Saturday, April 30, 2011

The Soft Tub

Our Soft Tub has been a real bargain and has worked well for over four years now.

In writing my Hot Tubs on a Budget article, I mentioned in passing the option of the Soft Tub.  We have had one for four years, now, purchased used on Craigslist, for $300, and it arguably has been the best hot tub we have had.

New, these sell for about $3000 retail, although I see them re-manufactured (re-lined) on eBay for about $1750.  So $300 is quite a bargain - don't expect to find that.

The fellow we bought it from was a piece of work - he had a house that was a perpetual remodeling project, two very expensive ($70,000 plus) boats in the front yard, three cars, and a lot of junk in his house - new and still in the packaging, or all busted up.  The place was a mess.  And he was in a lot of debt.  Typical American - unhappy.

He unloaded the soft tub because he thought it was broken.  He filled it with water, plugged it in, and when it didn't instantly become hot, he assumed it was broken.  But all hot tubs take hours to heat to temperature - usually overnight - and the Soft Tub is no exception.  If he had bothered to go online to their website and download the user's manual, he would have known that.

What makes a Soft Tub unique and arguably better than a regular hot tub?

1.  It is generally cheaper than a standard hot tub.

2.  It requires no professional installation.  Set it down on a level surface and plug it in.

3.  It runs on 110V, so no electrician or 220V power is required.

4.  It uses little energy - using waste heat from the pump motor to heat the tub - and thus costs less to own.

5.  It is smaller than a huge hot tub, so it takes up less room and looks more attractive.

6.  It has digital controls, including a digital temperature readout.

7.  It needs far fewer chemicals and thus saves on chemical costs.

8.  It uses far less water than a regular tub, so you can afford to drain it more often.

9.  Since it is portable and user-installed, you could put it on the patio of a rental property and take it with you when you leave.

10.  One or two people can easily lift it.  You can carry it home on the roof of your car (strap it properly, use cardboard to shim, see the Soft Tub site for strapping instructions!).

Are there downsides to a Soft Tub?  Yes, some, but not as many as you'd think:

1.  They are smaller than a standard hot tub, so you can't put 6 of your friends in there.

2.  They don't have a lot of benches, seats, or other fancy, but unnecessary features.

3.  They don't have "hydro-massage" jets and tons of water jets (usually just 4 or 5) so you don't get a "hydro-massage" from it.

4.  It does have a vinyl liner that will eventually wear out, and if you over-chemical the tub, it will stain.  A new tub has to be carefully filled to prevent wrinkles.

But the advantages far outweigh the disadvantages.  As I noted in my original posting on hot tubs, what we found to be the best thing about a hot tub was that it was a container filled with hot water.  The idea that you would get a "hydro-massage" was very overstated.  You just want to sit in hot water, Japanese-Style, with all the pumps and motors OFF.

And if you have back aches and the like, sitting in the "hot bucket" can be very relaxing and helpful.  And it is very useful for that.

So long as you carefully follow the instructions and don't over-chlorinate the tub, it should provide many years of good service.

Would I buy one again?  I hope I don't have to - that the one I have will last many years, and that I can simply re-line it or have it re-lined when the time comes.  But if I was in the market for a Soft Tub, I would look for a used one, or perhaps one of the re-manufactured ones.   I would consider buying one new, but would try to talk down the dealer on the price.

The model we have is the smallest model - the Softub 140.  It works well for one or two people, although in one moment of madness, we squeezed four in (do not attempt, it will basically force all the water out of the tub!).  But for two people, it works just fine.

As you can imagine, it is not often I endorse a product, but I have to say, I am impressed with the clever engineering of the Soft Tub as well as the ease of use of it.  If you are looking for an easy-to-use and easy-to-install hot tub on a budget, this is a very good option.

Why Do You Work?

What makes you go off to work every day?

When I was a kid, my Dad used to say to me, "Sometimes in life, you have to do things you don't want to do!  I have to go off to work every day to support you kids!  And sometimes I don't want to do it!"

My attitude toward work was initially framed by that argument.  And yet my parents had friends who never worked at all - and raised four children.  The Father worked for ARAMCO after the war, banked his salary, and then retired young, living frugally off his savings, rather than having to have the latest and greatest this-and-that.  They drove old cars - Volkswagen Beetles - rather than shiny new ones.

There was another way to live, it seemed, but that was only on the periphery of my radar screen.  The idea of living on LESS and saving MORE and not having to work, was alien to me.  And my parents chased the dream.

And in America, we are indoctrinated at an early age to live that dream. We spend countless hours in school, as a training for our eventual full-time employment.  We work more and more, and have less and less time to ourselves, until we enter the workforce and are expected to work 50 weeks a year, 8 hours a day, for 45 years, until we retire.

And then we laugh at Europeans and their 35-hour work-weeks and 8 weeks of paid vacation.  What are they thinking?  That life is for something other than work?  Stupid French!  Or are they?

Why do you go to work every day?  Seems like a silly question.   You might say "I have to!  I have to put food on the table!  Keep a roof over my head!" 

But are you, really?  How much of your budget goes toward food, and how much toward your cell phone texting plan, cable TeeVee, car payments, lawn service, jet-ski payments, and other, really nonessential items?  How much does that "roof over your head" cost - and how much is just to show off to neighbors, versus the fundamental cost of real shelter?

Granted, unless you have inherited wealth, you will have to work at some point in your life.  But many people end up working their entire lives not because they have to, but because they want a lot of expensive things - which they make even more expensive by buying on time - and thus end up chasing their tail trying to work down a perpetual mountain of debt.

"I'll never pay off my mortgage" and "I'll just work until I'm 70" are two of the mantras of my generation - and two of the stupidest things anyone could possibly say.

Generations ago, work was something you did in your own home - in your own farm, in your own business.  You got up and went off to do your chores - because there was a mountain of them to do, and no one else would do them.  You grew things or made things or performed services for others - and hoped to be able to make a little money on the side.  Much of your own needs, however, were not purchased from a store, but created with your own hands.

 But the way we work in the modern world is far different from the way we worked in years past.

Today, work is a very structured thing - you leave your home, get in a car, and go to a "workplace" where you have to arrive and leave at defined times and have a defined sets of duties.  And "work" pretty much consumes most of your waking hours.

So it is no wonder that most people use work as a form of socialization - finding their friends and even spouse at work.  To many people, work is life, and the idea of any other type of life is alien to them.

But there are other ways to live, and for many of us, it is only a matter of choosing to do them.   As a self-employed person, I work from home (no commuting) just like our ancestors.  And I work when I want to or need to - and work as much as necessary to make as much money as I want or need.  And increasingly, I am finding that I want and need less - that I would rather not work and make less money than to work like a maniac and have lots of expensive things.

It is a choice we all have but few of us choose to make.  Even the poor person the ghetto chooses "rent to own" bling rims in place of saving for retirement or not having to work.
 
And in this economy (or any economy) many people are discovering, to their horror, that "working until I'm 70" isn't in the cards - that even working until they are 55 might be a struggle.

You will retire and not work someday.   That is inevitable, if you are lucky to live so long.  And when that is, will not be in your control - most likely.  So why structure your life so you have to work when you can simply make different choices and structure your life so you can choose not to.

Why do you work?  Because you want to, or have to?  Take this simple little test:



If you quit work or lost your job, how long could you live on your savings?

0.  A month or less
1.  Six months or less
2. A year or less
3.  A few years
4.  About Five years
5.  The rest of my natural life


How much total debt do you have relative to your income?

0.  Three times my annual income or more
1.  Two to Three times my annual income
3.  One to Two times my annual income
3.  Less than my annual income
4.  Less than Half my annual income.
5.  Debt-Free


If your boss asked you to do something that you felt was illegal or immoral (e.g., cover up a toxic waste spill in a third world country), which would you do?

0.  Keep my head down and my mouth shut and remind him of my cooperation at promotion time.
1.  Say nothing, but send an anonymous letter to the President of the Company
2.  Say nothing, but sent an anonymous letter to the media
3.  Write a letter to the President of the Company and hope they don't fire me.

4.  Hire a lawyer and take advantage of the whistleblower statute
5. Walk out the door and notify the media of the spill


How do you feel about the work you do?

0.  I hate it, and the pay sucks.
1.  I hate it, but I can't afford to quit.
2. The work is OK on occasion, and the pay could be a lot better.
3.  I enjoy the work, but wish I made more money
4.  I enjoy the work but look forward to retirement
5.  I find the work satisfying and just onerous enough to be considered work.  The pay is largely irrelevant.


When do you plan on retiring?

0.  Never - I have no savings and am in perpetual debt.
1.  I'll retire when I'm 70
2.  I'll retire at 68
3.  I'll retire at 65
4.  I'll retire at 63
5.  I could retire today, if I wanted to.


YOUR SCORE:

0-5:     You are little more than a modern day wage- and debt-slave.  You have no life.
5-10:    Indentured Servant
10-15:  Salary Slave and Debt-Miner
15-20:  Doing Time and Hoping for Parole
20-25:  Congratulations!  You own yourself - you are your own man (or woman).

Confort Food - Television Shows


Many folks claim that TeeVee shows are entertainment.  But in reality, they are a form of comfort food - virtual friends that you visit every week.

