SWB: Alan B. Rowley II - Success Coach - ECoaching - Email Coaching

Skimming the News This Morning

So I'm glancing through some articles today, killing time while I try to figure out why I seemed to have lost my drive for the last couple of days, and I run across some things that just make me wonder.

The media is still reporting what people with a positive outlook are saying about our chances of heading for a recession.  Supposedly, we're still going to be able to avoid it.  Christmas ARM resets, oil prices, dollar value, and the credit crunch are all going to be deftly defeated because the Fed lowered the interest rate.

I think I understand the reasoning for this.  If they came out and said that there would be a recession, it would happen quicker.  The idea is to keep people spending money for as long as possible so the the decline is delayed or more gradual.  I don't think this justifies lying but I understand it.  Or maybe I'm just wrong and we will avoid a recession.  I have double checked my magic 8 ball and it says, "All signs point to yes."  It's hard to argue with the magic 8 ball.

Please Don't Let Me Be This Crazy

I scan articles on what the stock market is doing and just end up shaking my head.  I don't get it.  The market changes just on rumors and hopes.

Retail is up, trading is up.

Employment goes down, trading is down.

The fed might drop the interest rate, trading is up.

Do these people know what they're doing?

My thinking is that if they keep touching their stocks, they're going to go blind.  My stock goes up and down, up and down, and that works nicely for me.  I don't feel the need to pull it out and then put it back in, pull it out and put it back in.  Up and down is perfectly fine with me. 

I don't keep touching my stock.  Sure, I watch my stock.  How can you not?  It's fun to watch your stock go up.  Exciting even.  Not so fun to watch it go down but you always know that your stock is going to go back up again.  Sometimes it may take a while to get your stock back up.  It might take some outside stimulation but if your stock is healthy, it'll get back up again.  I'm sure there is some old stocks that never come back up.  It's always sad when a stock dies.

Each time you trade, you have to pay a fee and that can be a real stock sucker.  Each time, you have less and less stock.  Quite frankly, you don't want to reduce the size of your stock.  Size matters.  There are plenty of people out there who will promise to make your stock bigger but most of them are scams.  The best way to get a bigger stock is to let it grow naturally over time.

Don't keep playing with your stock.  Let it be and it will get bigger.

Customer Service: Quilter's Haven

I meant to write about this about 2 months ago but had misplaced the paper that I had written the store name on.  I just found it so I can finally do the post.

We went into town on the 24th of July to spend the day with my brothers.  We did some shopping, had a barbeque, and went to a baseball game.  It was a great day.

We started the day by stopping at Quilter's Haven in Bountiful Utah.  I can't tell you why we went to Quilter's Haven because it has something to do with a Christmas present for someone who might be reading this blog.  The reason isn't important for the story.

The sign said they were closed but I saw someone go in when we were pulling into the parking lot so I figured someone had forgotten to flip the sign.  We went in and, as it turns out, they were closed.  The person that went in was the owner and had gone in to vacuum and clean the place up.

We apologized and were going to leave but she said that since we were there and she was there, we might as well get what we need.  We thanked her because we had driven 120 miles and wouldn't be back for quite some time. 

She didn't rush us in the least.  She helped us just like the store was open and we weren't putting her out.  She showed different materials and designs and let us browse.  Someone else came in while we were there and she helped that customer as well.

We live so far away that it's really nice when people help us out.  Some places don't and some do.  We remember both kinds.  The people that help us get our repeat business and some good press on my blog.  The people that don't help us lose a customer and also get mentioned on this blog.

Quilter's Haven has classes on how to make quilts.  My wife wants to learn how to make quilts and has said that if we end up living anywhere near the store, that's where she's going to learn.

Customer service is so important.  It's amazing that it gets cut or isn't encouraged more.

Yikes! Are We Ready for the Truth About Oil?

I was glancing through some articles on oil today and I came across one that was incredibly surprising.  Here's an excerpt:

"Domestic demand growth of as much as five per cent per year in key oil producing countries is already beginning to cannibalize exports and will increasingly do so in the future as production plateaus or declines in many of these countries."

No talk about hurricanes, driving seasons, or the fact that there is this weird new phenomenon called winter that makes things cold in the northern hemisphere which causes people to want to heat their houses.

Production is on a plateau or decline in oil producing countries and they are holding more back for themselves (selfish bastards that they are).

This article is refreshing and frightening all at the same time. 

It's refreshing because it's nice to hear a little bit of truth from news outlets (this one is from CNN).

It's frightening because you know that they held this story back for as long as they could but the word is going to get out.  Oil is going to become more expensive and much more quickly than even I thought. 

Follow along now as I take you through the looking glass and into my wandering mind.

While We're Talking About Driving . . .

