Coffee heat rising

Month: March 2009

Staying solvent in penury

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At last! The FIRST GLIMMER OF HOPE in the past 24 hours of number-crunching.

If my figures are right, after I’m booted out into the financial snow I can continue to pay toward the Investment House mortgage, continue to live in the outrageous style to which I have become accustomed, and not go broke. The trick is to earn about $13,500 a year, the amount a good part-time job around here pays. I would need to net $938.75 a month and add it to Social Security and 4% of surviving investments to pull this off.

My arithmetic skills are so wobbly that I had to add up a year’s worth of income and outgo to figure this out. Here’s how:

The amount I’ve used to represent monthly expenditures shows the highest monthly utility bills of the year. But the power and water bills drop by more than 50% in the spring and fall. The working figure also includes a $170 payment on the Renovation Loan, which I can easily pay off, dropping that monthly bill to 0.

It occurred to me that with the pending much-reduced income, I could create a “pool” account much like the one I fund now with biweekly paychecks. But because so little money would go into it and the demands of daily costs are so high, the initial “grubstake” would need to be much larger than what I put in to start my present, much better-funded pool.

My current pool account was bankrolled in the amount of one paycheck, which at the time was about $1500 (it’s significantly less now, thanks to the furloughs). What if instead of funding this new “pool” in the amount of a paycheck, I grubstaked it in the amount of an entire year’s net income, $22,500? I have more than half of that laying around the credit union right now, and if I pick up two classes between now and the end of December, I could easily come up with the rest. So, on January 1, I deposit $22,500 into my “pool” checking account, scrounged from present savings and future earnings. That becomes the account’s “cushion.” If unexpected repair bills or the usual astronomical summer utility bills outpace my income, the 22.5 grand will more than take up the slack. In theory, over the winter when bills are much cheaper, I should catch up.

First I added subtracted each month’s typical bills from each month’s balance (the previous month’s balance plus Social Security plus investment income plus a proposed amount of earnings), assuming I netted $1,000 a month from freelance fees or part-time jobs.

Lordie! The result is I live like a queen, never dip into the red, and end up $2,090 to the good at the end of the year.

Well…I don’t exactly live like a queen, but at least I don’t suffer a significant drop in my already modest standard of living. I get to keep putting $200 a month into a fund for unexpected expenses and indulgences, and, best of all, I have no problem paying my share of the Investment House mortgage.

Next, I repeated this 12-step process assuming I earned only $500 a month. This left me $5,265 in the red at year-end. To estimate how much I might need to break even, I divided $5,265 by 12 months and then added it to the $500 monthly extra income. This suggested I would need just under $939 a month to run in the black.

Since my math cannot be trusted, I ran an empirical experiment to see if this was accurate: plugged $939 into the 12-step process. And by golly! This scenario produces a surplus of $3.00 at the end of 12 months.

This is the first time I’ve run a set of figures that make it appear I won’t be taking up residence in a tent city after I’m laid off. With three potential income streams, it should be pretty easy for me to net around $1,000 a month. These activities will force me to get out of the house and interact with some live humans, which can’t be bad. And who knows? It may lay the groundwork for a full-time job after age 66, when the government stops grabbing back your Social Security just because you still have something to contribute to the workplace.
w00t!
$$$$

Résumés on the wind!

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No grass grows under this old lady’s feet, that’s for sure. Just sent out a résumé for a sweet part-time job that would be a great hoot, and e-mailed my book-length curriculum vitae to the English department chair at a nearby community college.

Hey! We’ve only got nine months here to find a new job! Better get to work.

Truth to tell, I believe I could do either of these p/t jobs on the side, while wrapping up the deconstruction of our office. We know I’m capable of teaching the equivalent of four bloated sections of freshman comp for juniors and seniors while supervising an editorial crew; after that, two sections of real freshman comp whose size is limited to normal NCTE guidelines should be a piece of cake.

Far more appealing, though, is the prospect of serving as p/t gofer and sidekick for an editor (and friendly acquaintance) at my favorite local press. This is the outfit that pays me to read detective novels. Mirabilis! Some of the novels I’ve had the privilege to read have been pretty entertaining. If you enjoy detective fiction and thrillers, you should take a look at their booklist. I know I can do this job to a T, and it sure would be easier than teaching freshman comp. Not only that, but once I walk out the door, it probably would provide the income I’ll need to keep from starving.

