Wow, I ran across this USNews piece: How to Revive the American Dream: More Subsidies which makes me think the writer, Rick Newman, needs to eat some bran muffins or something. There is a grain of truth in what he says, but still - harsh!
If you haven't heard the news about the American Dream, please sit down while I tell you. Because the American Dream is dead. I keep reading the obituaries.
In the old days, people worked hard to improve their lives. They started small businesses that sometimes became bigger businesses. They bought homes and cars, and when they could afford it, they upgraded to nicer homes and cars. They saved money in case something went wrong.
Now, it's all ruined. And here's who did it: CEOs, for starters. Because they take most of The Company's money for themselves, and there's hardly anything left for employees who used to get 5 percent raises every year just for showing up.
Bankers put a stake in the American Dream, too, by giving mortgages to people who couldn't afford them. Even worse, now the sinister bankers will only give loans to people who can prove they'll pay the money back.
I don't know about Rick, but my American dream is not dead. Now, admittedly my dream is not the same as my parents or my grandparents or even my great-grandparents. But it is a dream and it is one I am pursing here in the ol' USofA.
My dream is to one day free myself from a paycheck. I also am working on liberating myself from fixed monthly expenses. At the same time I am slowly establishing a comfortable lifestyle. These dreams are all still very much in progress. New dreams can (and will) be added at any time.
I don't subscribe to the notion that there is only one way to live life nor only one dream worth having. Yes, a lot of financial mistakes have been made by many people. Corporations have become ways to enrich just a few while pretty much screwing everyone else (yes, that is employees AND shareholders). Some do spend a lot of time, money, and energy over the years trading up to larger homes and larger cars until they reach that pinnacle of space and expense only to then turn around and start expending the time, money, and energy to downsize.
Seeing all of this, I picked a different dream and so can you. Now, whether the Government will subsidize our individual dreams (free me from that paycheck faster by providing me with independent, life-long guaranteed, and affordable health care please!) - who knows...
The NPR story: Maryland Residents Asked To Cut Energy Use reports on various states who's leaders have set energy reduction goals. The problem is just asking residents to use less and conserve more is not really working.
People just aren't jumping at the chance to save energy.
That's partly because electricity is still relatively cheap, says Michael Dworkin, who has been involved in Vermont's energy-use reduction program — one of the most successful so far.
"Even high energy bills are typically only 2 to 4 percent of a household's discretionary income," Dworkin says. "You know, they're a third of what they spend on healthcare, or they're a third of what they spend on the car. They're a quarter of what they spend on housing."
Someone who spends $160 a month on electricity, for example, would save less than a dollar a day by cutting electric use by 15 percent.
But as the price of fossil fuels climbs, Dworkin says it doesn't make sense for people to wait until the pain of higher bills prompts them to act. "Efficiency is by far the better choice," he says.
Personally, it was not until I really started looking at my utility bills that I got serious about conservation. But my real "Ah-ha" moment with saving energy was when I could clearly see the money savings in my utility bill.
I think I have told this story before, but I am going to tell it again (in case some of you were not paying attention the first few times I mentioned this). When I purchased my home back in 2004 it came with two refrigerators. A brand new one in the main kitchen and a very old, harvest gold, fridge in the basement apartment. Almost a year later the harvest gold fridge started breaking down. I found an ad on craigslist for a white fridge that was just a couple of years old. The owner had just purchased a home and wanted to switch to stainless steel appliances - so I got the new "used" fridge for $100 (which included delivery). I was happy because I had found a bargain. But I became really happy when my next electric bill arrived. It turns out my $100 fridge was much more energy efficient than the old harvest gold one. The new fridge cost $10 less per month to operate.
Seeing that drop spurred me on to find other ways to decrease my bills. That is when I started swapping out my light bulbs and unplugging unused appliances. But the first step has got to be monitoring your utility bills. This is as simple as creating a spreadsheet and noting how much you are paying each month as well as how much you are using (kWh for electric). As you collect the data, you can start to compare your yearly costs. You may not be motivated by saving $10 in one month, but seeing that you saved $120 in one year might get you more interested.
To get the general public interested in meeting a conservation goal, you have to show them how they will be rewarded by achieving it. The states need to do a better job of showing the monetary rewards of saving energy. Once that connection is made in people's minds - they will conserve.
I am in the midst of reviewing applications for prospective tenants for my investment condo. I have been very pleased by the response from renters this year. My last tenant occupied the unit for two years, and I can say in that time, rents have definitely gone up in the city. I raised the rent on my unit by 10% for the new tenant over what the old tenant used to pay. Even with this increase, I am being flooded with interest. Makes me think I should have raised the rent more - but, oh well. I am happy with the new amount and my next tenant will be getting a bargain, so a win-win for everyone.
It appears letting the apartment stay vacant for a month has paid off. The prospects are really noticing the improvements I put in place. I am finding it much easier to show, since I don't have to coordinate with an in place tenant for scheduling. It is also more relaxing to show the unit since I can just let the prospects roam, without having to follow them to ensure the security of the prior tenants "things". The empty apartment does mean lost revenue, but I can now see why some landlords only do showings once the prior tenant is gone. For me, taking this loss is really only justified after multi-year back-to-back occupancy.
My pfgeekiness is well satisfied by the number of completed applications I am receiving. I am getting peeks into all of these stranger's personal finances. The hard part is weighing the weaknesses and strengths of the various applicants and making my pick. Fingers crossed that this all gets resolved soon and I have a signed lease and an end to all these emails, phone calls, and showings! Oh, yes, and those rent checks start flowing again. Really looking forward to those monthly checks resuming :)
The Washington Post article: The Extreme Reality Makeover Show reports that the Harper family, who received their four bedroom home, free of any mortgage, along with enough money to pay the homes real estate taxes for 25 years as well as full college funds for their three children - in 2005. For the past three years, the family appears to have taken out a $450,000 home equity line on the home, which they now can't seem to keep up with the payments. The home is in foreclosure and is expected to be auctioned off on August 5.
You could (and will) say the Harpers had it coming, but really, we all had this coming. One thing we'll always remember about this decade was the constant home do-over fetish, in real life and in the reality of reality TV -- the constant warping of the consumer's sense of entitlement, the fairy-dust economics, the MasterCard reminder that the experience is priceless. We'll look back and think of all the time we spent watching shows where people flipped houses for easy profit, or traded spaces, or designed it to sell, or were led into rooms blindfolded to experience the paroxysms that came with new paint, new furniture, new life.
All the crying people did for the camera: They cried when television's magic wand touched them, and the hosts always cried, too, while telling the camera how good they felt making the dreams of the sick and wretched owners of substandard tract houses come true. Think of the many tears that were shed on American television over organized closets and new kitchen countertops.
Now comes a long period of tsk-tsk, and tut-tut. The schadenfreude potential is everywhere now in these newly sobered times, and it would be something if the Harpers would make themselves available for an entirely other kind of documented extreme makeover, penny by penny.
knocked on their door Friday, told WSB-TV they got the loan for a construction business that failed.
Failure seemed an impossibility in February 2005, when ABC TV viewers got a look at the stunning home constructed in a subdivision three miles east of I-75. Painted dark olive and covered with specialty shingles, the home's domed door opened into a structure that featured four fireplaces, a solarium, music room and a porte-cochere that connected to Milton Harper's new office. The yard was a study in landscape art, with young magnolias, fieldstone and a Leyland cypress hugging one corner. A black metal fence ringed it.
