My Open Wallet

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!

Is There a Point to Being Frugal and Trying to Save?

2011-11-27T09:05:00.001-05:00

A commenter left this question on my last post, and I thought it was worth answering separately:

Can I ask you a question, in regards to some long term investments?

I recently did some calculations and the results are very much frustrating, to be brutally honest.
Have a look yourself - they are all published.

If you invest $ 40, 000 a year over 35 years, at modest inflation rate of 2% and administration fee of 1-2% you need stock market to perform at 4% just to preserve value of your money and higher to gain anything.

This means that you are only preserving money you are investing at a very high risk. So it is just plain wisdom - is there a point to be frugal and try to save, if you ended up loosing money?

Feeding financial industry and no living your life in full?

I definitely understand the concern about feeding the financial industry, which seems more and more rigged in favor of the rich and well-connected. And yes, investing has risk. You could look at the scenario this person describes and say "well, historically, the stock market has performed better than 4% on average during many periods," and you could also observe that it has performed much worse during other periods.

But here's my analysis:
If you save and invest $40,000 a year over 35 years and the market totally tanks beyond all expectations and inflation skyrockets and you trust a Bernie Madoff, you could end up with ZERO.

But if you DON'T save and invest $40,000 a year over 35 years and instead spend all that money on "living your life in full," you will DEFINITELY end up with ZERO.

Of course, "ZERO" is your cash balance and doesn't factor in comfort and pleasure and memories. As always, I advocate a balanced approach between using some of your money to enhance your life now, and saving some to enhance it later. If your definition of living your life in full depends on spending every penny you earn, maybe you should stop and think about all the rewarding, memorable things in life that are free. Those are things you'll still cherish 35 years later, more than all the stuff you spent money on.

And I know keeping that balance is never as simple as it sounds-- I've spent money on traveling, and 35 years from now I think I'll be glad I have those memories and not be wishing I hadn't spent the money. I'd hate to be 80 years old and have regrets about not having spent a few thousand dollars to go somewhere I'd always wanted to go. But I'd have even more regrets if I was 80 years old and homeless because I'd blown all my money when I was young. None of us can avoid making choices that we might regret later, but when it comes to saving money, I think it's pretty clear which way you should hedge your bets.

Net Worth July-October 2011

2011-11-07T09:00:00.000-05:00

Another belated net worth update. (I was trying to post updates on NetworthIQ but the site doesn't seem to be working and their security certificate is expired. What's up over there?)

Anyway, it's been an interesting few months-- some big ups and downs in my investment accounts. Mostly downs, unfortunately! After hitting a high of $591,390 back at the end of April, the stock market has been very cruel to me. I had a nice recovery in October, but I'm still down quite a bit from where I was.

Not much else of interest to report, other than moving a few thousand dollars from cash into mutual funds and some more I-Bonds at Treasury Direct. My credit card balance is in about the range it usually is, so no unusual levels of spending (and as always, I'm paying it in full every month). I've already maxed out my 401k deductions for the year, so any further changes in the retirement accounts will be due to investment gains and losses alone. At some point in the next few months I'll probably pay some extra principal on my mortgage and increase the home equity amount.

Stay tuned for a long overdue update on my spending and budget categories. Onward and upward!

Just Bought Some I-Bonds

2011-10-24T11:29:00.004-04:00

Jim at Bargaineering has a great post explaining why now is a good time to buy some Series I Bonds. It reminded me I hadn't bought any bonds in several years, and hadn't even checked how much interest I'd earned in quite a long time. So I went through the lengthy log-in process at Treasury Direct (it's set up to be extremely secure, with various access codes and security questions required), and was pleased to see I had over $140 more interest than I had the last time I checked, and I also moved $5,000 out of a couple of savings accounts to purchase additional bonds, bringing my purchases up to $8,000 in online-only bonds, and a $1,000 paper bond sitting in my fireproof box at home. The total value of these is currently $10,196.80 with the interest I've earned. I think I may start buying these a bit more aggressively, as I'm sitting on too much cash earning almost zero interest. I now have bonds that are old enough to redeem without penalty, so I could access the money if I needed it. Earning over 3%, and even more for the next few months, is very attractive right now!
If you haven't bought bonds before, check out TreasuryDirect.gov for more info.

