Madame X wrote an interesting post today about the 10 year anniversary of the Palm Pilot. Since 1998, she has contributed to the success of the Palm OS platform by purchasing 15 of the devices. That averages out to more than one per year. And she also keeps a spare. So, that got me to thinking about disposable products, serial purchases and planned obsolescence and how that all plays into our consumerist mentality. For example, one of my co-workers is on a short-term assignment in Singapore, told me that folks over there buy prepaid cell phones and then toss them after the minutes have been used up (think overflowing landfills). And if you’re a serious runner, you need to replace your shoes every couple of months or so.
But even if a product isn’t designed by the manufacturer to wear out or break after a certain amount of time, it’s hard to resist the temptation to ‘upgrade’ and replace everything that we own. We all want the latest and greatest.
I confess that I’m a serial purchaser when it comes to computers. I’ve owned (or partially owned) at least 3 laptops and 5 desktops, going all the way back to 7th grade when our family purchased an Apple IIe. That might not sound like a lot compared to other gear heads. But in my mind, a personal computer is still a luxury…something I don't really need…because I always had access to a second computer, whether through work or school. I'm sitting here typing this post on my new laptop, but my work laptop is sitting there in the other room. As a point of comparison, my best friend just purchased her first computer 3 years ago. And even then, it was a used computer that she bought off of a friend of a friend.
So, my question to you is this... are you a serial purchaser? If yes, what to buy and replace every year? Is it your cell phone, car, computer, TV or PDA?
Friday, March 31, 2006
Update on Amazon.com Marketplace
Several pf bloggers (including mapgirl and Jane Dough) wrote recently about the results of their ebay auctions. So, I thought it would be appropriate to give an update on my amazon.com experience. As I mentioned in an earlier post, I've been trying to sell some of my stuff (mostly paperback books, CDs and one electronic item). I haven't had much success with the CDs, but I've managed to sell a fair number of books. I have to confess that in my earlier post, I failed to take into account my expenses. At the time, they didn't amount to much because I was using recycled boxes and packing materials and had managed to consolidate some shipments. But the shipping costs are beginning to add up. I've also dropped the prices on several items, just to try to get them off my bookshelves, which means that I'm barely breaking even on those items after amazon takes their cut.
As of yesterday, I've netted a total of $159.98 (after expenses) on the sale of 32 items over the course of the past two months. Here are some relevant facts and figures.
Amazon.com marketplace fees = $102.21
Total revenue deposited to my account = $239.45
Expenses = $79.47
- Shipping (via USPS Media Mail and UPS) = $73.03
- 8.5" x 11" Bubble Mailer Envelopes (25 pack at Sam's Club) = $6.44
All told, I must have spent at least 20 hours uploading each of the items to amazon.com (i.e., writing accurate descriptions), packaging the items, and then dropping them off at the post office on the way to work. Was it worth it? Yes, in the sense that my mostly unread books found a new, more appreciative audience, and I now have more space on my bookshelves to gather more dust ;-)
As for what I would've done differently? Nothing, really. I'm glad that I resisted the temptation to sign up to become a Pro Merchant. It would have saved me $.99 in fees for each of the 32 items. But at a cost of $39.99 (or $19.99 per month) for the 2 month trial period, I would have had to have sold 40 items to have recouped the cost.
I know that a lot of folks prefer to sell things on eBay or half.com. But I think I've had decent results with amazon.com.
As of yesterday, I've netted a total of $159.98 (after expenses) on the sale of 32 items over the course of the past two months. Here are some relevant facts and figures.
Amazon.com marketplace fees = $102.21
Total revenue deposited to my account = $239.45
Expenses = $79.47
- Shipping (via USPS Media Mail and UPS) = $73.03
- 8.5" x 11" Bubble Mailer Envelopes (25 pack at Sam's Club) = $6.44
All told, I must have spent at least 20 hours uploading each of the items to amazon.com (i.e., writing accurate descriptions), packaging the items, and then dropping them off at the post office on the way to work. Was it worth it? Yes, in the sense that my mostly unread books found a new, more appreciative audience, and I now have more space on my bookshelves to gather more dust ;-)
As for what I would've done differently? Nothing, really. I'm glad that I resisted the temptation to sign up to become a Pro Merchant. It would have saved me $.99 in fees for each of the 32 items. But at a cost of $39.99 (or $19.99 per month) for the 2 month trial period, I would have had to have sold 40 items to have recouped the cost.
I know that a lot of folks prefer to sell things on eBay or half.com. But I think I've had decent results with amazon.com.
Thursday, March 30, 2006
In Defense of Chase.com
Sharon, over at consumerist.com just wrote a rant about the bankone.com migration over to chase.com this past weekend. If you'll recall, I wrote a post earlier this week about the same thing, but I had an entirely different experience than this woman did. I too have been a long time customer of Gary Wheaton, then First Chicago, then Bank One, and now Chase. And I too use Quicken to download all of my transactions, including scheduled bill payments. And unlike Sharon, I've had no problems whatsoever.
I think the difference is that I schedule my bill payments online, directly through the website, rather than inputting them into Quicken first and then uploading them to the website. Using the one step update, Quicken will automatically download all of the scheduled payments. And then once the payments are actually made, Quicken will match up the entries and 'clear' the transaction. So, it's been a fairly seamless process for me. I haven't really noticed any difference between Quicken's bill payment service and the bank's payment service. And I certainly wouldn't pay $9.95 for the privilege of using Quicken's bill payment service. But maybe someone can enlighten me on this one. Perhaps Sharon has an older version of Quicken or hasn't set up her accounts properly?
Sharon also complains about the longer 'float' with Chase (i.e., the fact that Chase withdraws the funds from her account earlier than Bank One did). Well, I hate to break it to her, but the majority of banks are doing the same thing. And on the flip side of the coin, Chase can do more payments through electronic funds transfer (vs. paper checks) than Bank One ever could. Instead of having to schedule some of my payments 5 days in advance, I can do it 1 or 2 days. So, the float works both ways.
