Everybody Loves Your Money

Have you ever thrown up just a little bit in your mouth?  I did today when I watched an episode of “My Super Sweet Sixteen” on MTV.  They should rename this show “How Not to Raise a Child”.

It all started going south for me when the show intro started.  It basically shows a bunch of spoiled little girls posing.  All these girls have one thing in common.  They all have their parents wrapped around their fingers.  Usually it’s the dad.

In this action packed episode, the audience was treated with scenes from the $450 photo shoot for the photos that would later be plastered all over the walls at the party.  I can only imagine how much the clothes for the party cost.  The girl was disgusted at the thought of buying a $275 purse.  Apparently that was too cheap and would scream out “White trash” to anyone that saw her carrying it.  I was particularly disgusted by the pouting and little whining episodes when the party didn’t appear to be going in the right direction.  This girl got surprised with celebrities at her party and the icing on the cake was the brand new BMW 7 series outside that her daddy bought for her.  Total price for the party plus car: $300K.

I don’t care how much money you have.  That’s just absurd.  What are you teaching your child?  This girl thought she was a celebrity and wanted to be treated that way.  To say that this girl was happier than someone from a middle class family would be a mistake.  She just found stress and sorrow in more expensive situations.

I’m just taking a quick break from the buzz on Christmas morning.  My three year old daughter woke up this morning and immediately wanted to check to see if Santa had come to the house.  She screamed with delight when she saw the cookies she had left out for him were gone and only crumbs were left.

Once she got over the excitement that he had come, she immediately went to work.  The first thing she did was unwrap the little gifts in her stocking.  My wife comes from a family that likes to put practical things in the stocking so my daughter found new princess underwear, shampoo, and a couple of “dollar store” presents.  She was definitely most excited about the princess underwear.

After that, she immediately headed for the tree in the front living room.  We had to slow her down a bit so that we could get comfortable and have a cup of tea.  At our house, you can normally see the Christmas tree.  I’ve been to some houses where you can’t see the tree through all of the presents.  We tend to take a lot more conservative approach when it comes to gifts at Christmas.  We spent a moderate amount of money this year.  I’d say we kept it under $300 total for the three of us.  That doesn’t include the $20 gifts that we bought for each of our nephews, but I think it was still pretty reasonable.

My daughter’s favorite gifts were the small portable radio that she can use to play her “princess” cd’s and her Leappad learning game console (50% off at Kohls so it was only $29.99).  I’d say the items that she spent the least amount of time admiring were definitely the clothes. 

Now, we are off to celebrate Christmas with family.

I hope that you all have a wonderful Christmas and a Happy New Year.

Let me be the first to raise my hand.  I’ve decided to feel fortunate for the profession I’m in.  Working with computers is far less taxing than diving through miles and miles of human waste to make sure there aren’t any clogs in the system……  Oh, and the pay is much better too.  $400 a month?  I know it’s all relative to the economy that you are in, but that just doesn’t seem fair!!

http://news.yahoo.com/s/nm/20061219/od_uk_nm/oukoe…

Sorry about the silence on the blog lately.  We’ve had kind of a disastrous week.  We live in the Pacific Northwest and were hit with a significant storm last Thursday.  Winds peaked at 69 miles per hour at our house and we lost a couple sections of fence.  Not a big deal.

With the storm came the chaos that you might expect.  Over 1 million people were without power and nearly 5 days later, there are still a couple hundred thousand that don’t have it.  We lost power for about 21 hours so we were lucky.  We didn’t sweat it though because we have a generator system tied in to the house so we had a furnace, lights and the fridges were cold.  We even powered my next door neighbor’s furnace and fridges.

So, we came out of the storm pretty well.  My parents, on the other hand, had disaster strike in the form of fire.  At 1:00 on Sunday my mom called crying saying, “Our house is on fire!!!!”.  I dropped everything and made the normally 25 minute trip in about 15 minutes.  The fire was still going strong by the time I got there and there were 5 fire trucks on the scene.  The garage and shop  (very large) were a complete loss.  3 Fiat convertibles of my dad’s, his new boat that he’s never even driven, and his forklift were all inside and completely destroyed.  I won’t mention all the tools that he had.  He even lost his tractor that he made completely from scratch when he was younger.  I guess there was some good news in all of this.  The house (attached to the shop) didn’t burn down.  It sustained some pretty significant smoke damage and they took a little fire right where the steps come in to the kitchen, but I’ve been told it’s fixable.  The main thing is that both my parents are okay.  That’s really all I care about.  We have set them up in the guest room at my sisters while they figure out where they will stay while it’s rebuilt.  Luckily they had insurance on everything so hopefully it will all be rebuilt.

Anyway.  That’s my excuse for not blogging much over the past week or so.  As you can imagine, there are all kinds of financial angles to this situation, which I’ll surely blog about as they happen.  I hope everyone has a great Christmas, or whatever holiday you celebrate!

