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Personal Finance

A Couple of Things I Can Afford to Do Without…

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1. New(er) Car

Toyota_Sienna_LEThe other day I picked up the Dog Chariot from Chuck, the Paragon of Mechanics. He charged me $300+ for a brake job and several other small details. I said I was thinking about replacing the tank with a Honda CR-V or a Toyota RAV-4. He and all the guys at the shop argued that the Chariot should run to 200,000 miles without major problems.

It only has 118,000 miles on it now. (“Only” 118,000 miles! Who would ever have thunk an American car owner would utter a phrase like that?)

Normally, I drive about 10,000 to 12,000 miles a year. Without the commute to various college campuses, the mileage is likelier to run on the low side than on the high side. So…if the Men of Chuck’s are right, the thing should last another 10 years!

Every day that car runs, it puts money in my pocket in the form of low insurance bills and negligible registration fees. If it actually survived another eight or ten years, a great deal of money could stay invested, rather than being engrossed by the various parasites who want to take it away from me.

I’d like to drive to the high country during the summers. But I’m not comfortable driving the aging Sienna up the rim, which is a steep climb, nor do I relish being stuck by the side of the road way to hell and gone out in the desert. But duh! It would cost a lot less than Arizona’s $420 registration fee to rent a car and drive it to Jerome or Flagstaff. What the heck? I could rent a Mercedes convertible for less than it costs to register a $25,000 car in Arizona! And not have to pay 25 grand for the privilege.

Yesterday morning I took the little tank by the annoying car wash (at Chuck’s behest: “Take it to the car wash!!!!!”) and paid their demand for an extra $4 to dust the interior. Therein lies the key: give them some vigorish and they do a decent job.

The clunk came out looking almost like a brand-new chariot! Very nice.

So I decided to touch up the paint on the two spots where the white enamel chipped off, one where either a rock or a BB hit the tailgate and another where I broke the tail-light and chipped off a little paint around the assembly. The trick (I learned after I left the tailgate open while backing into the garage and whacked it on the garage door) is to squirt a couple of light coats of white enamel spray paint over the nekkid metal ding. It worked, more or less…good enough for government work, anyway.

custom_paint_jobContemplating another eight or ten years of living with this contraption, it occurred to me to wonder if it would be worth having the clunk repainted.

I’ve always wanted a candy-apple red car. How cool would a candy-apple red Sienna be, anyway? Maybe with some nice yellow and orange flames along the sides?

2) Overcomplicated Decomplication Strategy

Several readers remarked, in puzzled tones, that my scheme to cut the number of credit-card charges to keep track of, month in and month out, was effectively self-defeating. They noted, for example, that buying a cash card for a grocery store would not be regarded as a charge for groceries but rather as a charge for a piece of plastic, counterproductive when the Costco AMEX kicks back 6% on charges for food, 3% on gasoline purchases, and 1% on everything else. Presumably a piece of plastic would come under the rubric of “everything else.”

Much more obvious strategy: cut the number of trips to the usual suspects among retailers. Where is it written that I have to jet off to the Safeway every time I notice that one or two small items have run out? Can one not make do for a few days?

Why not simply cut the number of trips to Costco to two a month (max)? And the trips to Safeway to four a month? Every Thursday morning, I drive right past the favored Safeway on the way home from the weekly networking meeting. Stopping for groceries then would serve two purposes: a) save gasoline by combining trips and b) reduce the number of visits to the supermarket.

Two Costco charges + four Safeway charges + three Costco gas fillups ≠ 98 gerjillion annoying little charges. Actually, they = nine charges.

What if I took out about $200 or $300 in cash each month, and paid any bills under $20 to $30 with actual dollars? Here in this stack of charge slips I see a $4.16 charge to Safeway, a $10.73 charge to a restaurant, a $12.39 charge to Trader Joe’s, a $19.05 charge to the propane dealer, and on and on.

If only Costco gas bills and bills over $30 were charged, last month’s number of transactions would drop from twenty-eight to to twelve. If the threshold were $50, then the number of charges made last month would have been seven. And if I limited Safeway trips to once a week and Costco expeditions to twice a month, the number might drop even further.

So. The new Decomplication Strategy: Use cash for purchases under $50; limit routine shopping junkets to specific days of the month.

Money Happens

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Lordie, money not only happens, it seems to materialize out of the air.

You can’t even imagine how little I am working, here in my dotage. But that notwithstanding, money keeps on happening.

At the end of 2012, I followed the accountant’s advice and withdrew from the S-corp what we calculated the S-corp should disburse to me plus repayment of the money I used to capitalize the business, which has been carried on the books as a loan. That amounted to enough to cover the business’s contribution to my upkeep for the first three quarters of 2013.

