The most expensive places in the U.S.

Of course, we have both the cheapest and the most expensive cities in the U.S. here are 10 most expensives ones in the U.S.

10. Los Angeles
9. San Diego
8. Oakland, Calif.
7. Boston
6. Washington, D.C.
5. Stamford, Conn.
4. San Jose, Calif.
3. San Francisco
2. Honolulu
1. New York Cost of Living in NY: 125.4% above average (Manhattan only)

My son has been living in Manhattan since he graduated in 2011. I wrote this to him. “Everything has a cost. The ultimate cost is time. You use time to earn money, with money to buy convenience, health, entertainment, etc. How much you can afford depends on (1) amount of time you pour in and (2) value of your time.”

Places where you can live cheaply in the U.S.

I can’t say they are among the greatest cities in the U.S. but they are certainly the cheapest ones. Here it is from Kiplinger site — 10 Cheapest U.S. Cities to Live In. I am surprised that some of the southern poor states like Mississippi and Georgia didn’t make it to the list. I am curious to know how Kansas goes when comparing to east and west coastal cities.

10. Idaho Falls, Idaho
9. Conway, Ark.
8. Springfield, Ill.
7. Pueblo, Colo.
6. Wichita Falls, Texas
5. Fayetteville, Ark.
4. Memphis, Tenn.
3. Norman, Okla.
2. McAllen, Texas
1. Harlingen, Texas

Boeing to cut up to 1,700 engineering jobs this year

I read this piece of news on 4/18, posted by Dominic Gates on The Seattle Times.

“The head of engineering at Boeing Co.’s Commercial Airplanes unit informed managers Thursday the jetmaker will reduce its engineering workforce by up to 1,700 positions this year, with as many as 700 job cuts coming through layoffs. Layoff notices to the first of those employees will go out today.”

I don’t need to get into the details of why and when. The news reminds me of the time when Sprint was laying off people in thousands and I was one of them in early 2001.

Over a decade has passed since then. We expect the end of tunnel is near and economy will pick it up soon. But it doesn’t seem so. I shared the news with my daughter. She said they shouldn’t have any problem finding another job soon. Glad she is optimistic about job market. Let us hope there are plenty of jobs for engineering people.

Slow growth forecasts by IMF

On 4/16, I read this one about U.S. economy. “IMF Lowers 2013 Economic Growth Forecasts” by Scott Neuman.

“The International Monetary Fund has lowered its projections for global economic growth, including in the United States, citing sharp cuts in government spending and the struggling eurozone.

The Washington, D.C.-based international lender’s World Economic Outlook shaved its 2013 forecast to 3.3 percent from 3.5 percent. It also trimmed its projection for 2014 to 4 percent from 4.1 percent.

The IMF on Tuesday also pared back its forecast for growth in the U.S. economy this year, to 1.9 percent from 2.1 percent.”

From this I think of many college graduates who have already been unemployed for a year or even longer. The dreadful part is this prolonged economic downturn will indeed create a lost generation.

16.2% youth unemployment rate for millennial generation

Last week I read about Millennial Jobs Report for March 2013 from Generation Opportunity site: 16.2% youth unemployment rate.

The youth unemployment rate for 18-29 year olds specifically for March 2013 is 11.7 percent non-seasonally adjusted (NSA).
–rate for African-Americans for March 2013 is 20.1% (NSA);
–rate for Hispanics for March 2013 is 12.6% (NSA);
–rate for women for March 2013 is 10% (NSA).

The declining labor force participation rate has created an additional 1.7 million young adults that are not counted as “unemployed” by the U.S. Department of Labor because they are not in the labor force, that is, those young people have given up looking for work due to the lack of jobs.

If the labor force participation rates were factored into the 18-29 youth unemployment calculation, the actual 18-29-unemployment rate would rise to 16.2 percent (NSA).

The conclusion is: job opportunities remain scarce for young people after years of debt-fueled government spending.

Economic downturn hits everybody

During the weekend of 4/6, while my daughter was out of town, I read this article —
Law School Graduates Continue to Face Brutal Entry-Level Market

“The Class of 2012 outcome data shed considerable light on how difficult the job market remains for law school graduates.

“These graduates fared 1% better than last year’s graduates in lawyer jobs: 56.2% of 2012 graduates were employed in full-time, long-term lawyer jobs. Exclude jobs funded by the law schools from this figure and it is 55.1%.

“A devastating 27.7% were either underemployed (short-term or part-time job, or non-professional) or not employed (unemployed or pursuing an additional degree). The national non-response rate was 2.6%.”

Bad time hit the underpriviledged and the elderly hardest

Ouch! I learned this piece of news about the suicide of an Italian couple due to financial trouble. The news came from CNN in Rome.

The man was 62 years old and his wife 68 years old. “He was a clerk at a shoe company, though he hadn’t worked for some time. She was a retired artisan. Together, they had no more than 500 euros a month, from her pension, to live on.
On Friday (4/4), they were dead.” The wife’s elderly brother “threw himself into the Adriatic Sea soon after the news broke about his sister.”

It was a sad day when I read this. And for a long time, the news stuck in my mind.

The savings of one-year used car

On 3/20, a friend of mine took my daughter to BMV to take written driving test. While waiting for her turn, my friend had a long chat with my daughter. Here’s what this friend told me of part of their conversation.

“When you grow up and get a high paid job, you will buy a BMW and can drive me around in your car,” my friend told my daughter.
“Sure, I will drive you, but I will buy a used car because it cost too much to buy brand new one,” replied my daughter.

My friend was impressed by her down-to-earth approach. Instead of boasting of spending big and chasing coolness like some young people that she knows, my daughter knows the saving of used car and the best of all, she doesn’t care about being pretentious.

I told this friend, “The cost of a new car runs at least $10,000 more than a one-year old used one when you combine the cost of car purchase, sale tax, annual registration fees, tax property, and insurance.” She was surprised to learn the savings of a one-year used car. I was surprised that she didn’t know all this.

Yale, Penn and George Washington University have all sued former students over nonpayment

On 2/4/2013, I read an article, “Yale Suing Former Students Shows Crisis in Loans to Poor,” by Janet Lorin.

Many college graduates, unable to find a job upon graduation, “are defaulting on almost $1 billion in federal student loans earmarked for the poor, leaving schools such as Yale University and the University of Pennsylvania with little choice except to sue their graduates.”

The worst part is the record high defaults on federal Perkins loans “may jeopardize the prospects of current students since they are part of a revolving fund that colleges give to students who show extraordinary financial hardship.”

Perkins loans are earmarked for students with extraordinary financial hardship. They are administered by colleges, which use repayment money to lend to other poor students. Yale, Penn and George Washington University have all sued former students over nonpayment.

I have learned that not just the government but also the universities that will go after those who can’t pay. But given the current job market, what can they get from suing their graduates who are unable to pay back their student loans?

