Everybody Loves Your Money

I was perusing the internet and came across this video and found it very interesting, as well as a little scary:

http://www.boingboing.net/2008/03/19/documentary-examines.html

After you watch the video, take a little time and read through some of the comments on the BoingBoing page. I was quite surprised at the intelligence in the comments. (Sure, there are a few moronic ones there too). I can’t see how anyone would argue that the current path we are on is a positive one. With trillions in debt and massive consumer debt, we can’t go on like this forever. At some point foreign investors WILL lose confidence in our ability to pay it all back.

While you’re at it, take a look at this video too. It really calls in to question how “free” our markets are. I have often felt like simple investors like myself are simply getting the very small crumbs while the market “rulers” are sucking up all the money.

http://www.youtube.com/watch?v=_3H6uEyR66M

It’s that time of year when people start planning out their summer vacations and begin booking all their weekends. One of the things we have coming up is a wedding to attend in July. We live in Seattle and the wedding is in central Montana. It’s one of my last cousins to get married and we really want to go to see her get married and also visit all of our cousins and relatives back there.

Over the last week or so I’ve been checking airline flights and it looks like the cheapest flights are about $350 round trip. When you multiply that times 3 it’s over $1000 just in airline tickets for my wife, daughter and I. Add in the hotel room and we are easily heading north of $2000. Ugh. On top of the actual expense of the trip is also the lost income for my wife. Since she is a contractor, she doesn’t get paid time off. Every week day we are gone makes the trip that much more expensive. Don’t get me wrong, I wouldn’t avoid going just so my wife can keep earning income, but it’s certainly something that comes in to the equation when deciding how long of a trip to plan.

The other option that we have is to drive there. It’s about 850 miles each way and takes a couple days to drive when you have a 5 year old. (In the past I’ve always just headed out at 4:00am and done the trip in one day but I don’t think my wife is going to approve of that plan now that we have a child). If we drive we would spend somewhere around $300 on fuel. That’s a lot cheaper than flying, but we also have to calculate in some wear and tear on the car. If we use the IRS mileage rate to calculate “real” costs it would be about $850 to drive. (The 2008 IRS mileage reimbursement rate is .505 per mile.) So, even if we use the conservative IRS calculation, it’s still cheaper to drive.

I guess the big question is how much is our time worth. The flight would take about 2 hours, while the driving would take around 13-14 hours. By spending an additional $200 we would get a couple extra days in town with our relatives. Of course if we fly, we may have to rent a car to get around there. In that case, it would really be more like $500 more to have a couple extra days in town. Hmmmmmm. I guess we’ll need to sit down and really hammer this out to decide what feels right.

If you are a long time reader of ELYM, you know that I’ve gone through a bit of a transformation, or enlightenment. For my entire adult life I have drooled at and spent way too much money on cars. If I had a nickel for every new car I’d bought, I’d have….. well, I’d have more than a quarter. As a college student I owned 3 different new cars. Pathetic. Each time I bought one I’d take it in the shorts when I got the urge to trade up or across. About a year ago I made the decision to stop the madness.

We now own two used cars. Both of them were built in 2000 and have between 60,000 and 90,000 miles on them. The first is a Toyota Tacoma pickup. It was a friend of mine’s and I love it. It’s simple, doesn’t have a ton of bells and whistles and just runs. I have absolutely no regrets on that purchase. The second is a 2000 Honda Accord that we own for the second time. Yeah, it’s a little confusing but we bought it new in late 2000, drove it for about 40,000 miles and then sold it to my sister. After a couple years, we bought it back from her and are continuing to drive it. Unfortunately the Honda is the car that is testing our resolve to drive older cars. The first test was when the alternator failed about 3? months ago. Luckily AAA came to the rescue and we ended up spending over $400 to get it fixed. Just when I got over that unexpected expense and told myself that it was better than a car payment and massive vehicle depreciation, the car has thrown us another curve ball. What now, you ask? (okay, maybe you didn’t ask, but humor me). We now have an intermittent “SRS” light coming on. After a little research on the wonderful world wide web it turns out this is a well documented feature, I mean problem, with the Honda Accord from 2000-2001. Apparently it has to do with a control module that malfunctions. When the “SRS” light is on, it means that the airbags will not deploy. While I fully trust my wife’s driving, I don’t particularly trust all the strung out crackheads that she might be driving by each day. From what I’ve gathered on the Honda forums, it sounds like it’s anywhere from a $400-$1300 fix. UGH.

