Posts tagged ‘finance’

Billing and paying the bills.

I’m just a little conflicted about money. Perhaps a sheltered life has left me without clear guidance. I’ve always had ‘enough’, and often more. Less since I started working four days a week; still enough that I can set aside some savings, but little enough that the eventual demise of my car threatens that savings. Meanwhile, other people, many of them surely more dedicated and hard working then myself, starve or struggle to get to a place of equal safety and comfort.

There was a particular incident that triggered this latest reflection. Recently one of my fellows in the martial arts school asked what I would charge to upgrade her reality shows web site, and I wasn’t comfortable naming a price.

Some of it I’m sure stems from a weak self confidence. I’ve heard a number of high consulting rates thrown around. At work we price engineering projects based on $75 per hour, although we don’t then track hours. That’s pretty low compared to others I’ve heard. Even on the condo board, we can’t get much of anything done for less than $40-50 per hour.

All rather more than minimum wage. Is the difference skilled versus unskilled labor? The woman who cuts my hair charges rather less than $50. She told me a while ago about the tough parts of beauty school – cataloging individual muscles, sufficient grounding in chemistry to avoid nasty or even dangerous combinations of chemicals, and enough knowledge of ethnic backgrounds to predict how hair and so on is likely to respond to various treatments. Perhaps the price is set by the typically brief male haircut and widespread competition.

The different cases don’t offer much guidance. Even skilled gets called into question – while I have a long history taming troublesome pieces of software, I had no experience with the Xoops package in question. At an hourly rate, figuring out the thing would undoubtedly be a expensive process, but I don’t feel comfortable changing people for my own incompetence.

In the end I picked a rate closer to the landscapers, but capped the bill at four hours, which seemed more than adequate for someone who knew what they were doing. I spent rather quite a bit more than that setting up a test environment and getting a handle on things. I actually came to the conclusion that the originally requested version upgrade was completely orthogonal to the features she was hoping to achieve with it. We set up only those changes, and now it’s back to ambiguity: if she chooses to upgrade for future proofing, technically I haven’t finished was I was asked to do, but I have spent considerably more time than originally allotted. I also found out during the course of the work that my bill was considerably more than the trickle of ad income the site generates.

Of course it’s complicated further by knowing the person. I’ve passed over requests for web site help from less familiar people before. When it comes to a closer associate, there is question hanging out there of whether it should even be a favor. A lot of things in the world run by volunteer effort alone, and a world without community driven organizations might very well be worse off. One of the reasons that I often feel rushed is because I’m involved in a couple of volunteer organizations.

Condo board members may not be paid by law. Yet someone has to watch over the common interests of the association, and volunteers are perhaps predictably scarce. If it’s not me, then it might be no one, leaving things undone.

Then there is martial arts, where I spend one or two nights a week in unpaid instruction. The martial arts is immersed in a tradition of mutual obligations – as you were taught, so teach. But it’s still out there when I start counting up where my time went. I’ve actually been pulling back lately. I cut out one class, and I’ve been going to the board game design group again, which intersects one night every other week.

I confront valuation again in software. My lifetime earnings from personal software projects is $5. Not a single solitary soul has seen fit to make use of the Disk Clock donate button. I’m considering marking the next version shareware, while still avoiding nagware.

Software is a nasty problem. A program has a duplication cost which rapidly approaches zero. Copying is free and easy, unless extra non-feature-related effort is spent to put artificial restrictions in place. Even then, what software does software can undo, and we have the DRM arms race – more and more effort being poured into making thing harder for the customer, instead of adding value for the customer.

The costs of software aren’t in duplication, they are development. The only way to match price with cost is pay for the developers time and attention. Yet the only thing most people will buy is a proven working program, which we only know how to sell through the old physical-item model. The only reason this works at all is the legal fiction of software licenses.

So I’m sitting in the frying pan of being paid for things I wouldn’t be doing left to my own devices, staring uncertainly out at the fire of scraping by through intentionally crippled software.

I had a thought experiment, which I’m not bold enough to put practice. For a period, such a year, neither give anything for free, or take anything without paying for it.

Personal finance question

What do you do with interest? I had put it into income, which was fine when I just had the bank-account interest. Now I’ve got a 401k and other funds, which sometimes experience large drops and wipe out ‘income’ for the month, even though my immediate situation is no near so dire.

The Agony of Real Truth and Honesty: The Story

As always, the great unknowning rules all. But the evidence is swinging twoards “A fool and his money are soon parted.”

To the larger extent I have attempted to present here only the factual account. A am conciously aware of several places where this is imperfect, and as always the ‘facts’ I have chosen to mention are subject entirely to my discretion, to say nothing of the bias in my own perception of events as they happened.

