Everybody Loves Your Money

Yeah, I know.  You aren’t supposed to care what other people think.  When I see pictures like the one below though, I often wonder what the rest of the world must think.  Looks like Materialism at it’s finest.  Bling bling!

I can only imagine how much those wheels and tires cost.  They probably cost more than the whole car is worth.  But, if they bought them from Rent and Roll they are probably sitting pretty with a $300 a month rental payment.  Well worth it when you consider the ladies you might attract.  </sarcasm>

On December 15, 2007 my parents had a fire at their home.  The fire gutted the garage/shop and smoked the inside of their house.  Days after the fire, my mother called the various utilities to stop them while they waited to rebuild and clean their house.  They knew it would be months before they would be able to get back in their house and didn’t want to have all that money going out the door for services that they couldn’t use.  One of the calls my mother made was to Qwest to put their phone service on hold and forward the number to their cel phone.  She told the customer service agent multiple times that she wanted to keep the number that they had been using for the last 19 years and have it forwarded to their cel phone and would pay whatever was necessary to do that.  The customer service agent said that wasn’t needed and that they could cancel the service but keep the number forwarding to the cel phone until my parents got back in the house.

Two weeks after the fire, my father died of a heart attack.  Needless to say, my mother was living through the toughest time of her life.  You can imagine the tough times we went through and then you can multiply that times ten and that will give you a sense of my mother’s experience.  She has handled it all amazingly well.

Last week my mother was able to move back into their house.  The place looks great and it has been a great feeling for my mom to finally come home.  After getting in and slowly unpacking some of the boxes my mom called Qwest to get her number turned back on.  The customer service agent said that they had given her number away three months ago and that she would have to get a new number.  When my mother explained that she had been told they would hold her number and forward it to her cel phone until she was ready to move back in the customer service agent said sorry but there was nothing she could do.  My mother was quite angry about this and started thinking about alternatives to Qwest.

My mother’s sister works at Qwest in their engineering department.  When she heard the story she was also disappointed.  She decided to email the president of Qwest to tell him personally how Qwest had let my mom down.  It wasn’t long after the email was sent that my mother was contacted by the president’s personal assistant.  She told my mother that she was very sorry for the situation and they would contact the person that had her old number and ask if he would consider giving the number back to my mother.  We all thought this was a long shot and was probably not going to happen, but to our surprise, about 3 days later the personal assistant called back and told my mother that they were able to get her number back and she would have it working at her house by Friday.  I was amazed.  Qwest took a bad situation and made it right.  Sure, they had given the number away originally, but I was impressed that they took the time to get my mother’s number back.  I wonder what they offered their other customer to give the number up………

When I saw these images of various consumer products that are vizualized in their various quantities I was struck with how much waste we have in this country. 

426,000 cel phones are retired every day.

http://www.themorningnews.org/archives/galleries/running_the_numbers/11rtn.php

http://www.themorningnews.org/archives/galleries/running_the_numbers/12rtn.php

11,000 jet trails are produced in this country every 8 hours

http://www.themorningnews.org/archives/galleries/running_the_numbers/

http://www.themorningnews.org/archives/galleries/running_the_numbers/02rtn.php

106,000 aluminum cans are used in the US every 30 SECONDS!

http://www.themorningnews.org/archives/galleries/running_the_numbers/05rtn.php

http://www.themorningnews.org/archives/galleries/running_the_numbers/06rtn.php

60,000 plastic bags are used in the US every 5 SECONDS

http://www.themorningnews.org/archives/galleries/running_the_numbers/09rtn.php

http://www.themorningnews.org/archives/galleries/running_the_numbers/10rtn.php

If I ever needed a boost to make sure I recycle, this display certainly brought it to the forefront of my mind.  We do a pretty good job of recycling at our house but I think we are going to try to do better.  I’d like to do my part to keep some of this stuff from our landfills.  It’s not like we have unlimited space there.  Remind me to post about when I was a kid and we had houses around us that could explode at any minute due to the methane gas that was seeping in to homes from the landfill a mile away.  People were having to evacuate and live in hotels just in case their house exploded.  I guess those memories give me added incentive to do my part to recycle as much as I can.

A lot of people talk about open source and point out that it’s the holy grail of software.  I love open source software just as much as the next guy but I also like Windows.  I’ve used Linux in the past (an old Redhat version and the more recent Ubuntu) but I could never bring myself to use it exclusively.  Like many others, I found I could use it for normal stuff like web browsing, email etc but I always ended up with some special application I wanted to run that just wasn’t available for Linux.