A lot of money is spent on cars.  In fact, car sales makes up a large part of the US economy.  The economy was up in August unless you take car sales out of the equation.  Then consumption was down.

People should be paying cash for cars but they aren't.  Not even me yet but I'm really hoping that I will be paying cash for my next car.  I'm going to keep the two I have until I have saved up enough money to buy another car.

Consumer reports says that if you drive your car for 15 years, you'd save over $30,000.  That's just what you would save and doesn't count how much money you would have if you continued to pay the amount of a car payment into your savings account.

Quite frankly, 15 years seems like a long time, even to someone like me who doesn't care about cars.  If you were to keep the car for 10 years and put the second 5 years worth of payments into savings, you'd earn interest for those 5 years and be able to pay cash.

Most people can pay off their cars in 2 years if they really want to so you could start saving 3 years earlier if you wanted or buy a car 3 years earlier.  Once you by a car on cash, you could buy a new car every 5 years if you continued to make payments into your savings account.  You might just find that you like having the money more than the car though and start keeping your cars longer.

Rent is becoming unaffordable

The housing market busted after house prices were run up to a point where they became unaffordable.  ARMs are resetting and foreclosures are going through the roof.  People leaving houses are looking for places to rent and the rent is going up and up.  In some cities it's to the point where it takes more than half a person's salary to pay it. 

People with lower paying jobs are looking to relocate to where they can afford to live but many are going to be staying in the same jobs.  This is going to bring up quite a dilemma when the gas prices go back up (whether it's in 4 weeks or in May).  People are commuting to their jobs from outer suburbia so that they can continue to be school teachers, cops, garbage collectors, and all those all other essential jobs that pay far less than the service they provide.

If gas prices (if? when) gas prices go up, it's still going to cost these people extra money in order to live where they want and keep their jobs.

As I was drifting off to sleep this afternoon for too short of a nap, I wondered what was going to happen when the people who do those jobs can no longer afford to do them.  Will there be shortages in these jobs in places like San Francisco where it's just dang expensive for a school teacher to live? 

I read a story where one teacher is sleeping on a relative's couch for now and will probably try to hook up with some room mates in order to continue to live close enough to the school where she works.  She doesn't really want to move on because she has found her place in life for now. 

Is that really where we're headed?  Putting our school teachers in dorms?

Sword Point Saturday - Technology

I never cease to be amazed by the technology that is coming out.  Things have changes so much in my lifetime that it's impossible to look ahead to what things will be like in another 20 to 30 years.  My cell phone looks like Kirk's communicator and that's old school now where people now have a little earpiece that they find comfortable enough to wear for hours.  Supposedly there will be a hotel in space in about 5 years. 

"How was your honeymoon?"

"Out of this world."

They anticipate that it will cost about $4 million for a 3 night stay and are working on ways for people to get it on without floating away from each other.  It will probably be easier for old rich people to get it up if they don't have to fight gravity.

Anyway, where was I?

Technology.

I'm pretty much out of the loop on technology.  I know the iPhone was released but from the little bits that I've seen, I don't understand the hype.  I just don't keep up with it all.  I won't say that I'm a technophobe but sometimes it seems that we create things that are more like toys than tools but pretend like their vital tools.

So, catch me up.

5 Sword Points for telling me about your favorite new technology or what you think is the coolest.

5 Sword Points for telling me about what you consider to be the most useless new technology.

I Own a Fisher Space Pen

Taking PTE Rick's suggestion, I purchased a Space Pen as part of his high-tech dayplanner.  Did I need a space pen?  Not really.  I usually wear shirts to work that have pockets and so my G2's fit nicely and do a wonderful job.  There are some days that I wear a polo though or days like yesterday where the uniform of the day was a t-shirt. 

Yesterday was my first trial run with the space pen and it worked just like he said (like he was going to lie).  I slipped the pen into the pocket of my jeans and it fit very nicely at the bottom.  It was comfortable and there was no chance of it breaking.

Breakage was something that I worried about with my G2s on training day.  That blue gel ink would most assuredly destroy any clothing that it came into contact with, especially if it was the whole pen worth of ink.  Now I'll take my space pen with me on training days.

I'm using the 3X5 cards too.

Have I mentioned what a good sport my wife is to put up with a husband who tries all kinds of different (different sounds better than weird) stuff?

Oil Prices Are High Because . . .

Not because we're running out, heavens no.

Dozens of other reasons.  Take your pick.  What I find interesting about the articles on oil lately is that the tune has changed and we just go on like it's always been this way.

Before this year, everyone expected the gas prices to go up for Memorial Day and then go back down around Labor Day.  We were told that peak driving months drove the prices up.  We knew it, we expected it, and even though we didn't like it, we accepted it.

