Coffee heat rising

Ethical? Charging what the (charitable) market will bear…

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Middle of last week, along came the following announcement in the community college e-mail:

Kewl, eh? For ten bucks you get an artsy-craftsy bowl (potential Christmas present!), a light meal, and some general socializing. And you donate to a good cause.

I asked La Maya and Kathy if they’d like to drop by this thing by way of entertaining ourselves and picking up a lunch. Kathy couldn’t get away from work, and La M had other things to do. But, said she, the local paper reported that this event was happening at AJs’ stores, too. She gathered the one in our part of town was hosting it on Saturday. She was busy, but Kathy thought she could make the endless drive from the hinterlands where she lives to the central part of the city.

So during the week when I was in the vicinity of that AJ’s store I checked, and yea verily: Bowls for Charity on Saturday.

Fortunately, Kathy changed her mind at the last minute. But that notwithstanding, yesterday morning I drove down to the store to check out the bowls.

A cluster of society wives was buzzing around the table where a bunch of young volunteers were peddling the nonprofit’s wares. As one of the women selected an unexceptional bowl, the amateur saleslady said, “That’ll be twelve dollars!”

Oh? And BTW, not a cauldron of soup nor a loaf of bread to be seen…

“So,” said I, “these bowls are $10 at the community colleges but $12 here?”

The young girl behind the table looked puzzled—and young, very young. She was probably a high-school kid. She had no idea.

Annoying. The presumption that just because you happen to shop at AJ’s—or because you would choose to go to that site after you read about the event in the newspaper—you therefore can be charged more for less: that’s annoying.

It’s every bit as annoying as the presumption that just because I wear a pair of Costco jeans into the local Saks, I can’t afford to shop there.

Is it unethical? I don’t know. Vaguely, I feel it could be. Why, I couldn’t say. It just feels like a gentle rip-off.

People on food stamps shop at AJ’s, believe it or not. One afternoon, before the Department of Economic Security started issuing debit cards in place of paper food stamps, I saw a man roll an entire cart full of healthy, nonjunk food up to a cash register and pay for it with food stamps. Should he have to donate an extra two bucks for charity (and not get the soup or the bread) just because he chooses to spend his dole at a store that stocks more real food than junk food?

If all you want is to pick up a handmade bowl or two, for twelve bucks you’d do better to wait for the next street fair. Or visit the excellent artists’ and crafters’ consignment shop directly across the street from that AJ’s.

If you want to donate to a worthy cause? Frankly, I think you’d do better to send money directly.

So, what cause would your purchase or donation support? Paz de Cristo is one of the most venerable soup kitchens in Phoenix’s suburban East Valley. Year in and year out, it has distributed hot meals to the poor, every single evening of the year.

It’s the offspring of St. Timothy’s Catholic Church, which for as many years in and out has supported it generously. Along about last August, in the depths of the worst recession this country has seen since the Great Depression, rel=”nofollow”St. Timothy’s decided to drop that support, abruptly cutting $300,000 in funding and throwing the charity to the mercy of private donors.

No indication of any wrongdoing on the part of Paz de Cristo was offered as an excuse for this moment of Christian charity. Instead, the church said that tithes had dropped off so sharply (could this mean something?) that it would no longer support the soup kitchen.

Hmm. What would Jesus do?

Theme Days: A way to organize time

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Ever get the feeling that you just can’t keep up with all the stuff you need to do? That there’s so much ditz to cope with that you can’t get to the important things, but if you do the important stuff first, then there’s no time left to deal with the steadily mounting pile of ditz? Lately, I’ve felt my life is out of kilter because I don’t organize my time well enough to keep up with all the challenges,  chores, and commitments that fill my days to overflowing.

Yesterday I worked from four in the morning to nine at night, with one break to fiddle with the pool equipment, one break to reheat some leftovers for a midmorning breakfast, and…and that was it. When I could no longer type another word or edit another confused sentence, in came an e-mail from the client expressing his wonder that I hadn’t edited two other documents he was in a hurry to get. It was almost 10:00 p.m. before I got up from my desk and stumbled into the kitchen to fix dinner.

Lists have always worked pretty well for me. But recently the sense of being utterly overwhelmed has left me too flummoxed to write lists. What to put at the top of the list? And how to get through all the things that need to be done? And when the stuff on today’s list doesn’t get finished (because there’s just too darned much to do in 12 or 14 hours), what gets lost from tomorrow’s list?

My lists sink beneath an ocean of too-damn-many-things-to-do-at-once.

