I wanted to briefly follow up on my earlier post about rising rates of diabetes-related disability among the young, and how that will adversely affect Social Security down the road.
Or more accurately, I wish to rant.
The enormous surge in type 2 diabetes in this country is a direct result of obesity and inactivity. Rather than take steps to address these problems head-on, through better physical education, support for nutritious food, reining in the agribusiness-fast food industrial complex's constant attempts to manufacture and market unhealthy, high calorie, overprocessed foods, and the development of pedestrian-friendly infrastructures, our society is responding to this easily preventable and devastating chronic disease by developing new classes of expensive, potentially dangerous drugs.
People in this country are being used. The food industry pumps us full of crap on the front side, and when we get sick from it, big pharma pumps us full of expensive drugs. We resemble nothing so much as animals in a factory farm, like the beef cows that are fed a steady diet of chicken manure, ground up carcasses, and antibiotics.
Oh, and just for good measure, once a whole generation is taking these new diabetes drugs every day, our government's wonderful new drug benefit will kick in to make sure that we pay retail prices for these wonder drugs.
Please speak not of market solutions to health problems, for in this case the market is the problem.
Thursday, May 25, 2006
We've been cut off!
My wife received a letter from a Julie A. Garry, Vice President and Business Manager at AT&T Universal Card. It read, in part
Mr. Bluebird is also sad, sad, sad about this news, since we're going to lose about $300 a year of cash money. (As I've written elsewhere, Mrs. B's card pays 5% cash back on gas, groceries, and pharmacy purchases.)
I can't say I'm completely surprised, however. Three hundred bucks is a lot of money to be throwing out the window, year after year, even if you're Citi.
In an amazing coincidence, I also received a letter from Ms. Julie Garry of Citi yesterday. Mine said, in part:
So I guess thanks Citi, and so long.
Citi®, the issuer of your AT&T Universal Cash Rewards Card has decided to discontinue this credit card for business reasons. Therefore, your account will be closed on 6/30/06. This letter outlines important information about the closing of your account.Mrs. Bluebird is sad, sad, sad about this news. She's had this card for more than 20 years. She was a charter customer with AT&T.
Mr. Bluebird is also sad, sad, sad about this news, since we're going to lose about $300 a year of cash money. (As I've written elsewhere, Mrs. B's card pays 5% cash back on gas, groceries, and pharmacy purchases.)
I can't say I'm completely surprised, however. Three hundred bucks is a lot of money to be throwing out the window, year after year, even if you're Citi.
In an amazing coincidence, I also received a letter from Ms. Julie Garry of Citi yesterday. Mine said, in part:
Congratulations.Like Mrs. B, I too was a charter AT&T Universal cardholder. But Citi never offered me any cash back or other incentive, so I the only time I use my AT&T card is when I've mislaid my regular card (that pays 1% cash back).
We've increased your credit line to $15,800.
...
As a valued AT&T Universal Card member who has maintained an excellent accounnt record with us, you have earned the credit line increase indicated above.
...
Your higher credit line is already authorized. So use it today, and enjoy the flexibility.
So I guess thanks Citi, and so long.
Wednesday, May 24, 2006
Double whammy
As tout le monde knows, the demographic bulge known as the baby boom is going to put the big hurt on Social Security over the next 30 years, as those born between 1945 and 1964 retire, leaving those born after 1964 to foot the bill.
An interesting article in today's Journal (p B3A, or here if you subscribe) notes that while the rate of disability is holding steady among baby boomers but rising dramatically among younger workers:
The biggest driver of increasing disability rates among younger workers is diabetes, with a 70% increase in the rate of diabetes among 30- to 39-year olds between 1990 and 1998.
This trend has alarming implications for Social Security, since Social Security disability payments come from the same pool as retirement payments and disabled workers don't pay payroll taxes.
Ouch.