Net Worth Jan-June 2011

2011-10-17T09:00:00.002-04:00

I've been very bad about keeping up with my monthly updates, but here's some summary numbers I ran a while back looking at net worth shifts for the first half of this year:

I moved some cash into my investment account in March, which explains cash going down so much that month. (Though cash went down by less than investments went up because I also received my bonus that month.) My credit card balance is fairly consistent most months, except in March-- not sure what happened then, I don't remember being particularly frugal that month! (Just as a reminder, I do pay my credit card in full every month, but I count whatever's outstanding at the end of the month as a liability.) My overall net worth rose nicely over the 6 months, but you can see that May and June were tough, due to the stock market.
I'll be posting another update soon to bring things up to date for the 3rd quarter. It's not going to be pretty, I'm afraid. Back in April I was thinking I could hit $600k by the end of this year, but the market has been crazy and I don't think I'll even be close...

New Productivity Features in iPhone OS5: Email Flags and Reminders

2011-10-13T11:02:00.004-04:00

In the almost 15 years since I've started using electronic devices to manage my life, there's one thing I've wished for: the ability to read and FLAG emails and synchronize that with Outlook.
Flagging emails, and sorting my inbox so they remain at the top, is my number one tip for staying organized at work and making sure things I have to do don't slip through the cracks. But when I first had Palm Pilots, I either couldn't sync my email, or they didn't have a flagging option. I have had Blackberries issued by my employer, but until the most recent one, flags weren't supported-- and I really hate the Blackberry screen, so I've avoided using it since I got an iPhone. But the iPhone email app isn't that great, and didn't show flags at all... until now!
I just upgraded to iOS5 on my iPhone 3GS, and now the flags synchronize perfectly with Outlook! I can read my email on the go and not have to mark it as "unread" if I want to remind myself to follow up when I am back at my desk. Unfortunately, the iPhone email app still lacks a lot of features I'd love, like being able to filter the view to only unread messages, or sort the inbox so flags are at the top.

The other feature I'd been looking forward to in iOS5 was the "Reminders" app. I've used other 3rd party To-Do list apps-- Toodledo is pretty good, but the problem with that was that syncing to Outlook was always a bit dodgy (and the app I used is no longer even supported)-- and that was when I was able to actually install the needed desktop program on my work computer. When I was upgraded to a new computer, the IT department totally locked down our ability to install any non-approved programs, so I completely lost my Outlook syncing.

But now that I've got iOS5 and Reminders, the problem is solved! After upgrading, Reminders was automatically added to the apps syncing with my Exchange account, and the first time I opened the app, my tasks were there and syncing worked perfectly in both directions. Unfortunately, there are a couple of major features missing again! First of all, my tasks are not sorted in any order I can figure out in the iPhone app list view-- they aren't by date created, they aren't alphabetical, they're just totally random. There are no options to determine your preferred sorting method. You can sue the date view to see tasks due on a particular date, but you can't see more than one day at a time, so that seems pretty useless.

The other issue is that I can create multiple task lists on the iPhone, and all the tasks in those lists will sync with Outlook-- but on Outlook all the lists are merged. There is no way to map your Outlook task categories to your Reminders lists. So much for my idea of going back to having multiple task lists on Outlook for Business, Personal, Grocery List, etc. Yes, I can have these lists on my phone, and I can recategorize tasks on the desktop, but it will be annoying to have to maintain this somewhat manually instead of having it automatically sync.
I have yet to come across any other reviews that address these issues, but I can't believe I'd be the only one to want these features, so here's hoping they add them later! I won't hold my breath, though. But I can at least loop this back to the topic of money by pointing out that these kinds of productivity aids help me manage my job and hopefully get ahead in my career and make more money... and the iOS5 upgrade was FREE!

Does anyone else have any good iPhone productivity tips?

Refinancing a Mortgage

2011-10-10T15:55:00.002-04:00

As you've no doubt heard, mortgage rates once again at historic lows. I've thought about refinancing, but I think I may just leave it alone for now, as it just may be too much trouble. The background on why relates to the story below.