As for the comments that other folks made about chase.com's inferior website design, I wonder if they've actually visited the site recently, because with the new improvements, it was "rated the best retail banking Web site among 29 banking competitors by Keynote WebExcellence Scorecards."
Anyway, I thought I'd share with you some highlights of the new website's enhanced features from an article that was posted on our intranet site:
- An aggregated view of all Chase accounts, including mortgages.
- Free Security Alerts. The site will let customers know if there are possible security concerns, such as a change to a password or user ID.
- Intraday account balances. Balances on Chase.com are updated throughout the day.
- Enhanced online bill-payment. More bills can be paid through electronic transfer rather than paper check on Chase.com, meaning faster payments.
- The ability to quickly view more account activity. Chase.com users can see 90 days worth of checking and savings account activity without having to view a past account statement.
- Small business account enhancements. People with small business accounts will be able to manage those accounts and their personal accounts under one log-on.
I think the difference is that I schedule my bill payments online, directly through the website, rather than inputting them into Quicken first and then uploading them to the website. Using the one step update, Quicken will automatically download all of the scheduled payments. And then once the payments are actually made, Quicken will match up the entries and 'clear' the transaction. So, it's been a fairly seamless process for me. I haven't really noticed any difference between Quicken's bill payment service and the bank's payment service. And I certainly wouldn't pay $9.95 for the privilege of using Quicken's bill payment service. But maybe someone can enlighten me on this one. Perhaps Sharon has an older version of Quicken or hasn't set up her accounts properly?
Sharon also complains about the longer 'float' with Chase (i.e., the fact that Chase withdraws the funds from her account earlier than Bank One did). Well, I hate to break it to her, but the majority of banks are doing the same thing. And on the flip side of the coin, Chase can do more payments through electronic funds transfer (vs. paper checks) than Bank One ever could. Instead of having to schedule some of my payments 5 days in advance, I can do it 1 or 2 days. So, the float works both ways.
As for the comments that other folks made about chase.com's inferior website design, I wonder if they've actually visited the site recently, because with the new improvements, it was "rated the best retail banking Web site among 29 banking competitors by Keynote WebExcellence Scorecards."
Anyway, I thought I'd share with you some highlights of the new website's enhanced features from an article that was posted on our intranet site:
- An aggregated view of all Chase accounts, including mortgages.
- Free Security Alerts. The site will let customers know if there are possible security concerns, such as a change to a password or user ID.
- Intraday account balances. Balances on Chase.com are updated throughout the day.
- Enhanced online bill-payment. More bills can be paid through electronic transfer rather than paper check on Chase.com, meaning faster payments.
- The ability to quickly view more account activity. Chase.com users can see 90 days worth of checking and savings account activity without having to view a past account statement.
- Small business account enhancements. People with small business accounts will be able to manage those accounts and their personal accounts under one log-on.
Giving Circles
Mapgirl wrote an interesting post last week about Korean gehs (i.e., raising capital to fund community micro loans) and then a follow up post in response to some questions that were raised by a commenter. One of my aunts participated in an investing community a few years ago on the advice of her slightly untrustworthy brother. And she wound up losing a substantial amount of money because some of the other investors in her community defaulted on their obligations. But let me hasten to add that my aunt didn't know the other investors very well. So, mapgirl is right in saying that the concept of an investing community is a good one, so long as you know and trust the other investors. The same concept applies in nearly any business venture, including partnerships. But I digress.
I don't know of any folks my age (Gen X) who are involved in either a geh or an investment club. But I do know of some folks who were a part of a 'giving circle', which is similar in concept to a geh in the sense that a group of friends pool their resources together to raise capital. But instead of lending the money to individual members, the circle functioned as a mini foundation, distributing money to worthy causes.
Every month or so, the group would meet to talk about various charitable organizations they wanted to support and why (e.g., goals, values, impact, efficient use of resources, etc.). If, at the end of the meeting, they were in agreement on one or more organizations, they would arrange to have some of the money from the collective pool of funds transferred to those organizations. It's a novel twist on an old concept.
I don't know about you, but I just love the thought of people pooling their resources together to help accomplish something greater than what they could have done by themselves. And I especially love the give and take and learning process that occurs when people dialogue with one another about issues that they care about. In a way, the personal finance blogging community does that as well. We trade tips and advice with one another, in addition to providing accountability and moral support.
So, many thanks to all of the trailblazing pf bloggers out there. As a relative newbie to the community, I'm reaping the benefits of your hard work. And a special thanks to the experienced bloggers who have taken the time to visit my blog and post comments. I'm immensely grateful.
I don't know of any folks my age (Gen X) who are involved in either a geh or an investment club. But I do know of some folks who were a part of a 'giving circle', which is similar in concept to a geh in the sense that a group of friends pool their resources together to raise capital. But instead of lending the money to individual members, the circle functioned as a mini foundation, distributing money to worthy causes.
Every month or so, the group would meet to talk about various charitable organizations they wanted to support and why (e.g., goals, values, impact, efficient use of resources, etc.). If, at the end of the meeting, they were in agreement on one or more organizations, they would arrange to have some of the money from the collective pool of funds transferred to those organizations. It's a novel twist on an old concept.
I don't know about you, but I just love the thought of people pooling their resources together to help accomplish something greater than what they could have done by themselves. And I especially love the give and take and learning process that occurs when people dialogue with one another about issues that they care about. In a way, the personal finance blogging community does that as well. We trade tips and advice with one another, in addition to providing accountability and moral support.
So, many thanks to all of the trailblazing pf bloggers out there. As a relative newbie to the community, I'm reaping the benefits of your hard work. And a special thanks to the experienced bloggers who have taken the time to visit my blog and post comments. I'm immensely grateful.
