CYC Gets #Tagged

March 2, 2012

Our friends at DQDYJ.net (Don’t Quit Your Day Job) called us out in one of those infernal games of cybertag. They posed some zany questions and challenged us to answer them. The way this works, as is our understanding, is that after we do that we’re supposed to derive 11 questions of our own and continue the chain. This gives us a completely new medium in which to explain the CYC rationale for doing things, so let’s get started. But first:

Our reading comprehension being what it is, we started by mistakenly answering the questions that DQYDJ had answered, rather than the ones they posed to us at the end of their post. Our answers follow: first to the questions we weren’t supposed to answer, then to the ones we were. We finish with 11 new questions, posed to the next link in the chain.

Have you ever been ripped off and for how much?

Yes, by a crooked, sawed-off little photographer named Casey Wiesel of 4413 Carrier Dove, North Las Vegas, NV 89084-2661, (702) 953-9540. He refused to pay $1200 he owed for a job, got sued, lost in district court, and was ordered to pay a judgment. He still hasn’t paid, in violation of the judge’s order. Also, his new baby is funny-looking.

Do you have pets? Are they awesome?

(Question tabled for fear of starting a disagreement.)

What is the air-speed velocity of an unladen swallow?

Great, a Monty Python joke. When do we start quoting The Simpsons and Office Space, too? Also, the question is retarded. Either “speed” or “velocity” is redundant.

Why are most children’s musicians terrible?

It’s not just children’s musicians. Most musicians, regardless of audience, are terrible. If a higher proportion of children’s musicians than “adults’” musicians are terrible, it’s because the former only have to appeal to young mommies, who have the worst taste in music of anyone on the planet.

Put it this way – if Jimmy Buffett didn’t sing the occasional song about pot, he’d be the greatest children’s entertainer of all time. He’s got it all – puerile wordplay, colorful costumes, easy-to-understand vocals. He even dresses like a kid.

What’s the most offensive thing about the $5 bill?

That Congress has never seen fit to emblazon it with the face of our greatest president, Calvin (“The Business of America is Business”) Coolidge.

Prior to Jeremy Lin’s current basketball greatness, he was staying on his brother’s couch because he didn’t have a definitive contract with the New York Knicks. Was the couch long enough to fit an out-stretched Jeremy Lin?

No. Jeremy Lin can probably reach 23″ above his head. That means a couch would have to be 8’4” long to accommodate him. The vast majority of couches are under 7’ long.

What’s the least you’ve purchased with $100?

A ticket to see Van Halen on their 2004 tour. Sammy sounded fine, Alex sounded fine, Mike’s bass didn’t appear to be plugged in, and Eddie gave an alcohol-fueled performance that, like music itself, can’t accurately be summarized in words. His tone was awful, his riffs were incomprehensible, and halfway through the solo he resorted to lying down on the ground and kicking his legs out like an indignant toddler. And not in the fun way that Angus Young does it, just in an inebriated way. The $100 wasted on that ticket took years of goodwill with it. Eddie has apparently sobered up, and the new album isn’t horrible, but you should donate $100 to the Corporation for Public Broadcasting before buying a ticket to see Van Halen on this upcoming tour. (That was sarcasm. If you have $100 to burn, spend $10 of it on our book and the rest here.)

What’s a reasonable amount of money to spend at a strip club?

Coming from a former strip club DJ, who was tipped out by the dancers every night, $12,000 is a good starting point.

How much do you tip the bartender? Really? That’s it?

A dollar a round, but that’s for club soda and Diet Coke.

How much would you pay for the perfect hamburger?

$2.29, apparently.

Is an iPad worth it?

We’d need the 64 GB, 3G one. Which costs $829 at Apple.com.

HOWEVER…there’s a guy with a 647 rating on eBay who’s selling new, in-the-box iPads 2 for $600, which is less than you’d pay for a new 64GB iPhone 4S.

But if you already have the latter, an iPad is thus less valuable to you, even with its larger screen and high-resolution pornography. And if you happen to have a MacBook Pro, for those times when you need to drink the Apple Flavor-Aid on a larger screen, that further diminishes the utility of an iPad for that particular consumer.  Throw in ownership of a Kindle, with its Methuselaic battery life and ability to be read in bright sunlight, and the iPad’s looking like a fancy paperweight right now. Plus you’d be looking at close to $1000 a year in data usage, guessing from what customers on AT&T and Verizon pay. So no, at this point it’s prudent to say that the price must to fall to -$200 or so before an iPad would make financial sense.

