafted-- if he'd stayed home, his political connections might have led to an appointment as a judge, but by the time the war was over, his brother was out of office and had no strings to pull.
My father's mother also came from immigrant parents of what I guess you'd call a white-collar working class background (her father was a machinist but became some sort of supervisor). My grandmother graduated from high school but never attended college. She never worked until after my grandfather retired, when she did some part-time clerical work for her sister (who has an interesting story herself, which I'll have to tell later.)

But here's the kicker: my grandparents had 6 children, my dad and 5 sisters. They put them all through college and may have made some contribution to graduate school/law school costs for at least one or two of them. (3 of my father's sisters have advanced degrees.) Can you imagine paying for all that in today's world, on a middle-class government lawyer's salary? Education just cost less back then, and though all the kids went to Ivy League/Seven Sisters colleges, most of them were able to live at home while going to school, which must have been a big savings. And I suppose my grandfather would have paid for some weddings too, though I imagine they'd have been small.

How else did they make ends meet? My grandparents definitely had a depression mentality, and never threw out a scrap of food. But they weren't crazily frugal-- my grandfather gave my grandmother plenty of jewelry, and he played golf (though at a public course, not as a member of a private country club), and they had a comfortable house in an expensive area. They didn't really travel much, but I remember them taking a couple of winter vacations. I'm sure there were many years when money was tight, but by the time they were retired, they had a nice life.

My grandfather went into a nursing home and lived there for a few years til he died at the age of 90. My grandmother continued to live at home for about 13 more years, with part-time care from an aide for about 2 or 3 of those years. Then she went into a nursing home for about 9 months before dying at the age of 94. In the later years of her life, she gave each of the 6 children a few thousand dollars a year, and after she died, they each got a share of the proceeds from the house-- it sold for about $500,000 at the top of the real estate market, so each of the kids ended up getting over $80,000 in the end. (This inheritance makes up almost 1/3 of my father's current net worth.)

It just boggles my mind that they managed to raise so many kids and live so long and pay for nursing home care yet still not run out of money. My grandfather may have had a really good government pension. Maybe he invested well. He definitely left everything set up for my grandmother after he died, with some kind of annuity in her name. I would not say my grandparents were wealthy, but they were definitely prosperous.

The "American Dream" is for that kind of prosperity to increase in each succeeding generation, not evaporate. Yet that evaporation is what seems to be happening in my family. My parents have savings now, but they'll likely be gone well before they're even in their 80s, and then they'll have to tap the equity in the house. My sister and her husband are in their mid-30s with credit card debt and have probably barely made a dent in retirement savings or college funds for their kids. Our family's situation could be far worse-- some of stories told by commenters on this site make me feel like I have no right to complain. I guess it's just sad to look back at those early generations, on both sides of the family: their hard work after starting from nothing, their frugality, their willingness to live with less. They passed on an amazing gift to us, a gift that went well beyond money itself. I think they'd be sad to see that gift wasted.

Family Stress

2009-08-17T17:53:00.000-04:00

I'm writing this after spending most of my weekend feeling some combination of angry and nauseous. My mother called to say that my dad, who'd been doing really well lately, was back in the hospital because he took a fall on the driveway and broke his shoulder. After my mother gave me the medical update we were just sort of catching up on other things. She told me they'd finally finished having the exterior of the house painted and mentioned that she also wanted to expand the downstairs bathroom to add a shower. Although this idea actually makes some sense, there are reasons it may not be possible and I also reminded my mother that we'd had this big discussion about the budget and that she really needed to hold off on any major projects for a while because they're running out of money too fast.

Well, I know it probably wasn't the best time to have mentioned it (though you'd think it was also probably not the best time for my mother to be regaling me with tales of home improvements), and sure enough, Mom kind of blew up at me, saying, more or less, that she didn't care about the money and was going to do these things no matter what I said... that they'd have to sell the house someday and it was important for it to have curb appeal... that she was stressed out from taking care of my dad and that decorating and renovating the house are her only pleasures in life... that somehow or other all the money stuff would work out because things just always do.
I started to remind her that things don't "just work out" and that she would be broke within a few years if she wasn't careful, but I realized I had to just shut my mouth and get off the phone or I'd say things I'd regret.

I was kicking myself afterwards and feeling guilty and doubtful. I felt like there was too much going on and I shouldn't have said anything about money until a calmer time. It's not like I want to harass my mother about her spending. I just want her to have a decent, comfortable life as best she can. And I began to wonder if maybe I was being too harsh. Maybe I'm too conservative, and was not taking into account that some of her expenses will lessen over time. Maybe things would work out.

