Friday, April 30, 2010

Should You Shop at IKEA?

Ikea has a lot of cheap furniture, which is great
...if you want cheap furniture.

Over the years I have purchased a number of items at IKEA, the iconic Swedish furnishings store. Do you need or want a bookshelf named Bjorn? The answer is generally "NO", unless special circumstances dictate. The following is based on my experiences with buying and using IKEA products.

I have bought a number of items over the years from IKEA, everything from furniture, to an entire kitchen, cabinets and all, to a bed, to lamps, and sheets, and accessories, and yes, even their Swedish meatballs in the cafeteria.

Tellingly, I own little or none of this furniture anymore. Most of it broke or was thrown out years ago. IKEA, as I have joked in the past, is a Swedish word meaning "sawdust held together with spit". And while I say this in jest, it is essentially true.

Now before you go accusing me of picking on Swedes, let me state that there are a lot of IKEA-like stores and catalogs out there, which sell similarly constructed furniture. Ballard Designs sells differently styled furniture that is also made of sawdust and assembled with barrel nuts and those little Allen wrenches. It is IKEA in drag, basically.

Regardless of source, these types of furnishings have the same characteristics: They are made of particle board (high density fiberboard) with a wood or artificial veneer, and are shipped flat in boxes. The user assembles them using dowels, barrel nuts and other fasteners. The articles are attractive, from a distance, but often look and feel cheap on closer inspection. And inevitably, they break, particularly when moving them, as the barrel nuts snap out of the fiberboard or the veneer delaminates.

They also have another thing in common, too: They are incredibly cheap to buy. And for this reason, they are popular with college students, young people just starting out, and folks looking for a quick and cheap way to furnish an entire room, apartment, or house, on a budget.

However, for the long-term, they are not a real bargain. Yes, this type of furnishing is less than half the cost of quality furniture. But it doesn't last even half as long.

When I was younger, I remember my Mother always saying, "buy quality furniture, you'll have it for the rest of your life". Well-made furniture can last decades, even centuries. For example, my parents had a sofa they purchased before I was born. They re-upholstered it twice. It is over 50 years old now and still in use.

We have a sleeper sofa with a hardwood frame that we have re-upholstered twice. It is nearly 30 years old now and still going strong - with decades of use left in it. We purchased two chairs to match it, had them reupholstered, and have had them for 15 years. They are at least 30 years old. Solid hardwood framing, serviceable and capable of being recovered many times.

Today, upholstery shops are getting harder and harder to come by, as more people opt for disposable furniture, which is discarded when the fabric wears out. Probably this is basic economics, as the labor cost of re-upholstering is far more than new, cheaper furniture these days.

But hard furniture (tables, book-cases, etc.) have no fabric to wear out. These pieces, if cared for and if quality made, can last decades with proper use. IKEA-type particle board pieces, in contrast, have a limited life span. Investing in quality furniture over time is probably a better idea than buying an entire roomful of pieces from the IKEA catalog, even if the latter gives you that "instant decorating" feel.

So where did all my IKEA pieces go? Here is a summary:

1. Kitchen: The IKEA kitchen looked great in the store and was cheaper than kitchen cabinets sold at home improvement stores at the time. Since then, home improvement stores have started to offer the same types of knock-down particle board kitchens that IKEA sells. We bought the cabinets from IKEA back in the days they were clinging to the metric system. As a result, everything was metric and caused some interesting installation issues.

Worse yet, after a few years, IKEA decided to cave in and sell cabinets in inch sizes, to appeal to a larger market. By then (5 years) many of the cabinet faces had started to delaminate. Water dripping from the melamine IKEA counter-top dripped on the lower cabinet faces, and the wood veneer started to peel. Since IKEA no longer sold the metric cabinets, we could not buy replacement doors. Ouch.

I bought a second set of cabinets and used them for an entertainment center. A friend made marble tops for these cabinets using scrap pieces. I still have these in my office for storage. Like most IKEA-type furniture, it did not survive the move well. While this type of furniture may work well when static, when you move it, any stress tends to tear out the barrel nuts, causing the piece to collapse. They have been repaired with screws, but screws have a hard time going into high density fiberboard, and tend to "pop" the board if not carefully installed.

Total life span, about 10 years.

Today, we have custom-made cabinets in our Georgia home. They are not that much more than particle board cabinets, and have real solid hardwoods and plywood. They look better and last longer.

In our New York home, we have Merrilat cabinets which came with the house. While an inexpensive cabinet, they are surprisingly well-made, with solid wood faces. While we initially were going to change these, we decided that after putting new pulls on them, they were ready for another 15 years of service.

2. Bed: We also got stung here by the switch by IKEA from metric to English sizes. We bought an IKEA bed and it worked well for a few years. The joints on the bed were problematic and kept pulling out, though. And after five years, the mattress was pretty much lumpy and shot. We went back to IKEA to get a new one, and, well, they didn't sell the metric sizes anymore.

The metric size thing was a fiasco from a sheet perspective, too. American style sheets never fit the metric beds properly, and the selection of metric sheets at IKEA was limited.

We bought a platform bed off the internet (same idea, shipped in pieces, but made of plywood and solid pine, made in America) and salvaged the headboard from the IKEA bed for that. It is still in use in our guest room - the headboard, that is.

Both our beds are now Tempurpedic models, which have held up well for over five years. And they are more comfortable, too.

And the bedframe?  Stickley - solid quarter-sawn "tiger" oak with beautiful inlays.  Expensive?  Yes, but it will be the last bed I ever buy.  It will be around decades after I am dead.   And frankly, I wished I had saved up to buy one when I was much younger.   It would have been a sacrifice, but if you subtract the cost of the crap furniture I bought in the interim, I would have come out ahead.

3. Lamps: IKEA has cheap lamps. But they use plastic housings for the lamp sockets, which tend to crack over time. Others stopped working. Replacing the plastic housings with brass ones requires you rebuild the whole lamp, basically. So yes, they are cheap lamps. But no, they don't last very long. Of all the IKEA lamps we bought over the last 20 years (5-10) none are still around.

4. Tables: We also purchased some small end tables and the like over the years from IKEA. Where are they now? They went to the trash long ago. They fell apart, delaminated, had the barrel nuts pull out, whatever. They looked good for a year or two and that's it. After 5-10 years, they went out to the curb.

5.  Desks:  I bought a Ballard Designs desk set (desk, return, file cabinets) for my home office in Georgia.  While it was cheap and looked good for a few years, the laminate - like an IKEA piece - started to come apart.   I sold it at a garage sale for less than 1/4 of what I paid for it.   I have heavy, commercial-grade cherry laminate desks now, and they will likely last as long as I live.

* * *

So our track record with IKEA and IKEA-style furniture has not been good. While the stuff was cheap to buy, it was also cheaply made and did not last long.  At best, IKEA is a temporary furniture solution, not a long-term investment.

The other problem with IKEA is SHOPPING.  As I have noted time and again, shopping (looking at products without any real purchasing goals in mind) is a dangerous pastime. You decide, after looking at a shopping display, to purchase, rather than making a purchase decision and then researching and comparing prices and quality.

And the IKEA store is a shopping nightmare. The stores were arranged in a serpentine track, so when you entered the store (after dropping the kids off in the ball-room and admiring the Volvo displayed out front, loaded with knocked-down IKEA furniture) you had to walk through each section of the store in order to reach the eventual checkout.