 

 

Okay, now the questions we were supposed to answer:

Would you rather be 8 feet tall and 100 pounds or 2 feet tall and 800 pounds?

8′, 100 lbs. Assuming that you’d still be able to move around, and wouldn’t break with your first step. Either way, you’d have a chance to be mobile, which a 2′, 800-lb. person would not.

Pick one: Canada, United States, Mexico.  Explain why it is superior to the other two.

Come on, how about a hard one? Having lived a couple of decades in Canada, only to move to the United States, this humble blogger will give an informed answer.
CanadaUSMexico
Capacity for a private citizen to have discreet deadly force at his disposalnoyesno
English-speaking women in revealing clothing for more than 6 weeks of the yearnoyesno
Little Beach, Mauinoyesno
Some autonomy in medical decisions, at least until 2014noyesno
30-minute flights to the Bahamasnoyesno
Cannibal women walking the streets freelyyesnounknown
No official language with gendered articlesnoyesno
Football as de facto national sportnoyesno
Lacrosse as de jure national sportyesnono
Soccer as national sportnonoyes

 

What is the best type of Personal Finance Writer?  (Think of writer archetypes – Investor, Debt Blogger, Wild-card, Contrarian…)

Aside from uncategorizable us? The debt bloggers blow chimp, we’ll start with that. The investors seem to know what they’re talking about more than most do.

Lump sum investing versus dollar cost averaging…Which is better?

Dollar-cost averaging. We’re all in this for the long term, right?

In the Led Zeppelin song Stairway to Heaven, what does the lyric “to be a rock and not to roll” mean?  Bonus points if you can somehow work Boleskine House into your answer.

Thanks for clarifying that you meant the Led Zeppelin “Stairway to Heaven”, and not someone else’s. Like Far Corporation, for instance. Which is just a cover of the Zeppelin song. Consider that the line follows “And if you listen very hard/The tune will come to you at last/When all are one and one is all”. Which is a reference to the infamous backward masking in that song. “To be a rock and not to roll” means nothing, but it’s the closest you can come to “Satan is my master” when spoken in reverse and still sound like English.

What’s your favorite dinosaur?

Triceratops, because it was the last one standing.

Paper or Plastic?

Plastic, and don’t get us started.

This question is being answered in Maui County, Hawai’i. Last year the county banned plastic bags from grocery stores, because Hawai’i is a state full of idiots. There’s a supermarket across the street, and now they give you those giant 1970’s-style paper bags, the ones without handles. This severely limits how many groceries you can carry at once. With plastic bags, carrying 8 at a time is no big deal. With paper bags, you’re limited to 2, and you have to use your entire upper body, not just your hands.

Did we mention that the supermarket is right across the street? It used to be easy to walk a few hundred yards, buy groceries and walk home. Now it’s a car trip, because otherwise we’d have to carry the bags home in shifts. So for whatever fossil fuels the geniuses in the county government tried to save by banning plastic bags, we’re now burning far more than that by taking a 40-second drive across the street. Also, whoever imposed this ban has clearly never owned a pet. But the paper bags are reusable! It says so right on the front panel. That is, when they don’t rip or soak through, something plastic bags rarely do.

If you had to pick, would you consider yourself a dog-person or a cat-person?

(Question tabled for fear of starting a disagreement. See above.)

What would you do with an extra $100,000?

Buy 2 cash-flowing single-family residences. This isn’t dollar-cost averaging, but the question is a hypothetical. The previous one was not.

What’s the best thing you ever purchased?

A $99 annual gym membership, perpetually renewable. That question just inspired a blog post, so we’ll leave the answer there.

Would you rather lose your phone or the internet for a week?

Phone, easily. Last month’s talk time totaled 7 minutes.

 

We’re supposed to forward this to 11 people, but we’re breaking the chain right here. Or shortening it, at any rate. Control Your Cash is at least in the 3rd series of links in the chain, which means that 1,453 people have received this even without our help. There aren’t enough questionnaire recipients to go around, and the only one whose answers we’re interested in (and who hasn’t already been called out by anyone else) is Paula Pant of Afford-Anything. Por Mlle. Pant:

Your next international trip will be paid for (standard, non-luxury accommodations.) One country only. Where do you go?

Which will happen first: Dow 11,000, or Dow 15,000?