Barnes & Noble’s is following Border’s footstep

On 2/6/2013, I read a rather sad story on The Wall Street Journal “B&N Aims To Whittle Its Stores For Years”– Mitchell Klipper, chief executive of Barnes & Noble’s, says the bookstore will close a third of its stores in the next decade. This further confirms the decline of the physical book stores when facing competitions from online bookstores like Amazon.

First, we saw Border’s bookstores lost its battle in the Internet age. Now, the inevitable thing seems to happen to Barnes & Noble bookstore.

It is sad as we have spent so many hours in these bookstores and so many good memories are associated with these places. And now they are on the road to be history. What can you do? Nothing.

You cannot afford to get sick at work

On 1/25/2013, a Friday morning, I learned that one of my colleagues was let go by the HR because of her excessive sick leave days.

This colleague fell and broke her shoulder bone, which required some surgeries to fix the bones. I don’t know the details of her condition but I know she is single and has been worried about the medical bills and her job security.

I thought she needed not to worry as there must be some kind of law protecting people like her. “How can the company fire you when you are sick and specially need income to cover all the cost thus incurred?”

Well, by the end of the day, a company is not a charity place. I guess I was too naive. Still, the news made that Friday a really sad day for me when I think of the fact that people just cannot afford to be sick. When you are sick, the company multiplies your miseries by cutting off your income. That hurts especially if you are single and have no other income.

Where is the American dream?

Yesterday I talked about college degree and its following debts for many graduates. On 12/3 I read another even more depressing piece of news “Downward mobility haunts US education” by Sean Coughlan.

For many people, a part of the American Dream is the upward mobility through education. If they didn’t have college education and have been trapped in their economic status, their children will move upward through college education and that the children will always be better educated and more prosperous than the previous generation.

With the depressing job market, the prolonged economic downturn, and heavy student debts, that American dream, that upward mobility in the next generation is under serious threat.

“Andreas Schleicher, special adviser on education at the Organisation for Economic Co-operation and Development (OECD), says the US is now the only major economy in the world where the younger generation is not going to be better educated than the older.”

Instead of moving upward, are we going to see “downward mobility?” as some people suggest. The author cites many examples to reach this conclusion — yes, we will have “the opposite of a Hollywood ending.”

This is a serious matter for the future of U.S. economy and of course for the coming generation.

Competition and survival of the fittest in life, business, organization and all

During this holiday season, we see how local retail stores like bestbuy, Walmart, Microcenter, etc adapt, evolve, and compete in the ever thriving e-commerce culture.

All these retailed stores have their online stores and have local store pickup option if customers place an order online. Many of them have price matching and deal guarantee policy. Some even have same-day delivery policy, with a little bit of extra cost.

All these new policies serve to provide the benefits of the low price of e-commerce and the convenience of local stores, resulting in positioning them well in the competition with Amazon and other online only stores. Without constantly adjusting their policies accordingly, they might lose customers and go out of business.

A business and a national party are very much like an organism. In the face of heated competitions for survival, they have no choice but to adapt, change and evolve. This often reminds me of people who survive well in time of economic downturn.

You know it’s a bad economy when…

Early this month I started reading Aftershock by David Wiedemer, his brother and Cindy Spitzer. Here are something interesting from the book.

“You know it’s a bad economy when…
1) Your bank returns your check marked as “insufficient funds” and you have to call them and ask if they meant you or them.

2) The most highly paid job is now jury service

3) People in Beverly Hills fire their nannies and are learning their children’s  names.

4) McDonalds is selling the quarter-ouncer.

5) Obama met with small business-GE, Chrysler, Citigroup, and GM–to discuss the stimulus package.

6) Hot Wheels and Matchbox cars are now trading at higher prices than GM’s stock.

7) You got a pre-declined credit card in the mail.

8) Your “reality check” bounced.

9) The stock market indexes have been renamed: the Dow is now the “Down-Jones” and  the S&P is the “Substandard & Very Poor.”

10) Webster’s is keeping its dictionary length constant by adding words that are commonly used, used as Twitter, tweet, and Facebook, and dropping those no longer needed, such as retirement, pensions, and Social Security.

The Unsustainability of US Economy and the Need to Diversify Your Savings

On 8/15/2012, I read an article — “Economist Richard Duncan: Civilization May Not Survive ‘Death Spiral'” by Terry Weiss.

The article warns of the pyramid scheme, that is very sharp downward turn of American economy. “America’s $16 trillion federal debt has escalated into a death spiral.”

American lifestyle is sustained by a huge personal and national debt and by a colossal consumption of gas, water and electricity.

Totally unsustainable is US economy, energy, ecological resources, and the whole American lifestyle.

The article conveys a strong sense of urgency. Imagine what would happen if US dollar becomes worthless! It does you no good to keep telling yourself “This is impossible.”

We individuals have to diversify our savings in case the pyramid does collapse. Don’t put all your savings in the form of US dollar. We already know that we should not put all our eggs in one basket.

More college graduates have debt than have jobs

I heard this news on NPR on 5/10 about college graduates struggling to gain financial footing. To be sure, it is not a cheerful situation for many of them and its long-term impact is rather depressing.

First of all, “A new Rutgers University survey of those who graduated from college between 2006 and 2011 finds that just half of those grads are working full time.”

Second, the sad part is, as Cliff Zukin said, “More come out with debt than come out with jobs,” NPR interviewed Caitlin LaCour who graduated from Columbia College in Chicago in 2011. She earns just $10 an hour, which was far from enough to take care of her $100,000 student loan debt. So she had to take on a second part-time job at a shoe store, and then a third… She said “I got addicted to working. I just burned myself out, because I didn’t want to have to worry about not being able to pay my loans.”

Third, your college major plays a role. “An engineering grad from a top school, for example, can job-hop and get back to a higher earning level in three or four years, von Wachter says. But ‘students who come from smaller, less-well-known schools and have majors such as humanities or arts — they tend to have depressed career paths lasting for a very long time.'”

Six Foundamental Principles of Economic Thinking, Part II

Third principle: No thing is just one thing; there are always at least 2 sides to every interaction. I recently read a column arguing that it was unethical for those of us who had jobs in a period of economic difficulty to continue spending when others are unemployed. But the reality is that every dollar of my expenditure is a dollar of income coming in for someone else. If there’s less total spending, there’s also by definition less total income.

Fourth principle: The law of unanticipated influences. We can see this with a concept from chaos theory called the butterly effect. In chaos theory, hypothetically, a butterly on one side of the world can flap its wings and, through a chain of causation that’s totally unpredictable, cause a hurricane on the opposite side of the world.

This is true in economics: No event ever takes place in a bubble; a change in any one part of an economic system is going to have ripple effects, often in far removed places.

Fifth principle: The law of unintended consequences. In our interconnected world, our actions are always going to have multiple consequences. A number of cities have installed red light cameras, which take a photograph of the license plate of any car that enters an intersection after the light has turned red. The unintended consequence is an increase in accident when cars try to make a sudden stop at the traffic light.

