Monday, January 29, 2007

Old Spending Patterns

I just got a year-end summary from Chase, and I browsed through it quickly, cringing.

Some numbers, a la Time Magazine:

40: Number of times Fiance & I ate pad thai
$2,872.54: Amount I spent on plane tickets
3: Times we went to Boston
2: Times that those trips were on consecutive weekends
6: Out-of-state trips we took
13: Times I gassed up my car
4: Times I paid for expensive and irritating repairs to my car
$1,128.28: Average monthly expenditures*

I'm sure I'll have more later, after I more closely analyze the numbers. Oh, how I wish I could download this stuff directly into Excel! Instead, I'm preparing for a nice long evening of data entry.

*I used this card for the vast, vast majority of purchases, excluding those made at Costco, damn their non-credit-accepting-black-hearts.

Carnival of Investing is up!

Check out the Carnival of Investing #58: Monopoly Edition over at The Digerati Life. Lots of great entries, neat format!

My favorite entry? Keep Your Cool in Stocks and Dating: Efficient market? As if! I totally agree with this guy.

And oh, my, I was an editor's pick (!) with my Anatomy of an Arbitration, where I describe what it is about investing that keeps me in business.

Friday, January 26, 2007

My very first carnival!

The Festival of Under-30 Finance is up at Golbguru's journal.

A few interesting entries:
55 Ways I Saved (or Considered Saving) Time and Money Planning my Wedding, which is nice and relevant. I love saving-on-weddings tips!

Top 10 Resume blunders--even though I'm not looking for a job right now, you never know! Plus, I'm on the hiring committee right now--and he's right on the money about what we toss. :)

Don't Rely on the Lottery. I have a co-worker that spends quite a lot of money on the lottery every day, and I just want to hit him over the head and shout: "The lottery is not a retirement plan!" Yeah, it's nice to fantasize about what to do with the windfalls, but for pete's sake. Lottery=tax on people who are bad at math.

Five Rules for Investing is a great set of rules for beginning investors. Of course, if everyone followed these rules, nobody would ever file a claim, and I'd be out of work!

Thursday, January 25, 2007

Shamelessly exploiting my connections

Also known as "intelligently using my resources," depending on whether or not you are inclined to be charitable.

This is pretty much my MO for wedding planning--step one is always asking, "Do I know someone who does this professionally?"

In several cases, I do. Most of them I wouldn't exploit, exactly, but if, in asking advice, they offer tips on getting better prices or offer freebies, wonderful! The best example of this is my tiara. I was prepared to pay through the nose for a really nice custom-designed, crystal- & amethyst-embellished piece, as I don't plan to have too many other accessories. And that's what most people will see of me, anyway (I'm a bit short). Also, I like tiaras.

So my first* step: ask my crazy Welsh friend who makes tiaras for Halo & Co. what my best option would be. My best option, she explains, is for me to sit tight and wait for her to send me a CD of the new collection photos, among which will be the perfect tiara.

On this CD is a price list, which has wholesale prices. Score! I say to myself. Wholesale! I e-mail her my order. "Wholesale? Pfah!" she says. "At cost! I'll let you know next week after I make it for you."

Considering the fact that the pound is just under two dollars at the moment, it's quite a relief. I'm doing little happy dances here at my desk.

*Also last.

Wednesday, January 24, 2007

Anatomy of an Arbitration

It's 1999. The market looks great for investing. Dot-coms are springing up, tech markets are booming, and you* are ready to buy, buy, buy! You go to see a broker. Let's call him Jim. Jim is a great guy, and just as gung-ho as you are. You talk about your financial goals: let's say you're 45, with retirement far enough away that you feel like you can speculate a little. Your only son got a scholarship at the state school, so you're in good shape there. You're ready to hand over your cash: a cool million for investing. You know what you want to do. Tech! Energy! Communications! All the sexiest stocks. Jim's on board, so he buys big in Worldcom, Lucent, JDS Uniphase, Qualcomm, and Yahoo. He also gets a few PIMCO mutual funds--they've been turning out some really nice, high numbers. You nod, but really you're impatient at the idea of wasting your money in something so staid as a mutual fund.

Most of the time over the next couple months, you just hold onto your stocks, but you can't resist the occasional trade. You want to play around with options, but you lose a bundle when a naked put gets assigned, and you drop that like a hot poker.

Aside from your gaffes, you're watching your profits billow. You couldn't be happier. Jim starts making some noises about selling, but you're scornful about his caution.