I, being the cheapskate that I am, hate paying for software.  Somehow I’ve managed to acquire MS software at a huge discount by getting it from a friend at MS, or through some sort of company promotion where they give you one copy of the software to use at home.  (It’s amazing how many big companies negotiate their licenses so that you can use a copy of your “work” software at home.  If you work for a big company, check with your IT dept).  Anyway, I’ve managed to collect a decent amount of software that I use on my computer and none of it has cost me a cent.  Here are some of the applications I use that are absolutely and totally free (and I won’t use software that puts any Spyware on my PC either):

-Lavasoft Adaware

Adaware is one of the few Spyware programs I run once in awhile to make sure that the evil Spyware dirtbags are staying away from my PC.  Worth every penny (Free).  (You can also use Spybot and a ton of other Spyware detectors.  Most are free)

-GoogleTalk

I signed up for Googletalk as soon as it was available.  I like the clean interface, lack of ads and just overall usability of it.  I also like the ability to use it within Gmail.  I’ve long since stopped using “pop” mail and have everything routed to Gmail so GoogleTalk keeps me informed of when I get new emails etc.  Google rocks and it’s all free to me.  If Google ever starts having issues with losing my data or exposing me to privacy breaches, I’ll have to kick them to the curb though.

-Windows Live Messenger

I use Windows Live Messenger, mainly because I can’t convince all my friends and family to switch to GoogleTalk.  It’s one of those things that just sits down in the corner of my screen and sucks up system resources.  I think I hate the large ad at the bottom of their window more than anything else.  It has a lot of what I’d call “foo foo” items like drawing, emoticons etc that I don’t use so I mostly find it to be bloated.

-Firefox

I like Firefox because it is clean and fast.  It’s amazing to see how great open source software can be.  I still find that there are some sites that don’t display well in FF so I still keep Internet Explorer around.

-Internet Explorer

I’ve actually been finding myself using Internet Explorer more since they released the latest version.  The tabs feature was long overdue.  I really got hooked on the tabs feature in Firefox.

-Yahoo Widgets

I love Widgets.  Since I’m running Windows XP, Yahoo Widgets has been a great “add on” for me.  I use a CPU monitor, memory monitor and stock ticker to keep track of my various stocks.  When Widgets first came out, I found myself using a lot more but these are really the three that I’ve found most useful and they are all FREE.

-Google Earth

This application impressed the hell out of me when it first came out.  The ability to spin the globe, zoom in and out and fly down to a particular address is incredible.  I don’t find myself using it too often now that you can get a lot of the functionality (at least the most useful functionality) on the online maps.

-Paint.net

I’m not about to shell out $500-$600 on Photoshop.  I’m not that good at creating images or altering photoshops (aka: I suck at it) but I do find that I need an application like Photoshop every now and then.  Paint.net is a great alternative to Photoshop and has many of the same features.  For an amateur like me, it works great and is FREE.

-Picasa

I use Picasa all the time.  I didn’t even realize I needed it until I started putting chunks of photos on the web.  It’s so easy to have Picasa create thumbnails and full pages for all my photos.  It sure beats trying to do it by hand.  I pretty much only use Picasa to create photo web pages but it’s invaluable to me for that one purpose.

-Itunes

Unless you’ve been living in a cave you know what Itunes is about.  The application is free but they end up getting some money out of you for the songs you buy.  (Unless you are still getting your tunes via Limewire or Bittorrent).  I like the ease of purchasing songs on Itunes and think .99 is a fair price for music.  I definitely think that Itunes runs better on a Mac than a PC though.  I’ve found I have a few performance issues with Itunes now and then.

-Windows Live Writer

I almost forgot to include one of my most used programs these days.  I use Windows Live Writer for all of my blog posts.  I used to use the web based Wordpress interface and hated some of the limitations of it.  WLW is outstanding for creating blog posts.  You can save drafts, include pictures (with drop shadows etc) and manipulate the heck out of each post.  It has definitely made my blogging much easier.  The best thing about it is that it’s free!