An interesting article in today's Journal (p B3A, or here if you subscribe) notes that while the rate of disability is holding steady among baby boomers but rising dramatically among younger workers:
while the [number of] Americans age 45 and older [is] growing at 3% a year, the number of disability claims [ for that group] has remained the same...among 30- to 39- year olds the [disability rate] more than doubled between 1984 and 1996 across all demographic groups...
The biggest driver of increasing disability rates among younger workers is diabetes, with a 70% increase in the rate of diabetes among 30- to 39-year olds between 1990 and 1998.
This trend has alarming implications for Social Security, since Social Security disability payments come from the same pool as retirement payments and disabled workers don't pay payroll taxes.
Ouch.
Sunday, May 21, 2006
After the storm
Thunderstorms just rolled through here, leaving in their wake...
But I cannot post without a brief rant about how Verizon is giving my phone number and payment history to credit bureaus without my consent.
But I cannot post without a brief rant about how Verizon is giving my phone number and payment history to credit bureaus without my consent.
Verizon had hoped to receive compensation from the credit bureaus for supplying payment data, but [Verizon flack James] Smith said that hasn't happened yet.I guess the NSA didn't pay for the calling data...
Saturday, May 20, 2006
Doctors and money
I was at a kids birthday party the other day, and as often happens, I found myself talking to another "mature" father. By mature I mean old. Over 40.
So we're chatting about this and that. Our kids, our houses, our jobs. Turns out we've both got kids the same age, we both moved to town about the same time, and we both live in normal-sized houses. He's an MD at a nearby hospital, and I'm, well whatever I am, I'm not an MD.
It turns out that he and his wife have just started construction of an addition on their house. It will increase the size of the house by about 50%. Based on how he describes the addition, I'm guessing it's going to cost between $300K and $400K. I mention how my wife and I sometimes idly talk about putting an addition on our house.
He tells me that he and his wife have been planning this for several years, but that financially they weren't able to "pull the trigger" until this year. He said that he was financing the addition by taking out "all" of the equity in his house, and he also said that he was sure after 5 years in my house, I probably had plenty of equity too. I kind of shamefacedly told him that, in fact, we owe almost nothing on our house (like $30K), and that I hate debt. He was kind of taken aback, and he mentioned that because of his professional situation, the only real tax break he had available was the mortgage interest deduction, so he felt like having a lot of mortgage debt was a good idea.
So we talked a little more, and it occurred to me that being a physician does provide one with a very reliable income stream. Barring disability or incarceration, you can always make a good income. This is not the case in my line of work, which is one of the reasons that I'm debt-averse.
After I left the party, I recalled that The Millionaire Next Door frequently cites physicians as UAWs (under-accumulators of wealth). I wonder how much the economics of a typical medical practice, where prodigious income is balanced with prodigious expenses for things like malpractice insurance, tends to lead doctors to embrace a high-consumption lifestyle.
So we're chatting about this and that. Our kids, our houses, our jobs. Turns out we've both got kids the same age, we both moved to town about the same time, and we both live in normal-sized houses. He's an MD at a nearby hospital, and I'm, well whatever I am, I'm not an MD.
It turns out that he and his wife have just started construction of an addition on their house. It will increase the size of the house by about 50%. Based on how he describes the addition, I'm guessing it's going to cost between $300K and $400K. I mention how my wife and I sometimes idly talk about putting an addition on our house.
He tells me that he and his wife have been planning this for several years, but that financially they weren't able to "pull the trigger" until this year. He said that he was financing the addition by taking out "all" of the equity in his house, and he also said that he was sure after 5 years in my house, I probably had plenty of equity too. I kind of shamefacedly told him that, in fact, we owe almost nothing on our house (like $30K), and that I hate debt. He was kind of taken aback, and he mentioned that because of his professional situation, the only real tax break he had available was the mortgage interest deduction, so he felt like having a lot of mortgage debt was a good idea.