A friend of mine, who I'll call Maud, is currently in the process of refinancing a property. In the course of talking to her about this, she told me all this interesting stuff about the history of her home-ownership. This all starts about 30 years ago, when Maud's parents sold their share of a small business and suddenly had some cash to invest. They decided to buy an apartment in NYC, figuring that their kids might rent it from them while they were students, and they could rent it to other tenants as well. After one of those other tenants left, Maud decided she wanted to settle in the apartment long term, but the problem was that she wanted to buy rather than rent, but the apartment was too expensive for her at that time. Meanwhile, her parents had also decided to buy another property elsewhere as a vacation home. They ended up inviting Maud to buy a share in the vacation home at a level she could afford.
Now this sounds weird, but it all ended up being part of some complicated tax shelter scheme, which allowed Maud to swap her part-ownership in the vacation home for shares in the NYC apartment over time. There was a big tax advantage for her parents, and for Maud the advantage was that she borrowed privately from her parents and stretched out the purchase in a way that made it more affordable. Over time, Maud's income increased and she was able to pay off the loan from her parents early, leaving her in full possession of her apartment. This all sounds kind of odd, but Maud insisted that she paid her parents the full appraised value of the apartment plus interest. As a real estate investment, it didn't turn out that well for her parents since the market crashed after they first bought the place, but I guess they at least saved on paying some capital gains taxes. This would be an example of the sort-of-rich getting sort-of-richer based on hiring good lawyers!

Anyway, a few years after Maud paid off the apartment, she was doing very well in her career and had saved a lot of money, since her monthly costs were quite low without the mortgage. She started thinking about real estate investments herself. She looked at properties outside the city and came across an inexpensive, very small, but charming house. It was so charming, in fact, that she decided she wanted it for herself and bought it to use on the weekends. She admitted that it was a rash decision and not exactly the kind of "investment" she'd had in mind! But she loves having the house as a retreat, especially since her city apartment is also fairly small and she can use the extra space, which seems cheap compared to buying a bigger apartment in the city.
When she bought the place, she got a fixed-rate mortgage of about 6.5%. So of course the rates we've been seeing in the last few months were very attractive to her, and she decided to refinance. But here's the reality of what's happened in the last couple of years: banks are actually being a lot more picky about who they'll lend to these days. Because the market value of her house was down since she bought it and because there were some other complicating factors, the bank that held her existing mortgage didn't want to refinance it, and it was unlikely any other bank would either.
(At this point, my question to Maud was why the same bank would ever want to voluntarily lower the rate on a mortgage from 6.5% to 4.5%-- sounds weird, doesn't it? But aside from not wanting to drive you to their competition, and benefiting from the fees that the refinance transaction generates, Maud pointed out that the rate itself is a wash for the bank, as they are always pricing the mortgage as a spread from the prevailing rate set by the Federal Reserve.)
Back to the problem with refinancing: Maud was a bit dismayed, but her very sharp loan officer came up with a great solution: instead of refinancing the weekend house itself, why not take out a new mortgage against the paid-off apartment and use that cash to pay off the house in full? The apartment had gained a lot in value over the years, so she had way more equity there than the value of the house. She'd be nowhere near the usual loan-to-value ratios banks would require for a mortgage. All in all, it was a brilliant solution, so Maud forged ahead with the application.
As the process went along, I began to compare her updates with the process I'd gone through to get my mortgage at the height of the real estate boom. It was amazing to me how exacting they were being about every little detail, verifying addresses she'd lived at 30 years ago, asking for all kinds of documentation on the monthly costs of both her homes and the finances of the co-op. An appraiser came and did a whole report with photos and floor plans of every room attached. And this is all for someone with a high income and a perfect credit score, whose apartment is in an established building with other recent sales. This was definintely not a "liar loan!"
Maud also said that the good faith estimate and other application paperwork she received was very clear in its disclosures of the terms. So if anything good has come out of the economic crisis, it may indeed be that our real estate market will now have more stable underpinnings, with mortgages only given to people who can afford them, for properties that are actually worth it.

But back to my situation: I put 20% down when I bought, and I've paid off some extra principal over the last couple of years, but I'm not confident that my apartment would be appraised high enough if I tried to refinance now. It might also be a concern that the developer still owns some of the units in the building. I'm also wondering about selling the apartment in the next few years-- I think I'll be renting it out soon and moving in with Sweetie, but I don't want to be a landlord forever. So it's a dilemma... I may make some inquiries anyway, so I can assess this based on real info rather than my own gut feelings. I'll of course keep you posted when I do!