Sixth principle: No one is, and no one ever can be, in complete control. If you apply an incentive to some subset of 6 billion complexly interrelated people, whose interactions are totally unforeseeable and have unintended consequences, and then predict the final result, that would be monumental. To go further and try to control that outcome would be utterly impossible.

Sounds interesting, right? Will share more later.

Six Foundamental Principles of Economic Thinking, Part I

On 4/1/2012, I watched one of the Great Courses that I bought the day before. The course title is Thinking like an Economist: A Guide to Rational Decision Making. Well, I know it is a bit late for me to learn to think rationally. Still, I couldn’t resist the temptation of some improvement.

The lecture starts with a brief review of the 6 foundation principles of economic thinking, which I think rather interesting. Below are the  from the lecture.

First principle: People respond to incentives. No premise is more central: If you reward a behavior, people will do more of it and more intensely; if you penalize it, they’ll do less of it.

Second principle: There is no such thing as a free lunch. It sounds silly, but that expression captures a lot of economic thought. Any use of time or limited resources for one purpose is an opportunity forever gone to use them for another.

More of anything always means less of something else; and it’s that option that you had to give up that economists call opportunity cost.
To be continued…

Education, Pursuit of Your Dream, and Pure Sense and Cent

During the last weekend of October, both my daughter and I read the 10/31/2011 issue of Time magazine. She made several comments on some of the articles there.

On this article “I Owe U: Student debt is on track to top $1 trillion this year. What happens when diplomas stop opening doors?,” the author lists many sad cases in which students incur tremendous amount of debts, yet upon graduation, unable to find a job or well-paid one to meet its debt obligations.

“OMG, how could one borrow nearly $170, 000 to study documentary filmmaking? You can’t even find a job with that major. How can you pay off your debts if you don’t have a job?” my daughter commented. The sad part is we have too many unfortunate cases like this.

While I applaud for those who chase their dreams and follow their passions, regardless of the cost, I lament the hard consequence of this impractical approach to life. I believe they are much better off chasing something practical if they cannot excel by a giant step in their dream yet not-marketable field. After all, one needs food and shelter and a decent human existence before anything else.

Retire as Early as Possible, Start Taking Care of Yourself, Part II

It makes absolutely no sense to toil beyond age 60 and reaching 70 only to find oneself drop sick or even worse drop dead. I am sure in case like this the only beneficiary is U.S. government who does not have to waste a penny on your benefit. What a bless!

Against the advice given by the article, I believe the best strategy is to retire as early as possible, without having to stress out and burn away your life for that meager 30%.

Here’s a simple math: on the one side of equation is stay on till full retirement age + a high probability of poor health with a huge medical bills + 30% retirement benefit; on the other side is early retirement + time to take care of your body with a small medical bill – 30% retirement benefit. See how little that 30% counts?

When you have more time to take care of your dear body, you can have a better chance of living up to 100 and going strong from there. Plus, you can use a small percent of your early retirement benefit to invest and make more money. If your return is greater than 30%, hey, you beat Uncle Sam more than once, while having a good time!

All this is made possible by your total savings. If you are short on savings, too bad you have no choice but to toil till you drop. How dreadful to be poor!

Retire as Early as Possible, Start Taking Care of Yourself Part I

On 9/9/2011, while I was on a teleconference, I saw an article “5 Crucial Questions for Retirees.” The word crucial caught my attention more than anything else, because I want to make sure I have done the right thing all the way. Well, too late if I have not.

The first crucial issue is the time of retirement. The article advices people to stay on their positions till full retirement age, 67 or 70, whichever the government defines, instead of the earliest possible age, that is 62. The argument goes like this. If you start getting social security benefit at the earliest possible age, you only receive 70% of what you would get monthly if you were to stay till full retirement age. You will suffer a “permanent reduction” of your monthly social security benefit for the so-called early retirement.

The argument makes sense if you could live long enough to enjoy the full benefit. This is the key, which, sadly to say, no one can guarantee. When I look at our chemotherapy infusion room, with people in their 60s and 70s and their quality of life, I have no doubt that they would rather retire early and be able to enjoy what little life has left for them, however reduced is their benefit.
To be continued…

Spoiled Children as the Debtors and Workaholic Parents as the Lenders

The economic mess that the U.S. is enjoying now originated from (1) over consuming, under production, either in housing bubbles and credit card abuse, at individual and national level, like going to war with borrowed money; (2) Negative saving, that is deficit, again on both levels.

China is doing the opposite: (1) Under consumption, over production; (2) Over saving. Hence, China lends the surplus to the US so that US can keep importing from China, which will perpetuate the consumption in the U.S. and the running of factories in China.

Sometimes, I see China as hard-working parents who toil themselves to generate value and save them for their children (the dear Americans), while the US behaves like spoiled children who demand high-level consumption even running on empty purse. We would expect the US, with a mountain of debts, to save more and spend less and China does the opposite. It is not likely to happen this way, though. The children must be spoiled because of their dollar dominance in the world. Something will happen eventually. Let’s wait and see.

The Poor and the Powerless: No Fun in Times of Economic Woes

Last Friday, 8/12, while I was reading “U.S. Debt Reaches 100 Percent of Country’s GDP” from fox news, I received an internal email on selling “cheap” Worlds of Fun ticket —
Adult $35
Junior (under 48 inches) $24
Season ticket holder wanting the meal only $13.02
With the country’s debt exceeding the total GDP, that’s the fun that most people have to forgo now.

It is very hard to become sanguine when we vision a few years down the road. The US economy is very much consumer driven, consisting of consumption by US government and ordinary citizens. Now, with Republicans calling for government spending cut and consumers increasingly squirreling away their meager savings for lack of confidence, we are seeing less and less spending instead of the other direction as people have expected?

Now talk about increasing productivity and revenue, a sheer empty talk. With the majority of manufacture jobs moving overseas and the lack of the required skills for the emerging technology market, where do productivity come from? No job, no income.

To be honest, forgoing the Worlds of Fun is a small sacrifice compared to the fact that many people will have to face the shrinking of their retirement pension and health care service. Keep in mind the government always stands by the side the rich and powerful while the poor and the powerless can never escape bearing the brunt of economic woes.

Avoid these Wasteful Habits, Part II

Continued from previous posting on this topic

16. Not reading the fine print.
17. Mismanaging your flexible spending account.
18. Being an inflexible traveler.
19. Sticking with the same service plans and the same service providers year after year.
20. Making impulse purchases, when on second thought you don’t really need or you can get it cheaper elsewhere.
21. Dining out frequently.
22. Trying to time the stock market. In trying to buy low and sell high, many people actually do the opposite. Instead, employ the simple strategy of “dollar-cost-averaging.” By investing a fixed dollar amount at regular intervals, you smooth out the ups and downs of the market over time. If you take out the emotion and guesswork, investing can become less stressful, less wasteful and more successful.