So we talked a little more, and it occurred to me that being a physician does provide one with a very reliable income stream. Barring disability or incarceration, you can always make a good income. This is not the case in my line of work, which is one of the reasons that I'm debt-averse.
After I left the party, I recalled that The Millionaire Next Door frequently cites physicians as UAWs (under-accumulators of wealth). I wonder how much the economics of a typical medical practice, where prodigious income is balanced with prodigious expenses for things like malpractice insurance, tends to lead doctors to embrace a high-consumption lifestyle.
Friday, May 19, 2006
Money jones
Claire writes a lovely, moving essay about keeping up with the joneses. It is something that each of us, with the exception of Bill Gates, must come to terms with: There is someone living near me who has, or at least appears to have, more money than I do. Like Claire, in my neighborhood we're the poorest family, with a smaller house, fewer servants, and basically less of everything than those around us.
Also like Claire, I have a truly adorable son. (Hers is here, you can see mine here.) I worry a little bit about how he's going to feel as he gets older. Will he compare our house with his friends' houses? Will he resent the fact that we don't go to Swiss alps for winter vacation? Will he be disappointed when he doesn't get a new Range Rover for his 16th birthday? Will he refuse to eat the food I make for him?
I hope he grows up knowing that what matters is what's inside.
Also like Claire, I have a truly adorable son. (Hers is here, you can see mine here.) I worry a little bit about how he's going to feel as he gets older. Will he compare our house with his friends' houses? Will he resent the fact that we don't go to Swiss alps for winter vacation? Will he be disappointed when he doesn't get a new Range Rover for his 16th birthday? Will he refuse to eat the food I make for him?
I hope he grows up knowing that what matters is what's inside.
Saturday, May 13, 2006
Water feature
One of the quirkier features of my house is that our drinking water comes from a 19th century spring, located near a brook at the back of my property.
Spring water bubbles up from underground and collects in that cistern, from whence it is pumped into our house. I could connect to the town's water system, which would cost about $5,000 or $10,000, plus an ongoing water bill expense of more than $1,000 a year, but as long as that spring keeps running, I plan to keep using it.
Where does my spring's water come from? As rain falls (or snow melts), some of it runs off the surface of the land into streams and rivers, and then into the sea. But a lot of it soaks into the ground and replenishes the local aquifer. Wells, springs, and streams are all fed by this underground reservoir.
When it's dry for a prolonged period of time, as it has been around here this spring, the aquifer water level drops. If it drops enough, my spring runs dry, and I'm out $10,000 plus the inconvenience of not having any water for a few weeks while they dig a water main to my house.
So one of the things I do when I take my daily woods walks is keep an eye on the various wetlands, vernal pools, and streams in the nearby woods. These water features all provide me with an indicator of the state of the aquifer.
Here are some pictures from a recent walk:
Meadow
Intermittent stream
Vernal pool
Pond
Spring water bubbles up from underground and collects in that cistern, from whence it is pumped into our house. I could connect to the town's water system, which would cost about $5,000 or $10,000, plus an ongoing water bill expense of more than $1,000 a year, but as long as that spring keeps running, I plan to keep using it.
Where does my spring's water come from? As rain falls (or snow melts), some of it runs off the surface of the land into streams and rivers, and then into the sea. But a lot of it soaks into the ground and replenishes the local aquifer. Wells, springs, and streams are all fed by this underground reservoir.
When it's dry for a prolonged period of time, as it has been around here this spring, the aquifer water level drops. If it drops enough, my spring runs dry, and I'm out $10,000 plus the inconvenience of not having any water for a few weeks while they dig a water main to my house.
So one of the things I do when I take my daily woods walks is keep an eye on the various wetlands, vernal pools, and streams in the nearby woods. These water features all provide me with an indicator of the state of the aquifer.
Here are some pictures from a recent walk:
Meadow
Intermittent stream
Vernal pool
PondI don't know my net worth
To my regular readers, my apologies for the recent drought of postings. I've been struggling with some health problems this week, and they've distracted me from writing or thinking about money.