In March 2000, your daily scan of the tickers gets frantic. You can't believe it. What's happening to Worldcom? Yahoo? They're sinking like stones. You call up Jim, hysterically order him to sell. Jim is adamant--you can't sell when they're down. It's a temporary wave, you have to hold on and don't lose confidence.

By April, you're despondent. More than two-thirds of your money is gone, and it doesn't look like it'll ever make it back up. But you're clinging to the idea of holding on, and your portfolio rallies a little over the summer. But in November, it dives again, and this time, Jim agrees to sell. Cut your losses, you think to yourself, and start again more carefully.

For several months you stew about the losses, until finally you go see a lawyer. Let's call him Sam. Sam grins like a shark when you tell him why you're there. He's more than happy to file a complaint on your behalf. After all, in 2002, there were over 4,000 formal investor complaints against a member of the NASD, and that number rose as more people got angry about their bubble bursting. He's about to make money hand over fist.

After you have a complaint number, Sam writes up a statement of claim. In the statement, you have magically become totally ignorant of investing--a complete naif. It was Jim and his firm that did all the trouble--failure to supervise, failure to diversify, making false and fraudulent representations, advising you, the Claimant, to pursue unsuitable investments, and causing you untold harm. When you finish reading the statement of claim, you're angrier than ever. How dare they take advantage of you like that! Never mind that most of it's just not true--you knew the risks.

The brokerage company gets the statement, and you're not sure what they do, but they come right back with an answer that calls you a big liar, and a slick profit and loss analysis of your account, complete with a row of neat little "U"s by the worst of the trades. You ask Sam what that means, and why he's covering his face with his hands like that, and he points to the footnote: "U=Unsolicited Trades." Oh. Those are the ones you initiated. That doesn't look good.

You and Sam continue undaunted, however. You schedule a mediation with the brokerage company, and it's scheduled for six months in the future, when the NASD finally has a free mediator. Meanwhile, you've stuck your money into a money-market account--what's left of it. The lawyer fees are starting to make a dent, and you're sweating a little. Doing some overtime, trying to get your wife to maybe think about working. She's pissed that you were so stupid about the stock market when you had a million bucks in the bank, and wants you to stop this idiotic lawsuit. But you persist.

When you get to the hotel that the mediation is scheduled at, you and Sam sit in one room while the mediator talks to you, then sit and wait while he runs to the room with the brokerage representative and lawyer. Huffing and puffing, he comes back with a settlement offer: 10% of your losses. Your lawyer laughs, and offers 75%. Eventually you're at an impasse--they won't come up, and you're too desperate to come down.

So Sam gets you in queue for an arbitration hearing. This is even harder to schedule, because three NASD arbiters will hear this case, and their time is as difficult to schedule as the mediator, multiplied by a factor of three. "Usually," Sam tells you, "Cases don't get this far. Brokerage companies generally have to pay out more, when the decision goes against them, but the awards can also be close to nil if the arbiters don't like you. It's like going to criminal trial, in a way. But you're a guy who likes risk, right?" You have a sudden qualm, but you can't stop now.

The intervening time is spent with the lawyer and the expert, trying to find some charts that look as terrible as possible, so the arbiters will take pity on your case. You have a sneaking suspicion the respondents, the brokerage firm, are spending time with their experts too--and the firm has a lot more money to spend on defending their case! They make Sam a few settlement offers, and you are really considering taking them, but he thinks you can get more, so you hold strong.

When the arbitration arrives, you realize that the respondents did, indeed, spend time and money prepping. Their expert, a chirpy young lady** in a very nice suit, lovingly describes every detail that could possibly prove ruinous for your case: your dealing in options, which shows expertise, and your enthusiasm for all those unsolicited trades. Your expert, a middle-aged man whose suit is rather rumpled, refutes, and your lawyers expostulate over the case.

The panel deliberates, and arrives at a figure. Less than $100,000. Once you subtract Sam's fee, you hang your head. He did better than you out of this. Was it worth it? Better than not having it, you explain to your wife that night. She rolls her eyes and ostentatiously hauls out the want ads.

*You in this case being a totally theoretical investor. This case is merely representative, and in no way is meant to portray any single individual.

