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Archive for January, 2008

You got hosed Tommy, you got hosed... Part II

January 31st, 2008 at 07:22 pm

Big government/small government, who cares?
This is just jargon politicians like to throw around. What we really need to do is to reduce our national debt. The national debt is not just a huge negative number. It's something that affects each tax payer every year. Whenever, around this time of the year, the white house publishes its discretionary budget there's a huge glaring piece of the pie in the expenses chart. It says *Interest on debt* and it's a greater than a Quarter Trillion dollar slice of pie. Ok, so that's a large number, but realistically, that's about $1000 per tax payer. So you'd probably think I'm p***ed that $1000 of my tax money goes into a black hole (technically not, but it might as well...). You're right, it's not something that makes me excited. However, the WORST part of it is that our national debt keeps on growing, that we do not feel the responsibility to reduce it to say... 2% of our GDP or something manageable like that. So, what would it take to reduce it to 2% of our GDP. Well, I'm no 'get out of debt' expert, but say we get a quarter trillion dollar surplus each year from now on, It would take close to 40 years to get out of debt, or maybe 35 years to make our debt more manageable. But a 250,000,000,000 surplus is a pipe dream. In reality, maybe 100 years is a more realistic goal. So in all reality, our children AND grand children WILL be paying for our irresponsible behavior. So, government, if you are listening, here are some suggestions on how to get a budget surplus:

Increase revenues, decrease spending (NO S***!)

Decrease DoD spending by 30% from $481.4B to $300B -> Save $161B!
Finish up this 'War on Terror' from $145B to $0 -> Save $145B!
Cut all other spending by 5% ->Save $100B
for a total spending cut of $406 Billion

Have Bill Gates donate 25% of his assets -> Receive $10B extra
Tax executive stock compensation at 50%
-> Receive $10B extra
Raise taxes by 1% -> Receive $12B extra
...Ok, so it seems really hard to increase income without radically increasing taxes. I'm not against increasing taxes for the super rich, for those with incomes higher than 500,000, but then again, I'm not super rich, so that's easy for me to say.

Anyway, with those suggestions, we'd have a difference of $440 billion, and it would give us a surplus of $200 billion.

Stop feeding the pigs!
So, I'd never heard of 'pork barrel spending' before. But, geez, it seems so wrong. In high school, I learned about a thing called 'federalism'. It's nice for states when it works one way (in that the federal government can't tell them what to do in certain situations) however, it does not make any sense that the federal government is paying for local projects. The only thing I can think of that the federal government should pay for are: federal lands (parks, military bases, etc.) and highway construction between states. Leave the state funding to the state governments...please...Ok, so I don't know what amount of money goes to these local spending projects, but regardless it should not be allowed.

Don't let them in, but let them stay
I'm talking about illegal immigrants. I, for one, do not feel 'threatened' by them. However, I think we should do more to stop them from coming into the US. However, for those already here, I think we should have them registered, get them working permits, HAVE THEM PAY TAXES, get them on a naturalization track of say 10 to 15 years, make them US citizens. But it's only natural to require them to learn to speak english. What language they speak at home, I don't care about, but we should not have to go out of our way to make this a bilingual society by printing everything in two languages, having customer service available in two languages, etc., etc. In the end, I believe that this policy will be good for the American economy. The more American consumers, the better!

Where is our money going?
Whether your believe the late Milton Friedman or not, it is a fact that money is flowing out of our country at the rate of about $800 Billion each year. Now, it has been argued that that money will eventually come back to us, or that the value of the money will eventually be returned. The problem, however, many argue , is that our trade deficit to other countries will be reinvested in the country of origin by those with a surplus. So in the end, who will the American government be owing money too? Probably the Chinese who have invested their surplus in American bonds. Only if we'd decide that we are unaffected by outside economies, and said we'd be trading with just a 'black hole' or something like that, it may be rightfully argued that our economy is unaffected, or even better off by the trade deficit. Because what's better than trading with a 'black hole'? You put in money, you get out goods, and the money never returns, which, locally increases the value of the currency. So you'll have more goods, and your currency is worth more. In any case, I personally believe the trade deficit might be bad for our economy. I, at least, perceive it as making it more vulnerable. The economy just gets so complicated these days!