Typically, halfway through the store, they had the IKEA cafeteria, with the ubiquitous Swedish meatballs. You would walk by display after display and think, "Wow, it would be neat to have a room like that!" and before you know it, you and the spouse have convinced each other, over a platter of meatballs, that getting the Bjorn bookcase and the Sven desk is not only a good idea, but something that you thought up yourself.

So rather than saying "Gee, I need a bookshelf, let's compare prices, styles, quality, and availability from several sources", you end up saying "Hey, that's a nice bookshelf, maybe I should buy it?" Shopping reverses the ordinary buying procedure by presenting you with the product and convincing you to buy, rather than vice-versa.

IKEA also caters to the "I want it all NOW" crowd. Rather than wait and build up an inventory of quality furniture over the years, IKEA promises you that you can have an entire houseful of furniture overnight (some assembly required) if you just whip out a credit card.

And again, I am not picking on IKEA. The catalog people do the same thing. You sit on the toilet reading the Ballard Designs catalog and suddenly it occurs to you that you desperately need a fake crafstman-style bookcase, because it looked so good in the catalog shoot.

Real furniture costs a lot more money, of course. But it lasts a lot longer, and moreover, holds its value. We have Stickley furniture in one home. It is made of quarter-sawn oak, not high-density particleboard. And after years and years of use, we can probably sell it for what we paid for it, rather than hauling it to the curb in pieces.  It will outlive us.

So while it may cost more initially, quality furniture, in the long run, ends up being less costly to own.

And oddly enough, much of the furniture that we still have, after decades, is quality stuff that we found, was cast-off, was bought in a junk shop, or was given to us by others. They were quality pieces and lasted a long time, but cost less than the "new and shiny" stuff from a furniture store.

For example, our main dining room in Jekyll has a solid oak slab table 12 feet long that is nearly 300 years old and was a family inheritance. The chairs? Old solid oak chairs from a high school, along with a used church pew, both of which we bought at a junk shop.   All solid stuff, and the cost, little to nothing. And it will outlast the Svenson dining room set sold at IKEA by 50 years or more.  Maybe 100.

But of course, there are situations where you need cheap furniture. The college apartment, for example, or your first starter home. Oftentimes you cannot afford to furnish such a place with quality furniture, but you do need a place to sit.

And it can be a cheap and easy solution, I'm not denying that. One friend of ours furnished their pied-à-terre entirely with IKEA. The modern Swedish styling complemented the Bauhaus style of their modern apartment and allowed them to completely furnish it in a weekend, for the less than the cost of one paycheck.

They smartly SAVED the assembly instructions and assembly tools in a ziplock bag.  If they do decide to move this furniture, they can disassemble it, put all the fasteners in the ziplock bag, and ship the pieces flat, rather than assembled.  Not only is this easier to do, it is more likely they will have something other than a pile of sawdust at the other end of the deal.

But they realize it will not be heirlooms handed down through the generations. All IKEA type furniture has a dumpster in its future, usually within 5-10 years. Just bear that in mind.

A special note on Office Furniture: Office furniture stores often sell the same concept: inexpensively made office furniture that looks fancy, but is made of particle board. Before you over-spend on this stuff, check out used office furniture, either online (Craig's list) or from a retailer. Often, quality pieces are available for less money than new fiberboard.

There are other inexpensive furniture solutions as well, of course. We furnished our Florida condos entirely in wicker and rattan, for a surprisingly small amount of money. No assembly was required and the furniture held up well. Actually, well-made wicker can last a long time and even be collectible. However it is a tropical style that only works well in southern latitudes.

When we moved to Georgia, we furnished our entire house, in one shot, from the same wicker and rattan shop. While not heirloom quality furniture, it has held up well (over five years now) and when we decide to move the Stickley there, we can probably re-sell the rattan to one of the locals for about what we paid for it.

So I understand the motivation to want to furnish it all now, using cheap furniture. But before you drop a lot of dough on particle board, bear in mind that in 10 years or so, you probably won't own that furniture. Before you "shop" at IKEA or in a catalog, consider buying some used heirloom quality furniture at your local antique shop. Or perhaps just drive around the richer parts of town on trash day. You'd be surprised at what you can find out there.

Thursday, April 29, 2010

The Religion Trap, Part Deux (Beliefs)

If you find this type of image highly offensive, then perhaps you have fell victim to the religion trap.  On the other hand, if you think it is funny, there may be hope for you yet.

In my posting The Religion Trap, I examined how many people end up spending an inordinate amount of time and money on religious organizations, often to their own detriment. And often, later in life, they regret all these efforts and feel that the religion has somehow abused them.

Ex-Scientologists, for example, blame their religion (and it is one) for "deceiving" them, but fail to examine their own motives and actions. No one put a gun to their head and made them join, right?

The fundamental problem with religions (and I do mean fundamental in every sense of the word) is that, no matter what flavor religion it is, they all follow the same story line, to some extent.

In every religion, the story goes like this. Once upon a time, there was this guy (and it's always a guy, right?) named Moses/Jesus/Buddha/Mohamed/Joseph Smith/L. Ron Hubbard, who had a religious vision. He talked with God/Jehovah/Allah/Thetans or whatever and they gave him stone tablets/visions/gold plates/scrolls/science fiction novels with rules of how everyone should live.

Fast forward a few decades, or a couple thousand years, and now we have an organized religion. According to the religion, we all have to live by these rules laid down by the guy, on the stone tablets, gold plates, ancient scrolls, or science fiction novels, with no room for dispute or discussion.  Oh, and by the way, give us your money.

Now of course, in any document there is always room for interpretation and discussion, particularly when the document, such as the Bible, is wholly internally inconsistent.  And particularly when some of the tenets of the founding document (e.g., condoning slavery) are clearly inappropriate in a modern age.

(Note that some people today are making a religion out of the "Founding Fathers"  - arguing that how our country should be run should be dictated by the intent of Thomas Jefferson, George Washington, et al.  The problem with this theology is twofold.  First, they entirely misconstrue the intent of the founding fathers, which clearly was for us to run our country as we saw fit - the Constitution was designed to be amended, laws were intended to be made and then unmade.   Second, our Founding Fathers clearly intended that women should not vote and that Blacks should be enslaved.  Obviously, we cannot live according to their original intents).

We are told, by the religion, that what some guy wearing a sheet said, a thousand years ago or more, is the end-all to life on Earth.  For some reason, people back then were apparently smarter than we are today, so we have to follow what they said, no questions asked.   So whether it was Moses, Joseph Smith, L. Ron Hubbard, or George Washington, we have to follow what the guy said, because he knew, and you don't know shit, compared to him, even though, in most cases, the guy probably wiped his ass with his bare hands.

But here's the catch.  You see, the organized religion that sprang up out of the original vision of the founder, now claims to control and own the message and any interpretation thereof.  And moreover, they reserve the right, to themselves, to make up new rules.  Jesus never talked about papal infallibility, but there you have it today.

In the aftermath of 9/11, many people became more religious.  Others have taken a different tack. They realize that the Islamic fundamentalism behind the 9/11 attack is no different than the Christian fundamentalism behind the Oklahoma City bombings.   And moreover, favoring one crazy set of rules over another crazy set of rules (or one organization over another) really makes no sense at all.

Many Christians, unfortunately, truly believe that the "war on terror" is a holy war against Islam - a war that has been going on for centuries.   Arabs aren't paranoid about this.   Christian Churches, like any other organization, don't like competition.