23. Buying insurance you don’t need, e.g liability for an old car.
24. Buying new instead of used. Cars lose 20% of their value the moment they’re driven off the lot and 65% in the first five years.
25. Procrastinating. Time is an asset money can’t buy. Start investing for retirement as soon as possible. For instance, if a 40-year-old saves $300 a month with an 8% return per year, he’ll have $287,000 by age 65. If he had started saving 15 years earlier at age 25, he’d have more than $1 million.

P.S. my son called yesterday morning. He sounded rather sleepy, not fully awaken. I was concerned, as he seldom called this early, “What is the matter, son?” He said, “Happy Mother’s Day, mom.” On occasions like this, both of my children know not to upset me by squandering unnecessarily on my behalf. Indeed, a call phone like this will make my day.

Avoid these Wasteful Habits, Part I

We are living through the times when children frequently hear about the hardships related to one of the worst economic downturns in the nation’s history. On the same line, I often read articles teaching people how to stretch their limited resource to last longer. Here’s one of them which I read on 3/2/2011, “25 Ways to Waste Your Money” by Erin Burt, that is, how to avoid the following behavior.

1. Carrying a balance on your credit cards. Debt is a shackle that holds you back.
2. Overspending on gas and oil for your car.
3. Keeping unhealthy habits like smoking and indoor tanning.
4. Using a cell phone that doesn’t fit. Your phone is not a status symbol. It is a way to communicate.
5. Buying brand-name instead of generic.

6. Keeping your mouth shut. By simply asking, you may be able to snag a lower rate on your credit card.
7. Buying beverages one at a time instead of a box of 12 or 24.
8. Paying for something you can get for free, like using library.
9. Stashing your money with Uncle Sam rather than in an interest-earning account.
10. Being disorganized. e.g. Lost bills and receipts, forgotten tax deductions, and clueless spending.

11. Letting a large quantity of your money wallow in a low-interest account.
12. Paying late fees and missing deadlines.
13. Paying ATM fees. Expect to throw away nearly $4 every time you use an ATM that isn’t in your bank’s network.
14. Shopping at the grocery store without a calculator.
15. Paying for things you don’t use and you can get it free from the Internet, like cable TV.


Old Rental Agreements and an Old Dream

While digging out old stuffs, I found some old rental agreements, which reminds me of what I once planned to do but never actually did it.

I kept all the old rental agreement thinking someday I would buy some apartment complex nearby a university and lease them to college students. I would use their rental fees to pay for the mortgage. I would need to learn how to create leasing agreement for my tenants. I started harboring this idea ever since I took accounting classes in 1993, back in Ohio.

One of them is from Dolley Madison Apartments in McLean, Virginia on 1/25/1997, 2-bedroom apartment monthly rent for $930. We lived there between 1/1997 and 5/1998.

The other from Corinth apartment in Prairie Village, Kansas, 2-bedroom for $603. We stayed there between 5/1998 an 7/1999. Another one from Jamestown townhouse, in Fort Wayne, Indiana back in 1994. We left Indiana for Virginia in January 1997 when my daughter was two months shy of two years old.

Well, these documents at least serve to witness a dream or a plan that I once had but never materialize. I don’t know exactly what stopped me from carrying out my plan, but I know my brain does not work well when it comes to accounting.

The Smart Ones Set the Fashion and the Crowd Follows

On 10/13/2010, I had a monitor from Michigan. She is so different from the mainstream culture in her spending habit. First of all, she said she always bought things from Wal-Mart or wherever is cheaper. “I never spent more than $25 on a piece of clothing,” she declared proudly.

The loveliest part is her strong feeling against buying any designer stuff. She lampooned those who chased designer clothes or designer bags. “I am not like those suckers who work their butts off to spend $700 on a designer bag.” She really sees through it all when she said, “Those designers can live in their majestic mansions and drive their limousines because of all these stupid suckers [who are] willing to dump in their hard-earned money for these designer stuffs. Those designers suck every hard-earned penny out of those suckers so that they have everything they want.”

Nothing is more true than this. Once the smart ones set the fashion, the opposite ones follow to the letter. That is how the rich get rich and the poor stay this way forever. Too bad there are too many people who fall for this schema. That is how the social order is well maintained.

Recession Should Change People’s Spending Habits

On 8/19/2010, I read an article by Phil Taylor, “15 Things You Shouldn’t Be Paying For.”

The recession seemed to have changed some people’s spending behavior. When people are running low, they try to get to places with less gas. I hope people can keep up the thrifty habits even after economy picks up. Here is the list of these 15 things.

1) Basic Computer Software; there are so many free downloads
2) Your Credit Report; you can always get a copy during a free trial period.
3) Cell Phone, absolutely. You don’t really need to keep up with the new products.
4) Books, of course — that’s why we have libraries. And no more books to crowd your room.
5) Water. It is also good for the environment when we consume less bottled water.
6) Credit Card. Why pay an annual fee for a credit card when there are plenty of free ones?
7) Debt Reduction Help. This is the last thing you should pay for, when you don’t have money to pay your debt. But I do know someone who hires an agent to manage all her bills.
8) Basic Tax Preparation. Do it yourself unless you have half a million to work on. I know some people are too hopelessly lazy to do it themselves.
9) News. Either go online and read or go to your local library or even bookstore. It is simply too old fashioned to buy news now.
10) Budgeting Tools; download free tools from the internet.
11) Pets. There are many lovely pets in animal shelters. You might have done a good deed by providing a home for one of them.
12) Shipping; look for free shipping deals.
13) Checking Account. Why pay for this when many banks offer a free checking account?
14) DVD Rentals. You can watch anything from the internet or get free rentals from
15) Exercise. Nothing is more true than this. You can exercise anytime anywhere, with free air and free sunshine.

Actually, there are a lot more things that people don’t need to buy, especially during back-to-school days. The weekend before school started, I saw many parents shopping for school supplies with a list from the school. What happened to the old school bag and supplies that they used last year? Why do people have to get a completely new set of school supplies every year?

The Cost of Poverty and Ignorance

On 8/20/2010, I went through a patient’s chart and met such a case — a stage IV breast cancer patient, in her 40s. When she was first diagnosed, she was already in this late stage. She felt a mass in her breast long before that, but since she did not have medical insurance, she decided not to see a doctor. When finally she had a chance for a free physical checkup, she related the mass on her breast to the doctor, who immediately asked her to do a biopsy, a thorough workout, then surgery. The workout reveals the cancer has metastasized to liver and brain.

I couldn’t stop thinking and feeling sad long after I closed her chart. I don’t know exactly what went through her head when she waited till the tumor became a palpable mass. Didn’t she understand that mass could kill her? Maybe she didn’t.

That evening I shared it with my daughter, “It is so dreadful to be this poor and ignorant. That’s why people of lower social status have both high morbidity and mortality rate. They cannot afford to seek medical help when they should and they don’t know the risk of delay.”