Okay, Dow 10,000 or Dow 16,000?

Oxford comma: yes, or no?

Isn’t it time we stopped minting pennies? 

Can you teach people to change their financial habits, or is it like asking them to change their eye color? 

Have you ever bought 89-octane gas? If so, why? 

Which is the best national park in the system? 

Do women seriously not care about looks? 

Have you ever bought an IPO? If so, why?  

White grits or yellow?

Filed Under: Math, Net Worth Tagged With: , , ,

Break Your Appliances, Not the Bank

September 28, 2011

Here, this looks like an easy fix

Rather than obsess on how to save money, at CYC we focus on creating, building, maintaining and protecting wealth – regardless of how much you’ve already accumulated. We maintain that few measures that purport to save money are worth the time. (If you don’t believe us, go visit the simpleton who cans his own preserves and then calculates the savings to the second decimal place. He’s easy to find.)

Easy Street, here comes Trent

That doesn’t mean we can’t write about saving money. But as usual, we prefer to drop anchor where the big fish are. Given the choice between pocketing .07¢ on every serving of peach compote or saving thousands with a couple of keystrokes, we’ll take the latter every time. (And then, of course, invest the savings.)

Do you own a house? You should, given that the combination of prices and financing is at a historical nadir.

Once you’ve got a house, get a home protection plan. It’s not quite insurance, but the differences are inconsequential. For a nominal yearly fee, a plan will cover you if something breaks. It will.

NOTE: This is not an infomercial. American Home Shield isn’t paying us for this. We should probably charge them, but they don’t know we’re writing about this and we didn’t tell them. We’re just trying to sell you on the concept of spending a few bucks today to avoid spending a ton later.

CYC World Headquarters has a policy that costs less than $54 a month. Every time something breaks – something that requires a professional – there’s a $60 service fee.

There’s NO LIMIT to the number of calls we can make. It says so right there in the company literature. Practically speaking, even if everything you own breaks, that wouldn’t amount to more than 20 items in a year. And presumably, every warranty replacement would remain in good condition throughout the remainder of the year.

The policy covers easily repairable stuff that isn’t worth the price of a service call (e.g. smoke detectors, doorbells), but also covers other items that a lay person can spend the better part of a week toiling over before admitting defeat (e.g. water heaters; stupid fancy Swedish dishwashers that we bought because they looked so alluring on the retailer’s showroom floor, but not alluring enough to save the retailer from receivership, and which no one in the six-state area seemed to know how to fix.)

On average, a heating unit costs almost $2700 to repair; or more than 4 years’ worth of payments to the warrantor.  An air conditioning unit costs over 3 years’ worth. Even a water heater can cost 11 months’ worth.

How does our warranty company make money? Who cares? Not our problem.

Wait, that’s not a fair nor satisfactory answer. We preach throughout the book that you should look at every transaction from the other party’s perspective. Determine if they’re screwing you over, or if they’re merely getting a fair price for a good service. In AHS’s case, the company profits by spreading out risk. AHS can almost guarantee its network of electrician and plumber affiliates a certain amount of work in each region where it has policyholders.

There’s an ancillary benefit too, which AHS doesn’t even publicize all that much. They give us non-obvious advice about how to maintain our things. (Non-obvious advice is the only kind we have any use for here at Control Your Cash, which you know if you’ve read us for any length.) For instance, who knew that a few pounds of lemon juice ice cubes will remove debris buildup on the sharp edges of a garbage disposal and put an end to that cacophonous whirring metal sound? It works in seconds, and it saves a visit from a plumber who’d rather be doing something challenging like a main line replacement or a boiler conversion.

That’s a win-win for both AHS and us: it reduces the likelihood that AHS will have to pay a technician, and it reduces the likelihood that we’ll require one in the first place. AHS would just as soon collect our money without having to do anything, and we’d just as soon not have stuff break. Plus we’re getting free, actionable knowledge: put into practice, that’s the very foundation of a worthwhile and productive life.

AHS doesn’t cover everything, but it covers enough. Fine, so we have to pay for own electrical face plates. Big deal. The peace of mind of knowing that we’ll never have to fix a well pump ourselves is more than worth the monthly fees.