Think I'm lying? Well you remember how they made a movie from C.S. Lewis' The Lion, The Witch and the Wardrobe?  Great Christian parable, right?  Well, the problem is, it is only one of a set of books he wrote in a series.  And while the others may be made into movies, there is one that I doubt every will.   The third book in the series, A Horse and His Boy, is little more than a slam against Islam and Arab culture in general.  While the characters are not described as Arab, they are described as having dark skin, wearing turbans, being rule by a sheik-like Tisroc, and of course, worshiping the wrong God.  If you can't connect-the-dots on that one, you are just being obstinate.

And of course, organized religions don't take kindly to newcomers.   The Protestant reformation did not occur without some bloodshed, and the followers of Joseph Smith were literally slaughtered by people calling themselves "Christian".

Today, followers of Scientology are labeled "cultists", when in reality their beliefs are no more ridiculous than those of Catholics.   I am not defending Scientology, just pointing out that Papal Infallibility and Outer Thetans are equally preposterous propositions - to someone not a believer of the corresponding faith.  We like to make fun of Tom Cruise for being a wild-eyed Scientology believer.  But we talk in hushed reverent tones about someone with a "deep faith" in Christianity or Islam (particularly the latter).  And Cruise's criticism of the pharmacological industry approach to mental health does have a kernel of truth behind it, doesn't it?

Now some folks, in response to the excesses of religion, claim to be atheists.  Unfortunately, they tend to make atheism into a religion itself, replacing one set of beliefs with another.  And instead of worshiping God, they substitute science, often in the person of Charles Darwin.  And more often than not, these religious atheists are not scientists themselves, nor do they have a scientific background. They merely hate organized religion - particularly fundamentalists - and want to poke fun at them. But Darwin is not a parallel Jesus.

This is very sad, too, as it feeds the phony "Religion versus Science" debate that the far-right Christians (and, ironically, self-proclaimed atheists) love so much.  It is a phony match-up, because Science is not, and never was, an alternative to religion.  Science is not an attempt to replace or debunk God, but rather a system of study to examine our universe and how it is structured.   While some scientific theories may be in conflict with literal interpretations of some religious works, the goal of science is not to debunk the Bible or any religion, but rather to study the universe, formulate theories, test the theories, and then reformulate them.

Religion is based on belief, not science.  Belief is not something than can be tested in a laboratory.   It is, by definition, something that you take on faith, without proof.  Even atheists have beliefs, although they might not admit to it.  We all do.

Science will never answer the question "What happens when you die?" which is the basic question religions try to answer.  Atheists will argue that when you die, you decompose, and that's it.  But there is no evidence to suggest this is the correct answer.   If you believe this, it is based on belief, not science.  And beliefs are the foundation of religion.  Atheism is thus a religion, plain and simple. QED.

Science, on the other hand, is never cast in stone, and always flexible and changing.  You cannot pit one against the other, like a tag-team wrestling match. They are apples and oranges.   And most Scientists are very religious people - perhaps not in the sense of snake-handling evangelicals, but in their own profound beliefs about the world and the universe and the nature of matter and mankind. Yes, scientists have beliefs, too - things they take on faith. But they try not to confuse them with science, which is tested and validated.

While we may study the structure of matter and try to understand how the universe is put together, it is a given that we will never understand fully the complex nature of the universe or in fact, what it is. In fact, there is a scientific theory to that effect.  Why our existence is structured one way and not another is a mystery that will not ever be solved, no matter how many cyclotrons are built.  And even if you could quantify the entire nature of matter and energy, there are still aspects of our existence that defy explanation.  For example, while mathematics may be an invention of mankind, number theory shows the telltale fingerprints of God.  Underlying matter and energy, there is pure thought. There is room for belief, particularly among scientists.

So, is religion a good or bad thing?   Like anything else, it depends.   The trap I refer to in the title of this article is what occurs when people surrender too much of their lives to belief - handing over money and control of their lives to religious leaders, marching off to wars engineered by Popes or Imams.  Blowing themselves up or killing others, in the name of God, as directed by some religious leader.   It is a trap, as you are not serving God, but merely being used by another human being here on Earth, who is manipulating you - using your beliefs to make you do something against your own self-interest - and really against what God stands for.

Belief is a wonderful and powerful thing, but it can be easily co-opted by mankind for less than noble purposes.  We all make fun of the televangelists in their shiny suits on television, every Sunday, begging for money from little old ladies.   And yet many people hand over their whole lives to such folks, or similar folks, in hope of eternal salvation, blinding themselves to the obvious - that the organized religion might not be itself a work of God, even if it invokes his name.

As I have noted before, con artists use belief to separate people from their money.   If you can get people to believe they can get something-for-nothing, you can fleece them all day long.   I am not saying that all religious leaders are con artists (although others might make that argument, particularly atheists), believing in a religion does not relieve the devout from using their own internal skepticism when it comes to dealing with other human beings.

We question why young Muslims would want to become suicide bombers, or why the followers of Jim Jones drank the Kool-Aide.  Why did so many in the Catholic church look the other way, while Priests abused children?   In every religion, it seems, there are followers who take it too far, or are taken in by religious leaders from time to time.   Why is this?  The answer, I think, is that people transfer their beliefs from their God and their religion to the all-too-human religious leaders, who are in fact, not God-like or perfect.

I am not advocating an abdication of religious belief.  However, the religious have to examine themselves and take responsibility for their actions when religious leaders fail them.   People have to be responsible for their own individual actions.  We can't blame Popes, Imams, or Jim Jones for misdeeds, when it is the followers of the religions that allow such misdeeds to occur.

Wednesday, April 28, 2010

Poverty of the Spirit

Poverty of the Spirit drags people down into real poverty. To succeed in life, you need to be rich in both your mind and body.

Poverty may be initially caused by a lack of basic opportunities, such as education, good nutrition, food, clothing, and shelter. A child born into poverty has fewer opportunities to get ahead in life.

And, as we have discussed before, poverty is perpetuated by making poor economic decisions. The decision to shun education, for example, as happens in many poor urban and rural areas. Or the decision to buy shiny consumer goods, like bling rims, or a snowmobile, on credit, is another example. Payday loans, rent-to-own furniture, title pawn loans - all poor economic choices that are targeted at the poor. In America, many of the "poor" actually have access to considerable sums of money, but manage to squander it rather quickly.

And when presented with economic opportunities, the poor consistently misjudge the market and miss opportunities. In an environment of economic opportunity, the poor seldom take advantage of circumstances, and in fact, shun opportunity entirely.

I was made painfully aware of this during a recent visit to Asheboro, North Carolina. Asheboro is about as far away from Asheville, North Carolina, in terms of geography and spirit as it is possible to be. Asheboro is near the Seagrove "pottery corridor" of North Carolina, an area with at least 30-50 pottery studios and an abundance of wealthy, out of town and out of State visitors looking to spend money.

And yet, even if you tried, you can't spend money in the area, other than on pottery. There is, it seems, a Poverty of the Spirit that prevents the locals from taking advantage of this economic opportunity. If you are a tourist visiting the area, there is no place to eat, few places to stay, and very little in the way of opportunities to spend money. Rather than try to tap into this lucrative tourism market, the locals turn their back on it - and even resent the intrusion of outsiders. And with the closing of the mills, poverty is rampant. Why not try to tap into a local industry that is thriving?

At first, this seemed very puzzling. But then it occurred to me that this Poverty of the Spirit may be a key to why and how poverty exists. Poverty is more than merely a lack of money in the bank. As previously noted, many "poor" people run through mountains of money, and seem unable to manage it properly. Giving money to the poor doesn't make them rich - at least for long. We see this all the time with lottery winners, an astounding number of which end up in bankruptcy, after winning millions of dollars. Why is this?