Yesh. I scared the bejabbers out of myself, along about three in the morning (as you can imagine, I enjoyed about 2 1/2 hours of sleep last night, between 4:30 and 7:00 a.m.), by loading Excel and massaging some figures. Didn’t take long before I was asking myself the Great Dark-of-Night Ontological Question:
What on earth was I thinking when I imagined I could support myself on Social Security and investment proceeds?

Wait! I remember: at the time, we all actually had some investments.

I was horrified to find that what with the 12-fold increase in healthcare premiums that Medicare will represent plus the need to take my share of the Investment House mortgage out of cash flow, my expenses will exceed my present net income, in the highest-paying full-time job I’ve ever held!

To get by, I’ll need to earn an extra $19,000 to $21,000 a year, above and beyond investment returns and Social Security. This will be a trick, since you’re allowed to earn a grandiose $14,000 before Social Security starts docking your benefits.

Not having the mortgage payments wouldn’t help a lot: even without those, Social Security plus proceeds from my total savings (including the money set aside to pay off the Renovation Loan and the savings fund to buy the next car) will not cover my expenses, post-layoff. Check it out:

Projected Expenses

projectedexpenses3-27-09

Projected Net Income from Social Security and Investments

projectedincome3-27-09Oops!

And oops, indeed: take a close look at what it’s going to cost me to live in blissful bumhood. And consider that my net income today is $39,000. I live like an ascetic: don’t travel, don’t own a cell phone, don’t subscribe to cable, satellite, or any other pay-per-view TV, don’t play computer games, rarely eat out, never buy more than the basic clothes and shoes, drive a 10-year-old car, don’t run a tab on the credit card, don’t even go to a freaking picture show! And I use up all but about about $2,000 of that each year. We’re looking at a $4,560 increase in my expenses once I’m on Medicare! Meanwhile, my income drops into the poverty range.

Clearly, I’ll have to work: either get a job or cultivate several income streams. The candidates are part-time teaching, growing The Copyeditor’s Desk, and monetizing Funny about Money.

Community colleges around here pay part-timers about $2,000 a course. The universities now pay about $3,000. Typical income from a freelance business is about $10,000 a year; I would be surprised, rusticated as we are in the middle of the Sonoran Desert, if Tina and I could generate much more than that, apiece. And what would FaM earn? It’s anybody’s guess. So guessy as to be negligible.

Hiring out to teach two courses from the community college district and two from the Great Desert University each year and ramping up our freelance business so that it pays a consistent 10 grand a year will produce something that looks like this:

projectedincomestreamsTwenty thousand extra dollars would do the trick, in theory. But that exceeds the Social Security earnings limitation by $6,000. Have the temerity to earn more than $14,000 a year, and you get your Social Security benefits axed. So, I would have to earn significantly more than 20 grand to end up with enough income to cover the bloated expenses of retirement.

If I’d had the prescience to sell my investments in the spring of 2008, today I would have plenty of money to live on, between SS and investment income. Too bad we didn’t all have crystal balls, eh?

Well, I felt a lot better, anyway, having sent out a couple of job feelers. Even if they come to naught, just doing something other than hunkering in the headlight while waiting to be run down feels like a positive move.

Ax falls but…uhm…bounces?

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Okay, folks. Hang onto your hats.

They gave me NINE. MONTHS’. NOTICE.

That’s right. I’m canned, but in the slowest of slow-mo.

They’re closing my office, but pretty clearly because they’re nervous about the faculty’s response (which will be stentorian), they’re “phasing it out.” They’re going to renew my contract at the start of the fiscal year (July 1), but only for six months. The editorial office is now slated to close in December.

My suspicion that they converted my assistant editor’s job from classified (nonexempt) to service professional (exempt)—behind my back, and without telling her—so that they could more easily can her was dead on. Classified staff must be given first dibs on any openings for jobs comparable to the one they’re being laid off from. This means there’s one job like it coming open and they want someone else to have it.

Dollars to donuts, that little maneuver is illegal: for a contract to be valid, both parties need to sign it, eh? I don’t think you can switch a person from a classified job to a contract job without bothering to let her know, which is what they tried to do. The only reason I found out was that a woman who either wasn’t too bright or wasn’t any too friendly to what they were up to telephoned and let me know. My sidekick now is aware—through me—that her job classification has been changed, but she’s never been offered a contract. Our business manager said that our offer letter isher contract, but the offer letter, as I recall, was for a classified position, not for a service professional’s contract.

