Everybody Loves Your Money

I wanted to share a few of the photos of life in New Orleans. They are a long way from “back to normal”. Each small picture links to a larger one.  And if you’ve got broadband and want to see what it’s like driving down the street down there, check out this video: http://www.everybodylovesyourmoney.com/images/MOV06477.MPG

Gas Station blown over:

Piles of debris all along the roads:

Apartment complex. Notice the flood line on the building:

Intersection. Look closely and see all the signs bent over from the storm:

Severely damaged building near the French Quarter:

Another damaged building. These are everywhere:

My wife and daughter have spent the last week in New Orleans visiting her parents.  They have lived down there for about 7 years due to my father in law being relocated to work in aerospace down there.  If you’ve been reading the blog for awhile, you might recall that I blogged a bit about my inlaws experience through the hurricane.  My mother in law even had a very large “write up” in one of our local papers here in the Seattle area.  They still have a home here that they rent out and still consider themselves locals, even though they’ve been down there for 7 years.  They opted to evacuate a couple days before hurricane katrina hit.  It was about 3 months before they got to go back to their house and survey the damage.  They were extremely lucky in that their home didn’t flood.  It sits a couple blocks outside the french quarter and was on some of the highest ground.  Amazingly, only a couple blocks away, houses were flooded.  They had a roof leak from the hurricane, lost some siding and their refrigerator was destroyed from all of the food liquifying and going bad in there over the 3 months they were away.  My father in law took the fridge out of the house, cleaned it from top to bottom with bleach, pressure washed it and used just about every other cleaner known to man.  It sparkled.  As soon as he closed the door for about 5 seconds, all the terrible smells of the fridge returned.  There was no saving it.  They put it on the sidewalk in front of their house, just like thousands of others did.  One day a man came by and took it away.  Besides the fridge, they ended up getting a new roof put on, some new siding, and had the house repainted.  (well, actually it’s being done now).  So, enough about the history of their situation.  Needless to say, they were one of the lucky ones.  They now have all of their utilities, although the power goes off much more often than it ever did before.  They even have high speed internet access again.  If you sit inside their house, you’d forget about all of the destruction that remains.

My wife has taken photos while she’s been down there.  She has emailed a few and will bring back many more.  We’ve talked a lot on the phone while she’s been down there and she just keeps saying over and over that it’s bad.  All these months later, many parts of the city are still deserted wastelands.  One picture she sent showed a few different street signs.  They all leaned at about the same angle, obviously blown that way from the powerful winds.   Businesses are closed all over.  Piles and piles of junk sit everywhere.  She talked about how overcome with emotion she was as they drove by a house that had been destroyed and there was a family sitting on the porch in the 90+ degree humid heat.  There was a little girl sitting with her family who was about the same age as our daughter.  The only difference between them is the complete loss of everything that little girl’s family had experienced.  It really caused my wife to reflect on how lucky we were and how terribly bad she feels for all those families down there.

We don’t stand much chance of a major hurricane near our home and flooding would be pretty much out of the question since we live up high.  Earthquakes are the natural disaster that are always threatening us.  We had an earthquake about 5 years ago that shook a lot of things, but we didn’t sustain any major damage at our home.  All the experts claim we are due for a big one.  With all the disaster talk in New Orleans and the gulf states I decided to look in to earthquake insurance.  Roughly 50% of our net worth is wrapped up in home equity.  A major earthquake would set us back significantly, especially if our house was destroyed.  So, just a couple days ago, I purchased earthquake insurance for our home.  It will only pay out if there is major damage and the deductible is quite high.  My only expectation from the policy is to keep us from losing our home and all of it’s contents.  It’s going to cost us a few hundred dollars a year, but I think that it’s a good decision.  I’ve had this nagging feeling in the back of my mind for quite some time.  Now, at least I know that if the big one does hit, while it will be a huge impact to us, at least we’ll have a safety net.

On the subject of things that don’t seem to make sense…….

Kiplinger has an article about how consumer confidence is at a 4 year high.  I confess.  This just doesn’t make a lot of sense to me.  Gas prices are at an all time high, interest rates are rising which could have multiple impacts on consumers  (credit card rates increasing, adjustable mortgages going up etc), credit card balances are over $9000 on average, the nation’s savings rate is a negative number, the global economy has multiple ramifications for our nation’s workers, we have troops on the ground fighting in two conflicts, global nuclear tensions are increasing, yet apparently nobody is worried about any of these things.  (okay, gross generalization).

http://www.kiplinger.com/personalfinance/apnews

Ahhhh.  We are a nation of optimists.  On a completely different note, I didn’t save a ton of money on my car insurance.

One of the many mysteries in the world is why people will pay well over $100 per month to store items that are barely worth that amount. What am I talking about? Well, public storage units, of course. Public Storage is a booming business! It never ceases to amaze me to see what people store in these units. I’m not talking about the person who rents a storage unit for a month or two while they are in the process of moving etc, I’m referring to the long term holders of these units. What on earth is in there that’s worth $1200 per year to keep it there? In many cases, I’d be willing to bet, not much. The business case for whether to store these things is simple:

Value of stuff/monthly rent=Number of months before you are wasting your money

What would I do? Well, thanks for asking. I would sell all of these things and pocket the money. If I don’t have room for it where I live, then I just don’t have room for it. If you are able to store all of these items in a public storage unit away from your home, that probably means that you don’t use it much and don’t need it.