**Chirpy young expert for the respondents? That would be me. Although truthfully it's very rare that we actually will testify in front of the panel. They'll fly us to Oklahoma or Minneapolis or Detroit, and we'll sit in a hotel room or lobby for hours, waiting to be called. Either that, or they'll schedule a time to call us over the phone--and then never end up needing us. (Our company's reports are very good. Usually, the claimant agrees to stipulate that our numbers are correct and we therefore aren't needed to testify about them.)

Sunday, January 21, 2007

My ignorance is costing me...$360/month (and sometimes more)

As I may have mentioned, Fiance and I work together. Naturally, we drive in together. He has a lovely car that he likes driving. (And it's only about 7 or 8 miles to our office from where we live, so it's a brisk 15 minute drive.)

Buuuut....his car has a standard transmission. Yup, you guessed it--I don't know how to drive stick. There's not much that can be done about teaching me right now; the slush and snow makes the road conditions pretty bad, and I don't drive much in the winter as it is. But when the weather gets nice, look out!

Actually, yes, look out.

(Kidding--I'm not that terrible of a driver.)

Anyway, the other issue is the convenience of having two cars available. There've been a few times when we split up errands, or had two places to be on the same night, but I think I can count on one hand the times when the scheduling problem couldn't have been solved by a little bit of forward planning.

There's two pieces of good news (as in, it's not costing as much as it could be):
1) The car was bought on a 0% loan, and I can adjust the payment amount as necessary (as the lender is my mother), and
2) Insurance is several hundred dollars cheaper because it's for pleasure instead of commuting, and because it's driven less than 2000 miles per year.

And that begs the question: If I drive it less than 2K miles each year...why am I keeping it?

Thursday, January 18, 2007

The birth control you won't see commercials for

So I saw a post about the cost of razors, and my mind jumped to another costly, yet rarely considered, expense. PF Ladies? Lend me your ears.

There's all kind of commercials for Nuvaring and Yaz and OrthoEvra, and they might be right for a lot of women, especially women who know that they may want to have a baby soon. But mostly, they're advertised because they're wildly profitable to sell. You think there's a lot of research going into longer-term BC? Hell no--why would they cut into their profit margin?

I've been on all three at various points, and when your insurance doesn't cover costs, it adds up quickly: $40/month for the patch, $25/month for the ring, $20 to $50/month for the Pill. And that's at Planned Parenthood: buying at pharmacies includes an extra markup for them to profit off your body as well. That's an average of $2,400 over five years. Not to mention the sanitary supplies and pain medications--few hundred bucks more. And frankly, I couldn't ever remember to take the dang pill e v e r y day.

You could be protected for about $350 for the same five years. Mirena, which I had installed in November, is five years of Guaranteed No Baby. Also, no period.

Okay, I seriously sound like a dippy commercial for it, and I don't mean to come across as a shill. But seriously, women who want to be frugal? An IUD is the way to go for massive savings in your 20s, when you know you're not going to be having babies. Or even if you don't want babies for just a couple of years--you can have them take it out whenever you want, and it's already paid for itself after about 9 months anyway.

Problem: a lot of doctors won't even install this for you (especially if you haven't already had a baby), so you might have to seek out a Planned Parenthood. (Which presumably you're already using for cost-effective women's health support--I love their sliding payment scale!)

The best wedding dress ever

When we first started planning our wedding, I had romantic visions of me wearing my mother's gown and grandmother's veil, floating down the aisle in a swirl of tradition and satin.*

When I got my first good look at the dress (I'd only seen pictures before), I realized: my mother got married in the early 70s. She was THIN. No way would this fly on me--no way, no how. But I still wanted a unique dress, something unlike anything I'd seen in the magazines and stores. Almost all of them were sleeveless, with massive trains, and covered in lace and pearls--ugh! And the idea of paying thousands of dollars for a dress I'd wear ONCE kind of made me want to throw something.

So I did the next best thing. I looked at a lot of pictures, made a couple sketches, and sat down to make my own. I did a sample dress first, out of cheaper fabric and simpler pattern, to see how difficult it would be. The final result was pretty (I wore it to my brother's wedding in September), but I definitely don't have the skill to do fancywork. I managed to put two sleeves on one side and had to rip one of them out--satin is much more unforgiving of those sorts of mistakes than cotton, I am led to believe.

