20 February 2006

47 percent of British drivers talk to their cars

This doesn't seem strange at all.

On Travel

Blogging may be light, or non-existant, for a while. I'll be on travel, and may not have access to the internet. At least that would give me a chance to catch up on my reading, and my Chinese.

Update on my cashless experiment

I'm entering my third week of not carrying cash. This seems to go against a lot of PF bloggers' advice, but it's working for me so far. I didn't start the experiment on purpose, I just spent all the cash in my wallet. After a week, I found I didn't miss it.

Thanks to MS Money, it's a lot easier to see where money gets spent through credit card statements. The only cash I do carry is a small pile of change in my car for tolls, and the Taco Bell drive-thru (McDonalds takes credit cards).

Economic disincentive to two-career housholds

Fark comes through again. This article from Newsweek points to how Europe's family friendly leave policies have made it difficult for women to have careers. It's an interesting read. However, rather than a true black and white difference, Newsweek missed out on a few things that have made the US more like Europe.

The article starts with a comparison of the two models. A is the US, B is Europe:
Choice A offers new moms 12 weeks of maternity leave, almost no subsidized child care, no paid paternity leave and has a notoriously hard-driving business culture. Choice B gives them five months to three years of paid time off from their jobs after having kids. Millions put their offspring into state-sponsored day-care centers for several hours a day. Government agencies, full of female directors and parliamentarians, protect workers at the expense of business and favor a kinder, gentler corporate culture.
But Choice A isn't always as harsh as that. Specifically, the Family Friendly Leave Act (even better than the Family and Medical Leave Act, but specific to Federal employees), makes it possible for fathers to use paid sick leave for certain events, including childbirth. Some companies are combining annual and sick leave, giving more flexibility.

Then there's this little tidbit:
European countries base their tax structures around the notion of a single breadwinner. The result: taxwise, it's often advantageous for families if the mother doesn't work. Germany is exhibit A. Second incomes are immediately taxed at the highest bracket.
Well, it's not so rosy here, either. All of my income is taxed at whatever rate Mrs. Random's leaves off at. Make too much, and certain deductions and the child tax credit go away. There's a sweet spot that it may make sense for Mrs. Random to work while I stay home with the kids we don't have yet.

So, read the article. To quickly summarize, Europe views family leave as a challenge requiring an entitlement, to be paid by taxes. The US views it as a personal choice and gives it's workers the flexibility required to find a solution that works for them. As a big fan of flexibility, I'd much rather live under the US system.

18 February 2006

Beijing opens the world's first "specialty penis restaurant"

As a source for offbeat news, Fark.com never disappoints. This article from the Sydney Morning Herald is just nasty.

I may go back to being a veggie full time while I'm in China. Stories like this certainly don't help. The good news is that most ex-pats (and the vast majority of Zhongguoren) can't afford to eat there.

15 February 2006

The [tax] cost of marriage

Despite claims to the contrary, the marriage penalty still exists for high wage earners. Its effects are lessened, thanks to the President's Tax Relief Act of 2001, which removed the penalty for the lowest tax brackets, but Mrs. Random and I calculated our penalty to be fairly significant.

This article, from CNN Money (my new favorite site) points out a few of costs of being married. It misses a big one, though. Mrs. Random and I cannot contribute to a Roth IRA due to our combined income. Singly, however, we would both qualify. Just as with the other examples in the article, the cutoff for married IRA contributions is less than double the cutoff for singles. Interestingly, 401(k) plans are completely individual, so there is no marriage penalty for those contributions.

I s'pose in a fantasy world, one could construct a civil contract giving all the rights and privileges of being married (survivor benefits, power of attorney, etc.), yet still be "single" for tax purposes. In the real world, it's still worth a few $K to be married, in the spirit of Valentine's Day, of course.

Sharebuilder update

I mentioned before that I had signed up for a Sharebuilder account through Costco. Yesterday, my first trade went through. I received notice that my $85- promotion bonus will be credited in 4-6 weeks. Woot!

14 February 2006

Festival of Frugality

My post on woodstove savings has been selected for the Valentine's Day themed Festival of Frugality #10, hosted by Boston Gal's Open Wallet. Be sure to drop by.

11 February 2006

Dubya in Mongolia

Somehow, I missed Bush's trip to Mongolia in November. Nothing earthshattering in the WaPo's article "Feeling the Squeeze of China and Russia, Mongolia Courts the U.S.", but it does give me a chance to post an interesting image, and plug the Mongol Rally.

