Everybody Loves Your Money

I have finally made the decision to switch from a plain old “cheap” cel phone to a phone that has data, web access, email etc etc. It has been a long road for me to get to this point. I have watched many friends use these smart phone devices (think: Iphone) and have drooled at the thought. What has kept me from getting one up until now? I absolutely despise monthly service charges. My wife and I have managed to keep our bill down to $50 per month for two phones for a long time. I don’t like spending $50 a month for the service but there is no question that it is worth it for the peace of mind that comes with always being able to reach each other in case of emergencies or for convenience. With company discounts I might be able to add data to a new plan for about $20 per month so it’s really only a delta increase of $20 per month. The real question is whether I’ll get enough benefits from the phone to justify the extra expenditure. I have a sneaking feeling that I will…..

It’s finally time for me to suck it up and join the smart phone crowd. I have considered buying a Tmobile G1 or HTC Windows based device but I have memories of borrowing friends phones and thinking that the interfaces were so clunky and “un-user friendly” that I just can’t bring myself to buy one. That leaves only one option at this point. Like millions of other people on the planet I’m thinking I’ll probably buy an Iphone. Unfortunately there couldn’t be a worse time to buy an Iphone. With all the rumors floating around out there, it’s pretty clear that they will be launching a new Iphone in the June time frame. I’m not going to finally join the ranks of the smart phone elite only to have it obsolete within a couple months. (Sure it would work fine for the two year contract but if I’m this close to the new launch, I might as well wait).

The other phone that is generating a lot of hype is the Palm Pre. I’ve done some reading about it and it appears to have excited a lot of industry people. While it’s going to be much weaker on the application front (Apple seems to have the corner on the market for applications due to the app store), maybe it will make up for it with other features. I just submitted my name to Palm as a potential “beta” user where they will send me a phone to use for 6 months and pay for the data/phone plan. Of course, they haven’t selected me at this point, but if they do, it could throw another wrench in to my plan to buy an Iphone. Who knows, maybe the Palm device has a better user experience than the Iphone. If I get selected to participate, you’ll know it because I’ll be putting multiple posts up talking about it with a theme towards getting my money’s worth out of it with increased productivity and accessibility.

Either way, now that I’ve made up my mind to go the smart phone route, it’s going to be very hard to wait to pick one up, whatever it ends up being.

I have to admit I’m a bit of a Facebook junkie after signing up a couple months ago. I received an email today from a friend on Facebook that looked legit and told me to click on a link:

Here is what the email said:

Julie sent you a message.

Subject: Hello

“Visit http://www.facebook.com/l/0a60b;http://fbactin.net/”

I removed the “O” from the url so that no one gets hit. It’s amazing how fast this thing is spreading. Anyway, just a heads up that you should avoid this message if you are a Facebook user. The site that it loads looks exactly like Facebook but if you look at the address bar in your browser you’ll notice you aren’t at Facebook.com any more. I did a “whois” check on the domain name and was surprised it looks like the record was created TODAY and is already spreading like wildfire.

The domain to avoid at this point is: fbaction . net. I’m guessing that domain will change as it’s pretty easy to alter as many viruses do. If the domain was just registered today, it’s likely this domain will change as the phishing attempt evolves.

Over the last few decades we’ve seen expansion and growth that boggles the mind. Now that we are in a recession that is looking to be one of the most severe in many decades, it’s amazing to see how consumption can just drop so significantly. Consumer spending has decreased drastically, the automotive industry in the US is in complete turmoil and even the more stable foreign automotive brands like Toyota and Honda are showing losses and reduced production for the first time in many, many years. Sales have dropped off by 27% at Toyota in the first quarter. Toyota’s worldwide production dropped by 46% year over year. Honda’s production dropped by 37% and Nissan’s dropped by 45%. Millions of automobiles aren’t being built this year due to the drop in demand.

Imported goods from China and other countries is down significantly. The decreasing trade around the globe is saving millions of gallons of fuel that would be used to transport these goods. Millions and millions of dollars worth of energy that would have been used to manufacture goods is not needed which is helping reduce emissions from the various energy plants around the world.