Wednesday, March 29, 2006
The Relative Costs of Self-Care
I had a brief conversation the other day with a friend who was lamenting the high cost of psychotherapy. She felt guilty for spending so much money on what she calls monthly 'maintenance' or 'self-care'. I half jokingly pointed out that therapy is a lot cheaper than a drug habit (prescription or otherwise). So it's all relative.
I find it interesting that people will easily pay upwards of $100 a month for a local gym membership that they rarely use, $70 per hour for a personal trainer, $350 to an accountant to file their taxes, $75 a week for housecleaning, $20 a week on dry cleaning, etc. But they're not willing to pay anywhere near a fraction of those amounts for psychological, spiritual or emotional forms of 'self-care'.
The point that I'm trying to make is nothing new. Other bloggers have said the same thing much more eloquently than I ever could. But it's good to be reminded about the basics...namely, that it's important to invest in yourself first. Not just your education, career or physical health, but your emotional, spiritual and mental health as well. It's more than okay to spend some hard earned dollars to see a therapist, counselor or spiritual director if it'll help contribute to a more joyful, purpose driven or goal oriented life. Sure, your net worth will take a short term hit. But the long term rewards are priceless.
I find it interesting that people will easily pay upwards of $100 a month for a local gym membership that they rarely use, $70 per hour for a personal trainer, $350 to an accountant to file their taxes, $75 a week for housecleaning, $20 a week on dry cleaning, etc. But they're not willing to pay anywhere near a fraction of those amounts for psychological, spiritual or emotional forms of 'self-care'.
The point that I'm trying to make is nothing new. Other bloggers have said the same thing much more eloquently than I ever could. But it's good to be reminded about the basics...namely, that it's important to invest in yourself first. Not just your education, career or physical health, but your emotional, spiritual and mental health as well. It's more than okay to spend some hard earned dollars to see a therapist, counselor or spiritual director if it'll help contribute to a more joyful, purpose driven or goal oriented life. Sure, your net worth will take a short term hit. But the long term rewards are priceless.
Tuesday, March 28, 2006
No Shoes, No Divorce, No Service
I know this is supposed to be a personal finance blog, but I just had to comment on this article posted at cnn.com
Service Says No Divorce, No Online Dating
A man separated from his wife but not quite divorced is suing a popular online matchmaker for refusing to help him find a date.
John Claassen, a 36-year-old lawyer from Emeryville, filed a lawsuit alleging eHarmony abridged his civil rights by refusing to match him up. He said the company, which has an "unmarried only" policy, broke California state law by discriminating against him based on his marital status.
Claassen, who is seeking $12,000 in civil penalties, said Monday he expects his divorce to be official in about two months, but that he should not have to wait until then to use eHarmony. It should be up to would-be dates to decide whether to pass him over because he is technically still married, he said.
Is it just me or has the world gone crazy? I know of several acquaintances who started seeing other people before their divorces were finalized. And I've often times questioned the psychological or emotional wisdom of doing so. But to sue an online dating service because they won't help you hook up with unattached singles? It's not as if there aren't any viable alternatives to eHarmony.
Claasen's divorce will be finalized in 2 months. Call me a cynic, but my guess is that the real reason behind his lawsuit is that his divorce is costing him an arm and a leg.
Service Says No Divorce, No Online Dating
A man separated from his wife but not quite divorced is suing a popular online matchmaker for refusing to help him find a date.
John Claassen, a 36-year-old lawyer from Emeryville, filed a lawsuit alleging eHarmony abridged his civil rights by refusing to match him up. He said the company, which has an "unmarried only" policy, broke California state law by discriminating against him based on his marital status.
Claassen, who is seeking $12,000 in civil penalties, said Monday he expects his divorce to be official in about two months, but that he should not have to wait until then to use eHarmony. It should be up to would-be dates to decide whether to pass him over because he is technically still married, he said.
Is it just me or has the world gone crazy? I know of several acquaintances who started seeing other people before their divorces were finalized. And I've often times questioned the psychological or emotional wisdom of doing so. But to sue an online dating service because they won't help you hook up with unattached singles? It's not as if there aren't any viable alternatives to eHarmony.
Claasen's divorce will be finalized in 2 months. Call me a cynic, but my guess is that the real reason behind his lawsuit is that his divorce is costing him an arm and a leg.
Unchained - I've Gone Wireless
Woohoo! I've gone wireless!
I mentioned in an earlier post last week that I purchased a new laptop, and it arrived more quickly than I thought it would. I spent a few hours Thursday and Friday evening transferring the files from my desktop to my laptop. In the process, I learned how to use my iPod as a hard drive. Or course, over the weekend, my friend pointed out that if I had purchased a router ahead of time, I could have hooked up both computers to the same network and then transferred everything over directly. But such is life.
After doing a bit of research online, I decided to purchase a Linksys Wireless-G Broadband router. The reviews were somewhat mixed on all of the routers, including that particular model. So, rather than order the router online, I purchased the router from my local Best Buy. I paid a few dollars more for the router, but I figured it was worth not having to deal with the hassle of shipping the product back if it turned out to be defective.
The product came with an installation disk. And it was supposed to be a quick and easy setup process. After an hour of rebooting and re-installing the software, I finally gave up and called an IT friend. He tried to walk me through a manual setup process, but that didn't work. Sigh. The online user reviews at cnet.com warned me about Linksys' poor technical support. But desperate times call for desperate measures. So, I took a deep breath and dialed the customer service hotline. Of course, they were experiencing unusually heavy call volume. And they suggested that I visit their website to download their Easy Connect software. "Sets up and configures your Internet connection and wireless home network as well as diagnoses and fixes wireless adapter installation issues!" Um, yeah right. Just like the software on your installation disk?
But I was on hold for a while, so I figured it couldn't hurt to download the software and at least try it. And amazingly enough, it worked! The utility even configured my security settings. Now why didn't they just include the online utility with the product instead of the installation disk software?!?!?
Lesson learned. If you're having problems setting up hardware or software, it's always a good idea to check to see if there are any helpful updates or utilities available online at the vendor's website.