Bad news on the Rally, though. Mongolia may have stopped waiving the import duty for cars as they finish, or at least made it more difficult. This means that it could be a lot more expensive to participate in the future. Apparently, things don't happen quickly in the land of Genghis Khan.

Primerica Financial Services

I don't know if you've ever come across Primerica Financial Services, but it appears to be a pyramid scheme indepenently operated but wholly owned by Citibank. Mrs. Random came across the Rip Off Report on PFS. It's a long, but strangely entertaining read. Some of the supporters of PFS,

No one can rebut the fact that alot of the financial concepts taught by PFS is not taught in schools. If it were, then society as a whole would not be in dire straits as it is today from a personal finance perspective, wouldn't that be true?

come off sounding like Time Cube cult members Cubicists (or Cubics). Perhaps PFS is based around this book.

Woodstove Savings

In November of 2004, I had the upper half of my chimney replaced. At the same time, a 6" stainless steel chimney liner was put in for the downstairs fireplace, and a wood burning insert was placed in the firebox.

During the winter of 2004-2005, the fireplace usage was somewhat sporadic. I didn't really have enough wood to last the winter, so the fire only ran when it was really cold, or when we wanted to have the downstairs lounge heated. This winter, I've made an effort to keep the wood stove burning full-time. The effect on the gas bill has been quite dramatic.

Whereas gas usage during January had previously spiked, this year I actually used less gas in January than I did in December. I'm sure the unseasonably mild weather helped this some. For the 03/04 gas year, I used 652 therms (435 from July through January); for 04/05, I used 553 therms (355 from July to Jan); and for 05/06 I'm projecting using 350 therms, with 212 actually used from July to January. Based on the summer usage, about 100 therms a year are used just to heat the hot water in the house.
So, last winter I saved 100 therms (80 through Jan), and this winter I've saved a remarkable 233 therms, and I'm predicting a total savings of 302. Last year, gas worked out to about $1.50 per therm (it fluctuates, and there are some fixed costs, but that's the average). This year, its closer to $2.37. That means that last winter, I managed to save a grand total of $150, while this year I've saved over $500, with a projected total of over $700 through the end of the winter. I've cut my gas usage by about half, and the total bill by even more than that, since gas prices have gone up.

To counter the $850 savings, I should comment on my expenses. In a recent post, I pointed out that I tried to be frugal about gathering wood, but I I had few specifics. I can lay those out now.

The largest expense was the wood burning insert itself. With the chimney liner, the total came out to be about $2400 (the top and shoulders of the chimney needed to be replaced anyway, and aren't counted). Last winter, I spent about $50 on incidental supplies (wood carriers, chainsaw lube, etc.). This year, I bought a new chainsaw ($150, massively on sale at Sears), as well as about $40 worth of incidentals. I also spent about $60 in gasoline, or in extra* gasoline, transporting wood from a friend's family farm or from my parents' house. So over two years, I've burned or collected perhaps 6 cords of wood, and spent about $300 gathering it. A cord of wood has a street value of about $200, delivered, in Northern Virginia.

So by the end of the winter, I'll have saved about $850 in natural gas. In doing so, I'll have burned $1200 worth of wood, saving $900 after the gathering expense (it's interesting how close these numbers are, it's as if a "therm" of wood costs about the same as a therm of natural gas). I also won't need a new chainsaw for a while. Where does that leave me? I'm either well on my way towards paying for the wood stove and liner, or I'm already turning a profit. This is because the wood stove does something that can't be quantified financially. It turns the lounge, the largest and best room in the house, into a livable space during the winter.

If I wanted to stretch the savings even further, I could count the chainsaw as a landscaping expense. And it gets better. There is a lot of chainsaw landscaping that needs to be done by next fall. By doing it myself, I will have saved $2000 vs. an estimate from a professional landscaper by taking down some pine trees, juniper, and leaning maples in the yard. I can then burn it for free.

* Extra gas -- Since I'd visit my parents anyway, the cost of transporting wood from their house to mine is only the extra gas burned by my truck (20 mpg) vs. taking one of the cars (25-30 mpg).

UPDATE: Welcome to all readers of the Festival of Frugality! Please check out the rest of the blog, and leave a comment if you like.

Amazon sale

The story actually starts with a 10% off sale (with your Sears card) at Sears this weekend. We went there hoping to find an old-fashioned, canister vacuum cleaner. The one we wanted, a Hoover Windtunnel S3639, was panned by Dwell magazine for not being stylish enough, even though it was the best performer, and the cheapest. Sears did not sell it.

So Amazon it is. There is a $25- off coupon for $125- or more in housewares, and free shipping, so it worked out to $135- total. Not bad. The Dwell street price was $199-.

