The Bicycle: A Liberating Vehicle

Here’s an article on the surprising freedoms brought about by the bicycle that had me laughing out loud as well as stunned by the attitudes prevalent less than 100 years ago. I ride for a variety of reasons, health, fitness, to clear my mind, but the primary motivator is the way it makes me feel. There is nothing like natural endorphin!

This past week I logged 105 miles on my bike without much thought to how fortunate I am to be able to ride – not just physically able but also from a socially acceptable standpoint. According to the article, in the late 1880’s, “Female cyclists were often accosted verbally and physically as they rode. Emma Eades, one of the first women to ride a bike in London, was attacked with bricks and stones. Men and women alike demanded that she go home where she belonged and behave properly.”

Now, I have had rocks, ice and beer cans thrown at me while riding but not for being a woman on a bike. I was simply an irresistible target to simple minded children riding in the back of a truck. Fortunately, the laws have changed and very seldom do I see kids in the bed of a moving truck, anymore.

It’s interesting that the bicycle is also partially responsible for changing the way women dress. To ride a bike, one had to wear a more rational outfit such as bloomers and not the customary long dress. I don’t know if my grandmother ever rode a bicycle, but she did mention that she played basketball in the early 1920’s in bloomers!

I owe so much to those that went before and fought to open up so many opportunities for me and others. What they went through seems unimaginable to me now days. I will never take another bicycle ride for granted!

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Protesting my Property Taxes

It doesn’t seem to matter that home prices are dropping across the country - tax appraisals continue to inflate. I was surprised to see that the county had increased the appraisal value for my home. I knew it would never decrease, but at least I entertained the idea that it might stay the same.

A couple of weeks later I received a letter from a firm that wants to protest my taxes for me and take 50% of the savings. I had been considering a protest and that convinced me to file. I called the appraisal district and was told that they can not adjust valuations over the phone. I explained my case and the appraiser on the phone suggested that I file a protest in writing. Ugh. More time and work on my part required just to get a fair shake, a fair appraisal.

The following is the first draft of my letter of protest. The place names have been changed, but other than that this is the letter to be mailed.

Dear Appraisal Revew Board,

It is my desire to file a protest based on the valuation of my property being unequal to other properties. Valuation and property data is provided in the following chart for three homes located in my home neighborhood.

My property at 928 Home Road is to be compared against comparable homes at 927 and 930 Home Road. These two homes, at street #927 and #930, are the two closest homes to my house at 928 Home Road. My house is located between these two properties. All three of these properties have been re-valued for tax year 2008 and the figures in this chart reflect the most current values for 2008.

First in a comparison of the lots, it becomes apparent that my lot is more narrow with much less frontage than either of these other two properties. Both of these properties have a more functional and usable shape and consequently should be more valuable than my lot, yet my lot has a significantly higher land rate (cost per square foot of land). In addition, I do not have usage of the last 100 feet (North end) of my lot because it is under water. A city drainage ditch completely crosses my property. Using the rate (cost/square foot) for the lot that most closely resembles mine (930 Home Road), my total land value becomes 0.74*28907 = $21429.

Next, my home structure is valued at a greater amount than a larger home next to mine. Both homes are rated in good condition and are separated by only one year in age. The home at 927 Home Road has 153 square feet more living area than my house and a garage that is 180 square feet larger than mine, yet my house has a higher appraised dollar value. By calculating the cost per square foot for the home at 927 Home Road and applying the same rate to my own structure, the new value becomes: $53.41*1947 = $103,998.

In addition, my home has a large retaining wall that is in need of repair. Neither of these two other properties have a comparable retaining wall. The wall is approximately 11 feet tall and extends over 90 feet across my property. This wall provides support for my home foundation. The wall is constructed of used railroad ties that were installed in 1987. The railroad ties have deteriorated and need replacement. I have included a photo of the damaged wall and an estimate to replace this structure.

As is the case for any major repair work, a prospective home buyer would request that the cost of the retaining wall work be subtracted from the final selling price of the home. Given a market value of $125,426 minus the cost estimate of the wall ($19,722), the final market price becomes $105,704.

Please review the information that I have provided and reconsider the property valuation for 928 Home Road.

Thank you for your time,
Sincerely,
homeowner


I really don't expect the county to lower my property valuation to my recommendation. However, I do expect some relief and of course I am eager to read the logic behind any rebuttal.