I mentioned in an earlier post last week that I purchased a new laptop, and it arrived more quickly than I thought it would. I spent a few hours Thursday and Friday evening transferring the files from my desktop to my laptop. In the process, I learned how to use my iPod as a hard drive. Or course, over the weekend, my friend pointed out that if I had purchased a router ahead of time, I could have hooked up both computers to the same network and then transferred everything over directly. But such is life.
After doing a bit of research online, I decided to purchase a Linksys Wireless-G Broadband router. The reviews were somewhat mixed on all of the routers, including that particular model. So, rather than order the router online, I purchased the router from my local Best Buy. I paid a few dollars more for the router, but I figured it was worth not having to deal with the hassle of shipping the product back if it turned out to be defective.
The product came with an installation disk. And it was supposed to be a quick and easy setup process. After an hour of rebooting and re-installing the software, I finally gave up and called an IT friend. He tried to walk me through a manual setup process, but that didn't work. Sigh. The online user reviews at cnet.com warned me about Linksys' poor technical support. But desperate times call for desperate measures. So, I took a deep breath and dialed the customer service hotline. Of course, they were experiencing unusually heavy call volume. And they suggested that I visit their website to download their Easy Connect software. "Sets up and configures your Internet connection and wireless home network as well as diagnoses and fixes wireless adapter installation issues!" Um, yeah right. Just like the software on your installation disk?
But I was on hold for a while, so I figured it couldn't hurt to download the software and at least try it. And amazingly enough, it worked! The utility even configured my security settings. Now why didn't they just include the online utility with the product instead of the installation disk software?!?!?
Lesson learned. If you're having problems setting up hardware or software, it's always a good idea to check to see if there are any helpful updates or utilities available online at the vendor's website.
16th Festival of Frugality
Thanks go out to Dawn for hosting the 16th edition of the Festival of Frugality at Frugal for Life. The festival includes a post by yours truly about megabus.com. Enjoy!
Monday, March 27, 2006
My Achilles' Tendon - Bad Math Skills
I have a confession to make. I'm really bad at math. When other personal finance bloggers talk about ratios and calculations and algorithms and such, I tend to start tuning out. In the immortal words of my best friend, "How can you be so intelligent, yet so bad at math?" Hmm. Good question. If I knew the answer to that, I wouldn't be asking you to figure out the food bill, now would I? Thank God for online financial calculators and Quicken software. Even so, I recognize that bad math skills are a huge risk factor for me. I'm more easily swayed by fast talking sales people because I sometimes don't understand how they got at a specific number. And I definitely can't do quick calculations in my head. So it's sometimes hard to tell whether I've gotten a good deal or not.
Most of the time, I can just laugh and shrug it off. My standard response to criticism is that "I have many other fine qualities." :-) Usually this happens when I go out to eat with friends, and I ask how much I owe. Thankfully, there's always somebody else in the group who can figure out the food bill in their head.
But today, I went to lunch with a friend whose math skills are just as bad as mine are. Of course, I didn't know that ahead of time. I let her figure out the food bill, and we wound up under tipping the waitress. Believe me, it was purely unintentional. But the waitress quickly made her displeasure known to us. She practically threw a takeout container at me, as she walked by. To make matters worse, it took us a while to figure out why she was angry at us. My friend and I literally were standing outside of the restaurant arguing about the food bill. Finally, my friend agreed that I was probably right. So, she wound up going back into the restaurant and giving the hostess some extra cash to give to the waitress. The irony was that the lower tip was probably warranted. The waitress already had a bad attitude when she got to our table. She practically rolled her eyes at us when we didn't order drinks. And she got my friend's order wrong (dressing on the side, please). If we wanted to send a message to the waitress, that would've been the way to do it.
Anyway, the moral of the story is that I am bad at math, and I need to use a calculator next time. Sure, I might look like a complete idiot next to my math whiz friends because I can't do simple multiplication, division and addition in my head. But it's better than relying on other folks to do it for me and then getting it wrong.
Most of the time, I can just laugh and shrug it off. My standard response to criticism is that "I have many other fine qualities." :-) Usually this happens when I go out to eat with friends, and I ask how much I owe. Thankfully, there's always somebody else in the group who can figure out the food bill in their head.
But today, I went to lunch with a friend whose math skills are just as bad as mine are. Of course, I didn't know that ahead of time. I let her figure out the food bill, and we wound up under tipping the waitress. Believe me, it was purely unintentional. But the waitress quickly made her displeasure known to us. She practically threw a takeout container at me, as she walked by. To make matters worse, it took us a while to figure out why she was angry at us. My friend and I literally were standing outside of the restaurant arguing about the food bill. Finally, my friend agreed that I was probably right. So, she wound up going back into the restaurant and giving the hostess some extra cash to give to the waitress. The irony was that the lower tip was probably warranted. The waitress already had a bad attitude when she got to our table. She practically rolled her eyes at us when we didn't order drinks. And she got my friend's order wrong (dressing on the side, please). If we wanted to send a message to the waitress, that would've been the way to do it.
Anyway, the moral of the story is that I am bad at math, and I need to use a calculator next time. Sure, I might look like a complete idiot next to my math whiz friends because I can't do simple multiplication, division and addition in my head. But it's better than relying on other folks to do it for me and then getting it wrong.
Goodbye BankOne.com
The last remnant of my old employer has gone the way of the dinosaur. This weekend, they finally migrated all of the legacy Bank One customers over the to Chase.com website closed down the bankone.com website. I was a bit worried about the changeover, but so far so good. All of my pending bill payments seem to have been transferred over to the new site. And it looks as if Quicken is communicating with Chase.com correctly. But I do miss the familiar Bank One logo. I guess I'm just kind of sentimental.
41st Carnival of Personal Finance
The 41st Carnival of Personal Finance is up! Thanks to Margo at Financial Baby Steps for hosting.
Sunday, March 26, 2006
Too Much of a Good Thing - Investing 401(k) Assets in Company Stock
According to an article in today's Chicago Tribune, workers continue to load up 401(k)'s with company stock. Here are some interesting excerpts from the article.