What's in my wallet

It's time for a cleaning anyway, so why not use this opportunity? Unlike Cap at StopBuyingCrap, I don't have the patience to blur a bunch of images, so I'll just post a list.

My wallet is a plain bi-fold black wallet that Mrs. Random bought for me for Christmas from Overstock.com. It's niftiest feature (as yet unused) is a zipper inside the fold that give access to another pocket behind the credit cards.

  • VA Driver's License
  • Aetna HMO card
  • Two copies of my business card (I gave away 4 yesterday, time to print more)
  • One blank check (and yes, the number is recorded in the register, in case my wallet gets stolen). It serves as emergency cash, and also as identification for buying guns in VA (I'm not kidding). I haven't used it in a long time, though.
Credit Cards, etc:
  • GM Card, MasterCard, image is a Pontiac Solstice
  • Discover Card, blue transparent card
  • MBNA Platinum Plus, MasterCard, from my college Alumni Association, no fees on foreign currency transactions (this is my newest card)
  • Local bank ATM card, which acts as a Visa check card (I almost never use this, since Discover gives a 5% kickback at the grocery store)
  • Travel card, Visa
Membership cards:
  • AAA Plus Mid-Atlantic
  • Sears Craftsman Club
  • Costco Executive Member (2% cash back)
  • NRA Range, annual membership
  • Petco, Wegmans, Giant, and CVS Pharmacy store bonus/discount/kickback cards
Other stuff:
  • Metro card with $3.80 left on it (Pandas on the front, Nationals on the back)
  • Laminated photo of (now) Mrs. Random and my Mom's favorite yellow cat, dated June 1996
  • Emergency contact phone #
  • Login passwords for my computer
  • Business card for my Chinese teacher
  • Receipt for $36.50 store credit at Ranger Surplus
  • 10% discount card at Casual Adventure
  • Three Subway Sub Club coupons
  • Free breakfast buffet at Quality Suites
  • Arigato lunch sushi buffet card (with 2 of 8 stamps)
  • UPDATE: Uncashed check for $7.60 from the US Treasury (overpayment of my now closed Federal student loans)
Notable omissions:
  • I have NO cash. MCD takes credit cards now, so what's the point? I spent my last three bucks on a tip for a haircut (my first in 4 months). I don't even have a lucky penny, or Irish money.
  • I don't even have an emergency $20-. Well, that is bad. I should keep enough for a taxi ride home, at least.
  • I don't have a spare key for my car. The zippered pockets are screaming for this.
That's it. It's a lot less stuff than I used to carry around. Still, I'll be first in line to have a credit chip implanted in my palm. And those store cards are killing me. I should just make a separate key chain for them and leave them in my car.

UPDATE: I happened to be at the mall, and had lunch at Subway. They told me the Sub Club cards I had are worthless, thanks to rampant counterfeiting.

Home inventory software

It's raining right now, and snow is predicted for today and tonight, so Mrs. Random and I are taking care of some indoor projects related to the move.

Right now, she's using free inventory software from knowyourstuff.org. Thanks to MyMoneyBlog for posting the link. It seems to work pretty well. It looks a lot like a Microsoft Access database that someone has made a really nice interface for. It also accepts digital images, which will be especially useful when we we start packing things for shipping and storage. We could even document the "before" condition of any furnishings and supplies we leave for the renters.

According to Mrs. Random, the software is great, but the process is time consuming. But, that will be true no matter what you use.

Free Barron's Online

Barron's Online is free, this week only. Thanks to Random Roger (no relation), who's site is always worth a look.

UPDATE: In addition to a bearish feature article about Google, there's a great article about how 1.3 million Americans have voted with their feet and moved from states that charged income tax to those that didn't between 2000 and 2004.

I moved from a high tax state to a medium tax state, but I chose VA over MD or DC because of taxes and other freedoms. VA has a %^&*#@ income tax, but it could be worse, and I'm sure it will be.

10 February 2006

Netflix sticks it to their best customers

This article is worth a read, especially if you use Netflix. I cancelled my subscription a few years ago, back when I was too busy to fully take advantage. I had considered starting up again, especially since my Mom's subscription appears to only be valid for chick movies (every time I visit..., though this was unexpectedly amusing). I guess I'll hold off on the membership renewal.

09 February 2006

Creative money savings methods

In the continuing saga of cheapness, I should report on our wood-burning-as-primary-home-heat-source experiment.