Lock That Rate

January 30th, 2008 at 03:18 pm

Today I went to the mortgage lady, and I got my rate locked in at 5.5% for a 15 yr mortgage. As it stands I'm going from:

30yr 6.75% ---- $908/mo
to
15yr 5.50% ---- $1119/mo

Which means in 3 years I will be paying less interest than principal! I wasn't sure whether I should wait for rates to drop. But I decided that I wasn't going to risk the rates going up again. Besides, since I'm at a credit union they allow my to lock in a lower rate for 60 days for just $100. The best thing of all, the refinancing cost me only $700! I love credit unions! Here's to saving $160 a months. Cheers!

You got hosed Tommy, you got hosed...

January 28th, 2008 at 09:20 pm

Most of us have been negatively affected by the recent 'downturn' in the economy. The result so far is there is less incentive than ever to save. I must admit I'm in no dire position at the moment, nevertheless I feel the need to vent a little:

Unscrupulous lenders or greedy borrowers?
I'm a big proponent of taking responsibility for one's actions. So who do I blame? Mostly the greedy borrowers. When I bought my house, I went to the local credit union for a mortgage. I was looking for the $150K to $200K range. What did the CU tell me? "Sir, you are eligible to borrow up to $350K." Say what? Tempting... But seriously, I'm not THAT stupid. My payments were going to be $2300/mo. We make $4200/mo, so it wasn't really out of the realm of possibilities. My point is, one should have a realistic view of what he or she can afford. Especially if you have other debts like student loans, credit cards or auto loans. The credit union didn't push any harder to get us a bigger loan, but it did *allow* us to get one. Note: I must, however, admit that I would not be considered *subprime*. So here's to less greedy and more realistic borrowers.

Companies that send jobs overseas or unions that demand too high wages.
I am from Michigan, so I know all about what damage unions can do to a local economy *cough* UAW *cough*. But do I really blame them? Yes and no. I blame them for *still* being so stubborn on compensation. $50/hour pay+benefits for a line worker!?!? Come on! That's twice as much as I make with a professional degree. No wonder jobs go overseas! I find it comforting to know that new hires can be employed for $16-$25/hour wages+benefits. This seems much more reasonable. You can't ship jobs overseas for that! Besides these pay ranges definitely do not make you poor.


Companies that send jobs overseas or people who do not buy *made in the (U.S.)* (or the country you are from)...
I am the first one to admit I don't even look if something is *made in the US* Unless it's a car or something *big*. I badly want to buy GM, Ford, Chrysler. But seriously, please give me some good options! I am willing to pay a premium if it is *made in the US* but it needs to be as well build as overseas brands (with that I mean Honda or Toyota).

What are you doing with that big credit card debt?
I understand,that is, if you work hard (say 60 hrs/week), and you make $10/hr or less, that things may become tight, financially wise, and you may run up some debt here or there. But I know plenty of people that don't work hard and still spend like they're millionaires. They say that there are no jobs, etc. excuses, etc. My goodness, Burger King has a big banner posting they are hiring. Ok, so you think you're too good for that job, that's fine, but stop spending like a millionaire then.

Who's going to pick up your garbage?
Everyone is getting college degrees these days...and less and less people are using them in their daily work life. What a waste of energy and time. People have to understand there is NOTHING WRONG with having no college degree. But there's a LOT WRONG with ignorance. We also need people that do the mundane things. People who clean, pick up garbage, deliver mail, answer the telephones, etc. etc. and they should be paid at least the same as those working at an assembly line.

Anyway, I just wanted to say I'm p***ed my yield rates are down.

Sushi for 20

January 28th, 2008 at 04:37 pm

We had a dinner party yesterday. Here's the bill...

Bill:

1 lbs of Sashimi grade Yellowfin (Ahi) Tuna - $20
1 lbs of Imitation crab - $6
4 Avocados - $7
2 Cucumbers - $3
2 Bunches of Asparagus - $5
5 lbs of sushi rice - $6
30 sheets of nori - $6
1 tube (20 servings) of Miso - $6
1 tub of firm tofu - $4
1 bunch of green onions - $1
------------------------------------
$64 or about $3.20 per person.