I was mulling over all this until the next day when my sister ZZ and I were texting each other while she was at the hospital with my dad. I mentioned that our mother had an amazing ability to obsess about the house's curb appeal while her husband was in the hospital, and ZZ texted back:

F'ing serious?? Stupid driveway estimate why hes in hospital

Suddenly I didn't feel so guilty any more and was just angry. One of my mother's home beautification plans was to repave the driveway . Of all the items on her wish list, this was the craziest-- the driveway is fine except for a couple of minor cracks, and spending even a relatively low amount like $2,500 to repave a driveway is just stupid given that she is on track to potentially run out of savings and lose half her current income before she hits the age of 70. But despite telling me she'd hold off, she was apparently forging ahead, and I guess just shopping around for lower estimates. And I guess my Dad must have wanted to see what was going on and talk to the contractor and that's where he was when he fell. I guess my Mom felt guilty about it and wanted ZZ not to tell me how it happened.

I felt like I was in some kind of emotional butterchurn for the rest of the day, but in the end what upset me the most was that I felt my trust had been abused. My mother has had such a checkered history with money, but I used to think my dad was partially to blame for a lot of it. He treated her like a child; he was secretive about their finances, and never gave clear messages as to what they could afford and what they couldn't, other than to constantly complain that my mother spent too much. My mother became convinced that he was a rich miser who was witholding cash just to torture her.

So when my father got sick and I started organizing the family finances, I kept trying to clearly explain things to her. I walked her through all the bank accounts and bills. I drew up a budget and showed her exactly how much their income was vs. their expenses, and how the deficit was made up by drawing on their savings, and how many years those savings would last. And when I re-did the budget a couple of months ago, I sat her down again and showed her exactly what was going on. I didn't just tell her she was spending too much money. I didn't really tell her to do anything. I just explained to her that this was her current reality and that she needed to make some choices, and that if she could make some modest cutbacks now, it would save her from having to make devastating cutbacks later. I thought I could trust her to take this seriously if she felt like she was in control.
But now I feel like I've been lied to and that trust has been betrayed. I'm back to feeling like my mother is a drug addict or an alcoholic who swears they've cleaned up their act but keeps falling off the wagon.

Of course I keep telling myself that it's not MY money. But it's my father's money too, and he is too sick to control anything anymore, and I know that he would agree with me on all this if he had the mental energy to listen to any of it. And ultimately, if my mother really does burn through all her assets including any proceeds from selling the house, which I wouldn't put past her at all, then it will be my money that's at stake because I can't just let my parents starve. And then I see this chain reaction-- I'm trying to save all this money for my own retirement because I won't have anyone else to take care of me, and if that doesn't go according to plan because I'm supporting my parents, then will my niece and nephew be left holding the bag someday because they have to support me? I know that is getting a bit too gloom and doom and I can't imagine it would come to that, but it's hard not to feel angry about all the WASTE. My parents were never rich but they would have had enough money to have a perfectly comfortable retirement, and I don't understand why my mother prioritizes cosmetic enhancements to the house over things that would actually improve her life, like hiring someone to clean the house or help bathe my father.

I really don't know if I'll ever be able to get through to my mother. Part of me wants to just give up and let her suffer the consequences. Part of me wants to stick to my guns and tell her that she'd better not repave that driveway if she ever wants me to set foot on it. And then there are the crazy, desperate plans: could I send a letter to every contractor within a 20 mile radius of home and beg them not to return my mother's calls? Would it be worth the money to hire a lawyer to prove my mother is so insane as to be incompetent so I can take control of her bank accounts and somehow prevent her from doing all these crazy things to the house? But maybe other events will intervene: it's looking more and more like my dad could be in a nursing home soon, which means their money will evaporate a lot faster than even my mother can spend it. Will that be the thing that finally makes her wake up? Who knows... I just don't know how I'm going to deal with this.

Last Summer's Vacation (Yes, It Was Botswana!)

2009-08-13T10:25:00.005-04:00

I can't believe it's taken me so long to get this written! Sorry I've been torturing my loyal readers for over a year. But if you think that was bad, get this: I told no one in my family, other than my very discreet sister, that I was going to Africa until about 3 days before I left. My parents tend to be worriers, and I didn't want them to be spending more time than necessary thinking I would a) catch malaria or worse; b) get caught up in Zimbabwean refugee violence or other political turmoil; or c) be chomped on by a lion. In the end, my dad was the more paranoid one, shuddering at the idea of having to be evacuated to a hospital in Johannesburg. My mother, on the other hand, who worries I'll be mugged in broad daylight in NYC, was thrilled to hear I'd be doing a safari and rhapsodized about me following my dreams, living life to the fullest, yada yada... which is actually no surprise when you consider my parents' financial personalities!