It had taken shape in six intense days in January 2005, when Atlanta-based Beazer Homes USA and "Extreme Makeover" demolished the Harpers' old home, plagued by a faulty septic system. Professionals and volunteers came together to erect the largest home that the "Extreme" team had ever built.
Materials and labor were donated, but the home would have cost about $450,000 to construct. When they were done, the home dwarfed all the ranch and split-level structures in neighboring lots.
That was not all. Beazer Homes' employees and company partners raised a quarter-million dollars in contributions for the family. The sum included scholarships for the three Harper children and a home maintenance fund.
The Harpers, whom ABC chose from among 15,000 "Extreme Makeover" applicants, spent the week in Disneyland while 1,800 people swarmed about the site. The family returned to a new home, plus contributions worth about $200,000.
Wow, I can't imagine running through $650,000 in three years. But then, I also can't imagine owning a home with four fireplaces - in the south - in Atlanta. What the heck were the Extreme Makeover people thinking when they built that monstrosity? What was the Harper family thinking when they started running through that money? I just hope the kids college funds did not get raided as well...
The other element that has drawn people to the story is Barry's personal tale.
"It's a great story of a writer making it big," Fox said, "and being discovered."
Barry, 58, has wanted to be a novelist since her early childhood in Marblehead. She self-published "The Lace Reader" last year, after which five publishers quickly vied to scoop it up — a dream come true for any aspiring author.
Barry chose William Morrow, a division of HarperCollins publishers, who signed her to a $2 million, two-book contract. The self-published version was immediately pulled from shelves, and the new version will be released today.
"When people say, 'Do you believe in magic?' I say, this is what I believe is magic," Barry said of her recent success. "I really can't believe it. At my age, and at my place in life, it doesn't seem real to me at all."
Yes, I would say getting paid a couple of million to have your book published is pretty magical.
My most recent natural gas bill recently arrived and in itty bitty print I saw this notice:
The Gas Supply Charge has increased from last month's charge of $1.5180 per therm to $1.8491 per therm. The increase is due to higher projected gas commodity costs.
So my gas bill has increased almost 22% just due to rising fuel prices. While I am not pleased to see double digit increases, there is not much I can do about that.
What I can focus on is reducing my household gas consumption. This time of year my big gas consuming activities are heating water, cooking, and drying clothes. The new clothes lines I put up a few weeks ago have been getting a work out. I am also only running my clothes washer with cold water. Comparing my most recent gas bill with last year, I see that I used 4 therms less - or a more impressive way of saying this is I used 35.71% less therms this month than the same time last year.
Conservation should help me battle the rising prices, at least for now.
Are you seeing increases in your utility bills? If so, how large is the jump? What are you doing (if anything) to conserve?
SanDiego.com's Money Makeover: Couple can beef up retirement savings profiles Maria and Felipe Betancourt who are playing catch-up on retirement savings now that their children are grown.
The Eastlake couple, both in their early 50s, experienced a financial shift when Maria earned her college degree and became a speech therapist at age 41.
Since then she has been working for a school district and putting money into her employer-sponsored retirement plan, in which she has saved about $18,000. In addition to almost $50,000 in cash and CDs, Maria will also have a $48,000 annual pension benefit (based on 25 years of service) to look forward to when she retires at age 66.
With about 13 years still to save, and a current combined income of about $93,000, the couple wanted to know if the retirement catch-up they have been doing for the past 10 years is going to support their living expenses in retirement. They also wanted to figure out sooner rather than later what more will they need to do to make their financial situation for the future even more stable.
The couple's desire to get into the landlording business has me a bit concerned. They still have a lot of retirement saving to do and starting a new business at this point seems risky.
We have been experiencing a very rainy July here in Boston. So much rain has been falling, that my self-watering half-whiskey barrel planters keep flooding. If I had known Boston would experience a tropical weather pattern this summer, I would have planted the containers with rice - at least that crop would have thrived in the swampy soil. The other day, after a particularly violent rain storm, I was out there bailing out the containers with a coffee mug. I used organic soil for the planters, which I have now learned means the dirt is mostly made-up of cow manure. So the brown water I was removing a mug full at a time smelled and looked just like cow diarrhoea. This was not what I signed up for when I got into the whole gardening thing!
Hopefully the soil will have a chance to dry out over the next few days and my plants will revive. We shall see.
The rain is also impacting me in other ways. My back yard laundry line is not getting used much, since the weather is so iffy. The side-porch line looks to be the most active, since it can be used regardless of the weather conditions. My solar panels are not producing as much as hoped due to the rain and overcast skies. Come back sun - my household really needs you!
Has the summer weather been impacting you in any unexpected ways? Or is it just me who feels like Mother Nature is out-of-whack?
Sloppy paperwork by large financial institutions is saving some from foreclosure
The New York Times article: How One Borrower Beat the Foreclosure Machine tells the tale of Mamie Ruth Palmer, a 74-year-old former housekeeper who just won a five year battle with Bank of New York.
Last month she received a settlement from the Bank of New York, the trustee for a vast pool of mortgages that included hers. Under the terms of the deal, the bank reduced Ms. Palmer’s loan balance to $59,000 from about $100,000 and has agreed to accept the proceeds of a reverse mortgage in full satisfaction of her obligation.
The settlement also eliminated about $12,000 in foreclosure fees added to her debt and called for the installation of central air-conditioning in Ms. Palmer’s home.
Roughly $10,000 in legal fees billed over five years by Ms. Palmer’s lawyer, Howard D. Rothbloom, will be covered by payments she has made toward her mortgage while she was battling foreclosure.
“I feel good,” Ms. Palmer said last week. “It’s been a long time coming.” To celebrate, she said, she is going to Florida to fish with her nephew.
Ms. Palmer’s case is hardly unique. It’s just one of a swelling number that revolve around the thorny issue of who owns the note on a home when it’s forced into foreclosure proceedings.
Makes you wonder - if the bank can't prove it has your deed, how can they collect your mortgage payment? How can they foreclose on your home if you stop paying them? My own mortgage has been transferred at least once since I purchased my home in 2004. I am fairly confidant all of my paperwork is in order. However, I have heard of people who's note has been transferred multiple times in just a few years. Who knows what that paper trail looks like?
The New York Times article: Plummeting Resale Values Lead Chrysler to End Leases was interesting to me, since I know two people who recently leased a minivan and an SUV instead of purchasing - both needed the large vehicles due to number of family members and recreational needs (boaters tend to have to haul trailers) - but both did not want to outright purchase a big vehicle because they were depreciating so rapidly. Looks like they are not the only ones who realized leasing was becoming a better deal for the consumer than the auto makers:
The company, now privately held, told its dealers on Friday that its financing arm, Chrysler Financial, would stop offering leases as of Aug. 1, a move that comes as plummeting resale values of gas-thirsty trucks and sport utility vehicles turn lease deals on those vehicles into big money losers for the Detroit automakers.
On Thursday, the Ford Motor Company took a $2.1 billion write-down in the second quarter, part of an $8.7 billion loss for Ford over all, related to unprofitable leases held by its finance arm, the Ford Motor Credit Company.
James E. Press, a co-president of Chrysler, said the carmaker would divert money it had been spending to subsidize leases toward offers that make traditional financing more affordable. He said Chrysler would offer discounts so that many customers who financed a vehicle would end up with about the same monthly payment that they would have had in a lease.