Every now and then I hear about someone going to a public storage auction. Units that are behind on their rent are normally sold to the highest bidder after a certain amount of time. The potential bidder gets to open the door and look around inside (You can’t go in the unit. You just get to look from the door). Some people make quite a good living by bidding on these auctions and then selling the contents on Ebay. Well, why did people have these storage units in the first place, if they were just going to let the contents go to auction? In a lot of cases, I’d bet it’s just poor money management. So, will I ever go bid on one of these units? Nope. I’m chicken. With my luck I’d bid on a unit like this:

http://news.bostonherald.com/localRegional/view.bg?articleid=133241

or this:

http://www.lasvegassun.com/sunbin/stories/lv-crime/2001/apr/10

or this:

http://www.abc4.com/local_news/local_headlines/story.aspx?content

So, in a mad world like this, what should someone do? Well, I’d recommend buying stock in some of the publicly held public storage companies, and if you’ve got lots of money, maybe you should just build one yourself. If you choose to build one, please hurry. There are a lot of people out there just dying to pay you to store their stuff.

They can’t vote, heck they can’t even join the military.  Don’t worry though, they can start digging themselves a deep hole while they are still in high school.  While I’m okay with someone under 18 learning to use credit with the help of their parents (assuming that their parents are good with money), I’m not so comfortable with credit card applications being distributed at schools etc.  Take a look at this article:

http://seattletimes.nwsource.com/html/localnews/2002947960

MSN article highlighting adjustable rate mortgages and rates of foreclosure. One thing that caught my eye. Rhonda took a two year adjustable rate at 7.8%? Can you say “robbed”? I’m guessing she must not have stellar credit.

http://moneycentral.msn.com/content/Banking/Homefinancing

It’s been a little quiet on the blog posting front the last few days.  We celebrated the Easter holiday at our house so there was plenty of preparations for that, and what has really kept me busy is that I took a new job within my company.  It should be more exciting and a completely different technology than I have been working with so I’ll be learning a ton.

And on yet another note, I am working on launching a new venture soon.  It should be fun and I look forward to posting about it once it goes live.  We are in the process of coding, testing, and building content etc for it now and we figure there is at least a couple more weeks of work (evenings etc).

Not much to report on the financial front.  As many of us have talked about multiple times, long term investing and saving can be a real boring adventure.  We are continuing to meet our financial goals and are watching the market go down more than up these days.  No problem for us though since when the market goes down, it just means we get a little bit more for our money.  Sooner or later, we’ll see it go back up so I’m not too worried.  I guess that’s one of the benefits of looking long.

Wouldn’t you just know it.  I buy a new truck that gets a little bit worse gas mileage than my previous one and fuel then gets even more expensive.  If gas prices keep going up, my wife just might have to get a paper route after all!

There are just too many parallels between this 20 second video and saving for your retirement:

http://video.google.com/videoplay?docid=-7195110930084047467&pl=true

http://www.tampabays10.com/news/local/article.aspx?storyid=28662

Okay. What the heck. What’s wrong with you Alex? You win the lottery and then get arrested for not paying taxes on it? Did you really need the extra tax money? I mean, I think I could live pretty well on $660,000 a year. I’d call it a nasty case of moronitis!

http://services.silicon.com/itoutsourcing/0,3800004871,39158081,00.htm

Outsourcing isn’t saving as much money as once thought. I take great satisfaction and comfort from this. When you couple the rate of savings with the increased operational risks, it doesn’t look so sweet in many cases.

http://online.wsj.com/public/article/SB114441900916020032-Ho7GX

There are a few drawbacks to being an internet porn millionaire. Poor guy. For some reason I don’t feel tons of sad feelings for him.

http://money.cnn.com/2006/04/12/news/economy/annie/fortune

Is a liberal arts degree all that bad? I’ve got one and I’m doing quite well with it. Sure, there are plenty of computer science majors out there making more, and certainly the MBA’s are pulling down some serious coin, but I’m okay.

And, this just in:

http://news.yahoo.com/s/nm/20060413/od_nm/japan_cash_dc_1

Wow. Two cases of moronitis on the same day. Uhhh, yeah. If you are going to hide your cash in a garbage bag, please, please don’t hide the bag in a garbage can.

Every once in awhile, I like to go back and find a post from the early years.  Oh, okay, the early months.  This post is back from August and was actually first posted on the blogger site.  Unfortunately, when I converted the site here, I lost all the comments, (this post had a lot of comments).

Take a quick look at the article and see what you think.  My point was that it’s probably wise to do some sort of a business case to validate the career you are going for is worth the cost of the degree.  If you are rich, disregard.  We all know you can go to any school you’d like.

http://www.everybodylovesyourmoney.com/?p=61