So, long ago, I'd alluded to the possibility of traveling with some friends. I'd said a safari was one of those possibilities but I'd initially written it off as being too expensive. After thinking about it more, and thinking about that year's budget, I changed my mind. I didn't know when else I'd have a chance to do this kind of group tour with friends, and I am not a sociable enough person that I wanted to risk being trapped for 2 weeks in the middle of nowhere with total strangers! So I gritted my teeth, signed myself up, and started bleeding money! The initial $500 deposit was just a drop in the bucket!

Package tour costs:
Perhaps if I'd been exploring this on my own, I would have picked one of the cheaper tours that other people I know have been on. But the friends I was going with had used our tour company before and were used to a certain level of travel comfort I guess. And I was okay with that for a trip like this-- I'll explain more about that below. Included in the tour cost was one internal chartered flight, other transport by boat and bus, all game park entry fees, all accommodation and all food and drink except for a couple nights in lodges where some drinks weren't included. All this, for a 13-day trip, came to $5,960.

Travel costs:
I shared a car to the airport with one of my friends-- I think that was about $40. Then there was the airfare-- I had to buy a round trip ticket between New York and Johannesburg, plus one-way flights from Johannesburg to Maun, Botswana on the way there, and from Victoria Falls to Johannesburg on the way back. The total for airfares was about $2,400.
One significant wrinkle was that my travel companion and I decided to book flights on National Air for the Victoria Falls to Johannesburg leg. National, which is basically "Air Zambia," had some kind of crash incident, or a wing falling off, or something like that, which led to their fleet being grounded, which in turn led to their bankruptcy about a week after we booked our tickets. We totally lost the money-- $300 each-- and had to rebook on British Airways for about the same cost. (Per the suggestion of some commenters, we tried to get a refund through the credit card company, but it didn't end up being eligible.)

Lodging costs:
We had to stay one night in a hotel at the Johannesburg airport before continuing to Botswana the next morning. We stayed in a lovely and convenient place for $152 including the cost of round trip van service to the terminal.

Food costs:
Most meals were included, but before we joined the tour, I spent about $20 on dinner in the Johannesburg hotel, and about $100 on lunch and various drinks at the hotel in Victoria Falls. (We stayed at the Royal Livingstone, which was very high-end, and only the room cost and dinner food were included in the tour cost.)

Medical costs:
If you're going to southern Africa, it's recommended that you get shots for yellow fever and hepatitis, as well as a typhoid vaccine and polio booster. (If you've had these before, you may not need them again.) Malaria pills are also recommended. There were no bugs whatsoever at that time of year in Botswana and we weren't doing any swimming, so the actual risk of infection was quite low, but to me, that just isn't something you want to mess around with. I spent $175 on doctor visits and shots, and $125 on medications. Travel medicine is not cheap, and insurance doesn't tend to cover it, though you can claim these expenses against a healthcare FSA. But the good news is that most of this was a one-time expense that won't be needed again the next time I take an exotic vacation to some disease hotspot of the world!

Tips:
It's customary to tip the trip leaders and the camp staff. The tour company suggests amounts of about $100-125 for the trip leader, $80-100 for the assistant trip leader, and $80-100 to be split among the other crew members. The tip amounts seemed like a lot to me at first, but for the length of the trip and the level of service, I ended up feeling like they were justified. We pooled all the tips from our group and then gave them out, so if anyone had wanted to put in a different amount, they wouldn't have had to feel self-conscious about it.

Miscellaneous other related costs:
These costs weren't strictly for this trip alone, but I bought some of those packing organizers, which are indispensable when your luggage is a giant duffle bag. I also bought a pair of binoculars, and a few months before the trip, a new camera. Also, I paid $3 for a SmartCarte at JFK (so annoying, as other airports around the world have free carts.) And I spent about $150 on gifts for people back home.

So what was the trip like? Well, in a word it was fabulous. If you'd asked me a few years ago, I would never have said I would do such a trip. I'm not that big an animal lover, and Africa wasn't at the top of list of places I wanted to visit. But this trip was like nothing else I'd ever done and I can sincerely say it was an amazing experience. There's something about being in such a remote place with wild animals all around you-- it's just glorious. I think part of the reason it's taken me so long to write this post is that I found it hard to put in words how I felt about it.

I don't think this kind of safari trip is for everyone, though. You spend a lot of time driving around on bumpy, dusty, unpaved roads. We spent most nights in tents, and even when we were in lodges, which felt quite luxurious, the amenities are still simple, and there are often limits on hot water and electricity use. Even the lodges have mosquito netting and canvas for parts of their walls, and July was winter in Botswana-- temperatures in the tents were sometimes in the high 40s (Fahrenheit) overnight!