I understand that lawsuits against Our Beloved Employer are sprouting like fancy mushrooms in Room Farm’s closet.

For me, this could work out well. Nine months will give me plenty of timeeitherto look for another job (ugh! not bloody likely) or to figure out how to extract a living from several income streams. The possibilities for Bumhood are rife:
– Monetize Funny about Money
–Market and expand The Copyeditor’s Desk
–Put together the two books I have in hand, and sell the things
–Line up a few university or junior-college courses to teach
–Find a part-time job
–Get Social Security started
–Bunch up all my savings and start drawing down 4%, Bush economy be damned

The beauty of this is that my health care insurance is now covered. Nine months’ notice will carry through until the end of December, 2009. I turn 65 in May of 2010: only five months later. The cost of COBRA is being cut, so that the amount I will receive in vacation pay will easily cover five months’ worth, after which I’ll be eligible for Medicare. Six weeks’ worth of vacation pay will cover five months of COBRA and then some: I’ll have cash left over.

Medicare may cost more than the new, reduced COBRA, which could represent a problem. But I’ll deal with that when I get to it.
* * *

A huge typhoon of a windstorm is roaring around outside. Stuff is banging against the exterior walls and thumping down on the roof. Poor little Cassie, who’s scared of wind (she apparently thinks it has something to do with the supernatural), has been locked inside for eight or ten hours, and now she won’t go out long enough to do her Thing.

She was trapped interminably because I left the campus at 6:30, got stuck in perfectly hideous late rush-hour traffic, had to get off the freeway and make my way 15 miles across town on jam-packed surface streets. Went by M’hijito’s house to tell him what’s up; he took me to dinner, so the Cassie wasn’t rescued until after 8:30 at night.

This morning I took my unfortunate client’s corrupted file out to the powerful PC on campus and to my amazement contrived to save it. The computer actually broke into the defunct file! It tried to crash when I hit the corrupted table, but by then I was wise to things and had saved changes. Next time the file opened, I managed to surgically excise the suspect material, and from then on the thing worked OK.

I had to rebuild 2/3 of Author’s twenty-sixtables, some of them very complex. It took hour after hour after endless hour, wrapped around a meeting in which I was told I soon will be out on the street. The upshot of it is that even though I saved the client’s job and will get paid (I hope…), I’ve earned something less than minimum wage for my trouble. Oh well. It’s enough to buy a month and a half worth of groceries, so I’m not going to complain. Much.

A layoff strategy

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On our morning walk, La Maya asked if I have a come-back planned should Her Deanship announce, during this afternoon’s unexpected audience, that the Great Desert University intends to lay me off.

As a matter of fact, I do. Several recessions ago in a galaxy far, far away, I happened to read a magazine article whose author argued that as soon as an employer proposes to lay you off, you should immediately come back with an alternative. The theory was that you can sometimes bargain yourself into a better position, or at least gain paid or partially paid time to search for new work.

Unclear whether this idea remains operative in the more extreme conditions we’re seeing today. But nothing ventured (etc.). So, I have a couple of come-backs:

1. Her Deanship says soooo sorry, we’re laying you off. I say:
Last night on the local PBS news program, a legislator said that a string the size of a rope is attached to the stimulus package Our Beloved Governor has asked the president for. To get the stimulus money, Arizona will have to abrogate and reinstate all the outrageous cutsto higher education(well, as one of the lead budget-cutters, he didn’t use the term “outrageous,” o’course). Therefore, in the next few weeks the university’s budget will be restored and all your programs can proceed as before.

So, why don’t you cut my hours by 50%, temporarily? This would save on benefits and taxes, and half of my gross salary would cover the cost of one research assistantship—including the out-of-state tuition waiver. Then, when things are better, you can reinstate me at 100% FTE.

2. Her Deanship says that will never do! I say:
Rather than yank the College’s support out from under not one, not two, but six scholarly journals (causing bad press for GDU not just locally but nationwide that will ring through the ages like time’s endless echo), why don’t you outsource the preproduction services to me? This will save the university the cost of my salary plus taxes and benefits, remove three research assistantships and a 50% FTE assistant editor’s position, and get the job done at enormous cost savings.