Despite many Enron workers losing sizable nest eggs when the company went bankrupt--and the constant drumbeat from financial advisers on the benefits of diversification--it appears many employees of large firms are continuing to pack their 401(k) plans with company stock.
In a 2005 report on 401(k) plans by Lincolnshire, Ill.-based Hewitt Associates that looked at more than 2.5 million eligible employees, company stock was the single largest holding for the average participant. Large U.S. equity funds came in second, Hewitt said.
"Familiarity tends to breed complacency," said Christopher Jones, chief investment officer at Financial Engines, a Palo Alto, Calif.-based provider of 401(k) managed accounts. "Employees feel more comfortable with the stock because they know the managers, know the CEO. ... But unlike a mutual fund, individual companies can go bankrupt, like those employees of Enron, WorldCom and Global Crossing" can attest.
Even with blue-chip companies, if you compare the performance of a randomly picked stock from the Standard & Poor's 500 with that of the S&P 500 index over the long term, the index would do better two-thirds of the time, Jones said "If it declines 20 to 25 percent, that's a really bad year for the S&P 500, but individual companies go down 20 percent all the time," he said.
The performance of an individual 401(k) also depends on what is done with the rest of the money. Nevertheless, "It would be more reasonable to hold 5 percent to 10 percent company stock, and spread the rest of the portfolio, and investment risk, across different asset classes," Jones said.
For further information on how to approach 401(k) allocations, see NASD's investor learning center at its Web site (www.nasd.com).
I have to confess that I'm kind of surprised by the results of Hewitt survey. In this day and age, it's scary to think that people are investing the bulk of their 401(k) assets in company stock. Even if you subscribe to Warren Buffet's philosophy of concentrating all of your investments in a handful of good companies, the majority of Americans aren't fortunate enough to work for any of the companies that warrant that type of investment. Admittedly, we don't have the full picture on all of these individuals. We don't know for example, whether these individuals have other diversified investments outside of their 401(k) accounts. So perhaps the company stock represents only a small percentage of their entire net worth. And we don't know whether these individuals are being forced to invest in company stock or whether the alternatives are far worse.
However, if you do have a large chunk of your assets invested in company stock and you do have other choices as to where to invest it, please consider reallocating at least some of those funds.
As for me, I do own some company stock, but it represents only 5% of all of my retirement assets and maybe 2% of my entire investment portfolio. So, my exposure is minimal.
Despite many Enron workers losing sizable nest eggs when the company went bankrupt--and the constant drumbeat from financial advisers on the benefits of diversification--it appears many employees of large firms are continuing to pack their 401(k) plans with company stock.
In a 2005 report on 401(k) plans by Lincolnshire, Ill.-based Hewitt Associates that looked at more than 2.5 million eligible employees, company stock was the single largest holding for the average participant. Large U.S. equity funds came in second, Hewitt said.
"Familiarity tends to breed complacency," said Christopher Jones, chief investment officer at Financial Engines, a Palo Alto, Calif.-based provider of 401(k) managed accounts. "Employees feel more comfortable with the stock because they know the managers, know the CEO. ... But unlike a mutual fund, individual companies can go bankrupt, like those employees of Enron, WorldCom and Global Crossing" can attest.
Even with blue-chip companies, if you compare the performance of a randomly picked stock from the Standard & Poor's 500 with that of the S&P 500 index over the long term, the index would do better two-thirds of the time, Jones said "If it declines 20 to 25 percent, that's a really bad year for the S&P 500, but individual companies go down 20 percent all the time," he said.
The performance of an individual 401(k) also depends on what is done with the rest of the money. Nevertheless, "It would be more reasonable to hold 5 percent to 10 percent company stock, and spread the rest of the portfolio, and investment risk, across different asset classes," Jones said.
For further information on how to approach 401(k) allocations, see NASD's investor learning center at its Web site (www.nasd.com).
I have to confess that I'm kind of surprised by the results of Hewitt survey. In this day and age, it's scary to think that people are investing the bulk of their 401(k) assets in company stock. Even if you subscribe to Warren Buffet's philosophy of concentrating all of your investments in a handful of good companies, the majority of Americans aren't fortunate enough to work for any of the companies that warrant that type of investment. Admittedly, we don't have the full picture on all of these individuals. We don't know for example, whether these individuals have other diversified investments outside of their 401(k) accounts. So perhaps the company stock represents only a small percentage of their entire net worth. And we don't know whether these individuals are being forced to invest in company stock or whether the alternatives are far worse.
However, if you do have a large chunk of your assets invested in company stock and you do have other choices as to where to invest it, please consider reallocating at least some of those funds.
As for me, I do own some company stock, but it represents only 5% of all of my retirement assets and maybe 2% of my entire investment portfolio. So, my exposure is minimal.
Friday, March 24, 2006
Update on Lenovo ThinkPad Purchase
I am totally impressed with Lenovo. I ordered my new laptop on Tuesday and chose standard shipping. By late Tuesday evening, they had sent two separate email notifications, confirming both the purchase and the actual shipment of the laptop. And by Thursday evening, the laptop had arrived in the mail.
Of course, I spent the next 3 hours transferring files from my desktop computer and loading software onto my laptop. I stayed up way too late fiddling with settings and such, and I'm not even halfway done. So, I'm totally dragging this morning. In hindsight, maybe it would've been better if Lenovo hadn't been so efficient. If the laptop had arrived today, I would've at least had the weekend to recover :-)
Time to do some research on wireless routers. That's the next item on my to-do list.
Of course, I spent the next 3 hours transferring files from my desktop computer and loading software onto my laptop. I stayed up way too late fiddling with settings and such, and I'm not even halfway done. So, I'm totally dragging this morning. In hindsight, maybe it would've been better if Lenovo hadn't been so efficient. If the laptop had arrived today, I would've at least had the weekend to recover :-)
Time to do some research on wireless routers. That's the next item on my to-do list.