Lately it has occurred to me that instead of compiling endless lists of tasks to plow through, it would make better sense to devote blocks of time to working on one general type of activity. Anything that didn’t fall into that category would be put off to some other block of time, which would be dedicated to a different kind of activity. “Blocks of time” would be restricted to whole days and half days. Theme Days and Theme Half-days.

On a theme day, all I would work on is projects related to the specific theme. And quite a few themes come to mind.

For example: I need to spend a fair amount of time on freelance projects. Right now, that work gets stuffed in around the many other things that need to get done, and it often suffers because something I perceive as more urgent gets pushed forward. Before long, I’ve fallen behind on the editorial work and then find myself laboring, bleary-eyed and fuzz-brained, to finish a late project—at midnight or one in the morning! The quality of the work suffers, and so do I.

So let’s suppose that instead of resolving (vaguely) that I must get to thus-and-such a project tomorrow (and tomorrow and tomorrow, and so on to infinity…), I had a Copyeditor’s Desk Theme Day. What would happen on such a theme day? Or on any other theme day?

Copyeditor’s Desk Day: Read the current client’s manuscripts, proof detective novels, index page proofs; hustle business

Teaching Day: Prepare for classes, meet classes, read student papers, enter grades & attendance, communicate with students online

Cleaning Day: Do laundry, clean house, wash the car, clean out the garage, organize closets

Shopping Day: Run around the city chasing down food and household necessities

Gardening Day: Clean up the yard, fiddle with the pool

Bookkeeping Day: Enter data in Excel & Quicken, reconcile bank accounts

Social Day: Hang out with friends, go out and do something fun

Choir Day: Sing

Blog Day: Write and schedule a bunch of posts, submit stuff to carnivals, host carnivals, study SEO and AdSense, learn more stuff

Some of these activities don’t require an entire day’s worth of effort at any given time. So a single day could consist of two Theme Half-days. Choir, for example, occupies the better part of Sunday morning but is over by about 11:30. Sunday could be a double-theme day, then: Choir Day and Shopping Day.

The to-do list would contain only tasks and goals related to the day’s theme, plus of course the basic survival chores. So a Sunday, to continue that example, would be mapped out with a list like this:

• Breakfast
• Feed dog
• Walk dog
• Church
• Change clothes
• Bolt snack-like lunch
• Write shopping list
• Go to Costco, Target, WalMart, Safeway, Trader Joe’s or Sprouts, AJ’s or Whole Foods, & Ace or Home Depot
• Unload car, unwrap & repackage bulk items, and store purchases
• Dinner
• Feed dog
• Walk dog
• Read & answer e-mail
• Check blog
• Fall face-forward into bed

Other types of activities need only be done once a month or once every couple of weeks. Bookkeeping, a half-day project, can wait until all the bank statements are in hand and then be combined with some other activity that can be completed in half a day: light housecleaning, for example.

Some activities need to be done every day or nearly every day—but they may or may not need to occupy an entire day. These themes could be assigned to days as activities need to be addressed, and shifted as workload demands shift. Hence…

Saturday
• Blogging, Socializing

Sunday
• Choir, Cleaning

Monday
• Copyediting, Teaching

Tuesday
• Teaching (grade papers)

Wednesday
• Gardening, Teaching

Thursday
• Copyediting, Shopping

Friday
• Blogging, Teaching

Saturday
• Copyediting, Teaching

Here’s the beauty of this scheme: it eliminates the gestalt. The frantic, scattered Brownian motion-like activity that consumes every day is replaced with focus on a set of closely related tasks.

To-do lists are focused instead of impossible agglomerations of disparate jobs that are running late.

And they’re shorter. Anything that’s not related to the day’s theme doesn’t appear on the to-do list. That helps to rein in the sense that you have so many things to do that you don’t even want to get started.

I haven’t tried this plan yet, but starting tomorrow I’m going to.

Think it’ll work? Do you have a system that works for you?

Image: Alvesgaspar, Shepherd Gate Clock, Royal Observatory, Greenwich. GNU Free Documentation License. Wikipedia Commons.

Prognostications

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Well, somebody thinks the economy is about to improve, big-time!

On the other hand, somebody else thinks (with questionable credibility) that whatever gains we make will be lost to soaring healthcare premiums as insurance companies gouge customers in the wake of national health-care reform.

Enough people think happy days are here again to push the Dow over 10,000.

But certain skeptics think the Dow is manifesting a bubble, and that we can expect swings back and forth around that honored threshold for some years to come.

The Fed allegedly believes the recession is over, though observers see “signals” from Bernanke that the Federal Reserve will keep interest rates low for the foreseeable future. That notwithstanding, others are convinced rates will have to rise in 2010 as inflationary pressures come into play.

Government scientists think my part of the country will be hotter than normal next summer (and for most of 2010, come to think of it).