What's different this year?

Driving season is over but gas prices are on the verge of rising dramatically (give it about 4 weeks - just a guess).  Why?  It's hurricane season.  Oil prices are going up because a hurricane might hit something. 

Will the gas prices go down after hurricane season?  Ummm, no.  Sorry.  We are already being warned that when hurricane season ends, it will be winter.  That means that we might need electricity to heat our homes and that's going to cost money.

Every season now has a reason why oil prices are going to be high.  Like hurricanes and winter are brand new phenomenons that have never happened before.   Suddenly, out of the blue, it gets cold in January in the northern hemisphere.  I don't know what all you people in Minnesota were complaining about before now.  Whiners.

Maybe next April and half of May, we'll catch a break.

Probably not.  By then, China, India, and Brazil, will be blamed for using up all of OUR oil.  One thing that is going to become apparent is that even if "they" can hide the fact that we are running out of oil, they won't be able to hide the fact that we just can't produce enough, fast enough, to get some out to everyone. 

Pick a reason, any reason.  There will be more of them coming in the future.

"Oil prices are up and it's April.  What gives?"

"A butterfly flapped it's wings in Madagascar."

"Oh."

The Housing Fiasco *Might* Effect the Economy

It's too early to tell, apparently, but it really could happen.

"There is a probability of fallout on the real economy in the USA," Trichet said.

The European Central banks are going to remain "alert" to what is happening in the USA and have injected billions into the global economy.

I have a question.  What the hell does it mean to inject billions into the economy?  Someone please tell me.  I have read it in just about every article on the impending recession.  One article I read suggested that the banks were issuing monopoly money to buy up crap paper from investors who were either stupid or tricked into buying worthless real estate backed investments. 

The last couple of articles have talked about trying to inject money into the system without bailing out people who made bad investment choices.  This would suggest that the article was at least partially correct.

If that's the case, then I have another question:

Should Obese People Pay More For Health Insurance?

Last year, I wrote a paper for college where my position was that under the current system, people who knowingly engage in high risk activities should pay more for insurance (which they already do for life insurance and car insurance) and that this should be expanded to cover health insurance.

I ran across an article yesterday that said this was in practice now and that the "high risk activities" has been reduced to pretty much just one thing: obesity.  Companies are checking the BMI of their employees and those that are obese pay more for health insurance.  Some companies charge one rate but give discounts to people who are more fit.  This is the same thing but worded so as to not be charging more for obese people, just less for not-obese people.

This type of discrimination has been authorized by the government as long as the difference in fees isn't more that 20%.

I can see some problems with this.

Here's An Optimist For You

"But at this stage, while the risk has gone up, I believe the US will avoid recession because the corporate sector is still in good shape and most households aren't having trouble servicing their debt." - AMP Capital Investor's chief economist, Shane Oliver.

Servicing their debt.  Nice.  Serving their debt is more truthful.  Debt is in control of their lives.  Who ever holds the debt is the master.  But I digress.

The stock market went down again and is expected to drop a good chunk on Monday.  People are pulling out.  China is pulling out. 

Gas prices might soar in the near future because OPEC won't (or should they be saying "can't") increase the amount of oil they are selling off.

Companies are laying off tens of thousands of people.

There is a bill being considered to change the laws on gas mileage for vehicles which could end thousands of jobs in the production of gas guzzling vehicles.

Some people say that we haven't hit rock bottom on the housing fiasco yet.

Banks and companies are begging the Fed to lower its interest rate so they can borrow more money.

Economists predicted that 110,000 jobs would be created in August and instead there was a reduction of 4,000 jobs.  Not only did they miss the mark by 114,000 jobs but they didn't even get the trend right, guessing positive when it was negative.  It was a fluke though, so they say, and jobs will rebound in September.

Other than these items from the top of my head, everything is going great.  Can you imagine what it would be like if things got bad?

Can You Outsmart the Credit Card Companies?

If you answered yes, you might be a very smart person.  You would probably be wrong but you might be very smart.

A study was done on the effects of a high IQ on things like income, net worth, and bankruptcy and while there seems to be a correlation between smarts and income, not so much on the other two categories.

Having a slightly higher IQ than average can lead to a reduced chance of bankruptcy.  These must be the people that are smart enough to know that they can't outsmart years of experience and closing loopholes.

There are lots of smart people working for the credit card companies that watch for people gaming the system. 

I did manage to find a loophole that they haven't closed yet.  Yet.  I'll let you in on the secret but try not to let it get back to the companies or they may close the hole.

Here's the deal.  If you don't borrow any money from them, you don't have to pay them any interest or fees.  Shhhh.  Pass it on.