Pull that one off, and The Copyeditor’s Desk has a bread-and-butter client that won’t quit. Tina and I will both be self-employed, which has its disadvantages but also has the advantage that we won’t have to schlep to campus. We can farm the work out to the graduate students on a freelance basis. While we can’t give them research assistantships, we certainly could hire one a semester as an intern, given what we would earn editing six journals plus the other work we’re doing.

Mwa ha ha! No wonder I’m an academic. I was born for this kind of bullshit!

Reviewed the financial strategy I’d already planned for the layoff eventuality. It’s going to be very tight. However, if it’s true that the stimulus package will pick up 60% of COBRA, my back vacation pay will cover COBRA until I’m eligible for Medicare, especially if the university keeps me on until the end of the fiscal year (June 30). Also, $2,400 of unemployment is now tax-free, so that means the pittance Arizona dispenses will be a slightly larger pittance.

So, I guess the main reason I’m not feeling very exercised about this development (besides the fact that I’m tired of thinking about it) is that, although it would be a major inconvenience, if they lay me off my world will not come to an end.

Uh oh! Watch this space…

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So I sneak out early this afternoon, planning to play hooky tomorrow, and upon arriving back at the house around 3:00 p.m. check the e-mail. What do I find but a summons to an audience with Her Deanship tomorrow afternoon!

Sumbitch. What is that about?

You can be sure that Her Deanship does not waste her time in idle chat with the likes of moi. She has never called me in to her office except to harangue me about one sin or another. Since she’s unlikely to have caught me in my chronic Creative Malingering (she’s not watching, you understand), this does not bode at all well.

Now, I know. I do borrow trouble. Borrow so much of it I still owe interest on years of accrued trouble debt. And it is true that my co-conspirator over in the Public History Department and I have been importuning her for weeks to say if and when we can hire RAs to replace the two who will make their escape this summer. So, yes, there’s a good chance this concerns nothing very drastic.

BUT… But: today I learned the Dean’s factotum…uhm, business manager…quietly reclassified my sidekick from a nonexempt hourly worker to an exempt service professional. The HR lady who revealed that bit of intelligence was surprised I had not been informed. This represents a huge change in my assistant editor’s status, and it adds a great deal of potential versatility to the position. As in…she could be used to take over my job, at less than 1/5 of what I earn.

Coincidence? Maybe. Maybe not.

AND BUT… The university has to give me 90 days’ notice if they’re not going to renew my contract. Contracts renew at the end of the fiscal year, on June 30. That means their lead time runs out on Tuesday. If the dean is going to hand me a pink slip, now is the time she has to do it.

Is that what she’s up to? Maybe. Maybe not.

Moments of Fame

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This week several carnival hosts have kindly featured various recent squibs from Funny.

The question about the worst financial mistake you didn’tmake appears in the 197th Carnival of Personal Finance, hosted this week by Four Pillars, who set a theme of the basics of personal finance. Hah! One of Four Pillars’s editor’s picks is My Money Minute, confirming my suspicions about pet insurance with a well-argued post and elaborate example. The Happy Rock is locked in battle with the grandparents over…what else? All the wonderful STUFF they keep giving the kids! Gather Little by Little discusses the ethics of keeping an unearned windfall.

“Frugality, Savings, and the Causes of Doom” made the 170th Festival of Frugality, which is live at MoneyNing. Speaking of pets, as we were above, Green Panda Treehouse, confronted with a sick cat, suggests a fewways to save on pet care. Off the Book of Phillip Sparrow¹topic, Family Balance sheet reflects on a much weightier matter: how she and her husband are handling a sharp business slowdown. And over at Pecuniarities, Penelope Pince makes the shrewd observation that not all “free” offers really cost nothing.

Spring has sprung at Moneytld, along with the Money Hacks Festival. This week’s well-organized edition is particularly good: it contains a lot of really interestingposts. Probably the least of these is Funny’s report on the credit union loan officer’s guess that comparables around the Investment House will rise in about nine months. I was especially interested in Free Money Finance’s list of 20 money-making activities, because one of them, “Write a Blog,” leads to a rich cache of information about monetizing blogs. Dough Roller thinks now is the time to refinance (assuming, I guess, your house isn’t worth $61,000 less than you owe on it…ahem!)—you have GOT to see DR’s amazing photo of Ben Bernanke! And in the gotcha coming & going department, Mark Montgomery reports that Sallie Mae’s new student loans now require payments while you’re still in school; repayment periods will drop and payments after graduation will rise commensurately.

¹{cackle!} Don’t you just love an obscure allusion?