The good news is that we are currently experiencing a fully functioning Honda Accord that doesn’t have the SRS light on. (It went off last night). I can’t say I really trust it, but I’m going to wait and see what happens over the next week or two. I really hope I don’t have to take it in so soon after the alternator. I guess this is the price we pay for driving older vehicles. Good times. Good times.

It must be something in the air, or perhaps it has something to do with all the doom and gloom stories about our economy, the price of oil, the failing housing market, the falling market. I don’t know, maybe I’m just crazy, but I’ve found myself thinking a lot more about doomsday scenarios when it comes to our finances. I’m going to be starting in a new position at my company, I just got a 7% raise, and we have finished the massive expenditures on our lake house so you’d think I’d feel warm and fuzzy all over, but I don’t.

I’m finding myself thinking, “What would I do if I lost my job?” Well, I’d fall back on my emergency fund for the first few months, but what if I couldn’t find another job for awhile? What if my wife lost her job too? How would we afford health insurance if we weren’t working for an extended period of time? What social programs would we be able to fall back on?

It’s easy to see how someone could go insane worrying about all the possible scenarios when the economy isn’t doing very well. When I start feeling stress about our finances I try to stop myself and think as rationally as possible. The reality is that I have a skill set that is in demand (IT) and have enough money saved that we could get by for quite some time. What I have to remind myself is that in a true financial crisis, we could do some fairly radical things. One thing we could do is withdraw some of our ROTH IRA contributions without facing a tax penalty. If things really got bad, we could withdraw some of our 401K and face the penalties of doing that. We could also borrow some money from our home equity line of credit. And if we were really in a pinch, we could even ask our parents for help, although that’s not something I’d really want to ever have to resort to. I guess the fact of the matter is, while we have many options that aren’t ideal and would drastically impact our long term goals, we do have a lot of options.

Are you worrying about your finances these days?

Well, I’m happy to report that after nearly 1.5 years worth of weekends, our lake house just had it’s final inspection and we PASSED! No more inspectors and we can move in now. I can’t even begin to tell you how much of a weight has been lifted off of my shoulders. No more deadlines, no more possible hiccups.

When we embarked on this project so long ago, it seemed like we would never get it done. All those cold weekends installing the siding, roofing and trim. All the back breaking sheetrock. All the mistakes and fixes. All the blisters, sore backs, sore legs, sore arms, sore “you name it”. I think the best part about it is that the financial impact is coming to a close. Sure, we’ll spend some money on some things for the place but all the huge construction costs are behind us. I knew that it would be expensive to build the place but it was really pretty amazing how the little things added up. I have a huge folder in my office that has every receipt for the place. The last time I added it up, we had spent over $35,000 on materials and labor (for the few things that we subcontracted out). It’s been awhile since I’ve added up all the receipts though so I’d put the total cost at about $45,000. Somehow we managed to pay cash all the way along which, when considering the total, amazes the heck out of me. How did we dig up that kind of cash?

Oh well, I guess the money fairy must have been looking out for us. Now the number one priority for us is to start building our emergency fund back up to a much more comfortable level.

Here are a few pictures of the interior:

It seems like yesterday. There you were, two years ago, flashing your bits at me. How could I resist? Legal music downloads? And only 99 cents? My god, you were sexy. What better place to put my new legit music than on a tastefully created Ipod. That is, of course, when I wasn’t listening to this new legit music on my PC with the large speakers. I still remember the first purchase. Okay, I don’t but it sounded good.

Yeah, there have been multiple music offerings over the last couple years. There was “Real Audio”, Walmart downloads, Napster (legit), and a multitude of others out there. In my mind, they all sucked. It wasn’t until this year that I finally found a new love. That new love is Amazon MP3’s. No longer do I have to deal with limited transfers from my ipod, to my pc, to my laptop, to my car. I actually have some new music now that I can put on the device of my choosing without the threat of a visit from the RIAA. No way, I’m not sharing them. It doesn’t take a rocket scientist to figure out that this new download has a unique identifier on it that could get me in trouble if it found it’s way online. I never have shared any music and don’t intend to. I’ve always just wanted the freedom to use the music where I want to.

Did I mention that a lot of the tracks are only .89 too? Oh, yeah, and when you download it, it just saves to whatever folder you want as an MP3, because that’s what it is. I’d also point out that the quality of the track is very good too. Sure, they have a limited selection, but I would bet they’ll have a comparable selection to Itunes in the not too distant future.

Anyway, I’m happy. Have you tried Amazon music? http://www.amazon.com/b/ref=sv_m_7/105-7538581-5324425?ie=UTF8&node=163856011 (notice I’m not referring you because I don’t have an affiliate account)