Creating a hit TeeVee show isn't too hard to do - once you get through those rough first few weeks.  Once a show is established, however, and has a steady viewership, you can just phone it in - and even fire the original actors - and people will still watch.

What am I talking about?  Well consider the show M*A*S*H - one of the longest-running, if not the longest running shows on TeeVee.  The show actually ran longer than the Korean War itself.  Every week, you could tune in and see the antics of Hawkeye, Hotlips, Radar, and all the gang, and it was as familiar and comfortable as an old blanket.

At one point, in the 1980's when the original show still aired, one of the local stations was playing re-runs in syndication - running two shows "back to back".  Another station on Cable was doing the same thing, so on a Thursday night, you could see a whopping five episodesof M*A*S*H in one night.

I used to joke that you could set up an entire cable channel to play nothing but M*A*S*H.  251 original episodes, 30 of the spinoff, the "Walter" pilot, plus the original theatrical movie, for nearly six days in a row without repeating.

But of course, the show tended to repeat itself - it became derivative - over and over again.  The plots were recycled, the lines became cliches (like most good TeeVee shows, the characters quickly adopted signature taglines, like Jimmy Walker's "Dyn-O-Mite!").  A typical plot would involve Hawkeye trying to get a new autoclave, which in turn would require that he find Klinger new pantyhose, which in turn would require that they find a new jeep for the motor pool.

Hilarity ensues.  Not really.  Comfort ensues.  The only people laughing are on the laugh track.

Speaking of which, think about the laugh track on that show - or any other.  Close your eyes and think of how it sounded.  You can hear the same people (or machines) laughing, can't you?  It has that odd sound, not really laughter.  And of course, the things that they laugh at, well, they aren't funny.

"Sweetening" they call it in the business - adding canned laughter to make an unfunny show seem funny.  And it is really annoying, and once you stop watching TeeVee, you can't really stand it.  Or if you are stoned, it sounds harsh - like great sheets of plate glass being dropped from a tall building.  Bummer.

So why did we all watch this drivel?  Because we became comfortable with it.  It fits like an old shoe and smells like an old blanket.  It is warm and fuzzy and reassuring, and people need and want that.

And once the show makes it past those wobbly first few episodes (M*A*S*H was on the verge of being cancelled, the first year) it takes on a life of its own.  You can cheapen the show (getting rid of expensive outdoor and helicopter shots in favor of indoor sets and buses) and even get rid of actors (hiring similar actors in their place).  The audience won't mind, actually.

The ensemble cast is the producer's best friend and the actor's worst enemy, as Suzanne Sommers realized to her dismay.  With a group cast, you can take out one or more characters and still have the show - and no one actor can hold out for more money.

And all TeeVee shows follow this same "comfort food" pattern.  So-called Variety shows were really more about repetition than actual variety.  If you watched Carol Burnette, you were sure to see the same skit setups over and over again.

And the shows all use the same or similar formats.  Late night talk-shows all follow the same format - slavishly - and the "comfort" is in seeing the same face, over and over again.  Johnny Carson was no late-night genius (I tend to agree with Wayne Newton that he came across as an acerbic, homophobic jerk, beneath his veneer of niceness) but we got used to him - and the tightly constructed format of his show.   When competitors and successors popped up, they all copied the same format - house band, opening monologue, guest couch, film clips, guest performer, etc. - to the letter.

Imitation is the sincerest form of television, as Fred Allen said.

Even the evening news is comfort food - and all alarmingly the same.  We watched "Uncle Walter" Cronkite, because he was a comforting Father figure.  And the format of the news hasn't changed since his day.  A dynamic anchorman opens with a "lead" and then quickly cuts to a "foreign correspondent" who stands in front of the Eiffel Tower (or some notable foreign landmark that seems appropriate to the story) and reads the same lead.  If you remove the repetition and typed up what they actually said, the 22-minute evening news could be reduced to the size of one index card - and read in less than a minute-and-a-half.

And yet, "more people get their news from ABC news than any other source" - and yet, people wonder how I can remain "informed" without watching "the nightly nooze".

Television is just dreck, and none of it is redeeming.  Even award-winning series like the "Sopranos" are just more comfort food.  In this instance, the format is the soap opera - serial television as opposed to idiotic episodic.  You tune in to see the same characters and take comfort in the sameness of it all.  There is no actual plot, of course - like a soap opera, it is just a bunch of shit that happens - whatever the writers felt like writing, and what needed to be written to get rid of characters that didn't pan out - or actors who asked for more money.

Even PBS is the same way.  You tune into "Poirot" to see the same comfortable characters in a largely recycled "whodunnit" plot.  It is very predictable.

It is funny, too, because at the dawn of television, no one had a clue what people would watch.  So they put on everything - ballet, opera, documentaries, whatever.  But what they realized was not that people wanted a variety of things, but a lot of the same. Game Shows, sit-coms, variety shows, soap operas, and the like.  People wanted to watch the same thing, over and over again, with minor variations - not different things every week.  And the early pioneers - Jackie Gleason, Lucille Ball, figured this out quickly.  Establish dynamic, lovable characters, with repetitious plot lines and tag lines -  "To the Moon, Alice!"  and "Lucy, I'm Hoooome!" 

So is this a bad thing?  Perhaps, perhaps not.  The problem with this sort of television is that it panders to the compulsive-addictive nature in all of us.  And compulsive-addictive behavior can be exploited and used against you.  Smoking, drinking, drug use, video games, even driving a car - are all examples of repetitive behaviors that we become addicted to and spend countless hours doing - and squandering countless hours in the process, not to mention countless dollars.

The average American watches 4.6 hours a day of television.  That statistic alone is scary enough.  What is scarier is that a growing number of people, such as myself, watch none - and a lot of people watch very little.  Which means that a huge number are watching 5, 6, or even 8 hours or more a day of TeeVee - everything from morning shows, to Oprah, to soap operas, to game shows, syndicated programming, the evening news, the sit-coms and reality shows, to late night, late late, night, and beyond.  Not to mention the 500 channels of cable to choose from.

And people who watch television are depressed - all of them.  There is no such thing as a happy, well-adjusted TeeVee viewer.  TeeVee sells comfort food, because the people who watch it are depressed and want comfort.  They are lonely and want friends, and I know a bar where "everyone knows your name" - every Thursday night at 8:30, at least.  And the enormous amount of time wasted watching it - plus the passivity it induces - causes more depression.

Pretty soon, you are finding it hard to even wash the dishes and throw away the pizza boxes.

For many people, giving up television seems like the hardest thing to do, when in fact, it is the easiest. And once you start acting rather than reacting, your life gets a lot better in short order.

Thursday, April 28, 2011

Winn Dixie "Winns" me Over

Of the five major grocery chains in our market, Winn Dixie is the best choice.

In my previous posting on Wal-Mart, I noted that the place has really gone to hell in a handbasket.  And this is not only because of decisions made in Benton, Arkansas, but because of poor management of the local store.  Wal-Mart has screwed the pooch, and the 10% drop in share price reflects this.
 
We were Publix people when living in Florida - they have amazing stores there - clean, well-stocked, and huge.  Here in Georgia, we have one Publix, and well, it is a little sad compared to the ones in Florida.

There is a Harris Teeter here, but that is pretty far away, and a small store with high prices, although they have a staggering wine department.

When the recession hit, we explored the local Wal-Mart and were pleasantly surprised with the selection and the prices.  But Wal-Mart dropped the ball, dropping many of its best store-branded products in favor of leasing shelf space to Nabisco and other big suppliers.  The store got dirty and disorganized.  Whole sections of shelving were bare. Garbage in the aisles.  Abandoned cars in the parking lot.   The raison d'ĂȘtre for going there ceased.  And few of the customers there would have understood the last sentence.

We tried a local chain, Harvey's, which has really good meat, but they sell a lot of junk food and the store is poorly organized - potato chips on every aisle, it seems (again, the practice of leasing end-caps makes a store a nightmare mish-mash of displays).

Winn Dixie was never our first choice.  When we moved here the store was older and not attractive.  But since then, they have remodeled the stores (there are three, with the one on St. Simons Island being the nicest).

The store is clean, has a good selection, is well-stocked, has good food, a reasonable wine selection, good deli and great bakery (the cakes in Brunswick are pretty amazing).

I was a little annoyed with their promotional tactics  - again, they throw pennies at us, hoping we spend dollars.  You get 50 cents off on a gallon of gas, as I previously noted, if you buy a certain amount of food.

Other promotions are a bit whimsical.  Buy four boxes of cereal (or oatmeal) and get $14 worth of milk, orange juice, Folger's coffee, and donuts.  They ran this under the banner, "everyone gets breakfast!"   It was a little fun, even if a come-on.

Since then, they have done similar promotions, tying like items together (materials for a backyard barbecue, for example).  Promotions and schemes generally annoy me - I prefer basic low prices, and hence my initial attraction to Wal-Mart.  But if you don't have products in stock, what's the point of having low prices?

The tipping point for me, however, has been the pharmacy.  They match Wal-Mart's pricing plans, so I can get the Wal-Mart price, without having to go to Wal-Mart.  And since we are already in the store, picking up a prescription is easier as well.