 **This article is featured in the Carnival of Personal Finance 329: California Dreaming Edition**

Filed Under: Healthy Living, Making Smart Choices, Math, Net Worth, Shopping Tagged With: , , , ,

Control Everything But Your Cash

August 24, 2011

We're running out of metaphors

There’s an argument for being contrarian, and a solid one. A true contrarian would have emerged from the recent housing crisis not only unscathed, but rich. In its simplest incarnation, contrarianism means exactly what it sounds like: buy when everyone else is selling, and vice versa.

The reason this doesn’t work when you follow it to the letter is that it means you would have sold Google stock when the rest of the world was pushing it up from $100 to $579; and you would have bought GM stock when everyone else was jumping off, anywhere from $72 down to its eventual delisting. Over the course of the stock market’s history, you would have lost money.

A popular hypothesis is that of the “permanent bull market”, which states that any downturn in the market, however long, is but temporary. Accounting for inflation, the Dow is well ahead of where it was when it started and it always will be over any given period if you just wait long enough. Therefore, just wait long enough.

The problem is that humans have life expectancies on the order of only a few boom-and-bust cycles. Generalities don’t really help when formulating an investment strategy. Yes, you can figure out which stocks to buy by analyzing fundamentals – in fact, we recommend it because we can get you started for a mere $3.50 – but even that implies that there’s a future worth investing in.

Not to go completely nihilistic on you, but ask yourself the following questions. Seriously. Don’t just read them, think about the answers.

  1. Is there a particular number the Dow could rise to that would give you confidence in the American economy?
  2. If so, what’s that number?
  3. When do you realistically think we’ll get there?
  4. (And did you factor in inflation?)

I recently asked the president of a publicly traded foreign company this very set of questions. Conducted orally, so he couldn’t see which one was coming next. Here were his answers:

  1. Yes
  2. 13,000
  3. (hesitating) 2013? Maybe 2014.
  4. (more hesitation)

Crossing your fingers and trying to convince yourself that things can only get better is better than being pessimistic, it would seem, but eventually you have to start quantifying things and weighing your situation against inflexible time horizons. Us each getting a year older every 12 months is the only constant. What the economy does is, of course, variable.

The following are not opinions:

America’s credit rating now at its lowest level ever, on par with Belgium’s.

If the Greek or Irish economy tanks, the damage can be somewhat contained. Not so for the country with by far the world’s largest GDP.

With a few notable exceptions, no member of either party in the United States government’s legislative or executive branches is remotely serious about reducing its size (and therefore reducing the size of its current and future obligations.)

Those same government functionaries have all but stated that their goal is to eliminate risk, which is a functional impossibility. Of course, the buzzwords they use are far more benign (“keep Americans in their homes”, “make the rich pay their fair share”, “put America back to work” et al.)

People are at least finally learning how to save.
(Ha! Just kidding. It’s true that that’s not an opinion, but it is a falsehood. People are borrowing more than they have in years.)

——–

The consensus opinion among the populace seems to be to wait and see. But an enterprising contrarian can’t decide to simply do the opposite of nothing.

At Control Your Cash we try to keep away from giving specific investment advice. Not because we’re not professionals, but because our M.O. has always been to teach people to fish. That being said, it’s time to champion hard assets.

Real estate is finite. With a growing population, it would seem that real estate’s value will always increase in the broadest of terms. (People need to live and conduct business somewhere.) Gold and other precious metals are finite, at least until alchemy makes a comeback.

“But technically, everything is finite”, you argue. Which would be true if we’re restricting our discussion to the tangible. But there is literally no limit to the money a worrisome government can create. If you don’t believe that, or think it’s an overreaction, go ask a Zimbabwean. Or a Weimar-era German, if there are any left.

Inflation isn’t just a devaluing of the currency. It’s a way to punish the poor at the expense of the rich (because rich people, almost by definition, keep a smaller ratio of their wealth in cash than poor people do. Rich folks can buy assets and hold onto them. Those whose wealth consists primarily of cash aren’t just too tempted to spend it, they’re too subject to the machinations of a market that conducts business in weakening dollars.)

Sooner or later, a government with overwhelming obligations and too many creditors will have no choice but to employ the nuclear option: if you owe lots of dollars, it makes sense to make each dollar you owe worth less. If you can do it, that is. You can’t. Governments can. And shortly, will.

**This article is featured in the Yakezie Carnival-September 11th, 10th Anniversary Edition**

Filed Under: Bad Examples, Capitalism, Consumer Debt, Net Worth, Personal Finance Tagged With: , , , ,
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