Inkjet Cartridges Refilled While You Shop at OfficeMax
Here's a money saving tip. Through March 25th, you can get your inkjet cartridges refilled for $14.99 (Black) or $22.99 (Color) at OfficeMax stores. Check your local weekly store ad online at officemax.com for applicable locations and other sales restrictions.
It beats trying to do it yourself with one of those messy syringe-type kits.
Too bad I just purchased a refurbished black inkjet cartridge online for $23. And that was even after I used the 5% discount that I found through couponcabin.com :-)
It beats trying to do it yourself with one of those messy syringe-type kits.
Too bad I just purchased a refurbished black inkjet cartridge online for $23. And that was even after I used the 5% discount that I found through couponcabin.com :-)
Thursday, March 23, 2006
Appearances Can Be Deceiving
Frugal for Life posted a link to a story entitled "Well-Dressed Women Get Better Service at Clothing Stores." How well-dressed you are is one indicator of your status, and how much money you have to spend. Makes sense, right? But so not true! If any of you have read the Millionaire Next Door, you'll know what I'm talking about.
Okay, a bit of a rant. But a few years ago, my friend (let's call her Justine) and I went to The Bombay Company store because she wanted to buy a birthday present for another friend. There was an older woman standing just inside the door, ostensibly to greet people and welcome them into the store. When Justine and I opened the door, she gave us the once over, and then pursed her lips. No 'hello', no 'welcome to Bombay Company'. Okay, then. Justine and I did a quick loop around the store and then walked out without buying anything.
'Did you see the look that woman gave us?' Yeah. Totally rude. I'm never going back to that store.
Admittedly, Justine and I were dressed fairly casually. She was wearing jeans and a nice sweatshirt. I was wearing jeans and a leather jacket. And admittedly we weren't wearing makeup, and we both look younger than our age. But here's the kicker. At the time, Justine was an auditor at a large consumer products company, and I was an associate in private practice at a large law firm. Could we afford to buy something at Bombay Company? You do the math. Justine was ready to make a purchase that day. But based on the treatment we received, she decided to take her business elsewhere.
In contrast, when I was in graduate school, I needed to buy an interview suit. So, at a friend's suggestion, I went to Nordstrom. I was wandering around the petite section, looking hopelessly lost and confused, when an older saleswoman came up to me and asked me if she could help me find anything. I told her I was looking for a black suit, one that I could wear on multiple interviews. But nothing too trendy or expensive. She sized me up with one look and then found two suits for me, both of which were very much on sale. After trying on both suits, I decided to go with the cheaper one. When she finished ringing up my purchase, she gave me her business card and told me to call her if I ever needed to buy another suit. Again, I didn't have any makeup on, and I was in student attire. You can be sure that I went back to Nordstrom and looked for that saleswoman after I graduated from school and entered the workforce.
The moral of the story is that appearances can be deceiving when it comes to wealth and purchasing power.
Okay, a bit of a rant. But a few years ago, my friend (let's call her Justine) and I went to The Bombay Company store because she wanted to buy a birthday present for another friend. There was an older woman standing just inside the door, ostensibly to greet people and welcome them into the store. When Justine and I opened the door, she gave us the once over, and then pursed her lips. No 'hello', no 'welcome to Bombay Company'. Okay, then. Justine and I did a quick loop around the store and then walked out without buying anything.
'Did you see the look that woman gave us?' Yeah. Totally rude. I'm never going back to that store.
Admittedly, Justine and I were dressed fairly casually. She was wearing jeans and a nice sweatshirt. I was wearing jeans and a leather jacket. And admittedly we weren't wearing makeup, and we both look younger than our age. But here's the kicker. At the time, Justine was an auditor at a large consumer products company, and I was an associate in private practice at a large law firm. Could we afford to buy something at Bombay Company? You do the math. Justine was ready to make a purchase that day. But based on the treatment we received, she decided to take her business elsewhere.
In contrast, when I was in graduate school, I needed to buy an interview suit. So, at a friend's suggestion, I went to Nordstrom. I was wandering around the petite section, looking hopelessly lost and confused, when an older saleswoman came up to me and asked me if she could help me find anything. I told her I was looking for a black suit, one that I could wear on multiple interviews. But nothing too trendy or expensive. She sized me up with one look and then found two suits for me, both of which were very much on sale. After trying on both suits, I decided to go with the cheaper one. When she finished ringing up my purchase, she gave me her business card and told me to call her if I ever needed to buy another suit. Again, I didn't have any makeup on, and I was in student attire. You can be sure that I went back to Nordstrom and looked for that saleswoman after I graduated from school and entered the workforce.
The moral of the story is that appearances can be deceiving when it comes to wealth and purchasing power.
Megabus.com - a Low Cost Transportation Alternative
There's an article in the Chicago Tribune about megabus.com, a new internet based company that provides cheap bus transportation between Chicago and 8 different cities in the Midwest.
Booking must be done through the Web site, which was launched Wednesday. At least three or four seats on each one-way trip are available for a $1 fare. At the upper end, one-way fares will range from $9 to $27.50, depending on the city.
It should take about nine months to see whether the pilot service catches on. If it proves popular, the company may introduce the double-decker buses used in Britain, because they can hold 93 passengers, as opposed to 55 in standard motor coaches. As well, the program will be expanded to other U.S. regions and Canada.
Booking must be done through the Web site, which was launched Wednesday. At least three or four seats on each one-way trip are available for a $1 fare. At the upper end, one-way fares will range from $9 to $27.50, depending on the city.
It should take about nine months to see whether the pilot service catches on. If it proves popular, the company may introduce the double-decker buses used in Britain, because they can hold 93 passengers, as opposed to 55 in standard motor coaches. As well, the program will be expanded to other U.S. regions and Canada.