Others who style themselves as experts assure us that any such phenomena have nothing to do with the free enterprise-threatening hooey that is global warming.

If we imagine any of these things might come true, can we make it happen by thinking about it hard enough? Anything’s possible…

...Your fairy is made of most beautiful things.
...Your fairy is made of most beautiful things.


Image: Sophie Anderson Tucker, Take the Fair Face of Woman. Public Domain. Wikipedia Commons.

Real Estate: What does the future hold?

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One of my Realtor friends says that not so long ago, he seriously considered declaring bankruptcy to get clear of the three properties he bought at the height of the bubble. He’s dropped the plan, seeing that things are slowly turning around, but he’s skill skeptical about the future.

Meanwhile, some speculators think real estate is set to grow at a fast clip. Yeah: any time now. Yale economics and finance professor Robert J. Schiller reports on surveys of home buyers’ attitudes. In 2009, 311 people responded. Asked how much they expect their property value to change annually over the next decade, their average answer was an increase of 11.2 percent; the median response was 5 percent.  Asked about short-term prospects, respondents answered, on average, that they expected a 2.3 percent rise in their home value over the next 12 months.

He who thinks his single-family residential property value is going to increase 11.2 percent per annum over the next ten years is stuffing his pipe with some mighty potent happy weed.

Over the decade I owned my last house, its value rose about 8 percent a year. But I got a good deal on it when I bought it out of an estate at the tag end of the recession that followed the savings and loan fiasco, and I sold it just as the late, great bubble prices were starting to run up. A four-bedroom house with many designer remodels, it stood on a nice street bordering a prime central neighborhood, within walking distance of an acceptable public school.

My guess is we’ll see a plodding annual increase of about 2.5 percent for the next several years, followed by a rise to 3 percent for a couple years, then settling into to 5 or 6 percent for the duration. More optimistically, I can imagine a 3 percent growth rate for several years that then drifts past 4 percent and 5 percent to arrive and stick at a steady rate of 6 percent per annum.

If you owe, say, $211,000 on a house for which you paid $235,000 and that’s now worth $160,000, what does that mean for you?

Scenario 1. Sale value rises by 2.5 percent for four years, then 3 percent for two  years, then 5 percent for 3 more years:

• Value rises to $176,610 after 4 years.
• It reaches $187,366 two years later, after a total of 6 years.
• And it hits $216,899 3 years later.

You’ve held the property for 9 long years. Interest has picked your pocket thoroughly and you won’t get your down payment back, but if you sell the house, at least you don’t have to bring any greenbacks to the table.

Scenario 2. Value rises at 3 percent for three years, then 4 percent for a year, then 5 percent for a year, then 6%:

• In 3 years, it’s worth $174,836.
• Another year later, at 4 percent, it reaches $181,830.
• The next year, as appreciation shifts upward another percentage point, it’s worth $190,921.
• The following year, at 6 percent, it reaches $202,377. Six years have passed. You’re still upside down, but today if you try to sell it you only have to bring $8,623 to the table, far better than the $41,000 you’d have had to come up with if you sold it in a panic at the outset.
• With appreciation holding steady, you hang onto it for 3 more years at about 6% p.a. (simply by way of comparing it to the first scenario), and it’s worth $241,034.

Because you’ve had to pour a lot of interest into the thing, when you sell it at the end of year 9 you don’t walk away with anything to make Uncle Scrooge proud. But at least you can unload the place without having to pay cash to the bank to get out from under the loan.

IMHO, that’s about the best we can expect. If that’s so, either of two strategies can help turn this lemon into lemonade:

1. If it’s a decent house in a safe neighborhood, live in it and enjoy it for nine years.
2. If it’s not anything you’re comfortable living in, rent it and use the rental income to turn the house into a gigantic tax deduction. Use the revenue to pay the mortgage bills, defraying some of the losses on the investment. If, as expected, inflation goes into the stratosphere, over time you’ll be able to charge enough rent to cover the payments and have some left-over cash to put in savings. Assuming you have a fixed-rate mortgage.

Let’s suppose a miracle happens and houses start to appreciate at 4 percent. This puts you right-side up in about seven years. Well, what the heck! If a miracle like that can take place, surely an immediate annual appreciation of 6 percent isn’t impossible. That would haul you out of the deep end in a little over five years.

There’s another possibility, of course: massive inflation. In that scenario, the real purchasing value of the money you owe on your monthly payments drops. If you manage to get and hold a job, the payments become more affordable over time. The dollar value of your house rises, but then the dollars are worth a lot less. You reach a point where you can sell the house for the number of dollars you paid for it, but those dollars won’t put a better (maybe not even a comparable) roof over your head.