Frugal living is suddenly sexy around the country. People are reusing and recycling materials that they once tossed aside without a second thought. The reuse of those materials is decreasing demand for new versions of those items.

The bottom line is that overall consumption of just about everything is down. I’d love to see estimates on what this means for the environment if anyone has any data or articles to send my way. There is no question that this recession has done more for the environment than any “earth day” initiatives out there. The only drawback to all of this progress is that many people are likely to return to their previous consumption levels once this is over.

With all the commercials on tv these days about how I could be saving a ton of money on my car insurance, I’ve had this little bug in the back of my head chastising me for not having checked my insurance rates in many years. I have been with the same insurance company for about 15 years and they have made a TON of money off of me in those years. The rates have felt reasonable but the idea of saving hundreds of dollars each year for comparable service finally spurred me in to action last week.

I figured that I’d have some pretty significant discounts headed my way since I’m insuring two houses, two cars and a boat. It turns out that isn’t the case. I built a simple spreadsheet that listed the prices I am paying for my current insurance and then proceeded to check Geico and Hartford to see what their rates would be (I specifically chose those companies based on my personal experiences and friend’s recommendations). Each company varied a little bit but it ended up being almost a “wash” when all the numbers finally came in.

I have to admit that I was pretty disappointed that I wouldn’t be interrupting my friends and family in the middle of their stories to tell them that I had just saved a ton of money on my car insurance but the other part of me felt satisfied that I’ve been getting the best rate that I could over the years. Even if another company had come in $10 a month cheaper, I don’t think I would have switched. I believe longevity with an insurance company can be beneficial. As an example, due to the many years without a claim, I won’t see our rates increase when we do get in an accident. If I was to switch to a new company and then have an accident, that wouldn’t be the case. I would end up having higher rates than I have now.

Anyway, I feel better now that I’ve actually checked on other company’s rates. I just need to be sure that I don’t wait this long to check again.

I should start this post out by apologizing for my lack of blogging lately. Life seems to be getting in the way of a few things and one of them is blogging.

There has been lots going on around here lately. Awhile back, I found out that I will be spending almost $11,000 on a new roof for the house. While this might have panicked me years ago, I’m pretty okay with it because we knew it was coming and have been putting money in a special account. When the roof is done, we’ll be able to write a check for it without having to borrow anything. Financially planning ahead for major expenses does have it’s benefits.

I almost didn’t want to blog about the other major purchase we recently made. Why? Because it is an absolutely absurd expenditure. I bought a new ATV (four wheeler) for the lake. Not only did I buy it, but I bought it NEW. Please, use the soft tipped arrows when you leave your comments.

I could go on and on about how concerned I was that the ATV shop employees needed to eat and that my purchase was single handedly keeping them employed but we all know I’m not that thoughtful. I have been wanting some sort of ATV for the lake for the past couple years so that I can go out and explore the hundreds of miles of trails that are just about right out my back door. All of our friends out there have them and disappear on day long excursions on their ATV’s. I have been wanting to go along every time but obviously couldn’t keep up on foot. We did go along in one of our friends “Polaris Rangers” and were absolutely amazed at all the great trails and open forest roads that are there.

So, now for the details. The ATV cost about $5000. I was able to get a massive discount off of the MSRP price because I chose a 2008 model that they wanted to clear out of their inventory. I spent a good solid hour negotiating the final price and after all the negotiating was done, I made them throw in a new helmet to seal the deal. I think I just about gave the guy a coronary when I told him that, after he had steeply discounted the ATV and all the negotiating was done, I’d like to pay for it with an American Express so that I could get another 1% back. This purchase is solidly in the “wants” category and I clearly knew that there was no justifying this as a “need”. We will pay the American Express bill off in full when the statement comes so we aren’t taking on any debt for it. It was a lot easier making the decision to buy this “toy” knowing that we were paying cash, we are maxing out our investment accounts, and we have a solid emergency fund in place. If all of those criteria weren’t being met, I would have never made the decision to buy it.

So, there you have it. As conservative as I try to be with our finances, once in awhile I throw caution to the wind and do something crazy. I guess I chalk it up to trying to make sure that we live for today AND plan for tomorrow.