I think there are a number of causes. Poverty of the Spirit is a name I chose to describe them all:
1. Low Self-Esteem: If you do not believe you deserve wealth, chances are, it will elude you. This is perhaps one reason why the children of the wealthy (or at least middle-class) do well, even if they do not inherit money from their parents. They simply expect a certain standard of living, and thus work up to that level. On the other hand, if you are raised in poverty and trained from birth to believe that wealth is something "other people" have, then chances are, you will not strive to obtain it. 
In my own life, I saw this firsthand among many of my friends. They did not believe they were worthy of more than a lower-middle-class or even poor existence. The idea of becoming a Doctor, a Lawyer, or other professional was alien to them. And to some extent, I believed that myself, which kept me back, until I realized that a lot of real idiots were Doctors and Lawyers, and there was no "magic key" into the club. All you had to do was try - and succeed. And it was not hard to do. Changing my attitude was the hardest part.
2. Low Expectations: Tied closely in with low self-esteem is low expectations. If you are raised poor, your goals may not be great. Get a job, a place to live, get by. But if you are raised in the middle class or wealthy, you tend to assume certain things in life - that you will have money, live well, have a nice place, not have bars on your windows. Expectations tend to be self-fulfilling, to some extent, particularly low ones. If you do not try, you will not succeed. Dream no small dreams. 
I had friends whose greatest expectation was to go on welfare, or perhaps Social Security disability. Or others whose only ambition was to wait for their parents to die, so they could live off a modest inheritance without having to work. Or others who hoped only to work an unskilled job for the rest of their lives, when they had the talent and skills to do so much more. Why do some settle for so little, when they are clearly capable of so much more? Poverty of the Spirit, I think is partly to blame. 
3. Passivity: Many poor people are remarkably passive about their predicament, waiting for government assistance or for good paying jobs to materialize, without taking action to change their circumstances. Low self-esteem and low expectations may feed this passivity. 
And perhaps this is why you often see poor people stay on in areas that are blighted or poor. If there are no jobs available in your home town, the intelligent thing to do would be to move to an area where there are jobs. Yet many poor people stay in places like Flint, Michigan, and passively wait for jobs to come back (they never will). 
After leaving North Carolina, we drove through Washington DC. We were astounded by the number of "Help Wanted" signs posted everywhere - even on billboards. Citibank had a permanent sign up saying "now hiring". All this in the middle of the worst recession in decades. Who knew? Within a day's drive of Asheboro, there are jobs galore, but yet few people will uproot themselves to overcome poverty. 
I grew up in Central New York, which was, and is, a very depressed area, economically, and also has basically 8 months of bad weather every year. Like most graduates, I left the State (New York's biggest export is college graduates) and went to Washington DC to seek my fortune - and found it. 
Many of my friends never left Central New York - with predictable consequences. Why is it that people cling to places that are unattractive, have little or no opportunities, and have no future, when jobs are waiting elsewhere? I believe the answer is, in part, Poverty of the Spirit.
4. Misconception of Wealth: When a poor person wins the lottery, what is the first thing they are likely to do? That's right - buy a new car. For many poor and lower class people, owning vehicles is the ultimate sign of wealth. As a result, many poor people squander enormous amounts of their limited incomes on vehicles, as well as modifying, customizing, and tricking out vehicles. 
Real wealth, as we know, is not represented by what is parked in your driveway, but by your net worth, which is often not something you can show off to people. Tangible assets, such as Real Estate, investments, savings, and the like are real wealth, not depreciating vehicles and appliances. 
Thus, the poor chase after the signs of wealth and status (cars, televisions, cell phones, gadgets, designer clothing, etc.) while failing to invest at all in any real wealth (savings, real estate, 401(k), etc.). 
Again, as a youth, I (and my friends) fell for the concept of wealth in terms of owning things, like cars and gadgets, not realizing that real wealth (and power) seldom showed itself off. It is only when you understand the difference between real and apparent wealth, that you can really build real wealth. 
As we have learned here, any idiot with a pay stub can drive a fancy car - for a while, anyway. But having money in the bank is something that eludes an astounding number of people in this country. 
5. Lack of Imagination: One stop on our pottery tour of North Carolina was a local coffee shop which had WiFi. Now, we've been to a lot of coffee shops, but this place was pretty sad. The coffee was unremarkable and warm. And the selection of "dessert items" comprised a packaged danish. You couldn't spend money in the place if you wanted to, unless you wanted to leave $20 in the tip jar. 
The proprietor spend all day on his computer, but failed to really attend to his own business. He had no imagination as to how customers would perceive the place (dank, unfinished, depressing) and what they might want to buy (good coffee, good food). He had no idea how to run a coffee house, and moreover, didn't seem concerned about learning how. He was scraping by, and apparently that was good enough for him. When I asked him about the status of the local economy, he blamed all his woes on illegal immigrants. And yet, no illegal immigrants were running coffee shops
In poor neighborhoods, you tend to see this a lot. Unimaginative and unattractive businesses, haphazardly run, stocked indifferently, and not well patronized. There are, of course, exceptions to this rule - the barbecue joint that does a slamming business, attracting people from all over. But those are few and far between, outnumbered by the dreary convenience stores stocked with stale, left-over bread and the like. Liquor stores selling only pints of bad booze. That sort of thing. Bars on the windows, a bunker mentality. No imagination, no talent, no daring, no nothing. 
As a result, in many poor neighborhoods, the only thriving businesses are often owned and staffed by outsiders or recent immigrants - people with drive, self-esteem, imagination, and determination. The stereotypical Korean Grocery store in the ghetto is a prefect example. They look to see what people want to buy in the neighborhood and then try to fill that need. The local residents have neither the ambition nor the imagination to take such risks.
I think this Poverty of the Spirit results in low expectations of one's self - and also that of others. So a poor person thinks, "I can't run a business like that", and if they tried, they would not have the imagination to see how it could be run, and thus fail. Low expectations and low self-esteem become self-fulfilling prophesies.

I am not sure I have explained the concept well, or completely. It just struck me, traveling through this very depressed (emotionally and economically) area, that there is more to poverty that a low balance on your bank account, lack of opportunity, and poor decision-making. There is something in your mind as well - and perhaps that is the greatest obstacle to overcoming poverty.

I am not trying to run down the poor, only to understand better why some of us succeed in life, while others, in nearly identical circumstances, fail to do very well, or do anything at all.

Poverty of the Spirit, drives out ambition, creativity, and innovation, and thus perpetuates poverty. Breaking free of this Poverty of the Spirit is, no doubt, difficult to do. Ambition and imagination are no doubt crushed early on.

I wish there were easy fixes or suggestions on how to do this. But perhaps recognizing this phenomenon is a good first step.

Engineered Hardwood Floors

Engineered Hardwood Floors are very popular today.
What are the pros and cons of this technology?

I have engineered hardwood flooring in both my houses. Today, they are quite common and have basically replaced "real" hardwood flooring in most modern construction and remodeling.

For me, there was no choice in the matter.  In one house, there is a concrete slab as a foundation, and traditional hardwood flooring would have been hard to install.  It also came with the house, so it was an existing installation I was not about to replace.