I didn’t pay a cent for any of these applications.  Okay, Internet Explorer is a bit of a fib because I know I had to buy Windows in order to use it but the rest of them didn’t cost me a cent.  I didn’t even pay for McAfee virusscan because, as a Comcast user, I get it for free.  The only piece of software that I’ve actually had to purchase is my copy of Windows XP and that was at a steep discount via a friend of mine that works at MS.  (Technically he gave it to me as a gift).  Other than Windows, everything else has come free since I got an “industry” copy of MS Office.  By using free applications from the web, I’ve been able to keep my computing costs extremely low.  The largest expenditure is for the hardware itself.  In the past I’ve always purchased components at a local PC shop and put the PC together myself.  I’m still using one that I built about 3 years ago and it’s chugging right along.  Total cost to build it back then was about $400.  (I reused a couple components from the previous system).  When I average that cost across 3 years, that works out to a little over $11 per month.  If I was to divide that cost by the number of hours I’ve used it, I’d really see the value.

In my never ending quest to find examples of people selling you what you don’t need, I’ve come across Rent and Roll.  In this case, if you don’t have the cash but need to get some nice “bling” for your car, you’re in luck.  With Rent and Roll you can rent the nice shiny expensive wheels for your car with their “rent to own” program.

What I couldn’t find when I looked through their site was any sort of terms.  They do say that they have some of the lowest lease rates in the business, but I think we all know that doesn’t mean too much.

I just wish that people would all wake up one day and realize that rent to own furniture, and especially completely non-essential items like new wheels for their car are a bad idea.  In my humble opinion, the only person that really comes out ahead with the rent to own programs is the companies that offer these terms.

THE ONLY THING YOU SHOULD CONSIDER RENTING on an ongoing basis is housing!  Yes, renting a tractor or other expensive item from a rental store for a day is a good idea.  In fact, in that case it’s a great idea because you don’t have the ongoing costs of maintaining the item and still have the ability to use the right tool for the job.  Renting anything else just isn’t a good idea.  You don’t need furniture that bad.  You don’t need a computer that bad, you don’t need a new TV that bad, and you certainly don’t need 22″ spinners (wheels) for your car that bad.

http://www.rentnroll.com

As I dug a little deeper on their website I found their “history“.  The founder of RentNRoll is really a veteran of the rent to own industry (as opposed to a veteran of the tire business).  What struck me as I read the history is that this business is really just another way to get people signed up in the rent to own cycle.  The terms are so sweet for the companies that offer rent to own that they just have to identify a product that lower income people want and then apply their rent to own concept to it.  I wouldn’t be surprised if other companies started popping up selling car accessories, or other non-essential items.  It’s just another way to tap in to those people that can’t wait to have something (as opposed to waiting while they save up the money to pay cash).

I guess, in a sense, these companies are just removing the credit card from the equation.  Instead of having the credit card companies pay them and then earn all that interest, they’ve figured out it’s better to get their customers to sign up for their terms which gives them all that interest instead.

Just when I thought I had heard everything, along comes this company that will sell you 52 fake ATM receipts that they’ll put any dollar figures you want on.  I’m sure that this is just a good prank for many people, but you know there are some people out there that will actually buy these in an attempt to be something they are not.  It’s keeping up with the Jones’ on a whole new level.  I suppose once these folks buy the receipts, they’ll then need to figure out a clever way of dropping them at just the right time so that someone they know will find them and think, “Oh my gosh.  He’s loaded!!”  Poor fools.

http://www.customreceipts.com

If you’d like to actually see a “REAL” copy of my ATM receipt, check it out here:

http://www.customreceipts.com/fake-atm-receipts/one-year-supply/?crcard=4136&crname=Hazzard&crdispensed=100.00&crbalance=749%2C000.85&crstage=2

Of course this is real and this is just my checking account.  I keep most of my money in my savings account so don’t think for a minute that I’m not a millionaire.

My brother in law and I had a good conversation about money today while we were all visiting at my mom’s house.  For those few readers that have been reading ELYM for awhile, you’ll remember that my mom and dad had a massive fire at their house back in December and then my father passed away two weeks later (from a heart attack).  Anyway, my mom has been staying at my sister’s for the last 7 months while she waited for her house to be repaired.  I’m happy to say that she is finally back in and the place looks amazing.  I negotiated some upgrades with my friend/contractor and we were able to do some additional work on the house on top of what the insurance company was paying for.  Basically my mom got all new paint and carpet inside, all new appliances and all new roofing and paint on the outside.  (and lots of smaller things done in the house as well).  On top of that, we decided to also install all new windows, gut all three bathrooms and put all new doors and trim throughout the house.  The place looks great and I think my mom, while she has had to face moving back without my dad, is much happier to finally be home.  Today was the first “get together” we’ve had in her house and it really felt nice to be back in there with my mom.