Other things you need
Mayonaise
Soy Sauce
Chili Sauce
Mixed greens/lettuce
Sugar
Rice Vinegar
Ginger Root
Garlic
Wasabi


Makes:
20 cups of Miso soup
10 California Rolls (Spicy optional)
10 Tuna Rolls (Spicy optional)
10 Veggie Rolls (Spicy optional)
12 pieces of Tuna Nigiri

* Mix 2 parts mayo with 1 part chili sauce for spicy mayo.
** We only had 14 people, and we ate about about 16 rolls.
*** Since I am not an expert at making sushi rolls, we ended up with relatively *thick* rolls with a lot of rice.
**** California rolls are the *safest* way to go for people who are not familiar with sushi.

House losing value: 8% in 19 months

January 28th, 2008 at 03:52 pm

So I haven't been updating the value of our house on my net worth balance sheet. The value of our house has dropped from $174.9K to $160.9K over the last 19 months (According to Zillow). Which is, off the top of my head, 8% or so. Or about $750 per month! I will devalue the real estate on my networthiq balance sheet by $750 each month until it is on par with Zillow's home value estimate.

Heck yes, I'm refinancing

January 24th, 2008 at 07:16 pm

My current mortgage is 30 year fixed. I pay $908/yr (+$400 taxes). I've had the mortgage for 19 months, and my payments are $133 principal and $775 interest. Now I can get a 20 year FRM for $957 with an initial payment of $316 principal and $641 interest. So basically, for $50/mo I can cut more than 8 years off my mortgage. I'm waiting until a couple days after the next fed meeting to see if the rates drop even more. After that I'm off to my Federal Credit union to refinance. In all I'm looking to save about $130/mo (money I lose through interest). So there are so upsides to this economy.

Organic is expensive

January 21st, 2008 at 04:31 pm

This might not be a revelation to some of you; but eating organic vegatables for dinner each night is not much cheaper than eating rib-eyes each night. From now on my wife is eating an organic-vegan diet (I'm definitely not). In any case, our food bill will go up by about 50% from now on...Oh well. We've been shopping at an organic/fair trade store called *food for living* lately. We'll see how it works out in the long run.....

**disclaimer**. I am in no way an advocate of organic growing and consumption practices (including "free-range" practices). There are both advantages and disadvantages to producing and eating organic foods. It has been proven that using copious amounts of fertilizer significantly increases the yield of farm land (as is performed in Europe). It is expected that both nutritional value, and "taste" may suffer from these practices, but it can be argued that intensive farming's improved yield is a better use of our land and a more responsible way of life for our ever expanding population.

"High Yield" no more

January 11th, 2008 at 03:31 pm

I have a "high yield" savings account at Citi. When I opened it, it had a 4.75%APY. The rates have tanked, and they are now 3.75APY. Now I wished I'd have gone with some other high yield account which still have rates from 4.50 to 5.25.

I like to watch my monthly interest climb as I add more to my savings account. But over the last half year it hasn't climbed at all, even though I have been contributing $500 to $1000 each month.

The fed is thinking about dropping the prime rate even lower. That sucks for savers, but it's good for people in debt. (Maybe I should refinance my mortgage from 6.75% to 5.75% that is offered right now by my credit union to offset the "losses" in my savings.)

Anyway, I have started buying up short term CDs (3 to 6 mo) at 4.50% APY at citi (even though other places have them as high as 5.25%).

A Look Back on 2007 Finances

January 2nd, 2008 at 03:59 pm

2007 was an "ok" year as far as finances were concerned. Our wedding/honeymoon took a huge chunk out of our intended savings. In all it cost us about $10,000, on top of the $15,000 that was funded by our parents. (a total of $10,000 for honeymoon, $15,000 for wedding).

A short overview:

Net Income: $65,653
--- Wife: $21,036
--- Mine: $39,541

Expenses: $58,389
---Mortgage: $15,412
---Wedding: $10,143
---Clothing: 5,518
---Groceries: $4,641
---Lunch/Dining Out: $3,771
---Household: $2,913
---Utilities: $2,836
---Leisure/Hobbies: $1,941
---Automobile: $1,936

Saving: $7,264