She worked as a secretary with my employer for a while, starting when I was in Las Vegas every week. I remember that because on the first trip, we called back, there was somebody new answering the phones.

It may have simply been that I was there only there two days a week for the first month, but she almost seemed surprised to see me. We managed to keep up some light conversation, usually while I heated up my lunch. After a few months of this, it finally dawned on me that she might be flirting with me. I’ll admit to choosing lunches that needed heating during this time.

My latest cooking experiments were one topic of conversation, and at one point she asked me to bring her something. I figured I’d go a step further and asked her if she wanted to come over for dinner some time.

That was a martial arts night, and I came home to two messages on my answering machine. I called her back and we talked for a little bit. After a while, she said she just wanted to be friends. All very well and good – I’ve few enough friends – but it did baffle me a bit. I figured it took pretty obvious flirting for me to even notice.

In any case the dinner was the first of many attempts; at least she called more often when she couldn’t make it in the beginning. I brought the leftovers in to work the next day, and she suggested we eat together. After that I figured company was better than eating alone, and we starting having lunch together almost every day.

She told me the rumor mill made great sport of this, though none of it reached me personally. I took her statement of friendship at face value, and was just mildly amused.

She quit about mid-February, citing personal differences with the main person she worked with. By this point we still hadn’t actually pulled off anything outside work. A last one got snowed out, but a few days later she came over for a half-planned lunch.

Next week (February 27) she was back, this time to say she was interested in me. She admitted to drinking a bit in order to be able to do so. She said she’d be back every week on Tuesday (my usual day off). She also asked to borrow $10 for gas; I only had $20s.

Next week there was no word. She had lost her cell phone service, so I sent an-email. This at least re-established contact.

Late one night she sent an e-mail saying she might be falling in love with me. It was late (or rather early) enough that I suspect she was drinking again. I had to speak honestly: i had taken her statement of friendship in good faith, and was starting back from square one, so I couldn’t match her feelings yet. Next time I saw her, she said she had probably overstated it, and overall it seemed a much cooler reception.

There was a benefit harp concert in Madison on March 15th. With all the other things going on, I didn’t ask her if she was interested until a few days before the event. She finally said yes, but it was very poorly planned and I think she ended up with the wrong time by several hours. When I finally got in touch with her by e-mail, she said she had been in a car accident coming up to meet me at my house.

I saw her briefly the next weekend. She wanted to borrow $100 for drugs and acupunture. She said she’d come back in a few hours, but I didn’t hear anything until a few days later when I guessed an IM account. Apparently, the morphine (Question: do they prescribe morphine these days?) for the accident pain really knocked her out.

She suggested spending an entire Sunday together, but disappeared again. I didn’t see her again until the next Saturday, on short notice as usual. She came over and immediately started looking through phone books to pawn off her laptop; it seems she was having trouble making rent. Now, I’ve never dealt with pawn shops, did, and probably still do misunderstand them, but have a prettty solid impression that they are bad news. I’d also been thinking about getting a laptop, so I asked if I could give her a better deal. She said the pawn shops would do about $200, and asked for $500. I looked it upon ebay later, and that was the high end for the model, so it was reasonably fair.

She also suggested that I might come down to visit her the next day; I hadn’t had anything other than an e-mail address up this point. She did give me a resume, (including address; curiously it listed the address she moved to while at my company, but did not include that company) since she was looking for work. Very early the next day, she called to say she was coming to me, and that she had some how come up with the money to pay me back overnight. She called later in the morning to cancel that and say she would be by Tuesday.

Tuesday (we’re at April 3rd now) she came and hung out for a few hours. She wrote me a check for $620 against a joint account with her ex-husband (actually, only his name was pre-printed on the check) and shortly afterwards asked about selling the laptop outright for $500 again. I thought this was weird enough that I didn’t want to do it right away. She said she was having trouble getting by in this area, and her relatives in Texas were putting pressure on her to return there. I deposited the check immediately after she left, but a little net research afterwards said it could take weeks for a bad check to come back.

I got an e-mail Friday afternoon saying she was on the edge of eviction. She was desparate, would ‘do anything’ and really needed me to buy the laptop. Since this was an immediate problem, and because I was a bit bothered by the continued denial of visitation, I puposefully respond to the e-mail, went to the bank, and then drove down there (40-60 minutes travel) without waiting for permission. She was at the offered address, but came out and told me to leave. She asked why I didn’t e-mail first, but when I got back I found a reply timestamped only a few minutes after my message.

Saturday we met half-way, and I bought the laptop (again) for $500. She mentioned that she still needed to find the other half of the rent, being a bit behind. I said I’d e-mail her when I got home on Sunday.