Just reconciled the February and March statements (you can see with what enthusiasm I approach these tasks…). Lo! I’ll only have to earn another $2,000 all year long to bring the balance back up to what it was before that drawdown. That is just amazing.

Just now no business is on the horizon — I do need to get off my aching duff and hustle up some work. But this is a feast & famine business. Before long something else will come in, and then it will be like popcorn in a cooker. While it’s quiet, I need to finish the e-book that’s almost done and then put together a couple of others from the bottomless pit of copy that is Funny about Money.

Decomplicate Me!

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Ohhhhhh gawd one more piece of paper to have to figure out, act on, and file is gonna break my achin’ back! Yesterday afternoon I was trying to figure out how to organize the usual complicated mess before handing it over to The Accountant from Nirvana, who offers to take on the migrainish bookkeeping. Obviously, the less mess for her to have to plow through, the fewer hours it will take her to beat it back. Hence: decomplication.

So much paper comes pouring into my house that often I just can’t keep up with it. It piles up like dust on the Plains until finally I’m forced to deal with it, and that dealing can take the better part of an entire day. Yesterday, I thought if only i could find a way to cut the number of transactions and the number of pieces of paper i have to screw with, maybe it wouldn’t take half my lifetime to keep this shit under control…

One spring that feeds the flood of papers is the charge cards. Specifically, the AMEX card. Costco’s American Express card is one of America’s premier kick-back cards: almost every charge racks up a few pennies or a few dollars toward the annual “rebate,” which in my case goes directly into savings. Because I charge everything on the AMEX card and then pay it off at the end of each month, some years that kickback has amounted to three or four hundred dollars. To make that happen, though, entails snowflurries of charge slips, each of which has to be entered in Quickbooks.

Most of these small charges, some as small as a couple of bucks, occur at a limited number of retailers: Costco, Safeway, Costco gas, AJ’s (a local purveyor of fancy groceries and the best coffee beans in town).

What if…? What if I were to buy cash cards at the places where most of my charges take place? You can buy cash cards at Costco with which to purchase gasoline and groceries. Ditto Safeway: give yourself a gift card. Same at the local upscale AJ’s. A person could pay for these things with the richly endowed AMEX card, thereby preserving the coveted kickback.

Wouldn’t it make sense to buy gift cards or cash cards to cover purchases at the most-frequented retailers, thereby consolidating 87 gerjillion receipts into three or four?

If said person then paid for purchases under about $50 with cash, wouldn’t that also get rid of a lot of ditzy little receipts to keep track of?

Then how much would be left to charge on credit cards, track, and organize monthly payments for?

Hm.

Averaging charges in various categories over seven months, I discovered that typically I’ve been spending about $55 a month at AJ’s, $300 at Costco on groceries and household goods, $95 on Costco gasoline, $120 at Safeway, and around $160 on small sundries. On average, large planned or unplanned bills can come to as much as $370 in any given month.

What if the only things that went on the charge card were gift or cash cards and large bills? And all the little stuff were paid in cash?

This would hugely change the budgeting scheme. Instead of $1100 a month to be charged on the card and paid off at the end of each month, things would look like this:

CashBudget

Biggest drawback: it would require me to traipse to the credit union once a month and get actual cash, of all things…

On the first day of each budget cycle:

1. Drive to the credit union; withdraw $160
2. Drive to Costco: Buy $395 Costco cash card ($95 for gasoline; $300 for in-store purchases).
3. Drive to Safeway, get $120 Safeway cash card.
4. Drive to AJ’s, get $55 AJ’s card.

Manage funds accordingly.

This would consolidate all the charges for groceries, cleaning goods, personal care products, and household stuff into three charges — Costco, Safeway, and AJ’s. Gasoline and some clothing would also be comprised in the Costco card. There would be no reason to itemize every single stupid little charge in these categories; instead, all that would be noted is the cost of an estimated month’s worth of charges, to be paid with a cash card.   Same would be true of the ditzy little bills, 50 bucks and under, that would be paid for in cash.

The only bills requiring serious itemization would be bigger-ticket items such as major car repair bills, gifts, dental visits, and the like.

Right there, dozens of scraps of paper, direct to the trash! Or at least not stashed in a file folder or envelope to be inflicted on the (expensive!) accountant.

Today, speaking of major bills, I have to leave my car at the shop for a brake job, so I won’t be driving around buying cash cards and extracting cash from the credit union. But tomorrow…

 

You Get What You Pay For

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Have you seen Mrs. Accountability’s latest post, the one contemplating the glories (or not) of Fiverr? It’s pretty interesting.

She’d mentioned that site over the phone a while back, shortly after the episode with the friend of the “who needs enemies” variety. So naturally, I shot right over there to see what it’s about.