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Remarkable Gas Savings with New Furnace

A few years ago I replaced an old gas furnace with a new, more efficient unit. The old furnace had failed, so there was no choice in the matter. This past week I captured my usage history from the web site provided by my gas provider and built this chart. The data ranges from October 2003 to the present. I replaced the 17 year old gas furnace the last week of March 2005.


It’s pretty obvious that the new unit uses less fuel. It even saves gas in the summer months most likely due to the fact that it does not have a pilot light. The plot also has a linear trend line which definitely indicates that usage has decreased. I continue to make other small adjustments to reduce consumption. For instance, I have replaced a programmable thermostat, built an attic stair insulation box and made more use of a space heater which allows me to set the thermostat lower.

The secondary axis is an inverted temperature scale and the smooth oscillating green trace represents the average temperature for each month. It’s surprising how the temperature profiles over the years follow each other so closely. There is not a whole lot of variation when averaged out over a month.

A comparison of the maximum usage of 12.3 in Feb 2005 to the maximum of 8.8 in Feb 2008 resulted in a savings of 3.5 thousand cubic feet of gas, while the average temperature was the same at 47 degrees for each of those months.

I am thrilled to be using less gas, but as you might expect, the bottom line has not changed due to rate increases. My total gas bill for the past year is remarkably similar to that in 2005.

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Case in point: 401(k)-style retirement plans not for everyone

What a shocker! 401(k)-style retirement plans are not worth much. Here we have an example of college educated teachers with control over their 401(k) type retirement plans that have failed to invest wisely to secure a decent income in retirement. After 17 years, the teachers have actually requested to hand over their retirement plan money and be allowed to go back into an under funded, state-run pension plan!

The experiment has failed. Unfortunately, Pandora’s box has been opened and even though these public employees will be allowed back into a defined pension plan, many private sector employees will not. Second chance do-overs for corporate America are not likely.

At my place of work, the new hires requested a portable pension-like fund and voted via surveys to get just that. When the company announced this change to the retirement plan for all new hires, I had mixed thoughts. I envied the portability and independence that a 401(k)-style retirement plan would offer. But, the impact of such a change extends much deeper than just having control over your own funds and the potential to capitalize or fail at managing your retirement income. As a long term employee and future pension participant, I am also very wary about how this portability will affect the workforce.

One of the greatest strengths at this company is the accumulated wealth of knowledge and experience that goes into every design. That is quickly changing. The new hires readily state that they have no intention of staying at one company for even 5 years! Let alone 10, 20 or a career. It’s a fact that employee turnover is increasing. A defined pension plan is one very good reason to stay with an employer and it is no longer a factor at this company.

The lessons learned from the teacher's case in West VA can also be applied to other similar situations. Remember how so many clamored for Social Security to be privatized? Give me my money, they said, I can invest better than the US Government. Personally, I would love to have Social Security privatized. I know I could invest intelligently and improve on the returns. Seems most everyone else thinks that too, but it is far from the truth. This WVA case is a prime example.

Privatization of Social Security would be a boon for me, but not so great for the country as a whole, and for that reason I am against it. Darn it! I detest socialism. But, I also know that Social Security is all that some folks have or ever will have for retirement or disability income and they do not have or ever will have the mentality or financial tools to handle money, invest money, or properly plan for their economic futures. Face it, the majority of humans are financial flops and giving them investment control over their Social Security money is akin to throwing them out on the street.

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Torn tendon Takes a Toll

While completing another one of my home projects, re-building a work bench area, I injured my right knee. I don’t know exactly when it happened. There was no sudden pop or moment of sharp pain. Rather, at the end of the day, I noticed my knee felt like it had been twisted. There was just a slight twinge of pain and then over the next few hours it started to stiffen up. By morning, it was too painful to walk! I hobbled around some, iced it and tried to keep it in the one position (straight out) that was pain free.

I did some research on line and verified that it was indeed my quadriceps tendon, one of the biggest tendons in the body, that I had aggravated. Based on the pain location, I have torn only the lateral or exterior side of the tendon. And every time I move and feel that sharp pain, I imagine that I am tearing the tendon even more. Yikes. So, my weekend plans changed abruptly. No bike riding or roller blading or even walking the dog with this bad wheel.