Even the Amish are complaining about rising fuel prices
The USAToday story: Amish also feel strain of high fuel costs points out that even folks who use horses for transportation, are feeling the pinch of rising energy prices.
The Amish, widely known for their horse-drawn buggies and a lifestyle that shuns many modern conveniences, are as susceptible to the sting of rising oil prices as anyone else.
From the diesel fuel for tools used in milking cows, building cabinets and sawing timber, to the gasoline used to power washing machines and freezers, the pinch is real.
Just proves how difficult it must be to really be totally energy independant in this day and age.
But it also includes many handouts to first-time homebuyers, longtime homeowners, returning veterans and senior citizens seeking to tap their home equity without getting hit with big fees. Millions of people have the potential to benefit in some way.
Huge numbers of people buying homes for the first time, for instance, will be eligible for what amounts to an interest-free loan from the government. Meanwhile, older Americans will now be able to borrow more and possibly pay less for reverse mortgages that allow them tap the equity in their homes.
Whether larding up the bill with all these benefits is good for taxpayers is a debate for another part of the newspaper. But there is no shame in taking advantage of what is offered. In fact, you would be foolish not to.
After reading through the various benefits, it looks like I will not be eligible for any of them. The one that might have applied to me is this:
ADDITIONAL DEDUCTION If you are a homeowner who takes the standard deduction on your federal income taxes and does not itemize, this one is for you. You can now take an additional federal tax deduction of $500, or $1,000 if you are married and filing your tax returns jointly. Again, this one is gravy; you get it in addition to the standard deduction.
Since itemizers are often people who pay a lot of mortgage interest, this deduction will generally benefit people who pay little or none, like those who have paid off their mortgages entirely or close to it. There is one hitch here: you will need to report the property taxes you paid on your tax form. If they are less than $500 (or $1,000 if you are married and filing a joint return), your deduction will be limited to the amount of the property tax you paid.
However, I itemize and since I purchased my home in 2004, I am still paying loads of interest - so no extra $500 tax deduction for me.
I kind of wonder why they included the provisions for first time home buyers (people who are buying homes now, when the prices have dropped so much), etc. It does seem like a lot of pork got into the bill.
Stephen Colbert has the solution for the weak U.S. dollar - he wants us to join the European Union so we can enjoy the strong buying power of the Euro.
The New York Times article: What’s Lurking in Your Countertop? caught my attention since someday I will remodel my kitchen and would like to put in some sort of hard surface countertop, but now I am thinking granite will be crossed off the list of potential materials.
“He went from room to room,” said Dr. Sugarman, a pediatrician. But he stopped in his tracks in the kitchen, which had richly grained cream, brown and burgundy granite countertops. His Geiger counter indicated that the granite was emitting radiation at levels 10 times higher than those he had measured elsewhere in the house.
[...]
The E.P.A. recommends taking action if radon gas levels in the home exceeds 4 picocuries per liter of air (a measure of radioactive emission); about the same risk for cancer as smoking a half a pack of cigarettes per day. In Dr. Sugarman’s kitchen, the readings were 100 picocuries per liter. In her basement, where radon readings are expected to be higher because the gas usually seeps into homes from decaying uranium underground, the readings were 6 picocuries per liter.
Yikes! Corian or cement are sounding much more appealing than granite right now...
Where to Find Tests and Testers
TO find a certified technician to determine whether radiation or radon is emanating from a granite countertop, homeowners can contact the American Association of Radon Scientists and Technologists (aarst.org). Testing costs between $100 to $300.
Information on certified technicians and do-it-yourself radon testing kits is available from the Environmental Protection Agency’s Web site at epa.gov/radon, as well as from state or regional indoor air environment offices, which can be found at epa.gov/iaq/whereyoulive.html. Kits test for radon, not radiation, and cost $20 to $30. They are sold at hardware stores and online.
The real reason I invested my hard earned dollars in solar panels - to stop the dreaded global warming induced kitten population explosion. We just can't allow this kitty explosion to overwhelm our country. Can you imagine the impact it could have on our economy? Who can get any work done when kittens are scampering all over the place? If this continues, I could be forced into housing some of these multiplying felines. Then what would that make me? A single woman with cats, that's what. Hopefully my investment in solar panels will save me from that cruel fate.
The housing crunch has caused anguish and anxiety for million of Americans. For Carlene Balderrama, a 53-year-old wife and mother, the pressure was apparently too much to bear.
Police say that Balderrama shot herself Tuesday afternoon 90 minutes before her foreclosed home on Duffy Drive was scheduled to be sold at auction. Chief Raymond O'Berg said that Balderrama faxed at letter to her mortgage company at 2:30 p.m., telling them that "by the time they foreclosed on the house today she'd be dead."
The mortgage company notified police, who found her body at 3:30 p.m. The auction had been scheduled to start at 5 p.m. Balderrama used her husband's high-powered rifle, O'Berg said.
She left a note for her family saying they should "take the [life] insurance money and pay for the house," O'Berg said.
The Boston Globe article: Food stamp use soars in Mass reports that more people are applying for and receiving food stamps in Massachusetts.
In Massachusetts, residents received about $48 million in food stamp benefits in April 2008, more than double the $22 million they received in April 2003. The figures reflect a drastic change for the state, which had the lowest food stamp participation in the country from 2000 to 2002.
"Certainly the economy, the lack of jobs - people not being able to buy food and needing help - that's a significantly contributing factor," Baker said. But changes in state application procedures, including a simplified online form, are also making the program more accessible, she said.
The online applications made available in November, combined with the state's eight new satellite offices, help working families and disabled people who might have difficulty going into state offices for interviews and paperwork, officials say. Four of the new centers - in Boston, Lynn, Chelsea, and Fall River - are dedicated solely to food stamps. The state is also waiving the need for face-to-face interviews more frequently for working families and the disabled.
In June, the state changed its asset requirements for recipients and no longer considers bank accounts, retirement accounts, or property ownership when determining eligibility.
Interesting, I wonder if the new asset requirements open a door for abuse of the system? I am not saying the current increase is due to abuse, just wondering.
The Boston Globe story: A brutal test in student borrowing profiles one family caught up in the whole subprime housing mess - only they are not worried about their mortgage, they are just trying to pay for their son's senior year of college.
Maria Ferraguto is finding it difficult to relax this summer. She's too busy figuring out how to pay for her son Michael's senior year at the College of the Holy Cross.
Some of the stress feels familiar. Maria and her husband, Paul, have been writing checks to Holy Cross for eight years. Their older son, Mark, graduated from the private Worcester college in 2005, and the Woburn family has always struggled to keep up with rising tuition and fees, which now total about $47,500 annually.
But this year, with first semester payments due Aug. 1, the Ferragutos, like many families, are especially concerned. Since the unprecedented collapse of the student loan market, financing a college education has become more complicated than ever. For the Ferragutos, it started in April with a letter from the Massachusetts Educational Financing Authority, the nonprofit lender for thousands of students who attend colleges and universities in Massachusetts. The letter said the authority would no longer offer federal loans, including low-interest Stafford and parent loans. Even worse, the authority said money for private student loans was in doubt.
A human resources manager for a uniform company in Burbank, Diehl makes close to $90,000 a year. She also picks up $6,600 a year renting out a room in her Camarillo house. Her only debt is the $92,000 mortgage balance on the three-bedroom home, valued at $400,000.