The question remains, is this a fluke, or part of an overall plan on the part of Winn-Dixie?  Apparently the latter.  The company emerged from bankruptcy a few years back and has spun off its manufacturing divisions, selling the last of them, a bottling plant, to Polar.  The goal is to concentrate on running the stores, instead of vertical integration.  And an aggressive store remodeling plan has helped the company shed its former image of run-down stores in poor neighborhoods.

It sounds like a pretty good plan, to me.  And it seems to be working so far.

So I logged onto Ameritrade and bought some stock in the company - $7 a share.  What have I got to lose?

UPDATE:  May 25, 2011.  Apparently I made the right call here. The stock is up over 26% since I bought it.  Sometimes, we get lucky.

Walgreens versus CVS!

NOTE: This is an update on a posting I started last year but never completed.


Ladies and Gentlemen!  On this corner, on any Main Street in Anytown, USA, long-time America's drugstore, Walgreens!   And literally, on the diagonally opposite corner, on the same street, the up and coming kid, CVS!  You both know the rules!  Shake hands and return to your corners and... get ready to compete in the marketplace!


Capitalism is an interesting phenomenon.  And nowhere is this more true that in the drugstore wars.  They have been going on for some time now, with many of the lesser opponents being dealt a knock-out blow.  Small chains and independents were K.O.'ed in the first round, many of the indy's leaving the ring feet-first.  And some may lament this passing and say the fight was rigged, that the kid took a fall.  But on the other hand, maybe he didn't have a choice.

Rite-Aid was getting woozy after the last round.  Recently they announced they would merge with a food chain and try another tactic.  They are stepping out of the ring, so to speak, leaving the last two men standing.

And standing they are.  In nearly every major city and town in the USA, at least on the East Coast, both Walgreens and CVS have been building drug stores - like mad.  And in most cases, they have build right across the street from one another.  This is nothing short of a declaration of all-out drug store war.  And at the end of the day, one man will be left standing, and the other will be laying on the floor of the ring, spitting out their bloody teeth and wondering what happened.

Who will win this fight?  It is hard to tell.  Both stores sell similar products at similar prices.  Both stores have similar subscription drug plans, albeit with different rules.  Both stores offer the same level of crummy service - and horribly badly designed websites that are nearly impossible to navigate.

And there is the key to who will win the drugstore wars.  The first pharmacy to realize that the service makes all the difference in the world.

Let's go a few rounds with these heavyweights and see who ends up the winner - and who ends up KO'ed:



ROUND 1:  Prescription Plans    CVS has a pharmacy discount card, but good luck finding it on their impossible-to-navigate website.   I even called their 1-800 number and the person on the phone had no idea what I was talking about.  They have a similarly named ExtraCare program, but that is merely a Customer Loyalty program that give 2% off on most in-store purchases.  There is an annual fee of $15, and prescriptions for generic drugs, 90-day supply, are $11.99.  and you get discounts on products you buy, as well as the flat rate on prescriptions.

Walgreens charges $20 a year, but only $9.99 for the prescriptions.  At Walgreens, you get a 10% discount, but only on Walgreens-branded items, and the discount is applied to your NEXT PURCHASE, not to the purchase you are making, which is a bit odd.  But if you don't mind buying store brands, this can be a pretty good deal.

Total cost to me at CVS, $51 a year, Walgreens, $60 - advantage CVS.  However, the Walgreens plan would be more lucrative if you have multiple generic prescriptions.  Plus when Walgreens has a better savings plan on store-branded items.

So it is a tie here.


ROUND 2:  In-Store Customer Service  If you get a Walgreens discount card, have fun with it.  Because actually using it is a nightmarish pain in the ass.  When you go to the register, make sure you whip it out FAST before the brain-dead employee starts scanning, because they will have to "void" the entire transaction and start over if you want to use your Walgreens discount card.  And yes, this requires the manager, so the line backs up and everyone starts making nasty comments behind you in line.  Even the person at the register will say snide remarks.


If the person at the register even RECOGNIZES the card, you are lucky, because brain-dead Becky will give you a blank stare and say "I've never seened one of them before!" and once again they have to call the manager up front. When the manager comes up front, she will look you over as if you shoplifted something, sigh, and then act like you ruined her day by using this card that the store promotes.  I mean, I'm sorry I darkened your door, bitch!

Even if you just try to buy something simple, and pay cash for it, the regular way, it takes 15 minutes to get checked out of a Walgreens.  Can anyone explain this to me?

But the same is also true at CVS.  For some reason, in both of these drug stores, it takes more time to ring up the sale of cough drops than it takes to buy a load of lumber at Lowes, or three carts of groceries at Wegman's.  What is up with that?


The pharmacy people can be just as bad.  I go to pick up my prescription. "$17 please" she says.  What about the $9.99 per the prescription savings card?  "Well, you didn't say you wanted that!"  You can't have both the prescription savings AND your insurance!"  Well, I'm not trying to do that! "Well which do you want?"  Gee, I don't know, $17 or $9.99?  Which do you think?  They look at you like you robbed a bank and treat you like a felon.  I just LOVE going to Walgreens and being treated this way!

I haven't tried CVS yet, so it is hard to call this one.  However, the first drug store to offer better service will win this round, as otherwise their prices and products are largely interchangable.


Round 3:  The Internet  People today are using the Internet more than ever - and this is not a "fad" that is going to go away.  The prize goes to the first store to totally embrace the Internet and make a site that is easy-to-navigate, easy-to-use, and easy-to-understand.  And you have to "get" the Internet and not engage in a lot of paranoia and make the site so hard to use that you have to go to the store to activate it.

Both contenders here have taken a wild swing at each other - only to punch themselves in the face.  Both are down on the mat, and the ref is counting.  But if they both have K.O.'d themselves, is it really a tie?  Or do they both lose?

Finding the CVS drug plan on their site takes a bit of doing - you are better off Googling it than trying to access through the CVS site - and that is a sure sign of an overwrought, crappy site designed by an advertising agency.  Walgreens is little better, asking you to "log in" or "pick a store" before they will even tell you about the plan (WTF?  Harvesting demographics?).

Signing up or renewing the plans is problematic.  As I noted in a previous post, the Walgreens site won't let me renew, unless I want to get a new card and wait 14 days.  CVS offers to allow me to print a temporary card right away (advantage: CVS) and mail one later.  But when I try to use the sign-up for the site, it bombs out and says "try again later" and no one seems to know why, nor is any explanation proffered.  Advantage, Walgreens, only because a crappy site that works is better than a good site that is broken.

Both could do better with less hype, animation, advertisements, and other HTML fluff.  Accessing basic items should be the order of the day.  I can only think that the prescription savings plans are a money-loser for them (offered only to counteract Wal-Mart) so they don't promote them very heavily.

The winner of this round?  Walgreens, but not by much.


Round 4:  Telephone Service  Both Pharmacies offer telephone 1-800 numbers.  Unfortunately, CVS has separate numbers for its customer loyalty program and for the pharmacy division and the prescription savings program.  I called CVS to ask why I could not sign up for their customer savings program online and I had no clue why.  I asked about the prescription savings program and the lady didn't even know what that was.

Walgreens answered the phone quickly and explained their asinine policy of forcing me to visit the store to renew my savings plan.  They provided quick accurate information, even if I didn't like the answer.

So, at the end of round 4, advantage Walgreens.

* * *

So both of these heavyweights are playing rope-a-dope in the ring, swinging wildly and getting some good hits in, but both are leading with their chin.  They are so concentrated on knocking each other out, they are not defending themselves very well.  All it will take is for some third party to step in the ring to take the both out, and be declared the winner.

And who could that be?    Possibly Wal-Mart.

Wal-Mart has a prescription savings plan that will mail prescriptions to your door, free of charge, so you don't have to loiter around a smelly old Wal Mart all day long.   Plus, they have a $4 a month or $10 for 90 plan, with no signup fee.

This means they beat Walgreens by $20 and CVS by $11 for generic prescriptions.

And since you can set up for home delivery - and automatic renewal of your prescriptions, you can avoid having to go to the pharmacy every three months - and don't have to worry about running out of pills.

Plus, the Wal-Mart website is remarkably easy to navigate and use - far more transparent than CVS or Walgreens - and they don't seem to be trying to hide their prescription plan, but rather are boasting about it.

Target also has a similar plan.

So the question becomes, not which drug store will win the drug store wars, but perhaps which Discount Store SuperCenter might end up winning.  Both Walgreens and CVS have aggressively opened up new stores across the country - sometimes two or three stores in a single town. Clearly, both cannot prevail in such a limited market.

Perhaps neither will.

UPDATE:  The Wal-Mart site bombs out, too, when you try to sign up and transfer a presciption.  In order to transfer a prescription, you first have to have a prescription with Wal-Mart.  Curiouser an d Curiouser.

Winn Dixie doesn't have a program, but will match WalMart's Plan Prices.  Their website is about as user-friendly as Wal-Marts, although it did bomb once (what is up with THAT?) although the second time, it let me on.  It does not display PRICES, so I had to CALL IN the prescription to the pharmacy.  Now that it is done, however, I can renew it online, and since we shop there anyway.....