As if immobility isn’t depressing enough, I am frustrated and a little distressed at how I got the injury. I have a 4 step wooden ladder. Most of the time, I don’t use all of the steps – meaning that I step down from the second or third step all the way to the ground. I have always done this, but usually I am working on dirt or the lawn whereas this time I was on concrete. Taking a bigger step places more stress on the knee of the leg that first touches down on the concrete. The distressing part is that getting older is most likely a key factor in this injury. Time is taking a toll on my durability.

I have torn other tendons before, usually playing sports: elbow, shoulder, and Achilles – they all hurt like a red hot poker every time they are moved. And the only way to recover is rest……Maybe that’s not such a bad thing. It forces me to slow down and spend some time doing other more sedentary things. It’s events like this that help re-new my appreciation of good health.

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Go to Jail, get free Tax Rebate

This local news article brings up the point that prisoners are actually getting tax rebates. Who would have ever believed that? Evidently, a lot of these criminals owe money to their victims. The article states that “the unpaid balance is in the tens of millions”, yet the US government is providing stimulus checks to these convicts.

The good news in the story is that the Texas Department of Criminal Justice said it would begin intercepting tax refund and rebate checks. Hopefully, other states will follow suit.

It just seems to me that another provision, excluding criminals, needs to be added to these type of rebate programs. As it is, only the “wealthy” as calculated by Congress are excluded. Something just doesn’t sound right about penalizing law-abiding, productive citizens while at the same time doling out checks to incarcerated murderers.

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Are you ready for the digital TV transition?

As you have probably heard, the transition to digital TV will occur in February 2009. Which means that anyone using rabbit ears for TV reception will need a converter box. Those of us that have basic analog cable can relax …a little bit. I currently receive analog cable and have an analog only TV set. According to this article, the FCC is requiring cable companies to continue to make all local broadcasts available to their users, even those with analog televisions until 2012. The cable operators have two choices. They can either continue to convert the digital signal to analog and pipe it out to homes or they can offer the digital signal only and roll out converter boxes to all their subscribers.

Hmmm. The keyword in that sentence is: local. I interpret that to mean my TV will only receive the local yokel stations and not the full suite that basic cable now supplies. I will probably need to upgrade to a digital cable package to receive anything beyond local TV stations.

I watch very little TV now, when I do watch, it is usually CNN or CNBC news and finance programs and of course sports on ESPN and TNT. I would not expect those to be local broadcasts and will require a digital Standard Definition (SD) or digital High Definition (HD) cable package.

I anticipate that I will want to upgrade, but for now, I have decided to order the coupon for the set top digital conversion box. I want to try this setup first and if I decide to upgrade later, I will still have a backup system in place. A backup is desired in the event of storms or bad weather. It is common to lose satellite TV transmissions during storms and for those with cable transmissions, the actual cable can be disconnected due to down trees or lines.

Just last week, my neighbor cut down a tree and took out the cable for the entire block. This was on a Sunday and TimeWarner Cable initially told him they would not be out until Tuesday! He explained to them that a lot of people were without cable and many had their phones on that line, as well. Fortunately, TWC relented and sent out a repairman that had us all back up within 8 hours of the incident. During that cable-less time, I watched the NBA quarterfinal game through a blizzard! I had forgotten just how bad analog TV reception can be. After that reminder, I am enjoying my crystal clear picture more now than ever. ;)

That brings me to another factor to consider. With my own converter box, I expect improved picture resolution. My existing Yagi antenna will receive the digital transmission which will then be converted at the box sitting on top of my TV. This should improve the picture resolution over that of the cable company converting the digital signal and then piping an analog signal to my house. The shorter distance that the analog signal travels the less likely it will be exposed to interference/noise.

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You Decide: Frugal, cheap or innovative challenge?

About a month ago, my left click button on my optical mouse started to misfire. I tried adjusting the speed settings, but still nearly every time I single clicked - the mouse gave me a double click or something in between. The mouse is 4 to 5 years old and was inexpensive – maybe $10 bucks. I could replace it, but instead I switched the left and right click buttons using the control panel. I have a number of reasons to hang on to this mouse:

• I don’t want to spend money on a new one,
• I don’t want to spend time shopping,
• I dislike throwing things out that still have some functionality,

and the best rationale of all,

• I figured it would be a good exercise for my brain.