She has about $422,500 in savings and retirement accounts.
Those savings, however, will have to carry her well into old age. Diehl has longevity in her genes. Her 85-year-old mother still works as an extra in movies -- often as a grieving grandmother in funeral scenes -- and plays golf every weekend.
Diehl's vision of retirement isn't lavish. She dreams of hanging out with her three grown children, all living in Southern California.
A crossword puzzle whiz and self-professed game show diva, she said it would be fun to land an appearance on a television game show.
But most of all, she wants to know whether she'll be financially secure.
It is a bit unclear to me if her "assets" include her home equity or if the Net Worth number excludes that amount. If she has managed to save over $400,000 PLUS has a hefty amount of equity in her home, then she is doing really well. But if her net worth is mostly from home equity, then yes, she does have a problem.
Three years ago, I made a decision that changed my relationship with money: I stopped spending, and started saving, every five-dollar bill that passed through my hands. Squirreling away each and every $5 received as change from a cash transaction didn't require any complicated savings strategy, but it has paid off, to the tune of $12,000.
That's right. In three years, I have socked away $12,000 just by saving fives.
I do the same thing to a smaller extent - I save all of my change. At one point in my life I just let the change pile up and only "cashed" it when I was laid-off the first time. Now, I just let the change accumulate until it fills its small jar and then I roll it and add the total to my savings account. In a way, I wish I had kept track of it in a separate account so I could point to how much saving just change has amounted to - oh well. The point is use any trick necessary to get yourself saving, you will be pleasantly surprised by the result!
Adrienne Radtke plans to keep riding her bike to work even if gas prices drop. Steve Pizzini got rid of his Cadillac Escalade in favor of a 16-year-old Acura and doesn't expect to have another gas-guzzler. "I had a paradigm shift," said Pizzini, a financial analyst. "I spent the money on a nice car. But to me, it's not worth it. I don't think I will go that route again."
Every economic downturn changes shoppers in some way. But this time, experts say the new behavior — fueled by higher gas and food prices, tightening credit and a slumping housing market — are the most dramatic and widespread that they have seen since the mid-1970s.
So retailers, marketers and investors are all trying to figure out which habits shoppers will keep and which will they drop when the economy recovers. Will the people who switched to store-brand ice cream go back to Breyers or Edy's? Will shoppers return to department stores or keep looking for labels at T.J. Maxx?
"We are looking at stuff that reminds me of the 1970s," said Patricia Edwards of investment manager Wentworth Hauser and Violich. "Americans have seen a huge amount of their balance sheet evaporate. The effects will be more lingering."
I know that my habits have changed - never again will I leave my house with the lights on, radio playing, and fan running. I have retrained myself over the last couple of years to turn things off when not in use. That behavior is here to stay. I also can't imagine purchasing a car without fully understanding its MPG and what impact that will have on my overall gas costs over the years of ownership. I think overall I am a much better educated consumer and that knowledge, once acquired, sticks. So if marketers are hoping for the return of free-spending thoughtless consumers, they are going to have to wait for a whole new generation of spenders is my prediction.
Peter Schiff, president of Euro Pacific Capital which specializes in foreign investment, said, "We are going to have a lot more inflation. Unemployment is going to keep getting worse. Interest rates are going to go a lot higher. That is gong to make things worse. We are going to see a lot more bankruptcies, a lot more foreclosures, a lot of the big retailers cutting back and going out of business."
When Schiff first started predicting the bursting U.S. mortgage bubble, failure of financial firms and a steep rise in oil prices, he became known as "Dr. Doom."
"And people just dismissed, they almost laughed it off like it couldn't happen," he said.
He says that Washington and Wall Street have gotten it wrong for years:
"Our economy has been built on consumer credit, on borrowing and spending money," Schiff said. "The real foundation of an economy needs to be on savings, on under-consumption, and on production. We've got it backwards."
Now he forecasts that there will be a slowdown in consumption because, given the current economy, more of us are now unable to pay our credit card bills.
"And then it's going to be very difficult for Americans to get credit cards," he said. "Americans are going to see their limits dramatically reduced on the cards that they have, and so their ability to consume is going to be limited to the money in their checking account.
Though Schiff says lower consumption, whether it's of expensive homes or fancy consumer goods (especially on credit) would be good for the country, the view from Wall Street is different:
"What kind of impact does that have when consumers stop spending money?" Braver asked.
"That is the daily worry down here," Cashin said. "The American consumer is 70 percent of this economy, and if the consumer hits a brick wall and stops, then the economy all across the nation will be in serious trouble."
The Boston Globe article: Mopeds' uncharted ground reports that people buying mopeds are not doing their homework first.
Nichole Burton's new $2,800 Piaggio Fly 50 moped - the economy version of a Vespa - is saving her hundreds on gasoline, exactly as advertised. But owning a moped comes with its share of problems - foremost being, where the heck are you supposed to park it?
At first Burton left it on the sidewalk, chained like a bicycle to a street sign. But her landlady warned her that it was illegal to park mopeds on the sidewalk in Somerville, and if she did it again, the police said they'd tow it away.
The street was the next likely option, but Somerville doesn't issue residential parking stickers to moped owners. Without a residential sticker, Burton figured she'd get ticketed.
"If I can't legally park it on the sidewalk and I can't park it on my street, what does that mean?" she asked. "It should be one or the other."
There are other issues moped owners need to be aware of - such as helmet rules, registration requirements, and speed limit laws.
The New York Times has just posted a series of articles titled The Debt Trap which takes a look at the surge in consumer debt and the lenders who made it possible.
Toting up her financial obligations, Ms. McLeod said she owed $237,000 on her home mortgage. Of that, sheriff’s costs are $4,350, and “other” fees related to the foreclosure come to $3,000. A house of similar size down the street from Ms. McLeod sold for $153,000 in January.
Her credit card debt totals around $34,000, she said. Each month the late fees and over-limit penalties add to her debt. Ms. McLeod said she would probably file for bankruptcy.
[...]
“Oh, I definitely have regrets,” Ms. McLeod said. “I regret not dealing with my emotions instead of just shopping. And I regret involving my son in all this because that has affected him and his finances and his self-esteem.”
Ms. McLeod says she hopes to be living in an apartment she can afford soon and to get back to paying her bills on time.
The Boston Globe article: Bushels of bargains takes a tour of Haymarket - Boston's bargain basement outdoor market. Purchasing produce there is a gamble, you never quite know how "ripe" everything is until you get it home. But this quote from the article sums up why people continue to shop there and take their chances:
"It's a different clientele," said Ottavio Gallotto, president of the Haymarket Pushcart Association. "We're looking to sell stuff 2 to 3 pounds to a dollar. They're looking to sell stuff $2 to $3 a pound."
That is why people shop there - for a few dollars you walk away with bags and bags of produce. When you get them home - wash everything well, and start cooking. This is not the kind of food you can let sit in your fruit bowl on the counter for a few days or in the crisper drawer of your fridge. These fruits and veggies need to be eaten sooner rather than later.
The Boston Globe Magazine article: Anybody Want a Ride? looks at why Carpooling is not catching on when other energy saving habits and changes are.