Habits that Make One Broke 2

On 10/8/2010, there is another article on thrifty living, “6 Habits That Will Make You Broke” by Claire Bradley.

I feel so unpatriotic when I constantly talk about saving, the opposite of spending and boosting up our economy. After all, consumer spending makes up nearly 70% of the nation’s GDP. If everybody were as thrifty as they should, we would never see the rebounding of our economy.

Still, you would not want to see this happen to you — “It’s still a week until payday, but your checking account is almost empty already. Where did all your money go?”

The money has been drained away by some of the following bad habits. Below is from Bradley’s article.

1. Window Shopping or internet goods browsing. To be sure, those window showcases are not without purpose.

2. Carrying Lots of Cash You know that paying with plastic is bad, but carrying lots of cash can be just as bad a habit. Avoiding plastic is great, but budgeting is just as important when choosing to pay cash.

3. Saving Your Info With the online Vendors. Those online shopping sites are so considerate to save your address and credit card information — some even have one-click ordering buttons, so you can buy something in just a second. It’s very easy, but also very dangerous.

4. Clipping Unneeded Coupons. The truth is that coupons can make us buy things even we didn’t plan for.

5. Shopping With Your Emotions — the worst type of shopping behavior. It was a rough week, or a good one, or you want to reward yourself for losing a few pounds, so you go shopping. You earned that new dress, that new gadget, that big pie — it was on sale, too. Letting your mood dictate your buying decisions is the quickest way to go broke. Sober up before shopping.

6. Not Planning Ahead. It’s Tuesday, you’re tired, and have no idea what you’ll make for dinner. A great night for takeout, right? Using data from the BLS, it’s estimated that the average family of four spends over $4,000 on eating out — a very expensive habit that will make you broke in a hurry.

I am writing this while thinking of the spending habits of my children. I surely wish they are all free from these wasteful habits.

Habits that Makes One Broke 1

On 10/9/2010, I read an article named “Top 6 Mindless Money Wasters” by Sham Gad. Here’s the short list.

1. Convenience Stores. Remember you have to pay for the goods and the convenience. Nothing comes free. People who like to buy on the spur of the moment are the biggest losers here.

2. Cell or your home phone plans. Be careful of your monthly bill. You might be paying more than you sign up for

3. Soft Drinks at restaurant. It always costs more than the one bought at grocery store.

4. Unnecessary Bank Fees
5. Magazines. Indeed, with the speed of internet, who needs to subsribe magazines? Or you can always spend some time at local bookstore or library.

6. Annual Credit Card Fees. It makes no sense when there are so many fee free credit cards.

The last piece of advice given by the author is “Be Proactive –Spend a couple of hours and go over the above categories along with any other regular habits you may have accumulated over the years. The time will be well spent as it could mean hundreds of dollars of recurring annual savings.”

“I work hard. I deserve it”

Sometime ago I heard this news. A woman earning $40K yearly bought a $50K car. It makes no sense that she lives beyond her means. When she was asked why, she said, “I work hard. I deserve it.” It is just this simple, probably out of the most simplistic mind.

Her explanation is faulty on several accounts.
(1) She should not spend more than her income, unless it is absolutely necessary, like buying a house.

(2) She is unable to think ahead and foresee any possibilities in the near future and prepare for the unexpected. e.g. what would happen if she lost her $40K job? In the long run, it is best to save first, spend second instead of the other way around.

(3) Together with an expensive car, she has to equip it with high insurance and maintenance.

(4) When she has very limited income, she has to sacrifice her other necessities in order to enjoy that luxury car.

My daughter thinks she should put aside some of her earnings and should not buy that expensive car since she doesn’t need it and cannot afford it. I am glad to see even my teenage child has more commonsense than this adult woman.

Sound Financial Advice

Recently, I read something like advice to people in bad economic time. Most of them are simply commonsense. I am surprised that people need to be taught about all this. Here are some interesting points.

(1) Cut spending to the bone, which means no dining out, no entertainment.

(2) Be honest about what is a want and what is a need. That is, avoid wasting on your want. Put food on the table before anything else.

(3) If you have to borrow, spend borrowed money on the basic necessities only. Yes, don’t we know better than this?

(4) Don’t touch your retirement savings.

(5) If you’re nearly tapped out: take any job offer. The key is to generate income while you continue to look for a better job. Remember beggars can’t be choosers. Too bad that’s not what most people do. Some of them, with some skill and education, would not stoop to any unskilled job.

(6) Stay where you are if you can unless you absolutely must move. Because moving always involve extra cost.

(7) If you’re thinking of walking away your house: talk to an expert and exhaust all other options first.

(8) If you watched in horror as your retirement fund took a plunge, do nothing. It will climb up eventually.

The Thrifty Minority Americans

On 8/24/2010 I had a monitor from New Mexico and the next day I had one from Michigan. We talked about the hot weather that we had to endure this year. To my surprise, both of the monitors told me how to save on electricity on hot days.

I learned one monitor used fans instead of air conditioner to save energy, the other living up north has tried to keep her bill under $100.

Who ever said Americans are wasteful? Not all of them at least. To be sure, they are hard-working monitors, and they are also exceptions to the rule in exercising financial discipline on themselves. They are the thrifty minorities, more so than most Americans that I have known.

When It Comes to Your Money, Always Check It Yourself

On 6/9/2010, I stopped by a local bank on my home way from work. Normally I don’t check the deposit or withdrawal slips against monthly bank statements, as I trust them to do the right thing all the time. Last month while I was cleaning my bag, digging out all the deposit slips, for the first time, I checked one deposit slip with the bank statement that I just received in mail that day.

To my surprise, I could not find on the statement one few-hundred-dollar deposit that I made on 4/16. I was intrigued and was determined to find out why. So here I was in front of a bank teller, asking him to help me see where this deposit should show up. While he was reading my statement and my deposit slip, his face turned red. I could sense there was something not right.

It turned out that the money that I deposited went to another person’s account, by accident as I was told. I will never know how that has happened. My mind was running fast through numerous deposits that I have made over the last decade and who knows how much money have gone to some unknown accounts this way, when you would think you can trust all bank people to do the right thing all the time. Even if it is a pure accident, the loss is on me and I have no idea how much I have lost over the years.

I can see my old habit of trusting people blindly is hurting me financially. I am not sure if it is a blind trust or I have been too lazy to do a check myself, cheating myself with the belief that I should trust these bank people. The moral lesson is when it comes your money, you cannot trust the bank or anyone without doing your own checking.

How I Teach my Children Financial Responsibility

A friend of mine at the skating ground once asked me how I taught my children financial responsibility. I told her I taught them with my daily activities. They know so well that they don’t need to be specifically told. The following instances reveal a lot.

I shared this joke my daughter on the weekend before mid-autumn festival. A person needs to send a coat overseas. He takes out the buttons from the coat before sending so that it would weigh less and cost less. My daughter said, “That must be you, mom.” I am flattered. In fact, I am not as resourceful as this person.