This graphic is fascinating. It shows the job increases and losses since January of 2006. Talk about going from Blue to RED!

http://www.slate.com/id/2216238/

Most of the time I feel fortunate to live in the Seattle area in the Pacific Northwest. The one time that I don’t appreciate the Seattle area is during the drab months of winter and early Spring. This year seems to have been particularly dark, rainy and gloomy. I was hoping that my quick trip to Las Vegas would feed my body’s need for sun and warmth and while the weather was decent, it just didn’t do the trick.

If you’ve been reading the news much you know there is a small real estate crisis going on these days. In my area of the country that translates to properties losing upwards of 20% of their value. For other areas of the country the equity drops have been even more severe.

Take Phoenix and Las Vegas as examples. Not long ago you couldn’t buy a house there without a bidding war and frothy interest from investors everywhere. Oh how times have changed. I’ve been watching Craigslist for both of these areas and it’s surprising to see 2-3 year old houses selling for between $95K and $125K. Amazing.

There’s obviously a reason that prices have come down so much. There is far more supply than there is demand at this point and I’m guessing that won’t change any time soon. That’s good news for someone like me who is just a little bit tempted to grab a house down there nice and cheap. If I could split the house with one other family (like my sister), we could keep costs low and it would give us a place to go warm up in the winter. With my job, I could easily spend a week at a time down there working remotely with no problem. The only complication is my daughter is in elementary school so that would limit our travel time significantly.

These days I’m a tad bit wiser when it comes to figuring in operational costs for owning a place like that. Since we built our house out at the lake a couple years ago, I’ve become intimately familiar with pesky costs like taxes, power, HOA dues etc etc. While the outlay to buy a place down there is somewhat affordable at this point, I’m not sure I want to add more monthly expenses to our budget just so that I can enjoy warmth once in awhile. As tempting as it is to jump in and buy a place that I could someday use as a winter home, I’m leaning more towards just planning a couple winter trips down south to warm up. This would give me some time in the warmth and also minimize my total cost outlay.

So, I’ll continue to ponder the idea of buying a place in Vegas or Phoenix while the prices continue to stabilize a bit. At this point, I’m leaning towards holding off.

You can’t help but stumble across links to articles about the economy these days. I’ve probably read more than would be considered healthy. Here are a few that I found interesting:

The New Survivor Guilt. I’ve found myself feeling bogged down and less enthusiastic at work as the work piles up and there is no relief in sight. Like the article says, I haven’t complained because I’m grateful to have a job. Luckily I haven’t turned to drinking by myself or popping pills but I bet I’ve eaten a bit more than I should to cope.
http://www.newsweek.com/id/193099

I can’t imagine graduating from college this year in the middle of one of the worst job markets in history. I’m guessing there will be a lot of underemployed people out there. This article points out that anything you need a credential to do is where the most jobs are.
http://www.businessweek.com/bschools/content/apr2009/bs2009048_818137.htm

Wells Fargo reported very strong earnings, well above what analysts expected. I wonder if we, the taxpayers, can expect a loan payment this quarter…..
http://online.wsj.com/article/BT-CO-20090409-708704.html

Here is a great article on consumerism. My college minor is in sociology and I’ve always been fascinated with macro level social changes. I’m going to be very interested to see how the shopping and saving patterns change due to this downturn. My initial reaction is that it won’t be very drastic because the level of suffering hasn’t approached anywhere near depression levels for most people. It usually requires a drastic shock to change behavior for the long term, in my experience. Anyway, this article talks about how a few different people have started to trade down when they shop. One person went from Nordstrom to JC Penney, while another went from TJ Maxx and Ross to thrift stores. It’s all relative, I guess.
http://www.mercurynews.com/topstories/ci_12101929

Well, it had to happen sooner or later.

People who stayed on the sidelines, diligently saving their money so that they could, one day buy a home that they knew was within their means, are starting to enter the home ownership club by buying homes that are drastically cheaper than they were a couple years ago.

These kinds of articles give me hope for a bottom to this economic storm:

http://www.nytimes.com/2009/04/03/us/03florida.html?_r=1&hp