So far, We've done a pretty good job of keeping the fire going nearly full-time. It's reflected quite dramatically in our gas bill. Last February alone we used 133 therms of natural gas, for a total bill of $180-. This "February" (Jan 6 - Feb 6), we used 60 therms, for $122. Despite gas prices that are 50% higher than last year at this time, we managed to save money, and cut our gas usage by more than half (correlating with our electric bill, it even seems that we spent MORE time at home this year than last year, which should raise our heating needs).

A lot of this savings is due to our remarkably mild winter. Probably most of the savings. But some of it must be due to the wood stove. Along those lines, I've found a few creative ways to save even more money.

First of all, I never pay for fuel. Ever. I've cleared trees in my yard, I've poached wood from construction sites (including my parents'), and I have a friend with links to a family farm. I use recycled newspaper and construction debris as kindling (all free, I don't even subscribe to a newspaper, I get it from a neighbor), and I split it all myself.

Second, I rarely pay for materials. Minus the wood stove itself (ouch, but part of a needed home repair), I've spend about $200-. Most of that was for a new chainsaw (I got one free with the house, but it's seen better days. The new one is nice). And, since it also facilitated needed landscaping improvements (the chainsaw has taken down many dead pine trees and juniper), it can't really count against the wood burning materials bill.

Third, I pay very little for transportation. The worst I've done was a 90 mile round-trip drive for about 2/3 of a cord of wood. I did that twice. The rest of the long-distance wood was from my parents. But since I'd visit them anyway, the only legitimate difference would be due to the mileage of my truck (20 mpg) vs. whatever car I'd have taken instead (25 or 30). Just a few bucks. Even the truck was free! My dad gave me his old one when he bought a new one.

Finally, I don't pay for stove maintenance. All the parts are easily replaceable (I'll probably end up replacing the door gasket at the end of the year). Best of all, I just swept the chimney myself. This is a service that usually costs about $80 to $100-. It was quick, easy, and kinda fun. And unlike every other home improvement project I've undertaken, this took zero trips to Home Depot (my norm is 3), and only two trips up the ladder onto the roof. I didn't even pay for the sweeper, I borrowed it from a friend.

All told, I've put about 3 cords of wood through the woodstove this year, with one more waiting to go. Each cord has a street value of about $200, delivered. And by burning landscaping debris, I've saved even more money by doing the chainsaw landscaping myself, and not paying to dispose of leavings. I won't say that the stove has already paid for itself, but it's getting close.

08 February 2006

Does home equity count towards legitimate net worth?

I've pondered this question a bit. Is your primary dwelling an asset that should count towards your net worth? Does its assessed value really mean anything if you're not going to sell it (other than for tax purposes)?

Well, I don't know. I have to live somewhere, and I can't improve my situation (bigger house, closer to work, etc.) without taking on a higher mortgage than I have. So, the value of my house is meaningless, really. I'm not going to sell it -- even when we move to China, we'll rent it out. The only thing the remarkable rise in house values has done is raise my taxes.

Speaking of that, check out Zillow.com. It's still a beta, and not perfect, but it does show the remarkable trend of house prices. According to the site, my house is worth $30K more than I had figured (my number was based on an actual assessment, the Zillow number is based on a formula, comps, tax records, etc.).

One interesting feature of Zillow is the graph it can generate. I had guessed that house values in my neighborhood had leveled off last summer, and Zillow confirms it. It's pretty nifty. I don't know how accurate it really is, but I'm a big fan of charts.

So for now, I'll keep my $650K estimate in NetWorthIQ. A constant number makes it easier to track real change (i.e. savings, investment appreciation, debt paydown, etc). I just have to keep reminding myself that our house is not an investment.

Prepping for China

Blogging has been a bit light, lately. I've started taking a Mandarin Chinese class. I should probably be studying right now, in fact.

Mrs. Random and I also started to go to Asian grocery stores. Tonight's trip to a Korean-owned international market was quite pleasant. There was a great selection of veggie food, and prices were much better than Giant or Safeway. About a third of the store was stocked with standard American food, and the produce section was quite extensive.

A few weeks ago, we hit another grocery store in Fairfax. I think that trip was better preparation for what is to come. The prices there were even better. Most of the food was Korean, with about 15% Japanese, 5% Chinese and other. Almost no "American" food was availible at all. Both places had similar layouts, with sections of imported cookware, fish markets, and restaurants in the store. But the Fairfax store seemed cramped and crowded. It was also the Saturday before the Chinese New Year, so that couldn't have helped things much.

I did learn one thing that may come in handy in Beijing. The freshest and cleanest green onions are at the very top of the stack, buried as far out of reach as possible. It is perfectly acceptable to literally climb over the bottom onions to get to the good ones. Perhaps that's why the front ones are not as fresh...