On the same day, my daughter and I went to Border’s bookstore. When she saw me carrying a small cup of coffee, she said, “Let me guess. It must be free.” Yes, she was right. It was a free gift sent to me by Border’s on my birthday. She knows I always carry my own tea cup when we go there.

Shopping Aeropostale: Don’t Be Victimized by Loud Music

On 9/18/2010, a Saturday afternoon, I was reading Psychology Today while waiting for my daughter’s art lesson. As always, I find many interesting reads here.

There is one article called “It’s so loud. I can’t hear my budget” by Emily Anthes. It answers a question that has puzzled me since 2008. During that year I frequented places like Aeropostale with my daughter. While she took time trying clothes, I was waiting outside, deeply disturbed by the loud ‘music’ or rather noise pollution in the store. I felt so miserable by the deafening noice that I kept asking her to hurry up, “Get a piece and let’s get out of this place.” I even asked the salesperson to turn down the volume. He told me it was company’s policy throughout all stores nationwide to set noise at this level.

Emily Anthes’ article finally reveals the ulterior purpose behind the deafening noice.

(1) The loud music creates a permanent party atmosphere. Loud music means party, fun, cool clothes, and youth. “If it’s too loud, you’re too old.”

(2) “People make more impulsive purchase when they are overstimulated. Loud volume leads to sensory overload, which weakens self-control. Overload makes people move into less deliberate mode of decision making. People might be more likely to be lured by discounts on items that they might not really want, and susceptible to other influences.”

As a dutiful consumer, I feel fooled and manipulated. I wish people can see through this trick and become wiser. As my daughter suggests, “Put on your ear plugs if you have to go to those stores.”

Poverty, Health and Culture

I read a report on 9/16/2010, not a pleasant one when the mid-term election is drawing near. On the other hand, it is not surprised to learn that “The number of people in poverty in 2009 was the largest in the 51 years for which the US government has been publishing estimates. The figures show a sharp rise in poverty since the beginning of the US recession in December 2007. Among the working-age population, ages 18 to 65, poverty rose from 11.7% to 12.9%, the highest level since the 1960s… The number of people in poverty increased by nearly 4m – to 43.6m – between 2008 and 2009, officials said.”

There is one interesting fact in the report on Income, Poverty, and Health Insurance Coverage in the US: 2009. That is, the report “indicates Americans of Asian origin are the richest, while black people are the poorest.” I am sure the white would come up the richest if you only counted the Jews.

This seems to be self-evident when you look at the dominant population in institutions of higher education and those of incarceration. You can write tons of books on the differences between these two ethnic groups, suffice it to say that one salient difference is that of culture.

While Asian Americans live in a culture that is gravitated toward financial success, whatever that is, black people must have something missing in their culture that can help them in that direction. To be sure, we are all products of our culture.

Interesting and Important Economic Statistics II

Contined from yesterday.
(11) As of 2007, the bottom 80 percent of American households held about 7% of the liquid financial assets.

(12) The bottom 50 percent of income earners in the United States now collectively own less than 1 percent of the nation’s wealth. [The country has seen an increasing army of low-income workers]

(13) Average Wall Street bonuses for 2009 were up 17 percent when compared with 2008.

(14) In the United States, the average federal worker now earns 60% MORE than the average worker in the private sector.

(15) The top 1 percent of U.S. households own nearly twice as much of America’s corporate wealth as they did just 15 years ago.

(16) In America today, the average time needed to find a job has risen to a record 35.2 weeks.

(17) More than 40 percent of Americans who actually are employed are now working in service jobs, which are often very low paying. [Service section seems to be the dumping ground or default place for anybody fall from middle class.]

(18) For the first time in U.S. history, more than 40 million Americans are on food stamps, and the U.S. Department of Agriculture projects that number will go up to 43 million Americans in 2011.

(19) This is what American workers now must compete against: in China a garment worker makes approximately 86 cents an hour and in Cambodia a garment worker makes approximately 22 cents an hour. [This is partly the result of globalization. Americans have to compete globally instead of feeding itself by reaping the fruits of labor from third-world countries.]

(20) Approximately 21 percent of all children in the United States are living below the poverty line in 2010 – the highest rate in 20 years.

(21) Despite the financial crisis, the number of millionaires in the United States rose a whopping 16 percent to 7.8 million in 2009.

(22) The top 10 percent of Americans now earn around 50 percent of our national income.

The above figures show clearly the middle-class is shrinking and the American society is gradually taking the shape of hourglass. It also reveals the economic behavior of most of Americans. I keep telling my children to put aside at least 10% of their paycheck and never spend it all. If anything, this is one of the economic lessons that we can learn from the above statistics.

Interesting and Important Economic Statistics I

The following is from Michael Snyder’s article “The Middle Class in America Is Radically Shrinking, Here Are the Stats to Prove it” posted on 7/15/2010. My comments are inside [my comment]

(1) 83 percent of all U.S. stocks are in the hands of 1 percent of the people.

(2) 61 percent of Americans “always or usually” live paycheck to paycheck, which was up from 49 percent in 2008 and 43 percent in 2007. [This tells a lot. First, it confirms that these people use up all their paychecks, leaving nothing for rainy days. So lack of common sense for so many people! Second, probably some of them could put aside 5% of their paycheck but they choose not to. Third, if they have not put aside at least 5% of their paycheck, their mentality is: live for today and let devil take care of tomorrow. Imagine this!]

(3) 66 percent of the income growth between 2001 and 2007 went to the top 1% of all Americans.

(4) 36 percent of Americans say that they don’t contribute anything to retirement savings.

(5) A staggering 43 percent of Americans have less than $10,000 saved up for retirement.

(6) 24 percent of American workers say that they have postponed their planned retirement age in the past year. [For both No.5 & 6, if you religiously put aside at least 5% of your paycheck each pay period, you would have more in your retirement and would not have to keep on working beyond retirement age. Sadly to say, for most people have chosen a different lifestyle.]

(7) Over 1.4 million Americans filed for personal bankruptcy in 2009, which represented a 32 percent increase over 2008.

(8) Only the top 5 percent of U.S. households have earned enough additional income to match the rise in housing costs since 1975.

(9) For the first time in U.S. history, banks own a greater share of residential housing net worth in the United States than all individual Americans put together.

(10) In 1950, the ratio of the average executive’s paycheck to the average worker’s paycheck was about 30 to 1. Since the year 2000, that ratio has exploded to between 300 to 500 to one.

To be continued…

The Near Desperate Economic Depression Everywhere

I found this article last Friday, 7/2/2010, by Chris Isidore, “The recession killed off 7.9 million jobs. It’s increasingly likely that many will never come back.”

The article cites the government jobs report issued that day, “The job losses during the Great Recession were so off the chart, that even though we’ve gained about 600,000 private sector jobs back, we’ve got nearly 8 million jobs to go,” said Lakshman Achuthan, managing director of Economic Cycle Research Institute.