A Few of My Favorite Things
Two days ago, I wrote a post about buyer's remorse. Today, I'd like to address the flip side of the coin. There are plenty of things that I'm quite happy that I purchased...things that either save me time, increase my productivity, or add an element of fun to my otherwise boring, mundane existence :-) Here's just a partial list.
Condo - my sanctuary. There are times when I hate home ownership (like when my faucet started dripping and I couldn't figure out how to fix it myself). But at the end of the day, it's a blessing to have a place to call my own.
iPod mini - I mostly listen to NPR podcasts and soothing, inspirational music. And yes, mom. I'm careful not to keep it on too long because I don't particularly want to lose my hearing.
Mountain bike - in terms of stress relief, nothing beats a long, quiet bike ride along the lakefront.
Kirkland Anodized Aluminum cookware set - much cheaper than All-Clad or Calphalon, although I wish that the frying pans had a second handle on the other end, since they're pretty heavy to pick up with one hand.
All-in-one printer, fax and copier machine - no more running to Kinko's to copy or fax one page documents.
Digital camera - these days, it's soooo easy to share photos with family and friends. Just point and shoot, upload and then email the link to everyone.
Cell phone with web browser - they locked down our computers at work so we can't access our personal email accounts. People still send me messages on my yahoo account and expect me to respond immediately. Sigh.
Palm PDA - no more random scraps of paper. My calendar and contact list, all in one. Quicken software - at times, it drives me crazy. But it's easier than doing everything via Excel. Electric, cordless kettle - it heats up water faster than a microwave and shuts off by itself. How cool is that? A must for tea drinkers like me.
Senseo coffee pod machine - for a quick, single shot of coffee in the morning, it can't be beat.
Cordless phone with dual handsets and speaker phone - if you're like me, it's easy to lose track of where you put the cordless phone. With two handsets, you're sure to have one somewhere close by ;-) And with a speakerphone, I can listen in on conference calls and type at the same time.
Method cleaning wipes - no harsh chemicals and biodegradeable.
The Kite Runner - beautifully written, yet incredibly sad. The one novel that I enjoyed reading the most in 2005.
I admit that I'm somewhat of a gadget geek and a gear head....comes from having an older brother who was really into that kind of stuff. Anyway, these are just a few of my favorite things :-)
How about you? What are your favorite things?
Condo - my sanctuary. There are times when I hate home ownership (like when my faucet started dripping and I couldn't figure out how to fix it myself). But at the end of the day, it's a blessing to have a place to call my own.
iPod mini - I mostly listen to NPR podcasts and soothing, inspirational music. And yes, mom. I'm careful not to keep it on too long because I don't particularly want to lose my hearing.
Mountain bike - in terms of stress relief, nothing beats a long, quiet bike ride along the lakefront.
Kirkland Anodized Aluminum cookware set - much cheaper than All-Clad or Calphalon, although I wish that the frying pans had a second handle on the other end, since they're pretty heavy to pick up with one hand.
All-in-one printer, fax and copier machine - no more running to Kinko's to copy or fax one page documents.
Digital camera - these days, it's soooo easy to share photos with family and friends. Just point and shoot, upload and then email the link to everyone.
Cell phone with web browser - they locked down our computers at work so we can't access our personal email accounts. People still send me messages on my yahoo account and expect me to respond immediately. Sigh.
Palm PDA - no more random scraps of paper. My calendar and contact list, all in one. Quicken software - at times, it drives me crazy. But it's easier than doing everything via Excel. Electric, cordless kettle - it heats up water faster than a microwave and shuts off by itself. How cool is that? A must for tea drinkers like me.
Senseo coffee pod machine - for a quick, single shot of coffee in the morning, it can't be beat.
Cordless phone with dual handsets and speaker phone - if you're like me, it's easy to lose track of where you put the cordless phone. With two handsets, you're sure to have one somewhere close by ;-) And with a speakerphone, I can listen in on conference calls and type at the same time.
Method cleaning wipes - no harsh chemicals and biodegradeable.
The Kite Runner - beautifully written, yet incredibly sad. The one novel that I enjoyed reading the most in 2005.
I admit that I'm somewhat of a gadget geek and a gear head....comes from having an older brother who was really into that kind of stuff. Anyway, these are just a few of my favorite things :-)
How about you? What are your favorite things?
Wednesday, March 22, 2006
Another Positive Customer Service Story
After my rant yesterday about stuff that I regretted buying, I started thinking that maybe I should email some of these vendors to voice my concerns. I decided to start with the smallest one first. I actually like Method cleaning wipes, and appreciate the fact that they're trying to market environmentally friendly and consumer friendly products, but ever since I started using their laundry detergent, my clothes and towels have come out feeling really stiff.
Anyway, they really make it easy on consumers to contact them. Right there, on the back of the bottle, they list not only their website address but their email address as well.
So, late last night, I sent a nice, friendly email to info@methodhome.com. First I complimented them on their cleaning wipes. Then I explained my frustration with their laundry detergent and asked if any other consumers had expressed similar concerns.
This morning, I went to check my email and low and behold, a marketing manager at Method had written me back. She indicated that they had received little (if any), negative feedback about the efficacy of the detergent. So, she was wondering if maybe it was just a bad batch and asked for the lot number. She also asked me for my street address because she wanted to send me some coupons for some free products. Cool beaners. That was really nice of her.
Anyway, I'm hoping that the bottle really did come from a bad batch because I'd really like to see this company succeed.
Anyway, they really make it easy on consumers to contact them. Right there, on the back of the bottle, they list not only their website address but their email address as well.
So, late last night, I sent a nice, friendly email to info@methodhome.com. First I complimented them on their cleaning wipes. Then I explained my frustration with their laundry detergent and asked if any other consumers had expressed similar concerns.
This morning, I went to check my email and low and behold, a marketing manager at Method had written me back. She indicated that they had received little (if any), negative feedback about the efficacy of the detergent. So, she was wondering if maybe it was just a bad batch and asked for the lot number. She also asked me for my street address because she wanted to send me some coupons for some free products. Cool beaners. That was really nice of her.