Back in the days when bankers were bankers, they used to say real estate should always be seen as a long-term investment. Guess those old guys knew what they were talking about! And the only thing they smoked in their pipes was tobacco.

Image: Bungalow in Darien, Connecticut. Public Domain. Wikipedia Commons.

How does your (financial) garden grow?

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Over at A Gai Shan Life, Revanche has been contemplating the degree to which her investments have recovered from the late, great economic crash. In comparison to the pickle we were in just a few months ago, even “not great” returns look good!

Coincidentally, just a few days ago I happened to take a look at my own funds’ performance over the past year or so…the first time I’ve had the heart to do so in a long time.

My big IRA, which is professionally managed, has been doing a lot better the past couple of months. Between mid-September and mid-October, it increased by a healthy $4,288. The taxable Vanguard funds increased $1,623 over the same period.

The high point reached by all my scattered investment holdings (not counting real estate) occurred in April of 2008. As of about three days ago, the value of all my non-realty investments had dropped by $110,470 off that high. However, I used about $20,000 to pay off a small second mortgage on my home, and so the real difference in value is about –$90,470.

The low point occurred in March 2009. The most recent figures show a gain of about $49,145 from the low point. Again, we need to remember that I made that $20,000 withdrawal in May 2009, and that some of the gain consisted of contributions to the 403(b).

The total package of investments, then, has a ways to go before my illusory riches come back. I certainly don’t expect to regain the remaining $90,470 of the retirement savings that evaporated in the economic meltdown anytime during 2010, even if I succeed in leaving the funds untouched. Really, I’m pleased just to recover that $49,000.

What a ride we’ve had, eh? How are your investments doing? Are you seeing any sign of life yet?

Reprojecting next year’s income

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Obsessive again, I spent another day and a half rehashing, in a desultory way, next year’s income and outgo. And worrying. Worrying worrying worrying: can I make it?

It appeared very much as though I could not. In 2010, projected discretionary and monthly unavoidable expenses, all told, will run about $30,075. Net income from Social Security, teaching, and GDU’s one-time payout for unused vacation time would come to about $26,200. The problem is, the $14,160 that Social Security will allow me to earn in 2010 before a 50% penalty kicks in is just too little for me to live on.

Cutting costs every which way from Sunday (my expenses have already been cut significantly, preparatory to unemployment) brings the estimated outgo down to $27,675, still more than projected income.

The goal, BTW, is to avoid taking a drawdown from savings next year, so as to allow the investments in my major savings instruments to recover from the crash of the Bush economy. With that constraint, there was no way income was gunna exceed or equal outgo, no matter how many numbers I crunched.

Dang!

Well, this morning a dim light dawned. The community college district issued my first full paycheck, which for the first time showed state and federal tax withholding. A little English-major math revealed that the total gouge, for everything, is only about 14 percent. I’d been estimating a 20 percent tax bill.

That 6 percent difference will make it possible for me to live on Social Security, my net vacation time payout, and teaching income next year! My share of the Investment House mortgage will be paid from a separate little windfall, and without that $800 a month hit, I should be able to live in something slightly more luxurious than full-out anchorite style.

Without cutting my current $1,200 a month budget for discretionary expenses (some of which are only nominally “discretionary”), I still run in the red, as you can see from the first four columns on the left. However, as a practical matter discretionary expenditures have averaged about $1,000 for the first nine months of 2009, despite several months with large budget overruns. Assuming straitened circumstances will lead me to keep those costs at or below $1,000 a month, I end up just within my 2010 net income—as shown on the right.

Add a $2,500 drawdown from the S-corporation, which I plan to take this December and stash in next year’s survival fund, and the picture looks even better:

In this scenario, if I manage to keep discretionary expenses around $1,000 a month (on average), I should have about $2,740 of play over the course of the year.

So, if no really huge unexpected expenses strike next year, I should survive the tight times of 2010 without undue suffering. It won’t be luxurious, but neither will I have to set up a campsite under the Seventh Avenue Overpass.

Whether 14 percent withholding for taxes will suffice remains to be seen. But that problem will have to take care of itself in April 2011.

By 2011, my investments should have recovered enough to justify a 4 percent drawdown. And the onerous restriction on the amount of earned income Social Security imposes will expire (for me) in 2011, so I can put all of my contract and blog income into the pot. As a practical matter, the combination of teaching, Social Security, and S-corporation income may be enough that I won’t have to draw down anything like 4 percent. I’ll need $800 to cover my share of the Investment House, and that’s only 2 percent of the present investment total. If, as my financial managers think, investments will have recovered substantially by 2011, it may be even less than that.

Hallelujah!