Even worse is the prediction that “We’ve entered a era where the United States will see more frequent recessions than anyone is used to,” Achuthan said.

The article reminds me of two Chinese college graduates here. Neither of them were fortunate enough to land on a job they desired. One of them went on to graduate school, the other went back to China to learn Chinese and hopefully will find a job in China. This brought to my mind the young relative who returned to China exactly two months ago and is still home waiting for a job.

The message is loud and clear to all of us —unless, you excel in your field, nowadays, job perspective is depressing, no matter where you find yourself.

By the way, I went through some of my early postings yesterday. It is almost embarrassing to visit these entries. I must have tortured readers miserably with those lengthy writings.

Global Solution: Key Feature for Future Job Market

When people talk about the desperate US job market, it is easy to get pessimistic about the future. Someone even asked me if I regret having come to the US and my children might have an easy life in China. Had I stayed in China, I surely would have a different path, most likely as a teaching professor. Yet, regret is never part of me.

I believe there is a future for every one of us even if the future of US economy is not bright and cheerful. The key to success in job market is global solution, which is the nature of future job structure, the one that defies any national boundary. This globally interweaving job market belongs to not any nation but bold and outstanding individuals who never for a second cease to look for global solution for global problem.

Computing technologies and remote access via internet bring about unlimited possibilities, making outsourcing a cheap solution even for doctors and professors. If we can use big screens for global conference, we can use it for global classroom, too, bringing education to every corner of the world, either Africa or Latin America. Pretty soon people will have to seek ways to lower the cost for higher education in US.

Bold thinking plus careful planning and solid efforts will give one a head up. No country is isolated and we all float or sink together. Protectionism is loser’s solution, hurting the doer more than anybody else.

You have to face global community for market and solution if you dare to rise above. This is written for my children and their generation.

Christmas Giving to Those In Need

Our clinic asked everybody to make donations to sponsor a family in need. This family hands us a list of what they want for Christmas. The list includes Jeans, Any new release DVD’s, Revlon new completion #2 makeup, any kind of kid movie on DVD, Axe for men, board games, Wal-mart, Best buy or Game Exchange gift cards, any kind of musical DVD, remote control car, Action figures, Transformers, Bi-onicals, … I become so impatient going their list.

I am not going to donate anything. Here’s why:
(1) I never did Christmas shopping for my children and never encouraged them to get anything for nothing, as if there were a real Santa burning money for all the kids in the world. Why should I deviate from my normal practice this time?

(2) As far as I can see, they can live very well without these stuff. That is, they don’t really need any of them and they just want something extra. I will take care of the need first and wait till I deserve it to indulge the want. They can do the same.

(3) I never bought anything that I cannot afford, other than the house. I wait till I have enough for the purchase. Why can’t they wait till they have enough? Nobody’s life is easy.

I have made clear my position on Christmas shopping. Yes, I am firmly against this wasteful practice of shopping spree, commercialization of a religious holiday, as if it were Jesus’ wish for everybody to buy and spend in celebration of his birthday.

Even more stupid is the saying “shop till you drop.” Indeed, shop till the nation drops. How ridiculous can we be? Watching Christmas shoppers often reminds me of the statement that the average intelligent level of the nation is that of a six-grader. No wonder I become impatient so easily among six-graders!

P.S. Before posting this, my daughter read the draft and asked me “Did you email it to your co-workers?” No, not that I am afraid of anything but that I don’t care sharing any of my thoughts with those around me. Here’s one funny thing at my office, some of my co-workers always do the writing on my behalf when writing is needed. Because they know my English writing is pitifully incompetent. Bless their hearts.

Only 5% Can Quit Working by Age 65

This is from the seminar that I attended on market America last Saturday evening while my daughter was skating. Talk about early retirement so that you can start doing whatever you enjoy, it seems an unrealistic dream for the majority of Americans (95 – 28), 67% of them at age 65.

For every 100 people, by the time they should reach age 65,
1% become wealthy,
4% financially fit, do not need to work,
28% dead, without actually reaching it,
5% still working, out of necessity,
62% flat broke, not having enough to live by even if they work their butts off.

What a dreadful picture! I think of one of my neighbors who told me she had to work into her 70s. I can’t believe only a tiny 5% of Americans do not need to work by age 65.

I believe there are two main explanations — either the majority of Americans do not earn enough to enjoy early retirement or they do make plenty but equally do they spend that plenty. Simply put it, they have not saved enough from their earnings. I see too many cases that fit second explanation. It is rather disheartening if you are one of the working 65-year-old in America. But you got nobody to blame but yourself. One can always do better than this if one starts saving for retirement right after the first employment.

On the way home that night, I shared it with my daughter. “I will be one of the 5%, financially fit not to have to work way before that age,” said she. I am sure the thought of this will transform into the desired reality.

JOB Means Just Over Broke

I just learned a new acronym today. JOB = Just Over Broke. For quite a few Americans, a job mean JOB when they live from paycheck to paycheck without any savings. Once they lose the job, they are literally broke, bankrupt, destitute, down-and-out indigent! Sooo terribly sad.

Last weekend, a friend of mine called telling me that her 14-year-old daughter had been babysitting since last year and had saved $1,500. She asked her mom where to invest this savings. I am very much impressed. I don’t know what to say. She has more economic sense than some of adult American friends that I know of.

By the way, sometimes I see the term indigent stamped in a patient’s medical record cover, which means no money and no insurance. How many choices of treatment can an indigent cancer patient have? Not many.

On Monday, on the way home from the skating place, my daughter and another Chinese girl were chatting all the way. The topic was how much money they would make in the future. One said one million, the other said over two million. I was too tired to join the conversation, much as I wanted to. I am sure my daughter and her generation will never know the experience of JOB if they ever learn something from the current economic bitterness.

Startups, There Is No Higher Calling Than This

My son has been very much into startups since his high school years, from his internet venture to this summer job, and endless plans and ideas. Out of my wild ignorance, I often interpret it as his desire to be his own boss, an extreme form of individualism, the product of American education, so unlike me with an overdose of patience to work with the most absurd species. I started looking at his startup from a new perspective after I read these words by Paul Zane Pilzer.

Pilzer, author of many books including The Next Millionaires, made a comment on the virtue of startup, “When you create a business, you create something that improves the life of your customer, of another person, maybe of ten people, of a thousand people, of a million people. There’s no higher calling.

So nicely put. I feel ashamed for not being able to take on this higher calling.

Selling Blood for Money? Getting a Second Job?

I know I have talked a lot about money. How I hate this topic! Too bad living through this financial crisis, we simply cannot shake the topic out of our heads. Plus, as I come from a different culture and being rather old fashioned at that, I feel rather compulsive at seizing every opportunity to drill the concept of saving into my children. They grew up in the richest and the most wasteful land of all, that is, spoiled under our loving care without ever feeling deprived. Indeed, how I dislike this culture of massive consumption. Okay, here’s another one.