Is the drug store as we know it a Dinosaur?  The only people I see in there are alcoholics buying the cheap beer.

They are creepy places, to be sure....

* * *

An Example of Not Getting The Internet - Walgreens

Walgreens has tried to go online.  Nice try.  Try again!

Walgreens sent me a renewal notice for my Prescription Savings Club, which does save me about $90 a year by taking a 30 day prescription for $12 and putting it into a 90-day prescription for $9.

Before, I was paying $144 a year for this prescription.   Now, I pay $36 for a year, plus the $20 club fee, for a savings of $88.  Plus they provide 10% off on store brand items, with the amount off deducted from your next purchase (odd).
 
But, I can live with that.

I went online to "renew" my Prescription savings card.  I enter all the data and am ready to hit "return" when I notice it says "ships in 7-14 days".

Huh?

So I call to check.  Yup, if I go into the pharmacy and pay in person, my card is "renewed".  But if I renew online, they mail me a new card which I cannot use for 14 days.  Moreover, they set up a new account with a new account number, so I have to re-enter all my card data again to access this online.

This is an example of "not getting it" - creating unnecessary work for the consumer, so they have to go to a store, chase pieces of paper, or otherwise do things offline, in order to do things online.

And often the "logic" behind this, is the thinking of paranoid people who don't trust or understand the Internet.  They conceive all sorts of dire consequences, which of course won't pan out.

If security is breached on my account, someone might go get my gout medication!


Uh, what?

People have odd, irrational, and emotionally-based fears.  It is like those photos you see on the Internet where people blur out their own license plate numbers.  When you ask them why, they nod their heads and saying knowingly, "Identity Theft!"

But your license plate number, as I have noted time and again, is visible to anyone on the street, so if there is a risk of "identity theft" it is a risk you take whenever you drive your car.

And the reality is, no one can open a bank account in your name or get a credit card based on your car license plate number.

But people are idiots.   And some of these sort of idiots work for Walgreens, in the Internet Services Department.

Hmmm.... maybe it is time to buy stock in CVS?

Sex Wages (the Labor Law Poster)

When you open a business, you are supposed to hang up one of these posters.

When I opened my own business, I obtained one of those posters you are supposed to put up in your workplace.  Back then, the poster had two sections.  One side said, "Discrimination on the basis of SEX is against the law!" and the other side side "Mandatory minimum WAGES are as follows..."

The words SEX and WAGES were both in large fonts, so from 10 feet away, it looked like the poster said "SEX WAGES" which I thought was pretty funny.

But at the bottom of the poster was some fine print along the lines of "Failure to post this poster prominently in a work area can result in fines of ten billion dollars and the Department of Labor cutting off your testicles with a rusty hacksaw" - or something to that effect.

And there was no shortage of companies out there willing to play upon your FEARS of the government, in this regard, offering to sell you "labor poster subscription services" for $100 a year - to send you a new poster every time some legislator or bureaucrat got a bee in his bonnet and decided that the poster needed to be changed to advise people that they are entitled to a bathroom break or some such nonsense.

It was then that I realized that being an employer was no Swiss Picnic, and I decided to get out of the game.

As an employer, you are not just hiring someone and paying them money for work.  And that alone is hard enough to do.   Hiring people is a difficult thing to do, as many people simply don't want to work, or do the least amount of work they have to, to get by, if they don't in fact end up causing you more headaches and work along the line.  And of course, they want to be paid handsomely and think that you are making out like a bandit - which is often not the case.

But on top of all that, you are expected to be the tax man as well.  You have to collect taxes from their paychecks and pay it to the government, filling out a lot of forms in the process.  Plus, you have to DOUBLE their Social Security and Medicare taxes, so for every dollar you pay a person, it costs you like $1.10.

The staggering amount of paperwork involved in this alone is enough to sink many a small business, so, like the poster paranoia people, companies have sprung up to help you out with "doing payroll" - often for some pretty steep fees.  ADP and others will "run payroll" for you, play the float and issue nicely printed paychecks for your employees - and file all those returns with the government.  It is all make-work, of course, and it adds to your overhead even more.

Oh, but wait, there's more.  Of course, you have to pay people a minimum wage, and of course you can't discriminate on the basis of sex or race.  Not only that, you might have to go out and recruit minorities and women, and advance them through your organization, ahead of other, more qualified candidates, lest you be accused of discrimination.  You might not be inclined to discriminate, of course, but you may find it hard to find people with the right qualifications that come in the correct colors and genders to make up a rainbow.  But nevertheless, you are expected to make up for the underlying racism and sexism in our society.  And if you don't - you'll get your ass sued.

It gets better.  You can't discriminate against someone of Hispanic descent.  But you'd better make sure all your employees are legal immigrants or have a green card!  Again, the penalties for failing to do so are enormous.  The government can't or won't enforce immigration laws.  They can't correct discrimination.  They cannot collect taxes.  So you, the employer, are expected to fulfill all these social justice deals.

And somewhere along the way, you are expected to run a business and make money.

But before you do that, you'd better make sure you provide health care and a retirement plan for your employees.  Why it is your responsibility to see that they go to a doctor is beyond me, but there you have it.  More and more, you are inserting yourself into your employees lives - becoming their father figure and confessor - as well as Sugar Daddy.  The basic transaction of working an hour and getting paid gets diluted further and further.

Eventually, you start to realize that your employees have a pretty good gig - and what you got, sucks.  Unless you can make a scandalously large amount of money, it isn't worth it - and that is one reason why many businesspeople want to make a scandalously large amount of money - because otherwise it isn't worth it.

But like any social program or tax incentive, there are sure to be unintended consequences, and in the case of U.S. Labor Laws, the consequences are many and devastating:

1.  Many companies, particularly those paying low-wage jobs, hire only part-time workers, to avoid some of the more onerous requirements of labor laws.  This provides a small "loophole" for places like Wal-Mart and other low-wage employers, to avoid paying onerous benefits.

2.  Many other companies are resorting to outside contractors, who are paid on a cash basis for their labors.  Why be an employer, when you can hire someone to work for you as a contractor?  In addition to reducing overhead, you can fire a contractor at will, if they don't work up to expectations.

3.  Many companies (and even the Government) are contracting out entire workforces.  You hire a contractor, pay them cash, and in return, they hire people and deal with all the messiness of being an employer.  Many school districts have done this with their bus garages, firing "Old Gus" and the rest of the guys in the garage, and the bus drivers, and hiring "First Student" or some other bus company in their place.  Gus goes to work for "First Student" but for less money.  Was this what Liberals wanted or the Government intended?  Well, its what you got.  Hope you're happy!


4.  Many Jobs are Simply Going Overseas:  In addition to the high cost of labor in this country, the high cost of being an employer is making "outsourcing" very attractive.  The hassle of being an employer in the USA is simply too much for many companies, and it is far easier to just hire people overseas, for a number of jobs.  Even with language barriers, shipping costs, communications costs, cultural differences, and time-zone changes (ain't that enough?) it is easier to hire Sanjay in Mumbai than to hire Lurleen in Ludowici.

5. The Staggering Cost of Employment Stifles Small Companies:  Many larger companies don't mind all this regulation and paperwork so much.  They can afford to hire a "Human Resources Specialist" to manage this kind of stuff and also an in-house payroll department.  Since they are a large company, they can afford these costs.  The small company, however, has to contract much of this out, which in turn means they pay more per capita than the large company.  Thus, these onerous regulations act as a barrier to entry which keeps small companies out - or at least at a disadvantage.  Liberals love to bash "Multi-National Corporations" but at the same time push for onerous labor laws, not realizing that the same onerous regulations help the Multi-Nationals and hurt the little guy.



And of course, all of this is in addition to the other underlying employment issues in this country.  Since everyone has "rights" in this country and everyone has a lawyer, employees are quick to sue at the drop of a hat, usually after becoming disgruntled after years of employment.

Think it never happens?  It happens all the time and I am treated to endless stories, usually from the "victims" themselves, about how they are victims of sexual discrimination, carpal-tunnel syndrome, or whatever.  And usually it is the victim themselves who tells me that they alleged sexual discrimination to get back at a boss they didn't like (or a co-worker) or the carpal-tunnel sufferer who shows me their photos of their recent canoe trip.  Frivolous lawsuits abound - and for the employer, hiring someone is not only a measure of finding a person who will work, but someone who will not actually cause trouble in the workplace.

And please, don't try to tell me that such suits don't exist or in fact, are not an epidemic.

It is unfortunate, but we live in a society where everyone has rights but no one has responsibilities.

Now, on top of all this, throw in UNEMPLOYMENT - the government's mandate that employers also fix the unemployment problem by providing unemployment insurance, and of course Workman's Comp - which is a neat idea, but also gets abused with great frequency.

The end for me came when I had to explain our firm's weapons policy to an employee - who decided to celebrate "bring your gun to work day".  At that point, I realized that I did not want to be an employer, now, never, or ever in the future.

So I closed my shop and became an independent contractor - which lowered my overhead and made my services more attractive to my clients.