What you find when you arrive at Fiverr is a list of offers of services and small products for five bucks a pop. Some of these (like graphic design) actually could command a decent rate, and some (like images a computer program can toss off in 10 seconds) ought not to. Based in Israel, Fiverr is an international enterprise, and presumably many of its vendors are living in countries where $5 will buy a week’s worth of food.

A similar program (presumably owned by the same outfit, given the identical site design) is called “Twenty Fiverr”; people who think they’re worth more offer the same kind of services and products for twenty-five bucks instead of five. Here’s a guy, for example, who promises to provide seven “quality” articles in less than 24 hours, using a program that generates pap-filled, verbose, redundancy-laced, and vacuous squibs, and he’ll do it for a bargain $25.

I have a lot of beefs with this model.

First, as a self-employed skilled worker who has nothing to sell but skill, experience, and time, I highly resent being undercut by people who are willing to work, it seems, for little more than an ego trip. This is something that for years has kept rates down for writers and for graphic artists, especially those who do business within the publishing industry. Publishers know that some people who can construct a basic article will do it for less than minimum wage — some will do it for nothing — just for the joy of seeing their names in print. The result usually has to be completely rewritten, but that’s what the assistant or associate editor is for. At both of the magazines where I worked full-time, a large part of my job entailed sitting down at a computer and, starting at Word 1, rewriting articles by freelance “writers” from beginning to end.

Many magazines have two or three contract pay scales. Unemployed or moonlighting journalists who actually do know how to research and construct a competent article are paid a living wage. Everyone else gets crumbs. Some publishers simply will not pay a living wage to anyone, because they know plenty of amateurs will do the job (or something like the job) for next to nothing.

It’s the intellectual equivalent of off-shoring. In the case of Fiverr and Twenty Fiverr, it probably is literal off-shoring, too. As an individual buyer of services and products, my sense is that those of us who resent corporate off-shoring of American jobs have no business doing the same to American contract workers. Buy American. And pay something more than slave wages, if you expect to see your country’s standard of living remain above the Third World level.

When one person does a job, even a poor job, for less than fair pay, that person drives down pay for five, ten, or twenty other people for whom work is a living, not a hobby. In my book, that’s wrong.

Second, you really do get what you pay for.

Let’s take a look at the “high quality” article that squib-generator built, using a set of key words relating to weight loss. Here’s its  lead:

Weight loss is a confusing topic. There are so many different people and articles telling you so many different things, it can be quite difficult to wrap your head around them all. This article will aim to lay down the essential and necessary basics of weight loss in hopes to clear the fog that surround it.

Does that make you want to keep reading, as a lead should? It makes me want to run away…but let’s stand our ground and take a hard look at the thing.

“Weight  loss is a confusing topic.” No, it’s not. Weight loss is a process, not a topic. In any event, as statements go this one adds nothing. Right off, we know we’re dealing with a writer who is either a moron or an amateur. Or, in this case, a machine. Even machines can beat around the bush.

“So many different people…so many different things.” Nice use of redundancy to pad space! Is it likely that a person would say “many identical people telling you many identical things”? If the inserting opposite term creates an absurdity, then the adjective in question — “different,” in this instance — is probably  redundant. Here, it is redundant to the power of two.

“Difficult to wrap your head around them…” I should say so, unless your head is made of Silly Putty.  Our electronic author first coins a cliché and then turns it into a grotesque image. Note that it injects another cliché (“to clear the fog”) in the following sentence.

Cliché is the least of the next sentence’s offenses, though. First, instead of telling us anything significant or intriguing, the electronic author vows to try to give us a few fundamental pointers on the mind-numbing topic of weight loss, with no promise — only “hopes” — that whatever follows will enlighten us. This kind of pap a lead does not make. Then it ends with a faulty idiom (“in hopes to clear”: a native speaker would write “in hopes of clearing”) and a grammatical error (“the fog that surround”: subject-verb agreement).

Come to think of it, the entire article is replete with grammatical, punctuation, logical, and idiomatic errors:

• “Easier” used as an adverb (Electro-author meant “more easily”).
• “Change subtle habits that will increase the amount of walking one has to do”: if the habits increase the amount of walking you do, why would you want to change them? Possibly Electro-author meant “develop” or “build”?
• No comma after “but” used as an introductory word (some people think it’s bad form to use a conjunction to begin a sentence, but that rule doesn’t apply much in journalistic writing).
• Lettuce that’s “more green”…heeeee!

Writing style is, to put it kindly, nonexistent:

• Neither the second nor the third section shows any sign of paragraph transition.
• Verb mood jumps from declarative to imperative in paragraph 5, for no discernible reason.
• Complex ideas are touched upon and sometimes given a cursory example, then dropped with no clue to how the advice might be interpreted or used.
• The final paragraph regurgitates the first one, adding nothing except another hilariously grotesque image: “too many hands in the soup.” Careful not to choke on those knucklebones!