Every time I get ready to click I must think about which button to hit. After a few times, it becomes natural. But then I go to work and use another computer which has the opposite click setup and I get to exercise a little more. From what I have gathered, this type of thing is a great stimulus for the brain. Introducing new and different skills or motor movements helps keep the mind fresh and sharp. Some other suggestions that I have tried include switching hands while brushing teeth, or using a fork with the opposite hand or even walking backwards.

It’s one of those exercises that brings you back to the present. You must think about what it is you are doing right now. I can almost feel the cogs turning in my head. LOL

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Delayed Feedback backfires

Last Thursday, my manager gave me an award. It was an “on the spot” type of award designed to be handed out to commend an employee’s performance. The idea behind this type of award is to get the award out quickly, skipping red tape and a long, drawn out approval process. You are not going to get rich on these type of awards, but it is always nice to know that your work is being noticed and appreciated.

The award caught me by surprise. I have not done anything outstanding lately (besides my job) that deserved an award. Once the paper explaining the award was in my hands, I immediately scanned the words as to why I had been so honored. The words were even more shocking. To my amazement, the award was for a test effort that I had completed over one year earlier! My manager noticed that I was taken aback by all of this. Without my asking, he began explaining that I had been nominated for this for some time, but the award money had been delayed.

I was appreciative, but it didn't take long for me to start wondering about all of this. It’s times like these when you are reminded that you work for a large corporation that is sluggish, unresponsive and simply out of touch with the employees and the work they are doing.

Maybe I should not be surprised, the award system has always been a joke around here with awards given for piddly items while major accomplishments go un-noticed. The simple reason for that incongruence is the fact that managers are not closely involved with the people and the tasks at hand. Unfortunately, my employer has recently taken steps to even further that disconnect. At one time, each manager supervised approximately 25 people, but now that front line supervisor job has been eliminated and an upper management position added. This reorganization has resulted in one manager for every 80 to 90 employees.

Awards are kind of a strange motivational tool anyway. I don’t do a job to get special awards. I do the work that is needed to get a job done. I would work just as hard as ever, even if the award program was cancelled.

No, this doesn’t affect my work, but ironically it does make me question my employer’s sincerity. After all the hype and corporate talk about enhancing the workplace and improving communication, I see that nothing has really changed.

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Are we buying stolen goods on ebaY?

“Hey, check out this great deal I got on ebaY - it’s brand new, still in the box and half price!”

I have heard similar boasts several times from co-workers and most don’t seem to care why it was priced so cheaply. They rationalize that since it was on a website, it must be okay to purchase. In fact, they encourage others to go online and try to get the same great deal.

There is a difference between being frugal, which is getting something for a fair price, and buying something at an incredibly cheap price that screams out “I am stolen merchandise”.

Yet, just about anyone will tell you that a lot of the stuff at the local flea market is probably stolen. And, if you think about it - isn’t that all ebaY really is - a worldwide flea market.

You might argue that sellers put their wares out there at low starting bids, so what can one do? Well, for most inexpensive items there is probably no way to know if it is stolen or not. Whereas for more expensive items your first clue might be when you see someone willing to sell a brand new, high dollar item with no reserve.

So, how do people get all this stolen stuff? Most business owners can tell you that theft is greatest amongst the business’ own employees. The “help” will rob you blind. Nothing like biting the hand that feeds you! I have seen this first hand and have always envisioned that the thief rationalized the whole thing by some kind of Robinhood scenario where the poor steal from the rich. He says stuff like, “The boss has so much money, he will never notice this item missing and besides he can report the loss on his insurance.” People can find excuses for even the most abysmal behaviors.

Because employers must trust employees and can not watch them all day, theft is real easy. An employee picks up an item off the store shelf, sets it in the back alley while no one is watching, calls his buddy to come pick it up and the next night it’s on ebaY.

As a side, I find it amazing that criminology students are taught that crime follows opportunity. Indicating that anyone would steal given the opportunity. Gee, a lot of us have worked in stores and never stolen a thing, yet we were surrounded by temptations. The truth is some people are just always looking for an opportunity to steal or commit another crime. You don’t have to give them an opportunity, they will find it or make it all by themselves.

The next time you see one of those deals that is too good to be true – ask yourself, is it possible that item was stolen? Do you want stolen goods?