If you're into camping, you'd find it quite easy going-- I'm totally NOT into camping and I still found it very comfortable. You don't have to carry your bags anywhere, the tents are spacious and equipped with cots and battery-powered lamps and shelves for your stuff. Your laundry will be done for you and the staff bring you hot water for a wash basin in the morning, and for a shower in the late afternoon. Each tent has its own bathroom area in the back, with a toilet seat over a pit and shower. The grossness of a pit toilet is greatly made up for by the gloriousness of using it under the spectacular stars and moon at night!

Every morning we'd have coffee and breakfast around the campfire. Lunch would be a picnic most days, usually in a scenic spot with animals grazing not far away. Dinner was in a big dining room tent, or, if it was really cold, we'd move the table out of the tent and onto the dirt so we could have piles of hot coals under our seats to keep us warm! The food was amazing: the cook made everything using pans over an open fire or a dutch oven buried in the coals, and she managed to produce all kinds of fabulous roast meats, stews, soups, homemade breads and cakes and muffins, all of it delicious. At first some of us were a little leery of some of the salad-y items, given the typical recommendation against eating any vegetables that might have been washed in iffy water-- but they used a tank of purified water for everything, and I don't think anyone got the least bit sick. Alcohol was abundantly served, and sometimes we'd even stop for sunset drinks out in the vehicles or even on boats. I had no idea we would eat so well.

The food and the level of service in the camping were a big part of the expense. It's key to point out that we were a group of ten guests. The staff were two guides, the cook, and at least 3 or 4 other crew at any given time. On our game drives, there would be 5 guests and one guide in each vehicle so there was a lot of personal attention. The guides got to know everyone and what they were most interested in, and if someone wanted a particular camera angle for a photo, they'd make it happen. After encountering other groups of 10 or 20 or more people packed into oversized trucks, I started to really appreciate the small, personal scale of our trip. We were on no schedule but our own, so if we wanted to stay out a bit later to chase down a leopard, we could... and did!

If there was any drawback to this trip, it was that there was very little "cultural" component-- it's really all about the animals. If you do a safari in Kenya or Tanzania, part of the trip will involve visiting a tribal village where people are still in colorful traditional garb, but in Botswana, you won't get that. We had a little time to walk around and buy crafts in one small village and there was one touristy town at the end of the trip with some shops and galleries, but otherwise we were quite isolated and hardly saw other people. So don't go if you like to shop a lot, and don't go if you just want to gawk at exotic-looking locals. But on the flip side, the tour guides and lodge staff don't keep their distance-- they sit and talk with you at every meal and hang out by the fire afterwards, so you can actually get to know quite a lot about them. They all spoke excellent English and we learned a lot about the history of the country and what life is like for middle-class Africans, who are somewhat absent from media coverage of the continent. In the end, that was probably of more educational value than visiting a traditional village.

So bottom line, if you've got $9,000 to spend on a fabulous two week experience, a safari is a great way to do it! I'm glad I did it-- pulling the trigger on spending so much was really hard for me, so for once, peer pressure was actually kind of a good thing! But of course I didn't take that kind of spending lightly--to make up for it, this year I'm not traveling at all, except for a relatively inexpensive family reunion trip I have planned for Christmas. There is no rule that says you have to sacrifice all luxuries to keep your financial house in order-- you just have to make the necessary choices to keep your budget in line, and in this case, the trade-off was worth it.

Oh, and did you want to see some pictures? :) Here's a few highlights, and I'll just point out that my camera was just a little compact point and shoot, without all that great a zoom lens.

If You Think $5 for a Slice of Pizza is Bad, How About $50,000 for Hot Dogs?

2009-08-12T08:59:00.000-04:00

Read this article:

Hot dog heartache has come to the Metropolitan Museum of Art, where the Parks Department on Friday evicted a weiner vendor who couldn't pay his $53,558 monthly rent.

Over $50,000 a month for the right to sell hot dogs in a prime spot, right in front of the Met. Wow. Of course this doesn't count any of the other expenses for the business, like the cart, the supplies, the labor...

The whole thing brings up so many questions. First of all, despite the populist outrage that the guy must be getting screwed by the government, the city didn't "charge" him that rent, the vendor BID that amount to win the contract. Did he just wildly overestimate the number of hot dogs he'd sell? He would have had to make $1785 a day just to cover his rent. I don't know how much a hot dog costs at this stand, but since there are few other food options near the Met, I'd assume the hot dogs are very expensive, say $4, which is double what many carts charge. That means he'd have to sell 446 hot dogs just to cover the rent. Maybe round that up to 500-600 hot dogs when you factor in all the other costs of the business. Say it takes 15 seconds at least for the transaction of buying a hot dog, plus an average of 15 seconds between customers-- that means it's 5 hours of steady hot dog sales in a day to make ends meet. Not impossible, perhaps, but certainly ambitious!

In any case, the article doesn't say how much the other bidders offered for the spot, or how much the previous vendor had been paying-- I'd love to know!