Well here’s an interesting tidbit.  Apparently our money is worth more melted down that it is with all of the US Mint’s work done on it.  Before you start firing up the coals, you might want to check in to the laws.  I guess it’s illegal to melt money and I certainly don’t want to end up in prison.  You know how the pecking order in prison works right?  You get respect based on the crime you committed.  While melting money won’t make you as weak as a child molester in jail, you certainly won’t get any respect from the murderers in there.

http://www.kirotv.com/money/10534107/detail.html

I stumbled on to an interesting article about the underground economy.  This article basically summarizes a book called, “Off the Books: The Underground Economy of the Urban Poor”.  Here is a quote from the article:

“On that one residential block, Venkatesh focuses on three women: Bird, a prostitute; Eunice, an office cleaner who sells home-cooked meals on the side; and Marlene, a nanny who is president of the block’s neighborhood association. (All the names in the book are pseudonyms.) The women share tart observations about their respective livelihoods: Bird thinks gangsters should “let the pimps show them how to run a business.” Through them, we come to meet a diverse cast of locals, “nearly all linked together,” Venkatesh writes, “in a vast, often invisible web that girded their neighborhood. This web was the underground economy.”"

I always find it fascinating to read about other people and how they get along in their daily financial lives.  What I’m struck with from this article is how structured the underground economy can be in a neighborhood and also by how “stuck” these people are in their situations.  I don’t think it would be very easy to work your way out of a situation like this very easily.

Anyway, take a look and see what you think!

Hmmmm.  At what point have we reached pure and utter excess in society when people start buying $13,000 Cadillac Escalade golf carts.  I don’t know about you, but I’d be horrendously embarrassed to drive this around the golf course.  Then again, since I golf at public PAR 3 courses, it would seem even more ridiculous!

Well, this is a very interesting article.  10 years of research point to the fact that a self directed investor is probably going to outperform a financial adviser.  There are a few reasons for this, but I won’t spoil the article for you.  I highly recommend you check this one out:

http://biz.yahoo.com/brn/061206/20408.html

I have often fretted about whether I should go seek out a financial adviser.  I consider myself quite the novice when it comes to investing.  To be honest, the most valuable information I’ve gotten is from a friend of mine.  I don’t mean “stock tips”, rather fundamental ways to measure a company’s value and how to spot a potential bargain.  I’ve watched in amazement as my friend recommends a stock based on his analysis (which he shares) and the stock always seems to go up.  Value investing is his favorite.

What would I have gotten if I had chosen to seek out a financial adviser?  Well, I just don’t know.  If I was lucky enough to find one of those gems out there that cared about fees, loads etc I’d probably be okay, but I’m not sure if it would have outperformed my indexing approach of putting money in different sectors of the economy but doing it by using low cost index funds.

I’m home sick today.  Both my daughter and I are sick so we are just going to take it easy today.  She is getting to watch more TV than we normally let her watch, but she is such a good sport about not feeling well, that we think it’s okay.

On a slightly related note, it occurred to me that she isn’t getting a lot of exposure to commercials anymore.  We use Comcast “On Demand” for some of the shows she watches.  There are no commercials in these shows so that drastically cuts down on how many she sees.  It also give us the ability to really be selective on what she sees.  In addition, we have Tivo so we are able to fast forward through any other commercials.  She pretty much doesn’t watch any live TV anymore.  I love it.  The less commercials she sees, the less materialistic she might become.

All that mumbo jumbo being said, she definitely is tuned in to the Christmas season.  She knows that there are presents in her future.  She is 3 years old and over the past year, when she asks for something at the store, we’ve told her to put it on her Christmas list.  We’ve also tried to make sure she understands that just because it’s on the list, doesn’t mean she’ll get it, although at 3 years old, she may still be hoping that isn’t true.

Our plan is to buy her a couple Christmas gifts.  We plan to buy her a small radio that plays CD’s for her room.  It should be less than about $40-50.  We’ll also buy her a small toy.  Overall, we probably won’t spend more than about $75 on her, which is more than we’ll spend on each other.  The reality is that she will be getting so many different gifts from aunts, uncles and grandparents, that she’ll be more than content.  It’s amazing how excessive Christmas feels in this age of cheap toys.  More than a couple times, I’ve heard family members say, “I just had to get her both since they were so cheap”.

http://money.cnn.com/2006/12/06/real_estate/mortgage_apps

Mortgage applications rise as rates tumble.  I’m hoping for rates to continue their trend down.  My theory is that this might stabilize home prices for awhile.  I’ve read a lot of articles that point out the trickle down effect of lackluster home sales.  With fewer people buying homes, that also translates in to less consumer spending on all the items that a new homeowner needs.

http://www.philly.com/mld/inquirer/business/16164843.htm

Some great personal finance questions and answers.  I pity the guy that asked the first question, “If I sell my primary residence within one year of buying it, will I owe a capital gains tax?”  Poor guy.  He may be able to avoid some capital gains taxes if he’s moving for a new job at least 50 miles away, but that doesn’t help him with the amount of sales commissions and local taxes he might have to pay.  Chances are, in this market, he’ll lose his shirt.

The last question is also interesting.  The reader points out that she’s contributing 6% to her 401k and getting a 6% match from her employer.  Her son has been telling her to contribute to a ROTH instead.  The columnist points out that she’ll lose the match!  That just goes to show you have to be careful who you listen to when it comes to financial advice.  Just because there is a “know it all” in the room, doesn’t mean they know anything!

http://www.easier.com/view/Finance/Credit_Cards/Balance_Transfer

This is alarming.  This article states that over 4.2 million people in the UK still haven’t paid off their 2005 Christmas debt.  If you are still paying on your 2005 Christmas debt, you should really consider your priorities and think about starting a new tradition of a less materialistic Christmas.  Just my opinion.