In my other house, we have hydronic in-floor heating, which sounds like a nice thing to have, that is, until it is 20 years old and starts to leak.  But more about that later.  Since you can't nail into hydronic heated floors, you have to glue down material, which you can do with engineered hardwood, but not as easily with "real" hardwood floors.

What is engineered hardwood flooring?  Well, as the diagram above illustrates, it is a flooring product that is made up of layers of laminated materials - plywood basically, oriented in different directions, and topped with a veneer of hardwood, pre-finished with a very durable urethane-type finish. This material comes in strips, which are packaged in boxes. Each strip has a tongue-and-groove on opposite sides, so it interlocks with adjacent strips.

What are the advantages of this material? There are many, which is one reason why it dominates new construction and remodeling today:

1. Cost: Engineered hardwood flooring is probably less than half the cost of installing a real hardwood floor and in fact may be competitive with the cost of refinishing an existing floor. It is roughly double the cost of quality wall-to-wall carpet (the cheapest floor covering there is).  For this reason alone, many people opt for engineered hardwood. It really is the only choice. 
2. Ease of installation: Tied to cost is installation cost. It takes little time to install engineered hardwood flooring, and a typical house can be completely floored in a day or so. Since the material is pre-finished, it requires no staining or urethane to complete, eliminating several costly and time-consuming steps in the process. 
3. No fumes or mess: We had a "real" hardwood floor refinished once, and it was quite a process that took several days. The entire floor had to be sanded, stained (optional) and then varnished with a urethane finish. It was dusty, and the fumes were intense. What's more, the sanding dust, when bagged up, ended up catching fire due to spontaneous combustion (which turns out to be quite common in that industry). Fortunately, an astute neighbor called the fire department in time and the installers cleaned up the mess. But others have been less fortunate. 
4. Consistent quality: A hardwood floor is only as good as the installer. Sanding, staining, and varnishing all take some modicum of talent, and defects in the final product may appear if stain is not evenly applied or varnish not properly applied and buffed. Engineered hardwoods, on the other hand, are finished in a factory under controlled conditions, so the finish is uniform - almost too perfect (and one way you can spot such products easily). 
5. Limited Maintenance: The makers of these products claim they require no waxing or regular maintenance. Just regular floor care products are needed occasionally to clean them. Unlike a hardwood floor, you don't need to mop them, and in fact, you really can't because of the water ingress issue. But as we shall see, it might not be a bad idea to wax these materials anyway. 
6. Dimensional Stability: Real hardwood floors can expand and contract with temperature and humidity and do funky things over the years. Engineered hardwood flooring, on the other hand, having differently oriented strands, tends to be more dimensionally stable, regardless of changes in humidity and temperature.

OK, so this wonder of modern science is perfect, right? Less cost, less hassle, looks better, what could go wrong?

Well, as with anything else, there are trade-offs. And I have learned the hard way there are some significant ones with engineered hardwood floors. Nothing to indict the product as undesirable, just some considerations to bear in mind:

1. Unfinished Edges: Yes, the tops of the panels are pre-finished at the factory and look nice and shiny. But the edges of each panel are not finished, and are in fact, raw wood. This means if you spill water on engineered hardwood floors, it can (and will) seep into the edges and damage the panels. Even water from the dog dish, or from a potted plant can seep into these edges and permanently stain the panel. 
The panels do "bounce back" from some staining, so if you end up with a water stain, don't panic and pull up the panel immediately. Wait a few weeks or even a month, and you may see the water stain disappear somewhat. The surface finish may tend to wrinkle, however, which does not seem to go away with time. 
I have found that applying a layer of paste wax to the floor helps in preventing minor water damage from spills and the like from staining the panels. We even have this material in one bathroom (not by choice, the installer messed up) and by waxing it heavily after the install, it seems to have resisted water damage. 
And of course, regular hardwood floors can be damaged by severe water spillage too, so they are not immune. But for the most part, a well-sealed "real" hardwood floor will not absorb much water, even if you dump a gallon on it. It is more resistant to water problems. 
2. Limited refinishing options: Engineered hardwood floors supposedly can be refinished once or twice. I am skeptical, as the veneer is very thin. However, the hardwood floor refinishing business has changed over the years. Gone are the days when we would sand off 1/16" of wood to get down to "bare wood" and refinish. New scrubbing pads are replacing sanding discs and belts, and instead of removing wood, we remove only the top layer of finish and then re-seal. 
So today, a "real" hardwood floor has an almost unlimited lifespan with refinishing, but engineered hardwood might only get one or two refinishes out of it. But then again, given the labor cost of refinishing a floor, merely installing a new floor is not that much more expensive.
So perhaps that evens out. 
NOTE:  Check your floor carefully before trying to refinish it.  Some engineered hardwood floors can be sanded and refinished once or twice.  Others have such a thin veneer that refinishing is not an option. 
3. Lifespan: In the same vein, while a hardwood floor may last 100 years or more, my experience seems to show that engineered hardwoods might last 15-20, depending on care and use. Granted, if you never walk on your floor, have no dogs with sharp claws, or friends with high heels, or small children with Tonka trucks, your engineered hardwood floors might last forever (if you never, ever spill on them). But for the rest of us, who actually live in their houses, the floors will take a beating, and after a decade or so, they might look a little ratty. 
However, the lifespan of engineered hardwood flooring is probably double that of wall-to-wall carpeting, so it still is a sound value, in terms of wear versus cost. 
4. Appearance: While engineered hardwoods may look "perfect" when installed, because of this, they do tend to look fake. You can tell the difference between engineered hardwood and a real hardwood floor, often because the real hardwood floor has imperfections, and also because a real hardwood floor doesn't have these lines in it where the panels join. 
Like a lot of modern technology, the perfection of appearance tends to take away from the character that we associate with real quality. Shiny fake gold trim, for example, is very easy to spot compared to real gold. 
5. Maintenance: Although touted as maintenance-free, as my experience illustrates, waxing this material with good old Johnson Paste Wax is probably a good idea, as the raw edges of the seams will wick in any water that is spilled and damage the panels.
So there are pros and cons to engineered hardwood floors. Regardless, these materials are here to stay, and chances are, in your lifetime, you will own or rent a home with these materials in them. As our planet gets more crowded, and the amount of virgin hardwood diminishes (and the environmental impact of harvesting hardwoods increases) it is more efficient and less costly in all respects to make flooring in the form of engineered hardwood than in the traditional manner. Of course, this will tend to make "real" hardwood flooring all that more desirable for those who have it.

In other words, if you have real hardwood floors, consider yourself lucky in this day and age, even if they are a hassle sometime.

A special note on Pergo(tm) brand flooring and similar types: There are other types of engineered flooring which use masonite-like layers and what is essentially a photograph of wood on the surface, instead of plywood layers and real veneer. These are usually cheaper, but tend to "potato chip" over time, particularly if they get wet at all. I have seen some of these installations in kitchens look very poorly after only a year or two.

On the other hand, a friend installed a Pergo floor in a family room, and it has held up well. The advantage of fake veneers is that you are not limited to hardwood designs. They chose a design that mimicked a tile floor, and it does look convincing.

However, while it was cheaper to install than tile, it clearly will not wear like tile (but then again, it won't crack like tile, either). But overall, I am not sure these types of flooring are a real bargain.

A note on floating floors: Ikea sells (or used to sell) an engineered flooring product called a "floating floor". I am not sure if it had real veneer or just a photograph of wood on it. Floating floors do not attach to the underlying flooring (as the name implies) but instead the panels interlock together and rest on a layer of foam material. Edges are concealed by molding on the baseboard, which allows the floor to expand and contract.