Anyway, I'm hoping that the bottle really did come from a bad batch because I'd really like to see this company succeed.
Profiling Jamie Dimon
There's an interesting article in Fortune magazine about Jamie Damon, the CEO of JPMorgan Chase. I've actually met the man in person. Back when he was the CEO of Bank One, I was summoned to his office, without prior notice, to answer some questions about a contract that I was helping to renegotiate. At first, when his name flashed on my caller ID, I thought it was a joke. So, the stories you hear about him talking to regular staffers to be sure that he's getting the real story are true. Thankfully, I was able to answer his questions reasonably well. So, there wasn't any shouting or screaming during that discussion. But in a follow up conference call with some other colleagus, he did raise his voice, and it was quite unpleasant.
Anyway, Jamie is known throughout the company and on Wall Street as a ruthless cost cutter. But what I didn't know is that Jamie is just as frugal at home as he is at work. "At home, spying a not totally empty bottle of ketchup in the trash ignites an explosion. At one point Dimon was appalled to see that his daughters were using bushels of towels--so he imposed a strict quota of one a week. He's so frugal that, to the shock of family and friends, he continued to wear T-shirts with the Citigroup logo long after Citi had fired him." This is a man who earns millions of dollars each year.
The other item worth noting in the article is the huge disparity in salaries between heritage Bank One and JPMC employees before the merger. "Regional bank managers at J.P. Morgan earned around $2 million -- five times the $400,000 that comparable Bank One people made." Wow. I'm pretty sure I wouldn't have felt too good about my job if I were a regional bank manager from the Bank One side. Even if you account for cost of living adjustments, JPMorgan employees were way overpaid, and according to Jamie, they knew it. "'I'd tell people they were way overpaid,' Dimon recalls, 'and guess what? They already knew it.' The kicker: Most of the managers stayed on despite the cuts."
The article is pretty long but well worth the read. The man is definitely a fascinating individual. It'll be interesting to follow his career in the next few years. And as a JPMC stockholder, I really hope he succeeds in vanquishing his competitors ;-)
Anyway, Jamie is known throughout the company and on Wall Street as a ruthless cost cutter. But what I didn't know is that Jamie is just as frugal at home as he is at work. "At home, spying a not totally empty bottle of ketchup in the trash ignites an explosion. At one point Dimon was appalled to see that his daughters were using bushels of towels--so he imposed a strict quota of one a week. He's so frugal that, to the shock of family and friends, he continued to wear T-shirts with the Citigroup logo long after Citi had fired him." This is a man who earns millions of dollars each year.
The other item worth noting in the article is the huge disparity in salaries between heritage Bank One and JPMC employees before the merger. "Regional bank managers at J.P. Morgan earned around $2 million -- five times the $400,000 that comparable Bank One people made." Wow. I'm pretty sure I wouldn't have felt too good about my job if I were a regional bank manager from the Bank One side. Even if you account for cost of living adjustments, JPMorgan employees were way overpaid, and according to Jamie, they knew it. "'I'd tell people they were way overpaid,' Dimon recalls, 'and guess what? They already knew it.' The kicker: Most of the managers stayed on despite the cuts."
The article is pretty long but well worth the read. The man is definitely a fascinating individual. It'll be interesting to follow his career in the next few years. And as a JPMC stockholder, I really hope he succeeds in vanquishing his competitors ;-)
Tuesday, March 21, 2006
Buyer's Remorse
I've been thinking a lot lately about how to declutter and simplify my life. I mentioned in an earlier post that I've been trying to clear out some space on my bookshelves by selling some of my books and CDs on amazon.com.
Along those same lines, Madame X at My Open Wallet wrote a fascinating post entitled How I Live in 242 sq ft. In it, she says "knowing that I don't have much space for stuff really makes me think about whether I really want or need to buy it, and I think it does have a significant effect on how much money I spend!"
Well, that got me thinking about some of the stuff that I wish I hadn't purchased. I don't really buy things on impulse very often. Even small items tend to be thoroughly researched beforehand. But sometimes, even after I've gathered all the relevant research and data, I still suffer from buyer's remorse. I guess no matter how many product reviews you read, it really just comes down to personal taste.
Here's a partial list of stuff that I own that didn't quite live up to the marketing hype.
Stearns and Foster Pillowtop Mattress - very expensive and way too soft. I wake up with a sore back. So now I just sleep on my side. Sigh.
CD/Radio Alarm Clock - I never use the CD or Radio. I wake up to the normal buzzer. Go figure.
Bimmer - see my post on Keeping Up with the Joneses. Also, since it's rear wheel drive, it's a helluva ride in bad weather. There's a really steep incline into my parking garage. When it's snowing heavily outside, I just put it in second gear, offer up a brief prayer and then floor it.
Leather tote - it's way too heavy, even when there's nothing in it. Add a laptop and a couple of files, and it's impossible for me to carry.
Patio furniture - I don't spend a lot of time on my terrace, other than to water my plants or do some grilling. I live in a high rise condo building. On most days, it's just too windy outside. And with city noise from the el and freight trains, it's not exactly peaceful or conversation friendly.
Bread machine - I used this a lot when I first bought it, but the cost of ingredients starts to add up. And the loaf starts to get stale pretty quickly. I think I'd rather just buy a loaf of bread on sale at the grocery store.
Satellite TV - okay, technically I didn't purchase this. It's part of my monthly condo association fees. But I rarely watch TV. So, this one really bugs me.
Method concentrated laundry detergent - this stuff is marketed as being environmentally friendly. Too bad my fluffy towels come out feeling stiff as a board when I use it. I've tried rinsing my clothes twice and adding more fabric softener. Nothing seems to work.
Middlesex - I know that this novel won the Pulitzer Prize, but I honestly could not get into this story. I made it halfway through the book before I finally gave up and called it a day.
Okay, that's it for now. I may update this list at some later point in time. And tomorrow, I'll try to list some of the things that I'm actually glad that I purchased.
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