Over the years, I have been approached by many people, usually young lawyers starting out - asking me for a job.  But it just wouldn't work.  Hiring even one person and paying them a steady paycheck would require a staggering amount of money, time, and labor.  And training that person and getting good work out of them would be problematic.

And of course, once they were trained, they would go to work for someone else - some larger firm who would pay more money.

But you try to explain that to a 20-something or to someone who has worked at a "Job" all their lives, and they give you a blank look.  "Gimme a Job!" they say, not realizing what it is they are asking.

Becoming an employer, however, had one reward.   While it was a financial fiasco for me, I did learn a lot about how the labor market actually works - and the real costs involved in being an employer.  I realized a lot of things, including the vast amount of weak thinking I was engaging in as an employee.  It gave me an appreciation as to how hard it is to hire people and to run a company.

So, if you are sitting around, unemployed, and wondering why someone doesn't "Gimme a Job" - maybe you need to think about what it is you are asking.  For many folks, it is all about "Gimme, Gimme, Gimme" and they fail to think about what they are giving in return.

No one has a "right" to a job - although the far-left pushes that agenda as well.  You can't force me to hire someone, particularly when you make it an expensive and odious proposition that would bankrupt me.

On the other hand, if hiring someone was easy to do and didn't require a lot of paperwork and nonsense, I'd be far more inclined to do that.

But that ain't about to happen, in my lifetime, anyway.....


It would be interesting to see how many jobs would be created if we had a law allowing small companies to hire people and just pay them in cash, like they would contractors.  Send out a 1099 at the end of the year and let the employee pay the taxes.  I would bet it would jump-start the economy.

Crappy, Low-Wage Jobs - and Why We Need Them.

Jobs at places like this are not great, nor do they pay well.  However, it is foolish to think we can mandate high wages for unskilled jobs.

In a recent CNN Article, a bleeding-heart liberal decries the rise in the number of crappy, low-wage jobs.  And her take is the one that the far left uses every time - how can the head of a family of four  put food on the table and keep a roof over their head at $8 an hour?

And if you aren't terribly bright and you don't think very hard, that argument makes a lot of "sense".

But of course, there are some major holes in the argument - and when examining any argument, examine the underlying assumptions or premise, as that usually is where the holes are.  And here, you can drive a city bus through those holes.

The presumption here is that every job has to support a family of four and that every person working has a family to support or even that every person working has to make a living from their wages.

But this is often not the case, and a huge number of people working low-wage jobs are not doing so to support themselves entirely, but rather to make some extra income - or even to just keep busy.

For example, the following people don't need to support the mythical family of four:

1. Teenagers and College students looking for extra money to buy things at the mall or buy a car:  Kids get after-school jobs to earn extra cash.  I did, starting at age 13, delivering newspapers (for far less than minimum wage!) and later on, at age 17, working in restaurants (for minimum wage) and later on, in college, delivering pizzas and chicken wings.  These jobs simply wouldn't have existed for me, if the government forced people to pay me enough "to support a family of four" - and I didn't have a family of four to support, anyway.  In college, I worked as many as three jobs at a time, and you know, it didn't hurt me all that bad.  In fact, it persuaded me that getting an education was a good idea, as I didn't want to work such jobs - for the rest of my life.

2.  Retirees Looking for Extra Income, Keeping Busy:  This is a growth sector of the job market.  And yes, I know a lot of retirees who work jobs like this, not just for the money, but to feel productive and to keep busy and to meet people.  Handing out putters at the putt-putt, or washing the golf carts at the golf course is not worth $20 an hour, to be sure.  And if we had to pay people "a living wage" to do these jobs, the cost of playing putt-putt would go to $40 a game.

3.  Multi-income families, children living at home:  In many families, both husband and wife work, and adult children living at home work as well.  While you can't support your family with ONE of these jobs, if multiple people living together work at multiple jobs, they can make enough to live on.  Are they going to get rich?  Of course not.  But getting rich is not a guaranteed right in the Constitution.  You have to work at it - and try for more than entry-level jobs.

4.  People starting out (new hires):  A new hire is often not very productive, as you have to train them in nearly every aspect of the job.  So, for an employer, hiring new people is a money-losing proposition.  Throw in all the government regulations we saddle employers with (enforcing immigration laws, collecting taxes, providing health insurance, retirement plans - everything Congress cannot or will not do, they foist off on employers) and it is amazing anyone gets hired at all.   It doesn't make sense to pay someone with no skills, $20 an hour or more, just for the privilege of learning.

If you take these sort of entry-level jobs and mandate higher wages, what ends up happening is that these sort of jobs go away  - or the cost of goods rises precipitously.

As I have noted, I have worked a number of low-wage jobs in my life, and would take one again, in retirement, with no qualms.  Mark recently took another such job, working part time at the gift shop at the lighthouse, mostly as a favor to the manager there.  Prior to that, he worked part time at the wine shop, which, while it did not pay a lot, was a good thing for him in a number of ways.   Do we need the money?  Sure we do.  And it does pay the grocery bill - no small feat.

And as I noted in my Disposable Income and Part-Time Work posting, the additional income from such a job may represent less than a 10% increase in our gross combined incomes, but in terms of disposable income it may be closer to 25% to 50% - which is nothing to sneeze at.    A married couple may not be able to live very well on one $8 an hour job ($16,000 a year) but if both work, they can be pretty comfortable on $32,000 a year, provided they don't squander what little they have.

Does it make sense to mandate "a living wage" for every job out there (as some Ithacans proclaim, on four-foot wide bumper stickers on the back of their $40,000 Volvos)?

We could, of course, and not too long ago, we did, in this country, when the Unions were strong.  We also had something called 10% inflation.  When you raise wages far enough, the cost of goods skyrockets - very simple things become very expensive.  As a result, the worker making more money finds that his money doesn't go as far - so he has to demand yet more money to make "a living wage" - and the process cycles again and again, and inflation takes off.

As I have noted in the past, very simple things made in America in the 1950's and 1960's were staggeringly expensive.  A Zenith mono FM portable radio cost $79 back in the 1960's  - which is a staggering amount of money today (enough to buy a cheap flat-screen TV today!).  A Coleman cooler or Weber Kettle was like $99 - about the cost of a used car back then.  Today they are cheaper in terms of dollar cost and far cheaper in terms of inflationary cost.

People decry the increase in the number of goods imported from China, and the resultant loss in manufacturing jobs here.  But what they fail to take into account is that since goods are so much cheaper now, people can have an effectively higher standard of living today than 20-30 years ago, even if they are making less money in terms of cash take-home.

People today are wealthier - even the poor - than two or three decades ago.  When I was a kid, having an air conditioner or an "Amana Touchmatic Radar Range" was considered something rare that only "rich people" had.  Today, people on welfare have these things.  Back then, having two cars in a family was considered "wealthy" - but today, you may see three to five parked in front of even the most modest of homes.

And yes, maybe in the 1950's and 1960's, people actually went to bed hungry in places like Appalachia.  Today, the biggest health problem among the poor is obesity - we simply have too much food to eat.

Now, I am not saying that we live in a perfect world or that everything is just hunky-dory (again, weak thinkers will jump on that argument - "so, you think everything is perfect!  You mean, nasty Republican Beast!" -oh, grow up!) only that things are not as bad as many folks want to make them out to be - particularly folks who never worked a minimum wage or low-wage job in their lives.  

One of the biggest problems with American competitiveness is that, on a global scale, we are vastly overpaid and under-worked.  Many Americans decry recent immigrants and illegal immigrants as "taking away jobs" - but in reality they merely take jobs that "real Americans" refuse to work at.  Immigrants understand the labor market from an international perspective, and realize that a good paying job is something to be treasured - and what they consider good paying is what most Americans refuse to accept.

And the "Real Americans?"  - they hate their jobs, sabotage the assembly line, or go on strike for six years (I kid you not).  What was the Number One song on the Country and Western charts during the last recession?  Yup, "Take This Job and Shove It!" - which pretty much sums up the attitudes of most Americans towards work.

But when the jobs go away, and when wages drop, two things happen.  First, people start to appreciate their jobs more.  Rather than resenting their employer and trying to tax the factory to death, people start to think about attracting employers and being nice to employers.  Second, when wages become more competitive in the marketplace, the cost of goods drops and suddenly, making things in the USA makes more economic sense.

The foreign automakers make money with their car factories in the USA, simply because they pay non-union wages.  Good paying jobs, to be sure, just not outrageously high-paying jobs.  Union plants, on the other hand, paid fork-lift drivers what a Doctor was making - and not surprisingly, those companies lost money and went bankrupt.  It doesn't make sense to pay an unskilled laborer the same amount as a Doctor, just to put bolts on cars as they move down an assembly line.  There should be some reward for going to Medical school, after all.

So what about that poor slob who has to support a family of four on a low-wage job?  Well, there is a reason we mandate education in this country.  We expect every member of society to do the best they can to support themselves and fulfill their part of the unwritten social contract.  And this means paying attention in class, learning how to read and write, learning some basic math, learning how to take care of yourself - and most importantly, learning some salable job skill.

And you know what?  It ain't hard to do, even for the dumbest among us.  And jobs are always available for people with some basic job skills.  If you can't do anything else, learn how to repair an air conditioner, or drive a truck, or something for God's sake. 