Good for the environment, the pocketbook, and perhaps even the social life, car pooling would seem, at this particular moment in history, to have a lot going for it. Environmentalists and traffic planners say it's one of the easiest and cheapest ways for cities to decrease pollution and congestion - never mind helping individuals reduce transportation expenses, which as of 2006 consumed approximately 15 percent of the average American budget (12 percent for those in the Northeast), according to the Bureau of Labor Statistics. And unlike public transit, a car pool requires little in the way of costly taxpayer-funded infrastructure or maintenance.
But Americans don't carpool much. In fact, over the past quarter century, despite increased traffic, fuel costs, and growing awareness of environmental issues, we've been doing it less and less. According to the federal Department of Transportation, the number of solo drivers on US roads nearly tripled between 1960 and 2000. In 1980, when the US Census began tracking car pooling, almost 20 percent of American workers shared rides to work. By 1990, the number had fallen to 13 percent. In 2006 - the newest data available - it was down to about 11 percent. Now, however, with 2008 poised to go down in history as the Year of the $4 Gallon of Gas, drivers are showing an interest in alternatives. MBTA ridership jumped 6.4 percent between January and June. A spokeswoman for the state's Mass-RIDES program, which maintains a ride-matching database, says her office is getting more calls than usual from commuters feeling the pinch. With so much attention focused on the cost of driving, policy makers have an unprecedented window of opportunity to encourage car pooling. "It's something people can do immediately that would have a fairly dramatic impact on what they're spending on gasoline," says David Luberoff, executive director of Harvard's Rappaport Institute for Greater Boston.
Interesting article - we shall see if gas prices eventually do resurrect car pooling as a commuting option.
When exactly did Barnes & Noble replace the public library?
I was shocked a couple of years ago when I learned a fellow worker with small children didn't know where the neighborhood branch of the local public library was. Turns out any time his kids wanted a book, he went out and bought it for them. Same for his own reading.
Talk about extravagance.
I have been guilty of under-utilizing my local library branch, but I made an effort to get reacquainted with it during my recent staycation. Even so, I never feel guilty for buying a book. I budget for my book addiction and I am also pretty good at reselling the books when they start to overwhelm my small home.
I just find it funny that the WSJ is mentioning them - if I start noticing BMWs parked outside my local branch and the book racks crowded with people in business attire, I will know who to blame!
My most recent purchases are up and working - that would be the clotheslines. I purchased a variety of items to see which would work best for the two areas I want to use for drying. I ended up installing the two retractable clotheslines. In the picture above, I am using the Lehigh 20-Foot Retractable Clothesline. As you can see, I am stringing this line between my shed and the back of my home. Since I need to walk behind there somewhat frequently, the retractable works best. A fixed line would have been guaranteed to decapitate me within days. With the retractable, once I am done drying, I just unhook the line and it spins neatly back into its holder and out of the way.
On my enclosed side porch I installed a retractable four line system that looks like this - Indoor/Outdoor Mini Retractable Clothes Dryer. I hung my first load of clothes out yesterday and this morning they were dry and ready to be folded and brought inside.
Let's hope that now that my drying system is in place, I will be using the lines instead of the gas dryer. If I can keep this up, line drying my clothes would be one of the most cost effective "green" investments I have made to date! It would be right up there with the light bulb change for spaving!
If it wasn't clear before Tuesday, it is now: This is no ordinary economic crisis, and it won't be over anytime soon. In fact, problems are multiplying. A year ago, the financial virus seemed confined to subprime mortgages, defaults on loans given to those with less-than-perfect credit. Now, much of the banking system appears rickety, and the U.S. economy has slowed to a crawl. But thanks to robust demand from still-growing countries such as China, the prices of commodities from oil to food have soared — hitting Americans from the gas pump to the grocery checkout.
"There's no hope of an early recovery at this point," says economist Kenneth Rogoff of Harvard University. "The best-case scenario is we have a long but mild recession — and that's the best-case scenario."
While I am generally a glass-is-half-full kind of Gal, in this instance I am thinking we are headed for worse-case here. Hopefully I will be proven wrong.
Generation X, defined here as Americans between 28 and 43 years old, are also getting especially pinched. They are particularly vulnerable because they are more likely to have young children, recently purchased a home or are in the market for one, and fall mostly within the middle class.
According to the article, these folks are cutting back on spending - but not on everything.
But that doesn't mean there's no fun to be had. Many Americans are leaving the car in the garage and staying on their living room couch. A whopping 50% of Americans plan to buy an HD or flat-panel TV in the next year, the study showed, with little difference between those who are hardest hit by the downturn and those who are not. Cable and satellite TV subscriptions are also way down the list on cutbacks.
Hum, while I am a member of Generation X and working on ways to cutback on my spending, buying a new TV is not an investment I am planning on making. The article also mentions more people cultivating gardens as a way of saving on food costs. That seems like a positive change to me.
Don't get me wrong, I think TV is a great economical entertainment option. But I would hope board game purchases would also increase as well as book sales (and library use) now that people are looking for inexpensive ways to entertain themselves.
I am moving ahead with my clothes line project at Boston Gal's HQ. I visited a local Home Depot this weekend to pick up the needed supplies, but was having trouble locating the correct aisle. Silly me asked a couple of orange vested employees where the clothes lines could be found and got lots of blank stares and shrugged shoulders. One young employee insisted that the store did not sell clothes lines.
Finally I was able to find the aisle by changing what I was asking for: "Do you have rope, pulleys, eyelets, and hooks?" To that question the reply from the Home Depot employee was an immediate "Oh yes, all of those items are here, in fact there is a display area with all of those items grouped together in aisle 16."
When I visited aisle 16 sure enough I found everything I needed, along with clothes pins and various retractable clothes lines...
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One of my duties as an Aunt has always been babysitting. My first Nephew (followed just days later by my first Niece) both appeared while I was still in college. I gladly spent my first Spring break as an Aunt getting to know my Nephew while his Mother spent quality time sleeping. Once I graduated from College and moved back to Boston the Nieces and Nephews kept multiplying and the need of my services for a night here or a weekend there grew. It was great for me, since I was a poor young professional and those babysitting gigs gave me pocket money, a place to do laundry, a meal, and lots of quality time with my favorite young people.
But the need for babysitting has waned as the older ones started taking care of the younger and as some of my siblings moved away with their families. I still see my Nieces and Nephews all the time, but I was not getting paid to do it anymore.
Then a strange thing happened. They started becoming teenagers and now, instead of my going to their home to visit, they are coming to my house. Invariably they are looking for ways to earn some pocket money. So now I am the one paying for them to spend time with me.
Currently I have two of my Nephews staying at my home (16 yrs old and 13 yrs old) and they will be with me for a couple of nights. They are camped out in my living room slowly working their way through a list of chores I created for them. Not only am I "babysitting" them, but I will be paying them for the chores. Plus, since I can't have them thinking a visit to Auntie's house is all work and no play, we are eating out, renting or going to movies, and generally having a great time.
I never realized how expensive babysitting could be...
The article goes on to document the families many green home improvements - such as the $45,000 in solar panels (after rebates it really cost them $24,000), the large vegetable garden, the super insulated attic, etc. But reading the article you get the sense the reporter is just not that excited about having to document this home. Nor does she seem all that taken with the family as a whole.
Which is another way of saying that Mr. Halpine and his family are energy efficient to a fault, dedicated to getting the greatest return for their time and calories.
“My father, when he retired, put four inches of insulation in his basement and a wood stove, and solar hot water,” Mr. Halpine said admiringly.
Not that his dad called himself green. “He’s a cheap Yankee and he couldn’t fathom paying good money for heat.”