Time for Plan C. My mom's friend Mary knew of a woman who makes wedding dresses! Mary sung her praises as a seamstress (the lady had done some spectacular work on Mary's mother-of-the-bride dress last summer), and suggested her as a person to go to for alterations at first. But after talking things over with her, I decided to have her make my dress. In fact, I wanted her to make dresses for my whole wedding party--me, my four maids, and darling little Althea the flower girl. For less than the cost of a traditional bridal gown. (Though I couldn't tell you how much exactly--she negotiated that with my mom, who kindly offered to contribute that portion of the budget.)

So far, I've only seen pictures and reports from a bridesmaid about my dress. Tomorrow, Fiance and I are flying back to the Midwest (where my parents are, and where this wonderful lady is), and I will have my first fitting. How exciting!

*That's a flat lie, actually. My first impulse was to convince Fiance to elope, so we could get married in jeans and baseball caps. No dice. He managed to win me over to his point of view instead, and that's when the romantic visions began to appear.

Wednesday, January 17, 2007

Don't you dare call a repairman!

Awhile back, our dryer started making funny noises. I, who am rather inclined to over-cerebrate, began to Google the problem. Surely our dryer is not unique, I said; surely others have had that horrible squeaking noise that makes you want to slit your wrists.

Perhaps that is not the best Google string for your search, Fiance suggested. Also, I'll give the Sears repairshop a call so they can send someone out to fix it.

But Google triumphed, as it does upon occasion, and a Kenmore dryer has a history of getting a worn-out flimjammer* that needs replacing. So I called Sears back to ask if they had just the part. Ha! Ha! they laughed. Parts? Try the warehouse at the other number, little lady.

So I gritted my teeth, hung up, and then insulted the heck out of their condescending tone. And called the warehouse, which did in fact have a flimjammer replacement kit.

After a brief field trip to drive out to Warehouse Land to retrieve the part, Fiance and I were ready to start fixin'. Actually, Fiance is not particularly in favor of home repair (hence suggesting a call to a repairperson), but I managed to draw him into things. Mostly by swearing at the front panel of the dryer, which according to the diagram I had pulled up from the website had interior screws at all four corners, but how the heck do you unscrew the ones at the bottom? Think about it--you'd have to have the longest arms in the universe!

We almost gave up several times--luckily, not ever at the same time. Turns out, the front just lifts off. It only had screws at the top. Took us half an hour to realize that.

The flimjammer itself was pretty easy to replace--it just sits there, holding the belt so it can be turned by the motor...somehow. Look, I just put it in, don't ask me to explain it!

Anyway, after we got the lid put back on, the repairperson called back in response to the original message, with a suggested arrival time of Three Days From Now and a minimum cost of $100 for the honor.

The part? Cost $12. And a banged finger, and an hour of shouting and cussin'. Plus a scenic trip out to Warehouse Land, but it was a pleasant drive on a day I normally wouldn't have left the house, so that doesn't count.

Right. Draw your own moral from this story.

*Not the actual name of the part.

Tuesday, January 16, 2007

Deciding which health insurance to use

My company offers two options for health insurance: a low deductible, high premium plan (BCBS Plan L) and a high deductible HSA plan. Fiance uses Plan L, and I use the HSA. (Obviously, we work together.) Wouldn't you know it that I'm the one with biopsies and ambulance rides this year? Shucks.

So just for giggles, I calculated the point at which the HSA saves money versus the low deductible plan. We are allowed to switch plans only once per year, in January, and I did this a few weeks ago, to see if it would be more cost-effective for me to switch.

Executive summary: If you have either very few healthcare costs, or ruinously expensive ones, the HSA is the plan for you. If your costs range from about $1-6K, stick with your low-deductible plan.

First, the parameters:
The deductible for the Plan L (called L hereafter) is $500, and the premium is $71.63 per week (paid before taxes from a cafeteria plan our employer has set up). This plan pays 80% of all costs above the deductible. All of your payments, the deductible and the 20% match, are paid in post-tax money.

Out-of-pocket payments for L, therefore: $3,725* + $500 + 20% of all costs above $500 + income tax on deductible & matching.

*yearly premium: $71.63*52.

The deductible for the HSA is $2,250, and the premium is $55.15 per week (also from pretax monies). Once the deductible has been reached, BCBS pays 100% of costs. You can also set aside, pre-tax, up to $2,250 (some plans allow you to contribute more than your deductible; ours doesn't). Unlike flex spending plans, this money is always yours. If you don't have any healthcare costs, just invest the money and let it sit there until you're old and infirm. You can also spend this money on almost any health-related expense: over-the-counter medicine, dental work, LASIK...pretty much anything but plastic surgery.