Despite the differing shopping experiences, we've been very happy with the exceptionally yummy food we've picked up. Cheap, easy to prepare, and capable of soaking up large amounts of soy sauce.

07 February 2006

February Net Worth, again

Blogspot is acting strangely. My post of 4 February, titled "Revised Net Worth for February", disappeared. Strange.

Fortunately, the Google cache came through. So here's the text of that post:

I posted this already, but I hadn't been as precise as I wanted to be last month, so the numbers came out wrong. Our corrected net worth is $365939 as of Feb 1, an increase of 0.81%. I had to edit this month and last month's figures to come up with these numbers.

The big revision was account for our annuities -- our almost worthless pension plans. I don't count on being able to draw them out like a true pension, but we do pay in a tiny fraction of our income, and the resulting number is tracked. Fortunately we don't have any other annuities.

Also, and this is subject to debate, I changed the way part of our "cash" was calculated. For most accounts (which are savings, or checking accounts intended for specific investments), I take the value at the end of the month. But for our main checking account, there are several ways I could have done this.

I could have taken balance in our main checking account on Feb 1, but I didn't like that since it's an arbitrary point in time for an account that fluctuates a lot. I could have taken the lowest point to which the account dips (the day the mortgage posts), but that, too, is arbitrary. A one day swing in one of our pay dates could make a huge difference. Also, some months, like December, have a "bonus" paycheck (5 Fridays, since Mrs. Random and I are payed bi-weekly, and offset a week). Mrs. Random does a good job of making sure that everything gets covered, despite the wacky schedule (it was so much easier when we both got paid at the end of the month), and of making sure that not too much is sitting in a checking account not earning interest.

So what to do? What is the true number? I decided to go with the median checking account balance through the month (in Excel, MEDIAN(C1:C31), for example). Arbitrary, I know, but I think it reflects the truest value. And as long as I'm consistent, I should be able to track the trend.

What do you think? How do you calculate your monthly checking account cash? Please leave a comment.

No Credit Needed is debt free

Stop by to congratulate him.

At the other end of the spectrum, some PF bloggers carry a metric crapload of credit card debt. Neo, of Neo's Nest Egg, has roughly $70K of credit card debt, presumably all of it as zero interest balance transfers. At the current rates (HSBC is at 4.25% APY, 4.80% for the next few months), that could generate $3000- per year, or more with a little risk.

I don't think I'd want to play that game (we much prefer paying off our cards each month), but it is an interesting idea.

UPDATE: 2million has a great post on how to take advantage of 0% balance transfers. It's worth a look.

03 February 2006

Back to the Future

50th post!

I picked up a copy of the Back to the Future trilogy at Costco today (remarkably, it's actually a buck cheaper at Amazon). I'm not the only person with a copy, though, as evidenced by Brokeback to the Future.

01 February 2006

How People Pick Stocks

I found this buried a few clicks below the 33rd Carnival of Personal Finance. It's old news, but interesting. Recently Mrs. Random and I have been doing some rebalancing. We used our free Ameritrade trades to purchase some value stocks, to be held for the very long-term. This appears to be the "correct" way to do it. I like this comment from beneath the article:
Great article! I like the way you point out the flaws of these three main types of investing styles. I would also point out that there are more billionaires made with “Value” investing than the other two types. However, the other two styles have a lot more seminars, conferences, and self help gurus. You can draw your own conclusions from that.
So, just as it will be the banks that benefit from the housing boom, stock brokers and seminar speakers benefit from short-term traders. Here's a nice graph that shows this point.

Networth IQ update for February

Our net worth has been updated. It now stands at $365,575, an increase of about $3500-, or just under 1%.

UPDATE: I had cut a few corners calculating last month's net worth. It's fixed now, but look for a new post analyzing the new numbers.

State of the Union Followup

Here's what I wrote last night:
9:43 The Dems seem pleased that they stopped Social Security reform. Good for them. I guess none of them have kids who might someday want to retire.
I was specifically referring to the standing applause when Bush mentioned that his attempt to reform Social Security had failed. I'm not the only blogger to notice this.

Glenn Reynolds noticed it. So did Tom Elia, Paul Mirengoff, Daniel Casse, and John Tabin.

Since when was fiscal irresponsibility something to rally around?

Also, special thanks to The Silicon Gadfly, who accuses me of nailing the live-blog game:
Looking good over at mission:nontrivial. Short and sweet, but he's keeping up and keeping it relevant in Liveblogging the State of the Union Address.
Thanks, that's really nice.