Anyway, that was a pretty long set up for the original intent of this post.  As we were sitting there my brother in law and I started talking about finances.  The majority of the conversation was around finding that sweet spot.  You know the one.  That balance between saving enough and spending a little so that you are both living for today and saving for tomorrow.  It’s easy to see that most people struggle to find that perfect balance between being sure that you are enjoying each day (because you never know when your number is up) and also not screwing your future self.  We both agreed that it’s really all about moderation.  Just like I’m not a huge fan of people on either the far right or the far left in politics, I’m also not a fan of either spending to excess or depriving yourself of living comfortably by saving every cent you earn while eating cardboard.  (I wonder if anyone has ever done that……  Is there any nutrional value in cardboard?)

For both my brother in law and I the sweet spot really comes down to living debt free (other than a mortgage and we both agreed that we’d like to pay off our houses far in advance of the mortgage terms we have).  Neither of us want to have any car debt (we don’t have any and they are almost done paying off their only car loan) and we also don’t carry any consumer debt.  On top of keeping non-mortgage debt to an absolute minimum (read zilch), we also both want to be investing at least 10% of our income each year.  In reality we are saving about 15-20% of our income.  That leaves us both able to enjoy things today while also ensuring we are not setting ourselves up for financial ruin later in life.  Like I said earlier, we both agreed that it’s all about moderation and living below your means.

I just love having conversations like this with people.  Call me sick, but I think if I had a choice, I’d spend all my time talking to various people about their financial situations.  I suppose that’s probably why I love reading PF blogs.  As I type this, I’m wondering if I’d enjoy being a financial planner.  I looked in to that once and realized how much I don’t know.  It’s too bad that there isn’t a career that helps people with the very basics of personal finance.  If there was, I bet I wouldn’t be half bad at it.

I’ve often found myself trying to decide whether to buy a cheap item that might not last very long or spend a little more and get what I perceive to be better quality.  I can’t tell you how many things I’ve purchased over the years that were at the bottom of the price/quality scale.  Some of those items have quickly found themselves in the garbage can while others continue to have a useful life.

One of the latest purchases I’ve made is a digital camera.  I opted to buy a low end Sony.  There is a little history here.  A few years ago we bought a “mid-range” camera that took great pictures.  We loved the camera.  The only problem with that purchase was that it didn’t take all that long before my wife and daughter sent it to the camera wrecking yard.  From that point on, I decided that it probably didn’t make sense to spend extra for better quality because 1)It might not last too long in our house and 2)technology is continually improving and bringing the price point down.  The cheap camera we bought this time has more capabilities and takes better pictures than the mid-range camera we bought a few years ago.  It takes higher resolution photos, processes the shots quicker, takes larger videos and also includes sound on the videos.  I bought that camera for less than a third of what we paid for the camera a few years ago.

Sometimes I don’t like to buy at the bottom of the quality spectrum.  That’s probably why I love Costco so much.  At Costco, I know that their buyers do the research to offer high quality products at a good price.  I can’t recall the last time I bought something from Costco that I wasn’t happy with.  A friend of mine has had similiar experiences: “Why I shop where I do“.  John points out how important good customer service is.  I also like to know that a company stands behind the products that they are selling me.  Certainly Costco is one of the top companies that stands behind their products.  Yes, Nordstrom also does stand behind their products but I don’t tend to shop there.  John mentions Video Only.  I would never shop there.  I have perceived them as just out to make a buck ever since my brother in law purchased a TV there and had problems with it.  When they told him that they don’t deal with any warranty issues and that my brother in law was on his own to deal with the manufacturer, I knew the place wasn’t for me.  Frankly, I never see anything in their ads that beats what Costco offers.  Anyway, check out John’s article and see if you agree with him, and if you disagree, be sure to leave him a comment.  Tell him Hazzard sent you. 

I remember back when I was 18 years old.  I was convinced I wanted to buy a nice car that required a car loan.  The only problem with my idea was that I was 18 and had no credit (and really shouldn’t have been buying a car at the time).  Since I knew no reputable bank would give me a loan for a car unless they had really ugly terms, I asked my parents to cosign the loan for me.  My parents completely trusted me and my judgement but they did spend quite a bit of time making sure I understood what I was getting myself in to.  In the end, I opted not to get a loan for a car.