At Twenty Fiverr you get seven such “quality” articles for $25…not a bad price, to make yourself look like a moron to whomever reads one of the things.

My momma always used to say that you get what you pay for. But it wasn’t until I moved into the first house I bought by my little self, as a single woman, that I truly came to appreciate that old saw.

The house had washer and dryer connections, and it must be said that one of the chores I hated most in life was schlepping my laundry to a coin-op laundromat. First order of business was to install a new washer and dryer.

Being the naturally submissive type, though, and hooked up with a very dominant gentleman, I allowed myself to be persuaded to buy a low-end Monkey Ward washer and dryer. The two machines looked good at the outset: extra large, nothing fancy but evidently serviceable.

The dryer lasted about a year. Soon as it went off warranty, it crapped right out. Annoyed (and by then wise to the fact that boyfriend was pushing me into doing things I knew better than to do), I had to go buy a new one at Sears.

The second model was far from top of the line — it was a mid-range Kenmore, well liked by Consumer Reports. Twenty years later, it’s still out there in the garage running well. From the day I tossed the first load of wet laundry into it, the thing worked better than the Monkey Ward cheapo ever did, and it still works.

By purchasing a piece of junk first, I caused myself to pay significantly more than it would have cost to have just ponied up a reasonable price for a reasonably good product in the first place!

If I’d replaced the junk with another cut-rate product, I’d probably be on my fifth or sixth dryer by now, to the tune of four or five times what a single decent appliance cost.

The personal finance message? Bully for you if you can get a generous  mark-down on a good product that started out at a fair price. The blade cuts two ways: paying a lot more doesn’t always buy a lot better quality. Paying a fair price — not the lowest though not necessarily the highest, either — is likely to get you services that do the job well and products that work and hold up over time.

 

 

Life Looks Brighter at One in the Morning

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So, the money situation is looking a lot better. Just paid a couple of AMEX bills. Have a stack of incoming checks to scan and deposit electronically, with two more editorial jobs in progress.

One of those jobs has GOT to get finished tomorrow, and another, quite the tangle, will need to be dealt with within the week.

Yesterday I met with the financial adviser to discuss how I’m going to get through next year without teaching f2f courses. It actually looks surprisingly doable.

For 2013, The Copyeditor’s Desk has enough to carry me through if it doesn’t earn a dime. The amount I’ll have to draw down from retirement savings next year represents 3% of the total, so principal should continue to grow next year. Barring any more radical stupidity from our elected representatives.

OK. That one’s not a foregone conclusion. But we can hope.

For the 2014 plan, I’ve made the assumption that Copyeditor’s Desk will earn nothing. This is highly unlikely, but why not plan for the worst, eh?

If nothing — zero point zero-zero dollars — comes in from the S-corporation in 2014, I’ll have to make a 5% drawdown from savings. That’s actually an overestimate, because I’m assuming a 20% tax, which the financial guru says is far too high.

When I reach the point in my dotage that I can no longer teach even one online course and I can’t earn anything by editing, I will need a 5.39% drawdown to live in the ascetic style to which I have become accustomed. That figure will drop to 3.46% if and when the mortgage on the Downtown House goes away.

Financial Guru believes 5.39% is within a safe range, the upper end of which he pegs at 6%. Once M’jito is either able to take over the mortgage or walks away from it, the amount I’ll need to live on will drop to a level that will preserve capital until I topple over into the grave.

I hope.

Meanwhile, SDXB’s axiom that money happens continues to prove true. A fair amount  of money is happening in connection with the jewelry endeavor — I just sold another piece, a rather ingenious idea requested by a customer. Will show you that whenever I’m up for fiddling with the camera and iPhoto.

His claim that one needs a great deal less to live in Bumhood than one expects also appears to be true. My savings amounts to about half the $1 million I believe one needs to sustain a middle-class lifestyle in retirement. However, I seem to be getting by on a drawdown that should preserve capital into advanced old age, without feeling unduly deprived. The keys appear to be…

• Pay off your mortgage before you quit working
• Pay off your car, too.
• Get out of all revolving debt and stay out of it — never charge anything that you can’t pay for that month.
• Develop a side gig that can be used to bring in pin money. It would especially good if said p/t gig could earn a little more than bare pin money.

This morning I ordered a vast pile of beads and supplies from Fire Mountain. The wholesale deal meant a $48 savings at checkout, significantly less than the amount I’d added up in Excel, even after the shipping charge. I think this purchase will make about a half-dozen lariats, one of which is already sold.

Welp, now that some of the banking & bookkeeping is done, a paper is graded, many hundreds of beads have been ordered, and the dog has been played with, I’m going back to bed.

Later!