These types of floors have one major disadvantage, however. Since they are not really attached to anything, carrying a heavy load over them can damage them severely. For example, I've seen a situation where a mover tried to move a refrigerator across a floating floor on an appliance dolly. The dolly dug into the floor, tearing it into kindling wood as he dragged the refrigerator across it. Ouch.

For that reason, I would not recommend floating floors, unless some specific issue required them.

* * *

Overall, I would say Engineered Hardwood Floors are a good product.  As I noted, since they are here to stay and are much more affordable than traditional hardwood flooring, chances are, they are the only choice you have.  The only downside to them is the water issue.  In wet areas like kitchens and bathrooms, or near outside doors, under dog dishes and potted plants, I would strongly suggest applying a layer of paste wax to "seal" the edges and minimize water wicking issues.  Or just use tile flooring in those areas.

Saturday, April 24, 2010

The Parable of the Non-Prodigal Son

The Prodigal Son Returns.
What a gyp to the Non-Prodigal Son!

You may remember the parable of the Prodigal Son. It is another one of those Bullshit Insane Bible Stories for Crazy People, which, like Jonah in the Whale, makes no sense whatsoever. While the meaning of this story has been debated through the ages, one question remains: What ever happened to the Non-Prodigal Son? That story has never been told, that is, until now.

The original story is found in Luke 15:11-32. Jesus tells the story of a property owner who has two sons. The younger son demands his share of his inheritance while his father is still living, the son goes off to a distant country where he "waste[s] his substance with riotous living" and eventually has to take work as a swineherd. There he comes to his senses and decides to return home and throw himself on his father's mercy, thinking that even if his father does disown him, being one of his servants is still far better than feeding pigs.

But when he returns home, his father greets him with open arms and hardly gives him a chance to express his repentance. He kills a fatted calf to celebrate his return. The older brother resents the favored treatment of his faithless brother and complains of the lack of reward for his own faithfulness. But the father responds: 'My son,' the father said, 'you are always with me, and everything I have is yours. But we had to celebrate and be glad, because this brother of yours was dead and is alive again; he was lost and is found.' – (Luke 15:31-32)

Now the Non-Prodigal Son, as you might imagine, was pretty browned off by all of this. While his Prodigal Brother was off having a good time, he stayed at home, having to deal with his crazy Dad, and trying to improve the fortunes of the family farm with only half of the assets left. And amazingly enough, he managed to do well, through hard work and made the farm successful.

So his no-good Brother comes home, and what does Dad do? Well, he slaughters the fattened calf (the one the Non-Prodigal Son was hoping to take to market next week and sell, so they could buy much needed improvements for the farm).

Worse yet, at the homecoming party, the Prodigal Brother starts hitting on the Non-Prodigal Son's girlfriend. Before long, the two of them are living in the basement. The Prodigal son sleeps until noon, refuses to help out with any of the chores, and worse yet, refers to the Non-Prodigal son as "Bro".

Of course, the Non-Prodigal son complains to Dad about all this, but Dad will have none of it. "He hath returned!" the Father says, with a wild look in his eye, "He Hath Returned!".

"What the Fuck does that mean?" the Non-Prodigal Son replies, "That makes no sense at all. He wasted half the money in the family and now you treat him like some sort of returning hero."

But Dad just repeats, with that far-away look in his eye, "He hath returned!"

The next day, around Noon, the Prodigal Son arises from the basement and says, "Hey, check it out, Bro, I got a new Tattoo!" and he rolls up his arm to reveal the phrase "He Hath Returned" inked into his bicep. "Bitchin' ain't it?"

"Ain't he something?" the Non-Prodigal Son's ex-girlfriend chimes in, wearing nothing but a t-shirt.

"That's it!" the Non-Prodigal Son shouts, "I'm out of here! I'm tired of Dad playing favorites. I'm not going to work my ass off for this family, only to have my efforts squandered by my deadbeat Brother and my insane Father!"

So he demands his share of the inheritance, which now, of course, thanks to his hard work, is nearly equal to what his Brother received, and leaves.

At first, he tries to follow the example his Brother lead, leading a riotous life and indulging himself with wine, women, and song. But he finds it all very shallow and unappealing. He realizes that his Brother must have been an idiot to find gambling, drinking, and prostitutes attractive in any way whatsoever.

So he returns home to the Family farm. The place is in a shambles. His Prodigal Brother has done nothing to keep the place up, and the fields lie fallow, choked with weeds. One skinny cow is all that is left of the livestock herd.

"I have returned, Father!" the Non-Prodigal Son cries out.

"Big Deal" His Dad replies, "Very Original. Where have I heard that before?"

"Well, aren't you going to welcome me with open arms and slaughter the fatted calf?" he asks.

"We can barely feed ourselves here anymore, thanks to YOU leaving. Do you think we can afford another deadbeat mouth to feed around here? And do you see any fatted calves lying around?" Dad replies.

His Brother, walking up from the basement, says, "Yo, Bro, whas up?" and tries to give him a high five.

The Non-Prodigal Son finally realizes that he was getting the shaft all along. For some reasons unknown, his Father would always favor the Prodigal Son, would always cover for him, make excuses for his failures, and try to protect him. And the Non-Prodigal Son realized that no matter how hard he worked, his Father would never appreciate him as much as he did his deadbeat Prodigal Brother. The whole game was rigged from the get-go.

So, taking his last few remaining shekels, he travels to Jerusalem and gets a job with a local business. Since he is used to hard work, within a few years he has put enough money aside to start his own business. And within a few years he is very successful and wealthy.

One day, on his way to work, he thinks about his Prodigal Brother and his Dad, and wonders how they ever made out. He thinks about sending them a post card or something, just to drop them a line.

But then he thought better of it.

The End.

Thursday, April 15, 2010

Time is money?

Time is the ultimate luxury item. Don't squander it.

Many folks complain they don't have enough time in the day to get things done. The complain that they want to do more in life, but can't seem to find the time. Businessmen say "time is money" and micro-manage their lives to make the best use of it.

Are all of these people actually squandering time? I think so. And recently I had a revelation.

Yesterday, I played 9 holes of golf and took a three-mile walk on the beach. No, it wasn't the weekend. And no, it wasn't a "vacation" either. I live in two places that are both vacation destinations, and it is easy for me to forget that what I do on a daily basis is what other consider a once-a-year opportunity or luxury.

How is it that I structured my life to make use of my time this way? Was I lucky? Or was it by plan? I would like to think the latter.

When I was younger, I was a very lazy person. To me, doing nothing was the best thing to do. I enjoyed school classes, but studying, doing projects and reports and all that drudgery, was an anathema to me. The best time of year for me was when school was out, and I could enjoy a lot of unstructured time. So perhaps this underlying desire was what motivated me to live the way I do.

During my working years, rather than follow the well-worn path others were taking, I struck out on my own. I lived on less and worked hard, invested my money and did well. At the right time, I was able to sell it all and move out of the big city and live the way I wanted to.

My friends all followed the well-worn path, buying larger homes, leasing fancier cars, and working harder and harder to get that coveted corner office and promotion. And of course, those goals never turned out to be as lucrative as they thought they would be - nor as profitable. It was a carefully set trap, it turns out.

You see, you only have a finite amount of time on this planet. You can make an unlimited amount of money, if you want, but it takes up a lot of your time, and thus subtracts from your time account. And yet many people chase the money, as if it were a scarce commodity, and time was infinite. It is, on the contrary, the other way around.