But many people choose not to but instead wait for jobs to be handed to them.  They take the path of least resistance and make the least effort.  And that is sad, of course, but is it our fault?

And more importantly, does it make sense to financially reward someone who really makes no effort to try?  Because when you do, you punish the person who is trying to get ahead and trying to learn a skill.

Of course, in Communist countries, this is exactly what happens.  As they used to say in the Soviet Union, "We pretend to work, they pretend to pay us" - there was little or no incentive to work hard, so not surprisingly, no one worked very hard, unless of course, they were threatened with a firing squad (as is happened to a number of early pioneers in the Soviet space program).

And that, in short, is where well-meaning liberalism leads to - a sort of proto-Communist Socialism where everyone is "equal" but all that means is everyone is poor.

Yes, it sucks that in America, some people make very little while others make a lot.  But in Communist countries, everyone makes very little and no one makes a lot.  Which is better?  The idea that everything sucks, but we all suck equally?  Or the idea that, if you work hard, you have at least the opportunity to get ahead?

Private Party Sale

When you buy things from an individual, the transaction is usually very simple - and cheaper as a result!

Suppose you went to a garage sale and were looking at buying a used armchair.  The owner comes up and says "buy this chair, and I'll throw in this toaster FREE!  But this offer is only good for a limited time!"

You demur, so he counters, "Sign up for my Frequent Garage Saler card and get a 10% coupon good for any purchase of used baby clothes!"

You give him an odd look, but he doesn't give up.  "You know, if you really like that chair, we can finance it, 90 Days Same As Cash! - and you can take it home today!"

But still you don't budge.

"But wait!" he says, "We're offering a mail-in rebate on this used chair!  Buy it today and get a $10 rebate by mail in 60-90 days!"

At this point, you are slowly edging away.  This is one freaking weird garage sale!  And you start running toward your car, as he shouts after you, "Hey!  This is marked down below invoice!  70% off! Buy One, Get One Free!"

And you drive off in a cloud of dust.... you can still hear him shouting, "5 cents off a gallon of gas!  S&H Greenstamps!  Frequent Flyer miles!  We take plastic!  Financing available!  Everyone is Approved!  Bad Credit Specialists!  Buy Here Pay Here!  Rent to Own!"


* * *

While that would be the oddest garage sale ever, as I noted in my hypothetical Cash Store posting, the retailing business is so complex today that the idea of offering products for a basic price - without any ancillary gimmicks - is nearly impossible.  And all of the gimmicks listed above - plus more - are used every day in nearly every retail transaction you attempt to make.

The closest the average consumer can get to a "pure" transaction - exchanging cash for goods, with no kick-backs, airline miles, cash-back, coupons, rebates, discounts, interest paid, shopper loyalty clubs, credit card surcharges, or whatever - is to buy from an individual.

You buy something on Craigslist, for example.  You go to someone's house, they have a used microwave.  You dicker on the price, you reach a bargain with the individual, you pull our you wad of money, pay him, and load it in your car.

And if you think about it, this sort of transaction, in addition to being very simple, is usually very cheap as well.  Granted, used appliances may have some of their life used up, and may have nick or scratch in them.  They are no longer under warranty - but then again, they are past that infant mortality stage.  But oftentimes their price is a mere fraction of the price new 1/2 to 1/4 - even though the amount of remaining service life is huge.

As I noted in an earlier posting, a friend just bought a used Mercedes with 58,000 miles on it - possibly 1/5 to 1/3 of the service life, for about 1/3 of the cost when new.  And as a straight cash-deal, there were no gimmicks, rebates, discounts, lease agreements, loan interest, or other nonsense to distract from the basic transaction.  Buying a car from an individual is even simpler.  You-give-cash-they-give-goods.

For this reason, it pays to at least look online for products when you need something - as opposed to wanting it.  For example, I was looking for some circuit breakers the other day.  The local store has them - for about $50.  But online, they are $20 new and $10 used, including shipping, and I don't have to dick around with a 10% off coupon.  I was also looking for a discontinued breaker ($250 online, if you can get it) and found a used one also for $20 - a considerable savings.

Some people, of course, use emotional reasons not to buy used equipment or to buy online.  They are too good for that, or they deserve better, or some such.  But if you can get a GPS unit for half price online, why not?

But of course, like anything else, you have to be astute.   There are some things for sale used that are not worth anything - and are horribly overpriced.  Used tires, for example, are often a bad bargain simply because the cost of mounting and balancing two sets of used tires makes the cost higher than simply buying one new set (which provides the equivalent mileage).  Or people have unrealistic ideas on prices - thinking that offering 10% or 25% off the price "as-new" is a real bargain, when in fact, 50% to 75% is more often the case.

But there are some things that wear like rocks - they never wear out - and can be bought cheaply used.  For example, as I noted in my Patio Furniture posting, the "wrought iron" (steel) patio furniture that has no cushions will last forever, provided you don't immerse it in salt water.  Just hose it off and occasionally spray paint it.  And yet, a used set goes for less than half the price of new.  Why screw around with those flimsy yet attractive-looking sets at the home improvement stores that cost hundreds of dollars?

And increasingly, of course, even online sales are getting complicated.  Amazon, eBay and PayPal pummel you with offers for kickbacks, flyer miles, rebates, frequent shopper rewards, or whatever.  And increasingly, of course, these mainstream online retailers don't offer the best prices anymore.  Often you can find the best price from some wholesaler's website, directly.

Of course, even in private party sales, there can be hoopla and distraction.  My partner works in retail and understands human psychology all-too-well.  At our numerous garage sales, he can often move merchandise by knocking money off a price, or combining two things into one.  "Buy this broken CD player, and I'll not only cut the price in half, but throw in these five cracked CDs for FREE!"

And people buy, too.  It is interesting to watch.

Wednesday, April 27, 2011

A Double-Dip for the Recession? Or Just Fear?


There is talk among many people that the stock market may dip yet again.  What is going on here?  Real quantitative analysis or just selling more fear?


As I noted in a recent posting on the aptly named Motley Fool, you can't go wrong selling fear.  The fool uses a simple trick designed to get Rubes to buy in.  It is like the old joke, "How do you keep an idiot in suspense?"

In the case of the Motley Fool, it is like the "One Trick to the Tiny Belly! Click Here for More Info!" but of course they never really give you the "info" - just a pitch to sell you a diet plan, or a subscription to their financial advice.

And if their financial advice was any good, they'd shut up and invest according to it and make money - and not tell YOU.  You never sell the goose that lays the golden eggs.  But regular geese that you can pass off as laying golden eggs - they are for sale all the time.

Their gambit was "The Great Sell-Off of 2011!" and with a lot of large fonts and exclamation points!!! told you how that it would all go horribly wrong, unless you followed their advice.  How convenient for them.  And people believe this shit, too.

But I have heard rumblings from others about a "double dip" in the recession, mostly from people who also are "birthers" (and still are, as of course the Birth Certificate disclosed today is a clear forgery, right?) so you have to take that sort of thing with a grain of salt.

Online, there are a number of blog sites pushing this - but also pushing right-wing agendas, or trying to sell you gold.  So those we can take with a grain of salt.  But what about real, quantitative analysis?

There is not much out there.  Or, like the end-of-the-world doom-and-gloom predictors, their predictions have expired without the doom-and-gloom occurring.

For example, this Wall Street Journal article (WSJ of course, now being part of the right-wing Newscorp Empire) talks gloom-and-doom sure to happen on January 1st when the Bush tax cuts expire.  Nice theory, but the tax cuts were renewed.  So strike that one.

This article from "Seeking Alpha" (which I have found to be a horseshit blog, for the most part) similarly predict gloom-and-doom, in vague terms, using emotional language and very little in the way of hard numbers.  The thrust of the article is a credentialist argument.  The opinions of "Karl Miller" an oil and gas guru, are that the world will end shortly.  They helpfully provide a link to his Linked-In page, in case you never heard of him.  Oh, look, he's "friended" Warren Buffet!

This article on Yahoo News! appears to be little more than an opinion blog piece that at least attempts to cite some hard data.  The author claims that the "downgrading" of US debt will trigger a recession, even though he admits, it is still AAA+ rated.  He also cites increased claims for jobless benefits - a slight rise last week as the trigger for this downfall.   Probably the most credible factor, however, is the increase in food and energy costs.

So.... are we headed for a "double dip recession" or not?  Well, from what I can see, I am not hearing anyone with any sort real hard numbers and a logically consistent argument saying this - just a lot of opinion pieces or fluff pieces or people trying to stoke fear for political or financial gain.  All all of these are suspect sources for hard, financial data.

The rise in energy prices and gasoline prices is troubling, as is the prospect of inflation.  The fed has been buying back its debt in an attempt to stimulate inflation, a move that I receive with trepidation.  As someone with money in the bank, inflation does not bode well for me.

The recent spike in gas prices is not unexpected to me - and if you read my blog, you will see what I mean.  Many folks barely remember the $5 a gallon gas that occurred before the last Presidential election - and most don't understand why that happened, and perhaps we still do not.  Oil was cheap then, but refinery capacity and pipeline capacity was limited.