Most of us want to be highly regarded by our friends, families and peers. The only way to achieve that and really believe that you are highly regarded is to expect more out of yourself. Hold yourself to a higher standard and eventually you will become that person of great integrity, honesty and sincerity.

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Will the Sub-Prime fallout sink your Pension Plan?

Did you know that it’s possible your pension fund was invested in sub-prime loans?

State Street, which manages hundreds of pension funds, has been accused of investing pension money in highly-leveraged investments in mortgage-related financial instruments – otherwise known as sub-prime loans.

As of October 2007, Prudential is one of four companies suing State Street for engaging in “deceptive, impudent and incompetent investing” without notifying Prudential or its retirement plan participants. The companies claim they have lost tens of millions of dollars in State Street funds that they were told would be invested in risk-free debt like Treasuries.

And to add a little more fuel to the fire, State Street has revealed today that they could spend up to $1 billion on the related litigation. Evidently, they expect quite a battle.

Up to now, I have been relatively unscathed by the sub-prime mess. Sure, the drag on the stock market has taken me along for the ride, but that type of risk is always present in the market. The resulting housing bubble burst has had little impact in my area and since I do not have a mortgage and am not planning on selling my home anytime soon, this most recent financial crisis has been a minor nuisance.

However, I do have a pension. And stories like this about State Street make me wonder just how far this sub-prime octopus can reach. Do you have a pension plan? Do you know who manages that fund for your employer?

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Climbing the Procrastination ladder

I realized this past weekend that I don’t have a priority list, I have a procrastination ladder. At the top is the one task that I dread doing the most. The number one reason that I put off a task is that I don’t know how to do the work. This uncertainty leads to anxiety about not doing a good job. In other words, I don’t want to make a mistake.

To combat this, I typically research the internet for “how to” information, as well as ask co-workers or friends for insight. This step does help build confidence, but it doesn’t always get me motivated to jump in and get to work. For this one particular task, which was a home improvement project mortaring in bricks for a fire pit and flower bed, I even wondered what it would take for me to get it started. I had already purchased all of the materials and done all of the pre-work. What else could I do to get myself ready?

Then it happened. I got another new task that was even more daunting! The home improvement project was no longer at the top of my procrastination list. I now had an even more dreadful task that jumped to the top. All of sudden, I found that I would rather try my hand with the masonry work, which I have no experience, than tackle this other new job.

The good news is that I finished the masonry work and it turned out just fine. It did take some practice and trial and error to get the right consistency of mortar, aligning and leveling the bricks and not getting excess mortar everywhere.

I now feel like I have some inertia going in the right direction and maybe that will help carry me into the next task. Plus, I found a post at this interesting site that provided a template to help work through procrastination. I plan to complete this template for my new daunting task.

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Discoveries for a Sunday Razoo

This week seems to be marked by a heightened interest in the tax rebate stimulus package. Everybody is asking the question, “where’s my check?”

I am not receiving a stimulus check, but I was quite impressed with the efficiency of the IRS in processing my tax return this year. I mailed in my return and check on the 14th and by the 17th, the IRS had pulled funds out of my account! They don’t mess around. If you would like to check the status of your tax refund, the IRS has a website for just that.

While cruising the PF pages, I came across a couple of useful posts this past week on my most recent Internet Razoo.

The best blog posts are those that provide useful, practical info that makes life a little easier. That is exactly what I found here at CashMoneyLife. I went through most of the items on this list to improve PC performance and it does appear to have helped.

Another interesting article offers an explanation for the US Treasury’s I-bond refocusing program. First, the US Treasury Department sharply reduced the annual limit on investments in I-bonds, from $30,000 to $5,000 beginning in 2008 and now, this week, they have zeroed out the guaranteed rate! Just when inflation indexed I-bonds started to look like an attractive investment, the Treasury knocks them out. What’s behind this? If we read between the lines, or just read the article linked above, it is very likely that the Treasury expects higher inflation and wants to limit its future liabilities (payouts).

Another theory concerning the I-bond situation was provided here by Chris Farrell. He postulates that the US Treasury’s actions are meant to bolster Wall Street. By limiting the amount an individual can invest in savings bonds, the US Treasury is forcing those to invest their remaining funds in something else – like the stock market, and in turn helping corporate America.