Consider your typical suburban couple. The complain they have no time in the day to get everything done. So they don't balance their checkbook regularly. They eat out in restaurants to "save time" (it takes longer to drive to a restaurant, order the food, and eat it, than it does to make a simple meal at home). Or they send out for pizza to "save time".

Of course, since they are not watching their finances and spending money on convenience items (to save time, of course!) they have to keep working harder and harder to make more money - so that they can afford all these "time-savers"! It becomes a circular logic, and a rat race. Or perhaps more like a rat on one of those wheels, running in place and never getting anywhere.

Meanwhile, time slips away, imperceptibly, year after year, until one day they wake up and wonder where their lives went. And it happens to most of the middle-class population in this country, year after year.

And where does the time really go? Television takes a lion's share - an average of 4.6 hours a day. Doesn't sound like much, does it? But subtract your sleeping, eating, commuting, and working hours from 24, and you'll see that television is taking nearly every other waking hour away from you.

Just as saving only "small" amounts of money can result in huge increases in your disposable income, saving "small" amounts of free time increases your available free time considerably. If you give up television entirely, you'll find you double or triple the amount of free time you have.

And once you stop paying for "time-saving" conveniences and do things yourself, you won't have to work so hard (which takes time) to pay for those time-savers. It has a snowball effect.

So what can you do to take your life back? To get back the TIME you have been squandering? It is not easy, and it takes courage, wisdom, and foresight. Not many can do it. Most humans, I am afraid, are doomed to lives of "quiet desperation," living as cogs in a machine, until they wear out and are replaced.

But a few of us - the lucky ones - can escape. While it isn't easy, it is totally worthwhile. But it requires that you re-think your whole life and your value systems.
1. Give up Television: Chuck it. Sell the damn thing. Cut the cable. TeeVee is a time waster and also designed to get you all riled up over nothing. The time saved is important, but moreover, the social cues it provides are horrible. Once you dump TeeVee, you'll stop acting like a lemming.

2. Get Control of Your Finances: Knowing where the money goes and why is key. You need to balance your bank and credit card accounts almost daily. You need to know, to the penny, what your net worth is. You need to know, to the penny, what your debt load is, and what your plan is to pay it off (amazingly, most people have no idea of their debt load, and have only vague plans on how to pay it off). Once you know where the money is going, you may be startled to see what you are spending on.

3. Re-Evaluate your Priorities: You may find that much of the money you spend every month is squandered on convenience items and also status items. And again, small amounts of disposable income are important. While it may seem that spending $10 a day on Starbucks coffee is cheap, in reality, even for someone making $100,000 a year, it is a big chunk of the disposable income. Many suburbanites are working like dogs so they can afford fancy cars and fancy houses. They pay a lot for a house in a suburban area, because it is near work. But if you had to live anywhere, would you be paying $750,000 to live where you are now? Ask yourself why you jumped on this treadmill.

4. Formulate a Realistic Escape Plan: If you are not happy with the modern middle-class suburban lifestyle, formulate an escape plan. It isn't easy, but I've seen it done, by many friends of mine. But you have to be realistic. You can't just up and quit your job and assume you'll find work elsewhere. And if you plan on going back to a simpler existence, you have to scale back your spending habits in advance. There are jobs in other parts of the country that pay less. Or you could start and run your own business. Or perhaps you can reorganize your existing finances so you can retire at age 50 - or even 40, if you are young enough and plan well in advance.
It is possible to live a different kind of lifestyle than what your neighbors and friends are all doing. It is possible to take back time in your life and make better use of it. But it takes a lot of courage to buck the norms of society, and not many are equipped to do this. Let's face it, most of us go through life trying to ape the behaviors of others, hoping that no one will notice that we are faking it and we don't really know what we are doing. And the joke is, that's what all of us are doing. Everybody else thinks you've got it together, while you look to them as a role model. Life is quite a farce, it seems.

Tuesday, April 13, 2010

Should you Unplug from the Grid?

Paying for services when you are not using them is a waste of money.

No, I am not talking about going back to nature and using a "hippie shitter" to recycle your own human waste. Nor am I talking about the crackpots who spend thousands of dollars on solar panels, wind generators, and car batteries, so that can save a few hundred bucks on utility bills. What I mean is that you can save hundreds of dollars a year disconnecting utility services when they are not in use.

Again, this blog is about how to live better on less money, not how to live like a pauper.   We have a vacation home on a lake in New York, and we do this on a budget. It does not take a lot of money to live large, if you are careful with your spending. Most people spend recklessly and end up living impoverished lives. Which is better, having a vacation home or leasing a new Lexus every 3 years? It is a lifestyle choice. I'll take the former. One way to do this economically is to pull the plug on utilities when you are not around. Sad to say, I was slow to pick up on this.

Here are some tips:
1. Seasonal Disconnects: In Florida, the cable companies offer a "seasonal disconnect" to snowbirds. Instead of disconnecting the cable every time you move North for the summer, they offer you a seasonal disconnect for a nominal fee per month. When you move back, you call them (or the service is automatically reconnected at a certain date). In most cases, they do not actually disconnect service, but rather just charge you less. They offer this, as having 100,000 people connect and disconnect service twice a year is just staggeringly expensive for them.

2. Power Disconnect: We have a camp at the lake which has power. Even if the circuit breakers are turned off for the winter, the power company (NYSEG) charges us $15 a month for service. I found out recently that we can disconnect service in the Fall and reconnect in the Spring, with no service charges. This saves $90 a year or more. If we did the same thing for our barn (which has separate service) we'd save another $90 a year, for a total of $180 a year. In the five years we've been there, this comes to nearly $1000 in savings we've missed out on. Bummer.

3. Winterize: Many people do not winterize their homes and instead rely on keeping the heat on over the winter (set at 50 degrees) to keep the pipes from freezing. The problem with this approach is that if the heat goes off (power failure, mechanical failure) the pipes will freeze, with catastrophic results. In addition, you will end up spending hundreds of dollars a month to heat an unoccupied house. So the savings in winterizing and "going cold" can be over $1000 a year, or a big dent toward your property tax bill.

4. Internet Service: This varies by provider. Some, such as telco DSL services, require you to disconnect service and then pay a reconnect fee, at whatever prevailing rates are offered when you reconnect. This can be a big hassle, as it requires you to reconfigure your modem and start over (which usually requires a call to India and an hour on hold). But others, such as Hughsnet satellite, will disconnect for six months and then automatically reconnect at a certain date, with no fee or charges. It is worth exploring either way.

5. Telephone Service: Our local telco offers to put telephone service on a vacation mode, for a nominal fee every month ($5). This way, you keep the same phone number, and don't have to hassle with a complete disconnect, reconnect and new phone number every time. But often such vacation disconnect will trigger a disconnect on your DSL service as well. So you have to be careful. I did this vacation mode one year and they never started billing me for the full rate for nearly two years. Under the law, they could only recapture three months back billing, which of course, was too bad for them.

6. Going All Cellular: Of course, cell service is one alternative to having a land line at all. For the cost of two land lines at each home, you can pay for your cell phone, which, chances are, you have anyway. I use a cell phone amplifier and a docking station to connect my cell phone to my house phones and have disconnected from the local telco. This allows me to have one phone number for both houses (and while traveling) and also use my house phones like a land-line, but in fact be making a cell call (and no more running around to find the cell phone when it rings, or having bad service). These are just a few ideas on how to handle owning a vacation home in an economical manner. You can save a lot of money on utilities (nearly half) by unplugging or putting on vacation mode while away. Live better by spending more wisely.