Yard Sale Economics

2011-10-03T17:10:00.002-04:00

Have you ever had a yard sale? I've been to many, but never actually ran one myself until just recently, when my sister and I helped my mother sell some stuff.
First of all, you get a lot of interesting people showing up, who I'd group roughly as follows:
--low income people buying household items and clothing
--frugal people looking for bargains
--hoarders who just can't walk away without taking "good stuff"
--dealers who want to re-sell items
--collectors who are looking for very specific items
--curious neighbors who always wondered what was in your house

Most of these people will want to haggle. They know that whoever's having the yardsale just wants to get rid of stuff. My sister and I didn't have time to tag everything with prices before all the early birds started showing up, so we found ourselves often just quoting totally random prices that were quite low. Sometimes I wondered if we should have started higher to give ourselves more room to negotiate, but on the other hand, I didn't want anyone to walk away from something they might otherwise have bought-- and I wanted them to buy lots of items!

I took charge of selling my father's old CDs, DVDs and books. Most of the CDs were swept up by a guy who showed up at about 7:30am, with a car already full of stuff from other yardsales. He asked if I'd take $75 for "all the CDs". We'd started off quoting $1 per CD, and I knew there must be a couple hundred CDs at least, so I said I wanted $100 considering he was getting that many, and he agreed. But then I realized I'd undersold myself when we started packing up box after box of CDs for him-- my dad was passionate about music, and he'd collected more like six hundred CDs, at least, and we hadn't even set them all out on the lawn yet! While the guy was looking at other stuff, I started telling our friends who were still bringing CDs out of the house to stop, which made me feel a little sleazy... In the end, the guy ran out of space in his car so he didn't really get "all" the CDs, but he knew he'd gotten a great deal-- I'm sure he's reselling them online somewhere for at least $5 a pop now! I was hoping some other collector or dealer would snap up the rest, but we still had a lot left over at the end of the day.

The hoarder types were funny -- several of them bought bags of random stuff that we never thought anyone would want. My sister had put out a plastic bin of weird junk that seemed so lacking in value that she just labeled it "free." A guy grabbed the whole bin and took it away, and gave us a dollar for it just to be nice!

There were times when it was hard to let things go. Ever since my dad's death, I've struggled with this-- I became a booklover from hours spent as a kid looking at all his bookshelves, and there were other odds and ends that had some sentimental value even though I knew I had no use for them and no place to put them. My sister and I both felt some anguish at moments when people seemed dismissive of the value of things that meant something to us... but there was also one guy who made me really happy. From appearances, at least, he would not have been someone who I would think would have anything in common with my dad, but he kept finding stuff he wanted. He'd buy a few things, then come back for more. You could tell he didn't really "need" any of these books and DVDs, or the old shortwave radio or the tools, but he obviously shared my father's sensibilities in some way, and he kept saying that we had some great stuff. I almost wanted to give it all to him for free, just knowing he appreciated it.

In the end, we cleared about $600, and made a lot of room in my mother's basement and garage. It's sad to think how much my parents paid for the stuff that was sold, as I'm sure it was more than ten times what we got for it, but it's more sad just to say goodbye to some of those things, and it will be harder still when I have a dealer come and buy most of the rest of my dad's books. I just have to keep remembering that it's not about the money, and not about the stuff-- it's about the memories, which will stay with me much longer.

Income and Poverty Statistics

2011-09-16T10:03:00.005-04:00

I love looking at data about income and wealth and poverty levels. I feel like we're so inundated with misleading information when people start talking about "the middle class" in relation to politics and taxes.

A report was just released of Census Bureau Stats about real income before taxes-- it's good to note that this is different from the Adjusted Gross Income stats often reported when people are referring to IRS data. Since weathy people tend to take more deductions for mortgage interest, charitable giving, 401k contributions, etc., it's important to remember that their real income is much higher than their adjusted gross income-- so when politicians talk about taxes that might affect someone whose income is above $200,000, they mean someone whose real income could actually be much higher.

But here's a few stats I found most interesting:

Overall, median household income adjusted for inflation declined by 2.3 percent in 2010 from the previous year, to $49,445.

That is for all households. Breaking it down a bit more:

Married couple households $58,036
Non-family, aka individual male $35,627
Non-family female $25,456

Median income of full-time, year-round workers:
Men $47,715
Women $36,931

15.1% of people are below the poverty threshold. Kind of an arbitrary line in the sand, as someone making a dollar more than the threshold isn't in great shape either. It's also interesting to note that about 34% of people are below 2X the poverty level. The poverty thresholds by household size are below:

# of people in household	48 states &DC	Alaska	Hawaii
1	$10,890	$13,600	$12,540
2	$14,710	$18,380	$16,930
3	$18,530	$23,160	$21,320
4	$22,350	$27,940	$25,710
5	$26,170	$32,720	$30,100
6	$29,990	$37,500	$34,490
7	$33,810	$42,280	$38,880
8	$37,630	$47,060	$43,270

211,492,000 Americans over the age of 15 earned money in 2010, or 67% of total population.