Out-of-pocket payment for HSA: $2,867.80 + up to but not over $2,250.

Here, have a graph:

The first crossover point is as healthcare costs pass about $1,250 (with data points at every $250). Until that point, the HSA is the better choice. From then until healthcare costs pass $6K for the year, L is the more economical vehicle.

Found Money!

Good news for us today--I found a hundred bucks in the lost room! Two gift certificates (one for Best Buy and one for Linens 'n' Things) were just floating around. Luckily, they don't expire, because I suspect they were Fiance's Christmas presents from 2004--or earlier.

I did a bit more organizing and shuffling around of under-utilized furniture, and hopefully the only furniture we need (a linen cupboard of some description--our bath towels are stacked on a chair, and the extra sets of sheets are on the shelves next to the TV, which makes for a very odd-looking home entertainment center) will be available at Linens 'n' Things--which we now have for $50 cheaper! Good deal, says I.

Monday, January 15, 2007

Getting Rid of the Stuff

When I started spending a lot of time in my fiance's condo, I thought it was a one-bedroom. There was a second door off the hallway, but I assumed it was a closet.

Technically, it was. When I finally poked my head inside, I was shocked. It was full of...stuff. I've hardly ever seen anything like it. I take that back--it looked like a fresh move. My parents' basement looked like that for awhile, after they moved into a newer, smaller place.

In this second bedroom, the closet was bulging with boxes, there was a bike leaning against some shelves that were in front of a wall of boxes, and things were strewn everywhere, atop the boxes. Everything that he didn't want around, but didn't want to make a decision about throwing out--landed here.

It only got worse after I moved in. We managed to beat back the mess to the perimeters, but I had some furniture that my mom wanted to reclaim (eventually) that got in the way. I had a spare bed that we could've set up in there, but it had to stand upright, because there wasn't enough clear floorspace to put it down.

A couple of months ago (this tale begins in December 2005, by the way, when Fiance and I began seeing each other), we got a large piece of furniture crated up and shipped 1500 miles to my mother, and that cleared out a large patch of workspace. I shuffled things around and got the bed to fit in lying down. We've tackled it in small bits and pieces as we happen to think about it, but I started to take a real inventory yesterday afternoon.

There's so much neat stuff! Hockey skates, bike & helmet, a golf bag with a set of clubs, an unopened printer, a TV, 2 VCRs, a PS2 (in need of small repair and long promised to a friend), a Sega Dreamcast, tons of Legos and baseball cards, fairly nice speakers and stereo system, older computer games...much of which he does not wish to part with. But then, there's also his old college textbooks and all of the presents he's received over the years that have just gotten put aside (unburned candles, a golf ball cleaning tool, &c.), and of course all of the empty boxes for computer monitors and TVs and furniture that was always just easier to put away than throw away.

Not to mention that closet full of boxes, which turn out to not even be his! He's storing them for his ex-girlfriend, whom I gather is somewhat mobile by nature, and we've had probably 700# worth of her stuff for over a year. But I digress.

I had a nice pass through the room yesterday, and I wish I'd been taking pictures all along to show progress, but I worked for hours and it doesn't look much different, really. The junk pile is much lower (not ceiling-high anymore) in the corner, that's it. But with the wedding in less than five months, I'd really like to see if we can have a viable guest room. I'm going to try to put travelling people in locals' guest rooms before making them book hotel rooms (lots of my friends are just out of college, and the reception hotel is quite pricey, even with the group discount), and I think it would be wonderful if we could host some folks too.

But not with boxes of Legos covering the guest bed!

Thursday, January 11, 2007

Maiden voyage

I hadn't planned to start a blog. I suppose that's what they all say.

But really, blogging qua blogging doesn't particularly appeal. I've had a livejournal for nearly four years now, and I haven't much to say over there, either. However, I do like talking to the intelligent blogging folks I frequently read, and it's easier to start a dialogue when there's a little knowledge of each other on both sides.

So here's my introductory post. My name is Ellen. Hi! (waits for chorus of "Hi, Ellen!") I am a twenty-something living in New England, engaged to a wonderful man, and living a lovely life filled with good friends and theatre. I work at a job I don't despise (most of the time) and get to read the thoughts of smart people on any number of topics that interest me.

I'm working on adding all of the blogs I like to the sidebar, but Blogger does not seem particularly flexible with such a maneuver.