UPDATE 2021:  The greatest cost-savings was ditching the vacation home and spending our summers traveling by RV.   You can vacation, even on a cruise ship or at a resort, for less money than "owning" a vacation home.  It makes no sense to "own your vacation" and this is especially true for timeshares.

However, I did learn a lot from this experience.  Today we have only cell phones - no cable TV, no landline, no Internet connection.   This cut our communications expenses to less than one-quarter of what they were.  Not only that, it means we have robust Internet service (via cell phone hot spot) when traveling. 

Friday, April 9, 2010

What is Most Important to You?

What is most important to you?

It is a simple question, but one that few of us bother to ask ourselves. What are the most important things in our lives, and how are we going about preserving those things?

What are your priorities?

1. Your health and well-being?
2. A Spouse or loved one?
3. Your children or friends?
4. Owning a nice car or house?
5. Impressing people you don't know with your wealth and status?

The last two items on this list sound ridiculous when taken out of context. But for most people in America, items #4 and #5 are the top of their actual priority list, and really important things like #1-#3 are at the bottom.

Think I'm lying? Think about it. The divorce rate in this country is nearly 50%, and children are shuffled between parents like so many chattels. The vast majority of Americans are overweight, eat poorly, and rarely exercise, and have little or nothing saved for retirement.

And yet, we all have fancy cars and are mortgaged to the hilt to have houses we can't afford, right?

So re-read my question again and you'll see I was right. Today in America, we throw away spouses and children - trading them in like the leased cars we drive. We buy status goods to impress "others" - the unseen hoards of people who will allegedly be impressed by our ability to sign a loan document (but in truth, rarely are, as they, too, have signed similar loan documents and understand how little real talent it requires to own things).

It is a shame that in a country that harps about "values" we have so few real ones. And the people who harp about "values" the most seem to have the shallowest - whining about their "right" to inexpensive gas, or blaming the government for their self-induced financial woes.

In case you've really missed the point, what is really important to your own life, as we all will inevitably discover, is not owning things or impressing others, but first and foremost, our own good health and well-being, as well as the welfare and companionship of our spouse and loved ones.

To achieve these goals, you have to look after yourself. And by that, I don't mean going deeply into debt to purchase consumer goods that may make you feel good for a transient moment. Watch your diet, exercise regularly, and try to stay in good health. If you have no major health issues, you are very fortunate, so there is no excuse for allowing your health to degrade by overeating, smoking, and not exercising regularly.

And taking care of yourself and your loved ones means investing for your own future, not spending for the moment. Putting money in your 401(k), paying down debt, having money in your savings account. Yet so many spend all of their income and borrow yet more so they can have a new pickup truck and a deer stand, or a jet ski and a new car, while not funding their own savings or retirement. Once laid off, they cry "foul" as if someone else forced them to spend all their wealth and leave them destitute.

And by loved ones, I mean your real friends and loved ones, not abusive family members or baiting friends. I see many folks, often the same ones obsessed with impressing strangers, try hard to get into the good graces of the local cliques, whether they be in the neighborhood, at school, or at work. They desperately want acceptance from shallow people, who of course, will dangle it right out of reach. Or those who continually try to obtain acceptance from family members, who in turn respond with little more than abuse.

Find true friends and clutch them to your breast. Let the others go, for your own sake and your own sanity.

Take care of yourself, be kind to yourself. Figure out what is really most important to you.

Wednesday, April 7, 2010

High Deductible Health Insurance

If you are self-employed, you have to pay for your own health insurance.  The cost of health insurance can increase dramatically as you age.  Eventually, you will be forced to go to a high-deductible plan.  So why not cut to the chase and do it now?

Note:  See also my posting Understanding Health Insurance for more information on this topic.

I have a $10,000 deductible Blue Cross plan, which I am very happy with.  Presently, at age 50, it costs me $199 a month (Blue Cross called yesterday to wish me a happy birthday and raise my rates!). But when I started out at age 44, it was about $100 a month. Either way, it is a very cheap plan.

But wait, you say, $10,000 deductible? That's just crazy! Suppose you get sick?

Well, as I have noted before, you can get cradle-to-grave coverage if you want, but expect to pay about 5-10 times more than I am paying right now. If you want that initial $10,000 covered, it will cost you about, well, $10,000 additional a year. Pretty simple math, eh?

The advantage of having a high deductible plan is that for everyday medical needs, you may get some prescription coverage, and occasional office visits with a $40 co-pay. So for most healthy people, it covers your basic medical needs throughout the year at a pretty low rate.

If you need additional services, you do have to pay a la carte, but the real kicker is, you pay at Blue Cross' pre-negotiated rates, which are generally 30-50% less than what a cash customer pays. By the way, these sort of rates illustrate how elastic medical care pricing is, so never be afraid to ask for a discount if you are saddled with medical bills.

But what happens if you need more medical coverage than that? Well, my experience has been, as a fairly healthy person, that in a bad year, I may run up $2000 in medical expenses - an MRI, for example, or a Colonoscopy.

In situations like these, having a $2000 deductible versus a $10,000 deductible really makes no difference. Either way, I have to pay $2000 in medical expenses. But with the higher deductible plan, I save more than $2000 a year in premiums.

In short, it works out even, if not better. If I go a year without any major medical expenses, the savings in premiums more than covers any deductible payments in other years. Over a period of several years, you will save more in premiums than you will pay in out-of-pocket costs.

And as my 50th Birthday illustrates, as you get older, rates will steadily increase. Actually, they will dramatically increase, particularly when you reach that scary gap between age 60 and Medicare eligibility. During those awkward years, you can expect your insurance premiums to skyrocket, perhaps to over $1000 a month, even for a high deductible plan. For most people, going to high deductible is the only option at that point in time.

So the net result is this: Going to a $10,000 deductible is not something you will never do. It is something you will inevitably do as you get older. That is, unless you are made of money. But if that was the case, chances are you are not reading this blog.

So why not cut to the chase and get the deductible you are going to get at age 60 anyway? The savings in premiums over the years will help offset those staggering costs during those last "gap years" prior to Medicare coverage.

Take the savings in your health care premiums and put them in a savings account. Pretty soon, you'll have that $10,000 in savings, if you need it to make the deductible. Within a few years, you'll likely have tens of thousands of dollars saved.

It is unfortunate, but in the medical care debate, most Americans want all the coverage in the world, but they want "someone else" to pay for it. We demand cheap premiums, but insist that the insurance companies (the bad guys, always) pay for every darned little thing, even our band-aids.

But here's the deal: The insurance companies have to at least break even or make a profit. And the overhead of paperwork they have is staggering. If they pay out $5,000 a year in medical benefits to you, you have to expect them to collect, on average, about $6,000 to $7,000 a year at minimum in premiums, just to cover costs.

Having a higher deductible reduces those costs and thus keeps your premiums low. Insurance is reserved for when you truly would need it - when some catastrophic accident or illness occurs.

And a high deductible has the secondary effect of forcing you to consider cost in your treatment. Yes, you do have treatment options and costs, and can make informed decisions as a consumer. When someone else is picking up the tab, money is no object. As a result, the consumer cares less about the bills, and the practitioner feels emboldened to increase them.

In order to bring some sort of sanity to health care costs, we need to have some mechanism where someone in the chain cares about pricing.

There Ain't No Such Thing As A Free Lunch!