I just found the whole article rather amusing. The poor reporter had to schlep to the suburbs and document a normal family who are more worried about spending money on things that make their home energy efficient and affordable and no mention is made of granite countertops or custom made drapery or antique furniture finds... Poor NYTimes reporter, real estate is going to be more and more about affordability and efficiency and less about overpriced materials and designers.
The Associated Press story: Government shuts down mortgage lender IndyMac reports on the largest bank failure since 1984. The FDIC takeover of IndyMac is good news if you are a depositor with less than $100,000 - bad news if you have more than that in the bank.
The FDIC planned to reopen the bank on Monday as IndyMac Federal Bank, FSB.
Deposits are insured up to $100,000 per depositor.
As of March 31, IndyMac had total deposits of $19.06 billion.
Some 10,000 depositors had funds in excess of the insured limit, for a total of $1 billion in potentially uninsured funds, the FDIC said.
Customers with uninsured deposits could begin making appointments to file a claim with the FDIC on Monday. The agency said it would pay unsecured depositors an advance dividend equal to half of the uninsured amount.
During a conference call with reporters, FDIC Chairman Sheila C. Bair said the agency would cover all insured deposits and then try to recover its costs by selling IndyMac's assets.
"We anticipate trying to market the institution as a whole bank," Bair said. "How much money we derive from that will depend on who gets paid what."
Holders of unsecured IndyMac debt may not fully recover their investment, Bair said.
"Generally if a creditor is secured, they are at the top of the claims priority," she said. "If they are unsecured, they're pretty low on the claims priority and probably will take some type of haircut with this, but we have not had a chance to do a thorough analysis to know ... how extensive those losses will be."
IndyMac spent the last two weeks trying to reassure customers that it was not near default.
M.P. Dunleavey finally admits to buyers remorse for the 2nd house
The New York Times article: Sleepless and Worried in My House has M.P. Dunleavey finally admitting to buyers remorse over the purchase of her second home.
It’s the rest of the package that keeps me up at night. Seven months ago the market was too soft to think about selling our old home; hence the idea of renting it out. Although we found reliable tenants — knock on wood — I’m not sure we really examined the true cost of maintaining a rental.
It’s a headache. And a bank-ache. We are going to put at least $4,000 into the rental house this summer alone. We can deduct that as an expense, and it will partially offset the $9,000 we’re getting in rental income. My accountant thinks we’ll break even, but I still fret. I hate knowing that we are on the hook if anything goes wrong. Can our emergency fund cover all the calamities that might strike two properties: foundation trouble and roof leaks and clogged plumbing, oh my?
WE assumed that we could sell the rental house in a year or two when the market perked up, thus preserving our equity. But there’s no perking in sight. Now we think sanity is more important than profit. “Even if it’s a wash, let’s unload it next spring,” my husband said. At this rate, let’s hope it’s not a loss.
As happy as we are in our current home, sometimes I question the tens of thousands of dollars that went into buying it. What if we had put that money into our old home instead, and renovated it rather than moved? Would that have been a smarter investment? If we had stayed where we were, our mortgage and heating bills would have been about half — half! — of what it will cost us to live in this big barn of a place.
Sigh, she answered her own question. Of course her family would be better off financially if she was paying far less for her mortgage and heating costs. We are all in for a very bumpy ride in this economy over the next twelve to twenty four months. M.P. works in an industry that is announcing layoffs on a regular and increasing basis. She lives in a rural area with few local job prospects. Her husband seems to works in a couple of part-time jobs. She has already experienced what unexpected medical bills can do to a self-employed insured persons emergency fund. Add to that her now stretched far-to-tight budget for the more expensive home and mix in rising food, gasoline, and utility costs - no wonder buyers remorse has finally hit.
However, her plan of trying to sell the 1st home in the Spring does not seem like the smart solution to me. Instead, she should take this time now, while the home is occupied by the tenants, to continue the necessary repair projects and make any improvements she feels are necessary. Then, in the Spring, she should move her family back into the affordable smaller home and put the expensive 2nd home on the market. If it is as attractive and seductive as she has made it seem, finding a buyer for it should not be a problem. Once back in the smaller home, MP and her husband can be a bit more creative in finding solutions to their space problems. Two options I would explore would be putting a "writers shed" in the yard of the cottage. Obviously it would be insulated, heated, and fully wired. The other possibility would be to look into adding a sun room onto the cottage to expand the living space and use that as an office. Either solution should be within MP's means and help add value to the cottage.
Most importantly, MP and her family would be back in an affordable home. A home which will allow them to save more for retirement, put something away for her young son's college education, and enable her to maintain a plump emergency fund. What could be more seductive than that?!
"It's a dilemma that New York has, because we so much rely on oil and natural gas for electricity," said NYISO spokesman Ken Klapp.
Nationally, coal provides the fuel for about half of all power generation, but in New York it only accounts for 14 percent of the total.
The largest share of New York's power, 39 percent, comes from plants that burn either oil or natural gas. Nuclear plants provide 28 percent and hydroelectric plants 17 percent.
The ratio is different in nearby states. Nuclear plants are the leading source of electricity in New Jersey and Connecticut. Coal is king in Pennsylvania. Natural gas is the dominant fuel in Massachusetts, as it is in New York, although that state also draws a quarter of its power from coal.
Coal prices have been rising sharply, too, due to higher demand in China and India, but it is a less expensive fuel to begin with, which has somewhat lessened the blow.
I have been noting the rate increases in Massachusetts for the last couple of years. Seeing that increasing trend, I predicted that rates would continue to rise and that was part of my personal justification for investing in solar panels. My solar panel owning side is happy to see the rates rise, since that shortens my pay-back period for the panels, but my electric bill paying side is not best pleased to see my per kWh increase (my solar panels do not cover all of my household needs - at least not at this time).
Wait til I get my money right, then you can't tell me nothin'
I am not a rap fan (nor hip hop and never could quite understand the difference), but the Kanye West song, Can't Tell Me Nothin' has caught my ear. I may be completely uncool in my musical tastes, but I can recognize the cry of someone dealing with money issues. While I can't make out all of the lyrics, the chorus provides a strong message:
Wait til I get my money right, then you can't tell me nothin'
Which sounds like a financial battle cry the way he sings it (you can listen to the song in the video below - but it is not the official video - this is a parody and frankly I thought it was more enjoyable than the original. Kanye West himself commissioned it, so I think he believes it is more enjoyable as well).
I find it interesting that the song seems to acknowledge how fame or just blowing large amounts of money is not ultimately enjoyable. He needs to gain control over his finances to then feel completely independent and free. Not a bad message for the younger and hipper crowd to be grooving to...
Looks like the US Economy may need to follow my lead
The CNN article: Zakaria: Perfect storm hitting U.S. economy sums up the bad news we are all hearing and feeling. This sentence of the story caught my eye:
What we need to focus on is the long-term problems that have accumulated: we save too little, spend and borrow too much, and over-consume fossil fuels.
Reading that, I realized it summed up what I have been working toward for the last few years. I have increased my savings (including maxing out my 401(k) and Roth IRA contributions), reduced my borrowing (paid off my investment condo mortgage - so am now down to just the mortgage on my primary home as my only debt obligation), have my spending under control, and I have been focused on reducing my consumption of fossil fuels.