Sunday, (Easter) I got back from my parents about 9pm and saw her car parked outside. She said she had been waiting about 10 minutes; after she left I found an e-mail message saying she would be there at 7, and a phone message from about 7:35 saying ‘in ten minutes’. She came up the driveway in tears. I held her for a minute, only asking about the time. We went inside, sat down, and I held her until she was ready to talk. She said her brother was in prison, (in Texas) and she wanted $1600 for bail. After reflecting for a few minutes, I offered to pay the bail personally rather than simply handing her the money. At this she started to pack up and leave, going on about how trust was just as important as the money and asking if there were any good places to sell her body. The ensuing conversation game me more time to think, and I came to the same conclusion as before: I still prefered a world where someone at the last resort could receive help over one ruled by self-interest.

She left saying we would have sex soon (not that I would, especially under the circumstances) but it just happend to be her period. Monday, I got a thank-you e-mail. Tuesday I got an e-mail saying she would be by in the morning; which she wasn’t. In the afternoon I got a phone call saying she had a new evening job, and that her parents had come up with the money “plus interest” and she would be able to pay me off perhaps Thursday.

Wednesday I logged into my e-banking and found the $620 check had bounced on Monday. Later in the day I stopped by the bank and was told the reason was ‘account closed’ When it was closed isn’t public information.

Backing up a bit, as I’ve omitted some relevent set-up. Her family is Laotian; according to the web, the culture is very easy-going and has tight family ties, which generally seemed to fit with the observed behavior. In an case, Laotian New Year was April 13-15, and a few weeks ago she had invited me to go to Texas with her to meet her family. The the 13th was the coming Friday. She told me that her ex-husband worked with an airline, and she was able to get free flights as long as she kept his name, which explained how she had been able to go back to Texas so often while in a state of poverty. (Question: do these programs really exist?) It also meant she had to take care of the tickets, and could do so at the last minute.

On Friday morning I got a call saying she didn’t have tickets yet. The bounced check came in the mail. In the afternoon, I got a call saying the airline reservation system wouldn’t accept me, so she was giving up and going to work instead. She said she would see me Tuesday, which she didn’t. I haven’t heard anything since. I haven’t been pushing contact since it gives me time for research and reflection.

Crossover II

Wrapping up Crossover I

2007-02-09: Mortgage balance reaches 0.

I wended my way though Citi’s phone system earlier today to confirm that they had received the payment. Estimates over the last few years put payoff anywhere from three years (a year ago) to one year (a few months ago), but backed up by un-expected savings bonds, cashed-out under-performing CDs, and a year end bonus from my employer, and finally the consideration that my ‘six months living expenses’ don’t need to quite so large without a mortgage, the picture got better every time I look at it.

This, however, after the initial recovery, leaves me with the question of what to do with my money. Real estate taxes alone means that housing will be far from free, but the mortgage was still a pretty big chunk of it. First of all, some art actually caught my eye a few months ago (Summit Doors being the lesser of them; I may make a more concerted effort to contact the other artist for Shore of Dreams after other things are taken care of.) Secondly, while my computer is holding pretty well (discounting the failed partition on the original hard drive) it won’t last forever. Neither will the car, and while it should have a long life yet, it has a corresponding large price tag. Beyond that, there charity, savings, and the great unknown future with opportunities yet to be revealed.

Meanwhile, would anybody be interested in a house-owning party?

Crossover

  • ~2004-11: Cash assets (including 401k) exceed balance of mortgage
  • ~2005-06: Principal part of (minimum) mortgage payment exceeds interest
  • 2006-12: Ready cash accounts (after cashing in some under-performing CDs) exceed remaining balance of mortgage.

It is sorely tempting to pay the thing off and be done with it, but I’m not quite willing to throw away my safety net, however fast it may recover. I do have a fair bit beyond my target safety net, but I will be spreading that out a bit for the sake of caution, especially with my financial situation about to undergo a major adjustment. Still, while I don’t have the exact income adjustment yet, it looks eminately possible to have slain the mortgage in another year’s time.

Financial Slight of Hand

Years ago when I moved to my current home, I took a survey of the local banks. Thankfully the one with the best interest rates was also an independent bank nearby, though I didn’t place as much emphasis on walking distance then as I do now. It has since then been bought, and the name progressively watered down until the old name has essentially disappeared. Still, they haven’t done anything else to offend me, and it is pretty nice having the bank just down the street. But that is a bit of tangent. The point is, that since I first joined, the interest rates have proceeded to, basically, stink.