Interesting that it corresponds very closely to the total number of people age 15-64, presumably the ages of people you'd expect to work. But a lot more people are working past the age of 65-- about 8% of people over 65 had income in 2010.

Total popluation of US: 312,222,000

0-14 years: 20.2% (male 31,639,127/female 30,305,704)
15–64 years: 67% (male 102,665,043/female 103,129,321)
65 years and over: 12.8% (male 16,901,232/female 22,571,696) (2010 est.)

What this says to me is that almost half of all working individuals in the US couldn't support a family of 4 at more than poverty level. Two-income families have become a necessity... as has debt. The graphic below, which accompanied an article by Robert Reich, highlights this nicely:

All stats are from this Census Bureau report and Wikipedia citations of Census data.

Overheard at the Gym

2011-09-02T11:47:00.003-04:00

The women's locker room at my gym is the best place to overhear interesting money-related conversations. (Actually, I suppose the men's locker room could also be a good place, but I haven't had the chance to find out!)
This morning, I caught snippets of a chat between two women who seemed to be discussing the boyfriend of one of them, or perhaps of a friend of theirs. They were saying that the boyfriend always seemed to brag about his money and status, even in the most unlikely situations, for example saying his office had had a leak during Hurricane Irene, but having to specify that it was some kind of executive suite office, not just "my office." But though they seemed to be saying the guy was sort of an insecure jerk, I caught the phrase "Marry him! Marry him!" I guess because he had money.
Then one of the women seemed to be bemoaning the fact that she'd never have a rich boyfriend. The other woman tried to console her by saying "but at least you're already living the life! I mean, Florida, the Hamptons, here [NYC]..." The first woman responded, "yeah, well, I do a good job looking like it," or something like that, saying that she worked in book publishing, where no one gets rich, so she was just keeping up appearances while being broke.

The whole thing was sort of funny, but also really depressing. I'm embarrassed on behalf of all women when I hear people like that talking about their plots to hook a rich husband, and off-handedly acknowledging that it's more important to them to look rich than to save any money in the hopes of actually being rich, or at least financially stable someday.

That Crazy Stock Market

2011-08-09T19:23:00.003-04:00

How are you riding all these bumps in the road? I was appalled to see the huge drops in the market last week and yesterday, but I also tried to view them as an opportunity to invest at a lower cost. I pulled the trigger this morning and bought some shares of Ford, Kroger and Bristol Meyers Squibb. In the last few years, I've generally stayed away from individual stocks and kept to various mutual funds, mostly the low-cost Vanguard index funds. But I guess I was feeling a little reckless this week, so I used the E*Trade screening tools to find myself some companies with lower P/E ratios and some earnings growth, and then picked these three. We'll see how it goes-- I bought first thing this morning, and by the end of the day, Ford was up almost 4%, while the others were down more than 1%, but my net for the day was a slight gain-- maybe $20! But I'm not trying to be a day trader-- I'll hang onto these for a while and see how they go.

How (Not) to Get a Job

2011-07-20T09:15:00.000-04:00

I have interviewed many many job candidates over the years, and sometimes I'm just amazed at how clueless people can be about presenting themselves well in resumes, cover letters, interviews and even thank you notes. It's really hard to get a job these days, yet some people make it even harder for themselves!