Looking back, I think my parents did a good job of educating me on the risks of getting a loan but I also think that they did a good job of protecting themselves from taking on a potential payment if I had trouble paying.  When you cosign a loan, you aren’t just saying, “Yeah, I’ll vouch for this guy.”  What you are doing is actually telling the bank, “I trust this guy so much that I’m willing to “back” him financially if there is ever a problem and he can’t pay”.  That’s a lot of trust to have in one person and it’s most definitely not something I’d ever want to do unless it was for a very close family member that really needed the help and I could manage the payment if my family member ever defaulted.

Recently, a friend of mine relayed a story about someone he knows, “Marcia”.  Marcia offered to have an exchange student from Indonesia stay with her.  I think she did this both for the experience and for the added cash flow to her budget.  Marcia received a monthly allowance for hosting the student and it really helped her cover her expenses for the household.

After the student had been living at Marcia’s house for awhile, the student asked Marcia if she would consider cosigning a student loan for her.  Marcia said yes and signed the paperwork.  Everything went well for a while until the student moved back to Indonesia.  It wasn’t long after she left that Marcia received a notice that the loan was about to go in to default unless she paid $1600 to catch it up and then took over the $300 per month payment.  Marcia had no choice but to do this in order to protect her own credit.  Now she has had to take on the $300 payment which has significantly impacted her budget.  She has talked to the student back in Indonesia (Yikes, how much was that phone call) and the student has assured her that she’ll start paying again soon.  I hope that Marcia doesn’t hold her breath though because the body can’t live without oxygen for too long.  The reality is that the student really doesn’t have a ton of incentive to pay the loan off.  She doesn’t care if her credit in the US is impacted and probably doesn’t have the income levels to support paying the loan each month.  The only thing that Marcia has going for her is that the student might feel bad for putting her in this position.  Needless to say, I bet Marcia might do things differently the next time someone asks for her to cosign a loan.

When considering whether to cosign on a loan for someone, you may want to consider:

• How well do I know this person?
• How has this person handled money in the past?
• Does this person have the income now to support paying the loan back?
• What will this person be doing in the future? (Like living outside this country)
• Can I take on the payment if this person was to default on their loan?
• Will my credit report be impacted by cosigning this loan?
• What are the terms of the loan that I’m cosigning?

The bottom line is that you should review the loan documents and consider the whole situation before deciding whether you’ll cosign a loan for someone.  You never know how the other person’s situation might change which could cause you to have to pay back the loan on their behalf.

Lately, as my job has been really stressful and I’m frankly not all that happy with it, I’ve been thinking about throwing in the towel and moving out to the lake house once it’s done.  (My wife would love to do this)  In a sense, we’d be checking out of the rat race we are in to find new opportunities and a slower pace.  Of course, I can’t just make a decision like this lightly so I’ve been running lots of scenarios through my mind:

• What would we do for income?  Where could we find jobs?
• How much interest income could we generate off of our current assets?
• What would the schools be like for my daughter and would we be risking her future success?
• Would I like living out there full time?
• Could we possibly get used to living in 1000 square feet?
• Should we consider selling both our houses and buying something a little bigger than 1K square feet out there?
• Would we dislike living farther away from family?
• What would we do about health insurance?

All these things are serious considerations when making a drastic lifestyle change.  Of course the fact that we are considering taking a risk like this must mean we anticipate a positive payback to doing it.  Here are some of the reasons we think it might be a good idea:

• Slower pace
• Less intensity in our day to day lives
• Much lower cost of living – less requirement for larger incomes
• Spend more time in a place we’ve come to love

What’s interesting is that the risks seem to be more plentiful than the potential benefits.  Of course some of the benefits mean more to us than some of the risks above.  It could be worth it to live in a smaller space in order to experience a slower pace.  Other risks are things that are more important to us though.  I don’t want to make a foolish decision while my daughter is so young, only to deprive her of better opportunities to learn and go off to college later on.  I don’t know if that would happen, but it could.  Regardless of what we make for income, I’m confident that we could live below our means and still save for our future and my daughter’s college.  If we aren’t making enough to do that out there, we’ll adapt and figure out a way to live below our means.  It’s really very easy to live below our means now, but that’s because we’ve made it a priority.  With no house payment out there and no debt, we could easily generate enough income to live on and save for the future. 

Needless to say, our minds are spinning fast on this one.  Even if we decide not to do it soon, we can still keep this in our toolbox as an option if I ever got laid off, or our circumstances changed.