Most PF bloggers periodically compute and report their worth numbers in their blogs. When I first started this blog, I did the same thing. Later, I took the spreadsheet down and replaced it with a set of ranges, thinking that if it's good enough for Sam Alito, it's good enough for me:
Instead of focusing on what I've got, I worry more about what I'm doing (since the future is easier to affect than the past).
- I am saving 15,000 in my 401(k) every year
- My employer is contributing 3,000 to my 401(k) every year
- I am saving 4,000 in both my and my wife's IRAs (pretty much) every year
- I have a cash cushion equal to about 6 months living expenses
- My total debt represents 2% of my net worth, and my debt service consumes 3% of my income
- My financial assets, ex-cash cushion, are allocated about 55% stock, 40% bond, 5% cash, all in diversified, low-cost mutual funds (except for my crappy 401(k) plan, which features exclusively high-cost funds).
From a happiness point of view, I'm beginning to think that it's better to focus on actions than outcomes. You can always control what you do, but you can rarely control how things turn out.
Most PF bloggers periodically compute and report their worth numbers in their blogs. When I first started this blog, I did the same thing. Later, I took the spreadsheet down and replaced it with a set of ranges, thinking that if it's good enough for Sam Alito, it's good enough for me:
Tangible assets: between 500,000 and 1,500,000At this point, with my relatively modest income, the fluctuations in my net worth have more to do with the gyrations of the stock, bond, and real estate markets than they do with how much money I save or spend each month.
Financial assets: between 500,000 and 1,500,000
Liabilities: less than 100,000
Net worth: between 1,000,000 and 3,000,000
Instead of focusing on what I've got, I worry more about what I'm doing (since the future is easier to affect than the past).
- I am saving 15,000 in my 401(k) every year
- My employer is contributing 3,000 to my 401(k) every year
- I am saving 4,000 in both my and my wife's IRAs (pretty much) every year
- I have a cash cushion equal to about 6 months living expenses
- My total debt represents 2% of my net worth, and my debt service consumes 3% of my income
- My financial assets, ex-cash cushion, are allocated about 55% stock, 40% bond, 5% cash, all in diversified, low-cost mutual funds (except for my crappy 401(k) plan, which features exclusively high-cost funds).
From a happiness point of view, I'm beginning to think that it's better to focus on actions than outcomes. You can always control what you do, but you can rarely control how things turn out.
Monday, May 8, 2006
Follow the money
Trivia question: Single-family house prices comprise what fraction of the US Consumer Price Index (CPI)?
Answer: 0.0%
Instead of looking at the cost of home ownership, 23% of the CPI is based on rental costs. Paradoxically, as more and more houses are built and purchased for "investment" (read speculative) purposes, the house price boom may be tending to reduce the CPI, since rents have been either flat or trending downward of late.
This quirk of the CPI can help explain Alan Greenspan's "miracle" economy, where dropping interest rates to a nominal 1% (and below 0% real), doesn't cause inflation: the cheap money gets used to inflate the prices of things like houses, stocks, and T-bonds that aren't counted in the inflation measure. Neat trick.
Answer: 0.0%
Instead of looking at the cost of home ownership, 23% of the CPI is based on rental costs. Paradoxically, as more and more houses are built and purchased for "investment" (read speculative) purposes, the house price boom may be tending to reduce the CPI, since rents have been either flat or trending downward of late.
This quirk of the CPI can help explain Alan Greenspan's "miracle" economy, where dropping interest rates to a nominal 1% (and below 0% real), doesn't cause inflation: the cheap money gets used to inflate the prices of things like houses, stocks, and T-bonds that aren't counted in the inflation measure. Neat trick.
Saturday, May 6, 2006
Filler
Just some filler for the weekend...