5 Sword Points for PTE Rick for submitting this article.

It Doesn't Look Like Gas Prices Are Going to Hold Out

Are we headed for a recession?  It depends on who you ask.  Some say yes and more say no.

If you remember, part of the equation for getting around the recession is to keep gas prices down.  I said a while back that my guess was that forces would act to try to keep gas prices down until the housing fiasco had reset.  Try.  It doesn't look like they are going to come close to succeeding.

Oil and gas reserves were tapped far more than expected the last week of August.

OPEC is saying that they aren't going to increase oil output.

There is more violence and tension in the Middle East and Nigeria.

Mexico has shut down refineries because of hurricanes.

All of these things are adding up to price increases in oil and there's a possibility that oil will hit an all time new high record in the very near future. 

If gas prices go up to where they were in May (or higher - yikes), it's going to cause a strain, probably to the breaking point.  Too many things are all happening at the same time.  Of course, "same time" for the housing market is probably an 18-24 month period so a lot can happen in there.

If gas prices hit a new high, I would like to change my previous guess for the chance of recession from 80% to 100%.

What do you think?

New York oil price nears record high

Oil, gold prices jump as heightened world political tensions unnerve investors

Can We Really Pay Off the Van Before Thanksgiving?

That was the prime question in our weekly meeting, which we held last night.  We played with the numbers and went back and forth with ideas. 

The bottom line is that it's going to be possible but it isn't going to be easy. 

I'm going to remind you that we're paying off the van a couple years ahead of schedule and we realize that if it takes us an extra month, we're still way ahead of the game.  We know this.  We understand this.  We even talked about it but we kept coming back to . . .

How cool would it be to enter the holiday season without the van payment? 

We would have our house payment and the $120 Saturn payment as our only debts. 

It wouldn't just be a monetary change but a mental and emotional change.  You want something to be thankful for on Thanksgiving?  How about one less debt?

We figure that we can do it but we are going to have to be more careful with our money.  In small ways, but we're at the point where every little bit helps.

When the debt is large, it's harder for us to be motivated.  As it gets smaller and smaller, each dollar pays off a greater percentage and our motivation goes up.  We're at the point now where our motivation is high and trying to figure out how we can cut costs.

The problem is, we have cut most of the fat off already.  We have been spending on average an extra $25 a week at the grocery store.  So, we'll cut back there.  That gives us about $100 extra dollars.  We have been going out to eat once a week which is about $20 a week.  We're going to cut that out until the van is paid off so that's another $80. 

That was everything we could see to cut.  Beyond that, it becomes a matter of sticking to the plan and watching for ways to earn a few extra bucks.

It's going to be close but it's going to be worth it if we make it.

August's Percentages

You can see the obvious correlation again between spending on stuff and our ability to pay down our debt.  I printed out a full size page with this graph on it and I'm going to hang it where I can see it each day.  It really is a great reminder.

That's why I am sharing it with you.  I hope that it helps remind you as well. 

We are going to try and nudge the savings up closer to 10%.  Doing that means that we will have to take the money from somewhere else.  We reached our short term goal with our savings this month.  The next step we want is 2 1/2 times more money so we are thinking about putting more in each month.

We used the van to go to town this time and it shows in the increase to Transportation. 

We think that we will have the van paid off before our heating bill goes back through the roof.  Maybe it won't be as cold this year.  If we can pay off the van before the electricity bill goes way up, we'll be able to use some (most) of the money that was a van payment for that bill and be able to focus on the paying off the car. 

Sounds like a good plan anyway.  =)

Starting to look at August's Numbers

Well, I am mostly back among the living today.  I'm still restricted in how far I can stray from the bathroom but I can at least sit and type for a bit.  I did break the barrier briefly to make a run to get some of the pink stuff for me and some Pepperidge Farm Fish crackers for Trey.  Two things that we should just always have on hand.

It's the first of the month and that means that it's time to start looking at some numbers. 

The holiday weekend seems to have delayed the processing of all three of our payments on our debts.  Whose idea was it to have them all due on the 1st of the month, anyway?  Haven't these people every heard of spreading them out a bit over the month?

It caused a leveling off effect for our net worth.  It still went up which is nice but it should be up higher.  More importantly, our debt should be lower.  They probably will be tomorrow but it won't show up on the net worth until next month.

The biggest changes for the month:

We have 6.27% less cash than we had last month.

We paid off 4.88% of our car loans.  That's not great but that's not bad considering the car payments haven't been applied yet. 

We have also been putting money toward a new computer.  We are splitting money between paying off the car, paying college tuition, and buying a computer.  I am going to try to increase the amount going into saving this month too.

I wouldn't recommend diluting your money like this until you are getting close to debt free.  The more money that you can put toward debt, the better.