I interviewed one person whose resume seemed a bit familiar. I'd already scheduled an interview with her by the time I dug out my files from a few years before and realized she'd applied for the same job before. And 3 years later, her resume was exactly the same, word for word. That was strike one-- even if your job is the same 3 years later, you should probably at least try to reformat your resume and freshen it up a little!
When she came in for the interview, I alluded to our having met 3 years earlier and asked her to fill me in on what had changed since then. She said "well, I got married!" She might have been trying to strike a conversational or humorous tone but it didn't seem that way-- it was as if she took my question 100% literally and answered me 100% literally that that was the only thing she could think of that had changed. You'd think she could at least come up with some vague statement about how she'd gained additional experience and learned a few things in 3 more years at the same job.
This person seemed to have no concept of how to sell herself in the interview. I was talking to her about a position that would be a somewhat different version of her current job, with a bit more responsibility and creativity involved as opposed to more administrative work. But her responses to my questions seemed to focus only on rote tasks, somehow, even when I was asking her very leading questions, almost trying to drag the right response out of her!
I asked her something along the lines of "if you didn't have to spend half your time doing X, how would you approach the Y part of your job differently?" The right answer would have been something like "The Y part of my job is really interesting, and I have lots of ideas on how to do it better. If I didn't have to worry about X, I could do Y much more proactively and at a higher level of quality." Yet her response was "Gee, it would be great not to have to spend as much time on X. Then I'd be able to respond to emails and questions the same day instead of a few days later." Lame.
I told this candidate that I would be making a decision within the next week because I needed someone to start quickly. I never got a thank you email or note after the interview, but about 3 weeks later she emailed me saying she wanted to "check in" to see where things stood. By then, the person who got the job had started.

And on the subject of thank you notes: I know some people say it has to be handwritten and mailed. I personally prefer the immediacy of email. But either way, give it some substance. I've gotten notes that just said "thanks for meeting with me. I enjoyed our conversation." This tells me nothing about whether the candidate has engaged with the job and is interested in it-- it's just a lazy way of fulfilling an obligation. But I've also gotten great thank you notes that showed that the candidate really listened during the interview. I like to be very clear with people on what I see as their strong points for a job and where I think they'd have a steep learning curve. The smart candidates pay attention to what they think I see as their liabilities, and try to address my concerns by pointing out things they might not have thought to say in the interview, or re-emphasizing other strengths that might overcome my reservations. It's not just a "thanks for your time," it's a way of saying "after hearing more about the job, I really want it and this is why I think I can do it well."

But the best candidates also don't overstate their abilities. I liked this post on Lifehacker about avoiding grandiose claims in a cover letter, which applies during the interview and in thank you notes too. Highlight your strengths, but don't go crazy saying you're the best. And if you've had 3 or 4 years of experience as an assistant, don't claim that your "vast knowledge of the industry" will be an asset to me-- I don't see how anyone can really have "vast knowledge" of anything in just a few years! And LISTEN during the interview-- don't keep interrupting the interviewer as they try to tell you about the job and draw out your responses to it. I've had people who barely let me get a word in because they were so busy telling me they could do a great job and had all the skills I'd need. One person actually did seem like the perfect fit for the job and was almost over-qualified, but the inability to listen was a deal-breaker for me.

And one more thing: be available. Like it or not, most people now have home computers, smartphones, and access to the internet pretty much everywhere they go. (And if you're going to Outer Mongolia or some other place where you don't have it, leave an out of office message that says so.) I invited a candidate to come in for an interview, and pointed out that I was trying to schedule interviews in a fairly short window of time. I never heard back from him until about 3 weeks later, and his excuse was that she'd been traveling on business and then on vacation. If you want to check out for 3 weeks and not read any email, fine, but you shouldn't expect a job interview to be waiting for you when you come back.

Spending for Love

2011-07-13T16:25:00.003-04:00

Does love make you spend money? I was thinking about this today as I returned from lunch with a bag full of largely unnecessary items. My Sweetie broke a glass measuring cup the other day, so I went to Bed Bath & Beyond to purchase a new one. While I was there, I remembered that Sweetie also wanted something for spraying on olive oil (theoretically, you end up using less than if you brush or pour it on, so it's supposed to be healthier). So I bought one of these, or something like it, for about $10. While I was at the register, I saw they had some little padlocks and since Sweetie just joined a gym and needs one, I bought one. I also managed to grab some of those little single-use packs of KrazyGlue, but that's for fixing my own broken watchband, not for Sweetie.

Sometimes it's just more fun to buy little everyday, non-occasion gifts for someone you love. If it was me who wanted the olive oil sprayer, I'd probably have thought about it a lot more, and perhaps experimented with some sort of cheapo spray bottle instead of buying this gimmicky one-- but since it was for Sweetie, I wasn't being that picky. Buying things for Sweetie activates my generosity, while in other situations, I feel very stingy. My usual rules of frugal, deliberative comparison shopping fly out the window when I'm shopping for sweetie, but when I'm shopping for myself, I tend to be very disciplined and often find it hard to commit to buying something.