Another Friday, another sale. My pick this week? The charging station. I like how the powerstip is hidden, but still accessable to turn all of the items off with one push of the button.
Find your own bargain at the Friday Sale. - Enjoy!
Don't forget to check out my Amazon Tips for more money saving ideas.
USNews Alpha Consumer blog posted the following today: Debate Over Standard of Living Changes. It appears Kimberly Palmer has been getting some feedback from her readers and boss informing her that Generation X is doing better than their parents.
According to one survey published in American Attitudes, two thirds of people between the ages of 18 and 44 say they are much or somewhat better off than their parents, while around 13 percent say they are somewhat or much worse off.
How do you feel? Are you better off than your parents, or struggling to keep up?
To answer her question, I am better off than my parents, but that is because I never married or had children and I live a simpler lifestyle than they did at my age. If I tried to own the same size home they owned, along with the two cars and boat - my finances would be seriously strained. Add in the five kids they had, and no way could my current income support that many people.
Finally able to afford that more meaningful career
The Boston Globe article: Late shift reports that more baby boomers are pursuing 2nd careers.
One of Homsey's clients, a widower of about 60, traded a corner office for a new adventure overseas. He does philanthropic work, helping orphans in Africa. Another client, an engineer who followed the financial markets in his free time, retired to pursue his passion. He started a hedge fund.
Those clients managed to squirrel away enough in their savings accounts to fund their dreams. They are among the lucky ones. For many others, rethinking retirement is a necessity, particularly in trying times.
A recent nationwide survey commissioned by AARP found that nearly 1 in 5 people between the ages of 55 and 64 are putting their plans to retire on hold because of the economic unease that has gripped the country. An even higher percentage of younger baby boomers, 1 in 4 people between the ages of 45 and 54, said they planned to delay retirement.
For many, an unprecedented dip in property values nixed plans to sell the family home and downsize, a common strategy for building a retirement nest egg. For others, dwindling investments and diminishing returns in 401(k) accounts forced the decision, the AARP study found. It polled 1,002 people age 45 and older; the findings were released in May.
But many baby boomers are changing their retirement goals if they can afford to leave their jobs. A generation that transformed gender roles, improved race relations, and revamped public education is now updating conventional notions about what it means to step off the corporate ladder and take a step back from career ambitions.
For them, this stage in life has nothing to do with slowing down. Rather, it's a time to embark on journeys of self-discovery.
The study looked at the projected retirement levels of nearly 2 million current workers of varying ages at 72 large U.S. companies and used actual employee balances.
"Women tend to be a little more risk averse, more fearful of losing money," said Alison Borland, an author of the study.
Women's saving habits haven't improved significantly over the past several years, either, Borland said.
The study also found a quarter of women didn't contribute at a high enough level to take advantage of the company match, which is typically 50 cents for every dollar up to 6% of pay. On average, women earned $57,000 versus $84,000 for men.
Yet women will have longer retirements than men by an average of three years.
I have taken studies like these to heart over the years. As a single woman who lives in a high-cost area, I have had to be even more vigilant regarding my retirement investments. When you add in my generations other retirement challenges - shrinking or non-existant social security, rising healthcare costs coupled with disappearing healthcare retirement benefits, and the lack of corporate pensions - retirement investing and planning is really all on the individuals shoulders.
I have always found it jarring that studies like these point out the challenges women in the US face, but at the same time we live in a culture that expects women to earn less, spend more on clothes, shoes, haircare, beauty products (got to look good in the office ladies!) and encourages us to delay investing in things like a home (what if the future husband does not like it?) or work particularly hard on paying off loans or getting out of debt (your young, go on vacation, have fun, find that man, spend on a big blow-out wedding - you can worry about your future later - much later). It is all so frustrating!
It is Staples one cent deals days - time to pop into a store and pick up a few bargains. If you are near a Staples, consider stopping in and spending a few cents. If you don't need the items yourself, you can always donate the supplies to your local school or any other organization you think might benefit.
This years sale is just in time for me. I had just put pencils on my shopping list and the folders are needed to organize some active paperwork on my desk.
The Boston Magazine article: Greener Than Thou is not very complimentary to Boston's "eco-puritans".
Inside, over the counter, a wall bears a boldly painted quote from Gandhi: "Be the change you want to see in the world." The proximity of the quote to the counter provides maximum bang for the buck. Customers get to buy organic, shade-grown, fair-trade java that comes in recycled cups and then, their transaction complete, can turn to this quote and solemnly genuflect to their own moral rectitude. "My conscience is clear," the purchase announces. "I am the change I want to see in the world." Like the obnoxious recycled bags available at Newbury Comics that read "I'm Saving the Planet—What Are You Doing?," taking part in such supposedly enlightened commerce may seem like a progressive gesture, but in reality, it's chiefly defensive, with its roots in the Puritan psychology.
Since I don't drink coffee nor own any bag purchased at a Newbury Comics, I can assume the writer is not talking about me.
My eco-puritanism has sprung from my long-term frugality, interest in financial Independence, and concern for the environment. I could care less about appearing to be trendy or part of the "winning team". My recycled shopping bags were free from Stop&Shop, are emblazoned with their logo, and save me $0.05 every time I use them at the store. The solar panels on my roof, which are the most visible sign of my eco-puritanism, could be considered my status symbol. But they are just there - I don't have a sign attached to them nor do I think they somehow berate others for not doing the same as me. When I look at them I see free electricity in my future and money savings. That is what the term eco-puritanism means to me, not high-priced organic coffee or over-priced shopping bags.
But I do think Boston is a very green city. New Englander's have a long history of reuse and recycling. Walk into any traditional New England historic home and you will see braided rag rugs on the floor, scrap quilts on the bed, and furniture that was likely owned by a few generations before the current owners. Just visit Brimfield this week if you want to see how many things we re purpose and reuse in this region. And this was all done long before Al Gore made a movie or we realized how stressed our environment had become.
I disagree with the general tone of the Boston Magazine article and don't think Bostonians should be mocked for wanting to do the right thing. I also don't think we should be prohibited from talking about our green choices. That sounds like an old Boston Brahmin attitude and we all know what repression and suppression has done to those families over the years....
Last week was a vacation week for me and I chose not to travel. Spending the time at home was more fun and productive than expected. The weather could have been better, but since I was at home, the rain and fog was not the fun killer it might have been. This was not a pure pleasure week for me, I had some duties to perform (mostly in regard to my investment condo), but even getting those chores done was pleasurable in its own way. It helped that traveling around the city mid-day and mid-week is a breeze compared to my normal commuting schedule.
But the week was not all chores and duties, I also made sure to spend time visiting friends and family - rediscovering simple pleasures like my love of Boggle and the joys of trouncing an older brother. I also declared it a "no cook" week for me and enjoyed eating out and ordering in (something I have cut way back on in recent years). Something as simple as enjoying a breakfast out on a Thursday morning really made this staycation for me. I also went to a movie, read a couple of books, and visited a couple of parks and walking trails in Boston that I had never been to before. I even spent a few hours at one of the BPL library branches and must say it was a great way to spend some of my statycation time.
Thinking back over the last week I am most impressed by how stress-free it all was and how much I enjoyed it. It is also nice to end a vacation without having to unpack. I have a feeling another staycation is in my future...
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"Anxiety and avoidance go hand in hand," he said. "It's probably a coping mechanism, though not necessarily a sound one." Some people become so anxious that they make the critical mistake of thinking they can "time" the market," Cirillo said - they pull money out of stocks that are on their way down and miss the subsequent rally.