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Bracing for higher prices and lower sales

Want a bicycle? Consider buying now, as prices are on the rise. According to Bicycle Retailer and Industry News, which is America's leading source of cycling industry developments, the country’s economic situation is about to hit the bike shop. It is expected that bike prices will rise by 10-12% and other cycling equipment will increase 10-20% in the coming month.

The cycling industry is citing the economic downturn, falling dollar and rising energy costs as the primary factors behind this jump in prices.

All of this sounds familiar. Similar price hikes are on the horizon for other items that are made in China, such as toys, footwear and clothing according to this NY Times article. The article warns of the impact of the falling dollar in addition to the result of China’s changes to labor laws, increased labor rates, increased regulation and higher prices of raw materials.

All of this has contributed to escalating inflation in China, which in turn is predicted to result in 20-30% boosts in prices for Chinese made goods purchased in the US.

How will Americans react? Will we tighten the belt? Cut the TV cable? Trade in the cell phone for a cheap, prepaid tracfone? Commute by bicycle? or sign up for another credit card?

It’s my observation that people have already begun to be more careful about spending money and they are putting off large purchases. A bigger concern, given higher prices and the soft economy, is how are all these local bike shops (LBS) and other small retailers with razor thin profit margins going to weather reduced sales?

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In Search of the Savings “rush”

When I find a product that works and I like it, I try to stock up on the item. You just never know when you will find something that good again. For example, I have a pair of Columbia sandals that are the best river running sandals I have ever owned and I don’t want to wear any other sandal or wet shoe in the water. So when I found another pair on sale at Sierratradingpost online, I pounced. Of course, I also found a pair of nylon river shorts that looked great. Both items were on sale and at a good price, but before I checked out, I cruised the net for a coupon. I tried three different sites and several coupon codes before I found one at Retailmenot.com for a whopping 20% off. Awesome.

Some may say that it was not cost effective to spend 10 minutes on the search, but that little boost of “feel good” that accompanies getting a discount on a product is precious. The savings amounted to $9.20.

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First Quarter 2008 Dividend Summary

Who doesn’t love passive income? Instead of working for money, the money is working for you. While the media has been focused on stock price depreciation over this past quarter, dividend producing assets have been chugging away in the background and paying out gains.

After reading about Living off Dividends recent passive income report, I decided to tally my own. It’s only logical that to help improve performance in just about anything from a physical activity/sport, to investing, to managing people or a business, one must first quantify or measure the activity to get a baseline. Once the baseline is established, periodic check ups can help identify trends and provide motivation to improve performance.

One other important point for me is that my passive income summary includes dividends only. Dividends are a steady, consistent income source. Whereas income from capital gains can vary wildly with a stock or fund’s performance. Also, I don’t include anything that requires physical activity – for instance rental income or blogging. There is nothing passive about blogging. It takes time and effort to create new posts on a regular basis.

Dividends are the purist form of passive income.

The chart below graphically displays my current dividend income streams. The largest contributor, providing 40% of my total dividend income, is a Real Estate Investment Trust (REIT). This asset class has had several banner years, then took a hit in 2007 with the housing crisis and is now rebounding in price very well. Through all of the ups and downs, it continues to pay out dividends with a 5.04% yield.

The next largest money maker is a money market fund, which is essentially my emergency cash fund. The fact that rates on money market funds have dropped considerably, from 5.21% to 2.46% this past quarter, has me exploring other options. I am also re-evaluating exactly how much cash I really need in an emergency fund. I currently have over twice my annual expenses stashed away and could probably reduce that to equal one year of expenses.

The next two significant dividend contributors are EWC and HTE. EWC is a Canadian ETF that pays out a small dividend, while HTE is a Canadian royalty trust that currently yields an impressive 16%. And finally, another 5% of my passive income is gathered from a health care mutual fund.

In comparison to the first quarter 2007, my dividend income has increased 18%. A portion of that can be attributed to the fact that over the last year I have been adding more dividend producing funds to my portfolio. Given the favorable tax situation with dividends, currently taxed at the same rate as long term capital gains (15% for those in the 28% income tax bracket and above), I will continue to add more dividend yielding funds over the next few months.

This past week I participated in the Festival of Frugality. My post "An ounce of prevention can help keep the plumber away" was included.

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