For those who are interested, I had a lovely walk on Thursday. And another one on Friday. This weekend is time for the first lawn mowing of the season. Should keep me busy for a few hours:
Unlike Jane Dough (and anybody else with any sense) I do not pay landscapers to work on my property. I am of the belief that if you can't take care of your own yard, you need a smaller yard.
The Wall Street Journal has a short item (first page of Money & Investing) about how you may be able to find better loan and deposit rates at a credit union than at a commercial bank. Bluebird says check out mutual savings banks too. The columnist, Ron Lieber, sniffs about how credit unions have the unfair advantage over commercial banks of not paying income taxes. Oh those poor, poor banks. How about pointing out that credit unions also don't need to pay dividends to shareholders.
I'm still working on a post about financial advisors. There's an old saw about stockbrokers that goes something like this:
For those who are interested, I had a lovely walk on Thursday. And another one on Friday. This weekend is time for the first lawn mowing of the season. Should keep me busy for a few hours:
Unlike Jane Dough (and anybody else with any sense) I do not pay landscapers to work on my property. I am of the belief that if you can't take care of your own yard, you need a smaller yard.
The Wall Street Journal has a short item (first page of Money & Investing) about how you may be able to find better loan and deposit rates at a credit union than at a commercial bank. Bluebird says check out mutual savings banks too. The columnist, Ron Lieber, sniffs about how credit unions have the unfair advantage over commercial banks of not paying income taxes. Oh those poor, poor banks. How about pointing out that credit unions also don't need to pay dividends to shareholders.
I'm still working on a post about financial advisors. There's an old saw about stockbrokers that goes something like this:
The goal of a successful broker is to gradually transfer ownership of the client's assets to himself.The bottom line about financial advisors is that for most individual investors, expect to pay the advisor and his henchmen at least 1% of your assets every year, regardless of how well or poorly your assets perform.
Excellent portfolio analysis tool
Jon Clements in today's Journal has a link to Morningstar's Instant X-Ray tool.
Simply enter the ticker symbol of your portfolio (including stocks, bonds, funds, and cash). It gives you a detailed portfolio analysis including
Simply enter the ticker symbol of your portfolio (including stocks, bonds, funds, and cash). It gives you a detailed portfolio analysis including
- stock/bond/cash split
- foreign/domestic
- sector weighting
- market cap
Tuesday, May 2, 2006
Never worry about money again
During periods of turmoil at work, and in my life, I used to idly daydream about becoming a personal financial planner. The good kind, who doesn't sell financial products, but rather charges an hourly fee for planning help and advice. I was going to help people who were stressed out and unsure about the future adopt simple strategies to get their financial houses in order.
I was going to market my service under the slogan "Never worry about money again" because I think that's really what most people want. Some people want to be rich, for the sake of being rich I guess, but most people would be happy not to have to worry about having enough money to retire on, buy a home, being able to pay their bills, and being able to see their kids go to college.
All for about $100 an hour.
Fortunately for all of my prospective clients, there is a book available, for about $20, that can achieve the same end: Jane Bryant Quinn's Smart and Simple Financial Strategies for Busy People. This book, in just over 200 pages, provides a combination jumpstart and quick reference for the main personal financial questions most people face:
A fine book, written with the interests of the reader at heart.
I was going to market my service under the slogan "Never worry about money again" because I think that's really what most people want. Some people want to be rich, for the sake of being rich I guess, but most people would be happy not to have to worry about having enough money to retire on, buy a home, being able to pay their bills, and being able to see their kids go to college.
All for about $100 an hour.
Fortunately for all of my prospective clients, there is a book available, for about $20, that can achieve the same end: Jane Bryant Quinn's Smart and Simple Financial Strategies for Busy People. This book, in just over 200 pages, provides a combination jumpstart and quick reference for the main personal financial questions most people face:
- Managing expenses
- Saving
- Dealing with debt
- Buying a house
- Retirement savings and insurance
- College funding
- Investing
A fine book, written with the interests of the reader at heart.
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