A while ago they started advertising a new program; a checking account, which if you maintain a certain rather high balance, earns a decent interest rate – several times what my ‘savings’ account was earning. It still baffles me what logic led to this program. Of course, there were lots of reasons to not take the offer. The prospect of getting a new account – with new checks and different account numbers, especially with several automatic payments, was somewhat daunting. There is also a little bit of a scam with the savings account – interest is paid quarterly, and unpaid interest is forfeited if the account is closed before that time. I’d also heard of socially responsible investing, but have never had time to investigate.

The net effect of this, was, of course the inevitable non-action, for most of the year. But a few months ago (the time delay until now evidencing yet more procrastination), it was just after the end of the quarter and social investing had gotten no further than before, so I asked about. It turns out that they are much smarter about it than I had feared – they changed the type code on my existing checking account with a few clicks (and a signature for the sake of form), closed down the savings account, and the whole thing was over rather painlessly. It still baffles me a little that they will raise the interest rate so much for the asking; I guess they are counting on lazy people like me not to ask, while having the program there to attract some new customers.

To be fair they bank will save a little a money for having one less account to maintain, and fewer transactions between them – I would deposit a little of each paycheck into the savings acocunt; my bank visits go much faster now that I have a single deposit.

It also points to the virtuality of money; to the bank the transfer was just subtracting one number and adding to another. Now I have a similar effect – I have one account that is both checking and savings, and the dividing line is kept entirely ‘on paper’ solely for my own purposes. This actually made for something of interesting question in the beginning – do I keep my checkbook in ‘available funds’ or in the actual account balance? I ended up going for the actual balance to simplify balancing with the bank statements. But now I can play the same kinds of financial games the bank can – I rolled my personal ‘minimum balance’ into the the virtual savings balance, since any short term shortfalls can just borrow from the savings instead of actually hitting a bank level overdraft. Likewise my ‘saving deposit’ has become a small book-keeping entry, together with keeping the new dividing line in mind as I make payments in the checking account.

Meanwhile, I ran across Zopa, which has a bit of the anti-institutional flavor, and even better rates. Of course this a bit of a long term investment (minimum 12 months for full repayment) and the savings ‘account’ is my 6-months living expense buffer + liquid emergency cash + big purchase savings. I’d have to double the 6-month figure to be able to withdraw living expenses at rate I want, and of course the longer term markets have better interest rates. In any case I’ve put off experimenting with it until the tax year is over, for the sake of simplicity.

Your Money or Your Life

I checked out Your Money or Your Life from the library. It seemed to be the main focus of simpleliving.net, which I mentioned earlier.

Even if you don’t intend to follow the program to “Financial Independence,” there are still some interesting arguments that we’ve been working longer and harder for money that we mostly throw away on expendables and toys. In brief, the program promotes disciplined audit of what you have, what you are earning, and where it is going. An interesting part of the audit is questioning whether expenditures are actually, honestly, fulfilling and in line with your values. In principal this auditing leads to a positive gap between income and expenditures, which becomes savings, which becomes capital. The ultimate goal of financial independence is when you can live off the interest; at that point you don’t have to continue with paid employment, and are free to pursue whatever you like: some quiet time, following up on dreams, or volunteering your skills to a worthy cause.

An overview of all nine steps is available online (link is to start of book overview; hit continue a few times to get to the step summaries.)

Money

I’ve never made such a big deal about money. If I did, I’d probably have hopped jobs a few years ago when tech was hot, and started playing the stock market with any spare cash. I like to say ‘all my bills are paid’. Sure there is a mortgage, a car loan, and one trailing student loan that owes it’s continued existence to a relatively low interest rate. But I do have the townhouse, and the car. I have 401k, and a separate savings account that won’t have huge penalties if I need to take some money from it. I have no credit card debt.

I have a 30% raise?

I suppose I can’t complain. Still, it seems very odd. It already seemed like I was living a kind of blessed existence, financially. But this looks to take me from ‘all the bills are paid and I’m saving some money’ to ‘all the bills are paid, I’m saving money, and smiting the loans mightily.’

Bills

This morning I realized something: I haven’t paid my monthly bills yet. Normally I do this about a week into a month.

Or, right about the time I was near the end of a three week crunch and flying out to a show in Las Vegas…

Now, most of my bills are on automatic payment, so they are just a matter of keeping accurate records. And the condo association is used to late bills – although that is probably why they have such a steep late fee. ;^)

The people running the car loan may have been less amused. They do conveniently list a late fee, so they are probably used to it as well – and the fee is less than I normally overpay by.

But everything should get there in time. The realization that bills had been skipped got me out of bed at a slightly more reasonable time, so I have time to do it this morning.