This time around, it seems that oil prices are to blame - the unrest in the Middle East, particularly Libya, contributing to a reduction in oil output - with Libya being a major supplier and supplies being cut off.  If the war there ends quickly, this could be a short-term disruption.  A long protracted war, on the other hand, could result in long-term high energy costs.

So, what does this mean to you, Joe 401(k)?  Do you call your broker and say "Sell it all!  Put it all in gold!"

Probably not.  As we saw in the last recession, trying to time the peaks and valleys is nearly impossible.  Those who "sold it all" in January of 2009 are hurting now.  Those of us who stayed the course (such as myself) made out pretty well.

The problem with this type of market prediction is that even if you could predict the movement of the market with any certainty, it is hard to know where to put your investments for safekeeping.  If you put your money into "Safe" government-backed bonds, they won't earn very much - and if your prediction about the market is wrong, you'll end up losing all that gain you would have had by staying in.

So, once again, all you really can do is diversify your portfolio.  Don't own all of one thing.  Buy stocks, bonds, Real Estate, Life Insurance, CDs, Money Market, FDIC-insured savings - and of course, pay down and pay off, debt.

If you do this, you don't have to try to predict the movement of the market, which is about as hard as predicting which slot machine will pay off next.  Simply stated, you can't.  And you will lose your shirt trying.

But if you diversify your portfolio, at the very least, you spread your risk and thus ameliorate any downturns.

But that leaves the question:  Who are these gloom-and-doom predictors?  As I noted, I heard this from a "birther" the other day - the sort of person who hates Obama, not of course, because he is black, but because he is Kenyan (and there is a difference, right?).  Those sort of people want to hear bad news - to WALLOW in it, just as some far-left liberals like to hear bad news as well (ironically, some of the same rumors are sold to both parties, with just the names changed.  The fabled Urban Legend of "Marshal Law" signs in the back of a wrecked Wal-Mart truck was used when both Clinton and Bush were in power).

These sort of folks have nothing invested in their 401(k) or IRA so they like to run down the market all the time to self-justify their spending it all on a car.  Think I'm kidding?  I'm not.

I've seen people comment on sites that it is better to "lease a car now, so when you are old, you'll have all those great memories about the great stuff you had" which sounds moronic, because it is moronic.

But again, people will use any excuse to self-justify bad behavior, and people who spend it all and don't save will argue that there is no point in saving as the market will just tank, hyper-inflation will wipe out your savings, or the trilateral commission will declare marshal law and put us all on the "Amero".

Nice theories, but it doesn't make buying a Jet Ski a better proposition.  When you are old and retired, a burnt-out 20-year-old Jet Ski isn't going to put food on your table.  Stocks may be risky, but buying shit is just squandering money - you are guaranteed that most all the crap you buy in life will eventually be worth far less than you paid for it.

So, unless I see something more concrete, I am not sure that I am going to change my investment plans that dramatically.  Not just yet.

Note: When I first wrote this, I made a typo and used the term "qualitative" in the caption, when I meant to say "quantitative" and of course, there is a difference.  Words matter.  This link explains the difference between the two.  Most of the arguments for a "double dip" are qualitative (emotional) not quantitative (mathematical)

OMG! Was George Bush Right?

Could this idiot have been right about the Middle East?  Scary thought!

About a decade ago, Saudi Arabian terrorists headquartered in Afghanistan flew airplanes into the Pentagon and the World Trade Center and tried to fly a fourth into the Capitol.  In response, we invaded..... Iraq.

At the time, George Bush and the neo-cons said that removing the dictator Saddam Hussein and installing a Democracy would cause the people of the Arab world to rise up and overthrow their dictatorial governments and a new era of Peace and Democracy would flourish in the Middle East.

Ten years later, and, well, across the Arab world, people are, well.... rising up and overthrowing their dictatorial governments...

Was George Bush right?  Scary thought, no?

Of course, it remains to be seen exactly what sorts of governments will emerge in Egypt, Libya, Syria, Yemen, or Bahrain - or whether the popular uprisings will succeed or be crushed.

And of course, when Bush was talking about people rising up against their governments, he was hoping it would be Iran, not the countries whose Dictators we had either cozied up to or had in fact, installed.

It must have been embarrassing to Hillary Clinton to see people she was just talking to the week before, being overthrown.

And that is the interesting thing.  We had at least made peace or some sort of arrangements with most of these governments, which put us in the awkward position of wanting to support the overthrow of a dictator - while at the same time, having awkwardly supported or at least maintained relations with, the same dictator.

Compounding this problem is that it is not very clear who will prevail in the aftermath of these revolutions.  If the Dictator prevails, and crushes the opposition, he will be none too pleased with our support of that opposition.   It will be Saddam Hussein all over again.

And who is the opposition - or more succinctly, if they prevail, who will take over?  The Military?  The Muslim Brotherhood?  A Democracy?  Probability dictates that the latter is highly unlikely, given the history of the Middle East and the inherent weakness in Democratic movements.

But I wonder if perhaps Bush was right.  The nascent Democracy emerging in Iraq - at such a great cost in terms of human lives and money - may be an example to others in the region.  Once they see, firsthand how Dictators can topple - and how the alternative may not be so bad - they are motivated to create change.

But then again, we're talking George Bush, here. 

Should You PATENT Your Invention?

You can get a Patent on anything, such as my famous BEERBRELLA Patent.  But whether or not this makes financial sense is another matter.


In this blog, I talk a lot about how people think emotionally and not logically.  And nowhere is this more true that with Inventions.

Everyone, it seems, at one time in their life, comes up with what they think is a "great invention" and then they fantasize about Patenting it and making a billion dollars from it.

And yes, I get a lot of phone calls from people wanting to know how to get a Patent.  And yes, there are con artists out there known as "invention brokers" who cater to people who have these ideas, and take them for $5,000 to $10,000 or more.  And usually people are too embarrassed to say anything when it all goes South, as they don't want to be perceived as foolish.

Should you get a Patent?  Probably not.  But if you are bound and determined to do so, nothing I can say will stop you - like people who say they want to lease a car.

Oftentimes, however, the urge to become the next Edison wears off, after a few days, weeks, or months.  Usually it quickly wears off when I tell a client that it may cost $5,000 to $10,000 to get a Patent.

I've tried to be "helpful" sometimes and offer to help an inventor get a Patent "on the cheap" - but again, altruism is always suspect - and problematic.  If I can't get the person a Patent - or a broad Patent, they end up getting upset - even if I charged them a pittance of my normal fees.

And I've tried to steer inventors away from the Invention Brokers - with near-comical results.  One fellow approached me after seeing a "20/20" expose on TeeVee about the invention brokers.  While he was on the phone, I searched his invention online and found three "dead on" references, which I sent to him, free of charge.  I gave him the usual warnings about invention brokers and told him to walk away from them.

P.T. Barnum had it right - the suckers never value that which they don't pay for.

Anyway, he calls me back a week later, telling me I am full of hot air and that the Invention Broker told him that his invention was a "sure thing" and he would make millions.  I told him to be careful and wished him luck.

Two years later, he calls back, whining about how the Invention Broker "ripped him off" and why didn't I warn him about the invention brokers?

So you see, you simply can't help people - most people.  Most people think emotionally, not logically, and are willing to believe in all sorts of ridiculous nonsense.  And chances are, you'll believe it, too.

Perhaps we all do.  But the secret to getting ahead in the world is to stop looking for easy answers and something-for-nothing solutions - to stop scapegoating and externalizing our own problems and obsessing about politics.  If you can do that, chances are you will do well.

50-Something Growing Pains

When you are in your 40's and 50's, you may experience some interesting health issues, such as neck and back problems.  It is all a part of growing up and growing old.


Welcome to the second half of your life.  Actually, the last third, if the actuarial tables are any good.  And when you are in your late 40's and early 50's, you may discover that your body has decided to defect from the cause.

What the heck is going on here?  For the most part, it is called getting old, and many people freak out when it happens.  And in many cases, you can throw thousands of dollars of medical treatments at it, and not much changes.  And living here on Old People Island, you get an interesting perspective on it.  You tell some oldster about your ailment and they say, "Yea, I had that when I was your age."

So you ask them what happened.

"I grew out of it," they reply.

Grow out of it?  Yea, a lot of what you may think are medical problems end up being transitory things that either your body adjusts to, or you accommodate over time.  You get used to it, I guess.

You have reached the peak of the roller-coaster and now can go "whee!" all the way down.  Because your life is running out and your body is running down.  And no, "this doesn't go on forever" - but that's OK.  Life is still a good deal - and the finite aspect of it makes you appreciate it that much more.

This is not to say you shouldn't see a doctor, but don't be surprised if he yawns and says you're just fine.  They'll run tests, of course, but unless you have some sort of cancer, chances are, they won't do much.

For example, in my late 40's, I started having neck problems.  I had always had a pinched nerve in my neck from my 20's, due to a motorcycle mishap and an over-enthusiastic young friend of mine who decided he wanted a "shoulder ride" and jumped on my neck, causing a loud cracking noise and numbness for two days.

But as I hit 45, my left arm started going numb and my left index finger got numb as well.  I wrote off the latter as a side-effect of an incident with a pneumatic nail gun (don't ask) but the former scared me - was I having a heart attack?