Investor dread in this slowdown has been compounded by a slump in housing values and increases in gas and food prices. Then there's the Dow Jones Industrial Average, which closed in bear market territory last week, meaning it's down 20 percent from October's peak.
"I'll take a quick look at it and put it right down," Chris Neri, 57, a Plymouth realtor, said of his quarterly statement. "Right now I'm just treading water. I try to think long term. I've probably got another eight to 10 years before retirement, so hopefully I'll catch an upswing and get out alive."
Such long-range thinking has been ingrained in investors who have experienced the ups and downs of past economic cycles. Some said they try to boost contributions to retirement funds when the market retreats to buy shares at a discount, but others said escalating costs have left them no choice but to scale back. Most have kept their contributions steady, as financial planners advise, while looking to rebalance their portfolios between stocks, bonds, and cash.
It is those who are reducing retirement contributions due to escalating costs that have economists worried. As a whole, American's are poor savers. The current market slump combined with the pressure household budgets are feeling with rising gasoline and food prices - could mean our savings rate will be heading lower.
On Thursday, in a sign of further weakening of the labor market, the Labor Department said that nonfarm payrolls contracted by 62,000 in June. With downward revisions for employment in previous months, the economy has lost 438,000 jobs since January. The unemployment rate held steady at 5.5% last month.
Another department report released Thursday showed that the number of workers who filed new unemployment insurance claims rose to 404,000 last week, after seasonal adjustments, up 16,000 from the week before.
And separately, the Institute for Supply Management said its gauge on the health of the nation's service industries -- which include retailers, restaurants and health care -- took an unexpected dive to 48.2 in June from 51.7 in May. A reading below 50 signals contraction.
The increase in the number of long-term unemployed has led Washington to extend unemployment benefits, which usually expire after six months, for an additional 13 weeks.
Congress says the emergency legislation is expected to benefit up to four million workers before its March expiration, with the average weekly check totaling $292. The estimated cost: $8.2 billion.
The current rise in people out of work for more than six months appears to be part of a longer-term trend. Since 2002, the proportion of long-term unemployed among the jobless has dropped no lower than 15.2%.
Having gone through a couple of unemployment periods, I can say from experience that losing a job is never fun. Trying to find a new job in tough economic times - also not fun. I am lucky that Massachusetts has a relatively generous unemployment payout as well as a fairly lengthy payout (26 weeks) which has also now been extended thanks to that new legislation. I hope to never have to use the Massachusetts unemployment system again, but if a job loss happens, I am grateful it is there for me.
The New York Times Op-Ed column The Luckiest Girl provides an update on Beatrice Biira who recently graduated from Connecticut College. The name Beatrice Biira is not ringing a bell? She is the Uganda girl who owes her transition from abject poverty to American college student to a goat donated to her family by some Connecticut school children through Heifer International (as told in the award winning children's book: Beatrice's Goat). That goat is a gift that keeps on giving according to the column:
Moreover, Africa will soon have a new asset: a well-trained professional to improve governance. Beatrice plans to earn a master’s degree at the Clinton School of Public Service in Arkansas and then return to Africa to work for an aid group.
Beatrice dreams of working on projects to help women earn and manage money more effectively, partly because she has seen in her own village how cash is always controlled by men. Sometimes they spent it partying with buddies at a bar, rather than educating their children. Changing that culture won’t be easy, Beatrice says, but it can be done.
The Wall Street Journal article: How to Declare Financial Independence points out what pfbloggers have been posting about for years - losing debt gains freedom.
Now it's time to declare another kind of independence -- your own. If you're like most Americans, you haven't been free in a long, long time.
Instead you're in chains. You're manacled to dozens of monthly bills you can't seem to escape.
Mortgage payments. Car payments. Credit-card payments. Cellphone, landline, cable TV. TiVo. You name it. Thousands of dollars.
Call them tribute. Or tithes.
Who's really free here?
Our Founding Fathers probably would have thrown their cable boxes into Boston Harbor. But then, they ranked liberty ahead of the pursuit of happiness.
But the suggestion in the article that just ditching the lattes or premium cable will erase the average family debts burden is naive. It will help and is a good first step, but much bigger (and more painful) steps have to be taken to really reverse the upward debt trend.
I have been working on my financial independence for well over a decade now, and I am no-where near that goal yet.
Another Friday, another sale! One of these bullet waste bins would make the perfect kitchen trash barrel for me. Plus, if I squint a bit, the picture looks more rocket-like than bullet-like - just the thing to get me in the mood for tonight's fireworks. Happy 4th everyone!
Find your own bargain at the Friday Sale. - Enjoy!
Don't forget to check out my Amazon Tips for more money saving ideas.
Massachusetts Gov. Patrick signs green energy bill
Very interesting news. I will have to see just how this new bill will impact me - there are some provisions that pertain to Net Metering, but I am not sure how that will benefit existing solar panel owners. I was interested to hear that now Massachusetts utilities will be able to basically rent solar panels to folks in the state - this will make putting solar panels on your roof an option for those who can't do what I did (basically pay for them upfront - meaning I own mine).
The energy efficiency programs are extremely attractive to me - more rebates to help me transition to energy star appliances. On my list of appliances to replace is my ancient 1985 central AC unit - getting the state to help me afford a new unit is very good news indeed!
CBSNews looks at the Food Stamps and Rising Food Prices
CBSNews aired this story tonight: Food Stamp Crunch Intensifies which reports on how the "Other America" is impacted by rising food prices.
In the afternoon, the aisles were almost empty at One-Stop Foods on Chicago’s South Side, because most of the patrons there rely on food stamps - and their monthly allotments had run dry.
“They're struggling to get through the month,” Dennis Kladis, the store’s owner, said. “So the minute they get their money back, they come shopping!”
The benefit money is electrically deposited on a debit card. For many there, it comes just after midnight on the first of each month.
For Maranatha Mays, the moment can’t come soon enough.
How long has it been since she last were able to come to the store and buy food?
“Like two weeks ago,” Mays said.
She lost her job six months ago, and her family of six gets $369 a month in food stamps.
"It really like, cut me out,” she said. “I’m really not eating. Because my kids have to eat before me.”
I curse you financial markets for taking away my half-millionaire status this month. My retirement accounts are making me feel so poor, I don't know if I can hold my head up high when shopping in Target - I may need to go back to mingling with the Building 19 crowd...
OK, perhaps it is not all that bad, but still - OUCH!
In the good news column, I managed to increase my savings - which was no small feat this month given the following:
- I am still waiting on my rebate check from Commonwealth Solar after installing those pricey solar panels - this will be a significant check, so you can imagine my daily disappointment when I fail to see it in my mailbox.
- I purchased a new dishwasher last month, which hit my most recent credit card bill - since I pay that off in full each month, that added expense decreased the amount available to save.
Also in the good news column, I participated in a focus group last week which paid me $125.00 for two hours of my time. I also spent less on groceries due to all of the traveling and visiting.
In the bad news column, I am short a rent check this month since my condo tenant has moved out. This is a planned vacancy which I knew would hit my bottom line, it was just bad timing that it coincides with the market drop.
Hopefully next month things will look up. Getting that rebate check for the solar panels would be a big boost. Also getting the unit rented will help. However, I have work planned for the condo, so the spending continues...
is being republished by Harper Collins. 