Do you ever find your spending habits change when you're buying for a loved one?

The Dilemma of Asking For and Accepting Help

2011-06-06T15:47:00.004-04:00

I keep thinking about a friend I'll call Edna. Edna is a divorced mother of two. Because she's had to juggle child care, her job history over the past 15 or so years has been rather checkered-- nothing bad has happened, but she's had to stitch together various part time jobs that would allow her to be there for her kids. She'll do pretty much anything, from cleaning out someone's basement to cold-call selling on a commission-only basis to bartending, but many of her jobs have been temporary so she's never had a chance to really establish herself in a career. Her husband has paid child support, but she's just barely made ends meet-- one of the kids is now old enough to have her own part time job, and she made more money last year than Edna did. I learned this fact during a dinner when another friend of Edna's urged her to apply for food stamps, which Edna did not want to do.

The friend's argument was that these government assistance programs exist precisely for people like Edna-- she does her best to find sources of income but is trying to look after her kids without being a burden to anyone. Her income in some years is basically at or below poverty level though there are times when she manages to do better. Shouldn't she accept some help?
But Edna hates to ask for help, which leads us to another fascinating aspect of her situation: Edna's parents are quite wealthy.
They have several other children. Some of those children have been given quite a bit of financial assistance-- particulary the male children: there seems to be just enough of a generational gap that girls were seen as needing only to find a husband, while boys needed education... and cars and clothes and apartments and so on. But although they've occasionally paid Edna to do work for them, they are otherwise very stingy with her. They barely even give gifts to Edna's kids, and when they do, there's often a whiff of goodie-bag re-gifting about it. Edna hates to ask them for anything, and rarely does, but at one point she reluctantly reminded them of an offhand promise they'd once made to chip in when it came time to pay for sending Edna's kids to college-- this time they kind of winced and alluded to money being tight for them... but of course this is in the context of them having two luxurious homes where they do lots of entertaining, and other trappings of an upper-class life.

I'm way over-simplifying the situation here to avoid too many identifying details, not to mention writing a mile-long post, but it's an interesting dilemma, isn't it? Should someone who is not wealthy herself but has a wealthy family turn to government for assistance? Is it the family's obligation to help her first? Some will no doubt say "neither" but what is someone in such a situation supposed to do? Leave her kids unattended? Pay money she doesn't have for day care programs? Edna's ex-husband is a mess, so he's not much help. It's hard to imagine anyone being more responsible and less prima-donna-ish than Edna... but she just can't seem to make all this work on her own.
Within a few years, both of her kids will be in college, and whether or not they get financial aid, that will be another drain on her resources, even if it does free up her time for a full-time job. But she's already been looking, and it's tough-- with the resume of a stay-at-home-mom who's fit odd jobs in around child-rearing, she's not going to be the most attractive job candidate in a climate like today's, where employers can probably be more picky. But she did mention that she will be going on a second interview for a job that pays about $40,000 a year, an amount she referred to as "life-changing."

Interestingly enough, she told me about the potential job while we were both at the home of another friend who has become something of an art collector. As I was listening to Edna, I was looking up at a painting above the fireplace that supposedly cost $50,000. It was such a collision of worlds... and it leads me to one more facet of these kinds of situations among friends:

Whenever Sweetie and I have dinner with Edna, we'll often cook something at home in order to avoid the issue of whether Edna can afford to go out. Sometimes we do end up going out, and sometimes we'll just pick up the check ourselves and tell Edna it's our treat-- but again, Edna has a lot of pride and won't always let us do that. The art collector friend hadn't seen Edna in a long time and invited us all to visit for a weekend in the country. I had thought we'd just be barbequeing, but we went out to dinner one night, and when the check came, we all split it evenly. I guess on one level that's totally fair, and just because one person makes 10 (or 20 or 100) times more than another doesn't mean it's their obligation to pay. But I personally think that if you invite someone to spend the weekend with you, they are your guest for the whole weekend, which means the host should cover the dinner bill, while the guest will hold up their end of the bargain by bringing wine or some sort of gift and offering to chip in for dinner but not arguing too much when the hosts insist that they'll get it. That rule doesn't have to be set in stone-- maybe going out to dinner one night is the thank-you gift to the host/hostess, to show your appreciation and relieve them from having to cook so you can all just relax and talk. But in this situation it seemed a little insensitive...