I went to the doctor and he yawned and said, "sounds like a compressed or ruptured disc on the C5 vertebrate pinching a nerve"

As it turns out, this is a common problem, although I thought I had some exotic disease.  And a MRI confirmed the diagnosis and relieved the doctor of a malpractice suit (for failing to diagnose neck cancer or something).

And as it turns out, there was little to do in terms of curing it.  Trying to operate would be problematic - it might "fix" the problem, or possibly paralyze me for life.  Some of those nerves are important - such as the C4 nerve, which drives your diaphragm and makes you breathe - "cut the C4, live no more" as they say in medical school.

So they send you home with muscle relaxants and a prescription to relax and get a massage.  And in a few years, yea, I largely "outgrew" the problem - although most of this was just my body adjusting to the pain and changes in mobility and my brain getting used to not feeling as much from some fingers.

And yes, some of these types of medical problems are stress-related.  It is amazing how better I feel since we paid off our debts - and how much less pain or difficulty I have with these "50-something" growing pains.

Mark had a similar problem with his back.  Again, same deal, we go to the doctor, he immediately diagnoses where the rupture or compressed disc is, a $2000 MRI is needed to confirm this, and the cure is.... nothing.

He tried some sort of injection from a "Dr. Feelgood" here in Brunswick - whose office was full of remarkably healthy-looking people getting scrips for pain-killers.  But the injection backfired and sucked the spinal fluid out of his brain, leaving him with killer migraines.  A "blood patch" seemed to fix the problem.  Lesson learned - never go to a doctor who advertises on billboards!

And of course, the Doctor offered to prescribe pain-killers, including Oxycontin, but we politely refused.


So what fixed the problem?  Massage and heat (from the hot tub) and a massage chair from Sharper Image that I bought online for $89.  Really.  That and better posture and seating and walking habits.  And getting older and "growing out of it".

Again, you could get operated on, but oftentimes the cure is worse than the disease. They can put plastic discs in your back, but it may not make things better - and in fact make them far, far worse.  I've heard horror stories from people who went this route and ended up in chronic staggering pain, as opposed to discomfort.

Of course, many Americans feel that they are entitled to an operation, and in fact, insist on it.  Their body is "broken" and they want it "fixed, good as new" and so are willing to go under the knife and risk horrible outcomes to cure a minor problem that is chronic to most people their age.

Or they want a solution in a pill, and end up like Rush Limbaugh, addicted to pain killers.

A friend of my Mother's had the surgery, and it didn't go well.  She was in a lot of pain over that.

And it goes without saying that losing weight can affect these sorts of problems.  Mark lost 15 pounds and, funny thing, his back problems mostly went away.  A lot cheaper than surgery!

I have other ailments, of course, and for the most part, they are "chronic" and cannot be fully "cured" but rather just "managed".  Diverticulitis could possibly be cured through a bowel resection - but the risk of the operation is far greater than the inconvenience of taking a Metamucil caplet every day.  And besides, some have reported the condition comes back after the operation.  Not worth the risk of peritonitis, frankly.

So, what does this have to do with finances?  Two things.


1.  First, throwing money at medical conditions often doesn't cure them.  Medical Science is not as advanced as you may like to think - we are still at the monkeys-fixing-cars-with-hammers stage in Medical Science.  They whack something and sometimes it seems to help.  But in many cases, they can't really help a lot of conditions.  And this is an interesting observation from both a personal financial view (after having spend $5000 or more on MRIs and treatments) and from a political one (the high cost of health care).

2.  Second, you are very likely to become infirm as you get older, and having your finances in order after age 50 is important.  When you get older, you may not be able to work - or work as well.  So the idea of "working until I'm 70" may sound great, but if you get sick, you'll wish the mortgage was paid off and you didn't have jet-ski payments to make.  Being able to not work is something you should plan on.  And in addition, so many illnesses are stress-related or aggravated by stress, so being debt-free and stress-free can also mean you are healthier.

Of course, the examples I have discussed above apply to our personal medical situation.  CONSULT YOUR DOCTOR for advice on your conditions.  I am not giving medical advice here or promoting non-treatment of medical conditions!

However, if your doctor tells you that basically there is no treatment for a 50-Something malady, don't be surprised.  It happens.

And who knows?  Maybe you'll "grow out of it".

Make Money in Real Estate?

You can make money in Real Estate, but it takes hard work.

This article on CNN talks about a couple buying Rental Real Estate properties on the Texas Gulf Coast.

Can you make a lot of money in Real Estate as a landlord?  Yes, you can.  But it is not easy money, nor is it free.  You need to work hard, have a little intelligence, and a little luck.

And yes, in the present market and for the next few years, we should see some bargain properties come on the market.

Why do I say this?  Because I saw the same thing happen between 1989 and 1998.

In 1989, we had a Real Estate meltdown - housing prices plummeted after several years of double-digit increases.  Then a number of savings and loans went insolvent.  Many "little people" lost a lot of money, and there was a call for tighter regulation of both the housing and banking industries.

Sounds very familiar, don't it?

I bought most of my investment properties from 1995-1998, when the market bottomed out.  That's right, it took nearly a decade for the Real Estate Market to hit bottom.  But by 1998, things started turning around, with a vengeance.

Today, I think we will see the same thing.  There is talk of a "double dip" in housing prices, as a backlog of foreclosures hits the market and buyer incentives and other efforts to prop up the market expire.  Housing will remain flat for a year or two more - at least.

Why is this?  Not strictly economics, but emotions.  Markets are irrational, and home buyers - individuals - are the most irrational of the lot.  Back in 1995 when I bought properties, my friends all said, "You're crazy!  I lost my shirt doing that!  You need to get into this "Dot Com" deal instead!"

And of course, they were wrong. 

Today, I think the same thing will happen - people will be "scared off" by their bad experiences in Real Estate.  People who went bankrupt or lost their life's savings will shy away from owning an investment property.

And this is probably a good thing, too.  Those are the folks who drove up prices and bought properties with huge negative cash-flows and sometimes never even rented them out!  They thought the equity was the whole deal, and neglected the income aspect of it.  They never should have been investors in Real Estate.

Can you make money in Real Estate?  Yes, but there are some caveats:

1.  You have to have a neutral or positive cash flow:  If you buy a house or apartment or other rental unit that has a monthly carrying cost of $2000, then you have to have at least $2000 in rental income to offset that.  The idea that you will make it all back in appreciation (or through reduced taxes in depreciation) is nonsense.  You cannot guarantee a rate of return on equity, but you can with income.

2.  Vacancy Kills:  If you buy a place, fix it up, and then decide to double the rent - good luck!  Because you can't dictate rents to the market.  But if you can rent out a unit at an attractive price, it will stay rented all the time and you will make a modest amount of money.  One month's vacancy every year is enough to sink your ship, so make sure you factor this in to your cash flow calculations.

3.  You Have to Have Good Tenants:  Being an amateur landlord isn't easy.  Being an amateur slumlord is murder.  Walk away from renting homes in the ghetto or in bad neighborhoods.  You will have vacancy, vandalism, and evictions - but never rent paid on time!  Prosperous areas and vacation rentals are far safer bets, and what I would recommend for the smaller investor.

4.  You Have to Be Handy:  Or at least know a good handyman.  But if you can fix a leaky faucet or replaced a recalcitrant light fixture, you can save hundreds of dollars in service calls.  And while this may not seem like a lot, it often is the difference between profit and loss.  Can't change a light bulb?  Think carefully before buying five houses.

5.  You Have to Be a Good Bookkeeper:  Keeping track of the books is essential, to know whether you are making money, and also for tax purposes.  So much is deductible from your taxes, so you cannot simply pay for things out of pocket and say "It was a small expense, no need to log it".  You'll go broke that way.  Understanding the tax code and how the Depreciation Deduction works is key - you can get a lot knocked off your taxes by owning rental properties.  Of course, they recapture this on the back end, in terms of Capital Gains taxes.  There are, of course ways around this (turn a rental into a personal residence, for example).

6.  You Have to Be a Ruthless Landlord:  This does not mean abusing your tenants, but rather not letting them abuse you.  We never had any problem tenants, but if you do, you have to evict and be businesslike about it.  You cannot be "friends" with your tenants, or use your position as a chance to enact any of your cock-eyed social or political ideas.  You'll go bankrupt in short order - and problem tenants will flock to you, sensing your weakness.

Should you jump into investment Real Estate and make a million bucks?  I did, but then again, I wasn't afraid to sheet-rock a kitchen or install a new toilet.

In the coming years, we may see some opportunities to buy properties and rent them at a profit from nearly the get-go.  It is not necessarily a bad gig - and when the prices drop to the point where you think, "This is a ridiculously cheap property, I can rent this at a profit!" it might not be a bad time to buy.

But it can be a risky business, and you should think carefully before you jump in.  If you over-pay for a property and over-estimate the potential rental income (two newbie mistakes) you could end up with a negative cash flow that could drag down your personal finances and end up bankrupting you if you can't sell the property for more than you paid for it.

Landlording is a RISK-TAKING business, and if you are approaching retirement, think carefully as to whether you can afford to take the risk.