A friend of mine, a young one, talked to me about making money quickly, because that friend of mine needed money badly in order to pay the bills. I learn that some people take second jobs or even consider selling blood for money.

To be sure, my friend needs money all the time — for clothes, parties, for drink, hair, nails, rent, gas, water, electricity, cable TV, cell phone, etc. It is so sad that we have to sacrifice extra time in order to pay all these bills. Oh, how I hate having my precious time taken away this way!

I am concerned when I think of my children. Unless they have the ability to make unlimited income, they must find a system to make sure that they don’t over-spend their paycheck like most of young people today.

I told my daughter during our daily walk that, no matter how much or how little she makes, she must put down at least 10% of her paycheck into savings and must not get herself in a situation where she has to work two jobs to make ends meet.

I know my teaching runs against the mainstream practice of spending more than one’s income through borrowing. I seem to over-emphasize on saving instead of making money. Well, here’s my newest and greatest statement: you should either have the ability to make unlimited income or saving as much as you can. No matter what, never find yourself in any dire financial situation.

Unwilling Donor in Bad Economic Time

Yesterday during lunch time, I was on my way to SMW on 83red street. Suddenly, I heard police siren threatening from behind. I checked my rear mirror and saw a police car following me. “Do I look like a terrorist or what?” Not sure what was going on, I stopped the car. A young policeman stepped out of his car and walked toward me with a triumphant look.

He accused me of violating traffic law by “turning right on red light.” “I thought we could turn right as long as the traffic was clear,” I explained. “Not here,” the cop said with a faint smile on the corner of his month and a haha-got-ya look. He checked my license and insurance, then wrote a ticket of a heavy fine, saying he could double this fine and could send this traffic law violation to my insurance company, which means raising my insurance premium. I protested, he told me I could get into more trouble for showing contempt for law. I could saw the end result of throwing an egg against a rock and I didn’t want to be that egg. So, I shut up and drove away.

I have never tasted the destructive power of a law enforcement till that moment. I was mad beyond words. I told my daughter about this on the way home. Both of us were boilingly mad and throwing out bad words profusely. Finally, I said “Let’s consider this as a donation to the police department since money is in short supply everywhere and that policeman was just trying to raise money, except I cannot claim it as tax deductible donation.”

P.S. today I looked for the sign saying no turn on red at that intersection. Indeed, there is one. Still, it doesn’t say specifically no RIGHT turn on red as the conventional wisdom implies on left turn on red. Ouch, it hurts to pay for this ambiguity.

P.S. 6/18, I talked to someone else about this sign and was told blankly, “No turn on red means no turn whatever, left or right.” I knew it. Just need to be told again.

Your Endless Desire Restricted by Your Limited Paycheck

A neighbor of mine told me they never had enough no matter how much the bread-maker in the family brought home.

This brings to my mind another aspect of securing financial security — our financial situation depends on both making and spending money. Many people have their eyes on making money, but not on how they squander money like water and running faster than they can make. Imagine this!

We were at graduate school when my son came along unexpectedly. We lived on the meager income from part-time teaching and scholarship. While we never deprived ourselves, we still managed to keep growing thousands of savings.

Have you realized that your desire is fathomless but your paycheck is so miserably limited? Unless you know how to spend wisely, you will never be able to know financial security. How? Spend only on things you really need not what you desire. You reward yourself with some luxury only when you have done something deserving this. A simple and sweet truth for anyone who cannot make unlimited income for their equally limitless desires.

Venture, Startup, Summer Job and Beyond

My son’s summer job involves his newly-incorporated startup with an MIT Ph.D holder, an MIT Ph.D candidate, and his high school friend. He is the youngest of the four. They were strong enough to get funding for the summer. Right now everything is just an idea, without any product and nothing being able to bring in revenue.

Being initially his idea, my son has always wanted to have his own company. He worked on something during high school years. For this one, he has worked very hard and was excited when it got funding. I don’t know anything about starting up your own company and I do hope they are keenly aware of the fact that they need to generate something so that they can go beyond this summer. There are so many tons of things that they urgently need to take care of this summer in order to keep the startup afloat for the long, long time to come.

Now my mind is jammed with too many what-ifs, self-invited headache, and I can do nothing but wishing everything goes well with it. What a good feeling!

Don’t Build Your Mansion on One Pillar

This is a sad case of life and death and of building a house on one pillar.
Every time I see an Asian patient at our clinic, my mind drifts back to a colleague of mine back in late 1990s. I remember vividly when they were at our place and I talked to him about his wife staying home with the children. I said, “It’s better that your wife has some kind of job instead of staying at home. It always brings more security if both have jobs.” He said jokingly, “Don’t worry. I won’t die that soon.”

I felt a bit stung at his word, as if I was trying to jinx him. “Hey, I don’t mean that. I mean no job is secure and you feel a little secure if both of you work, at least the benefits will continue if one lost the job. I would think it a good idea for your wife to take some classes or training while she is young and just get ready for a job.” They were about mid-30s then. He sounded so full of confidence at that time. I know how nasty I can be when it comes to giving unwelcome advice. I always feel like slapping my face afterwards.

During the Thanksgiving of 2004, I saw him again at a Chinese church, so delightful seeing him with his 2-year-old son, as young and handsome as before. We had kept in touch over the phone and seldom saw each other. There was no sign of illness at that time. But who knows that was the last time that I ever saw him. I was totally shocked and speechless when I learned that he passed away in less than a year of brain cancer and he was about 41 years old, leaving behind three children and a jobless wife. It was about 6 years after we talked about security and he assured me that he would not die that soon. Life is so fragile and unpredictable.

I know the family has been very close to a Chinese church, which must help the widow and the children more than I can imagine. Then again, I keep wondering if he could have been better off during Sprint massive layoff in 2001-2003 had he listened to my advice, because I learned over the phone that he was overcome with worries, fear, and anxiety – a long range of negative feelings, enough to crush an iron-man, so much so that he did not sleep for the week before the announcement of layoff. I could feel his burden with three children, a house, a wife, all depending on his precarious paycheck, like a big mansion standing on one pillar. But I would not talk about his wife’s job any more.

Life is so unpredictable and beyond our control. It gets even more scary for many first generation immigrants here when we don’t have our extended family here to tide over any misfortune. Here comes the cross-standing church building, our forever dependable pillar, emotional one at least. Still, I would advice against building your mansion on one pillar, like that “Dear Departed.”

Anything that Can be Digitalized Can be Offshored and Much More

Some of my friends have asked me about jobs at healthcare industry. Are they secure? They were wondering. Not exactly. Nothing is guaranteed and nothing is secure. Face this reality — anything that can be digitalized can be offshored. e.g. medical transcription, radiology images, medical coding and billing. You can always scan the paper, the bill and transfer it anywhere you can find cheap labor to analyze it and file it to the insurance company.

At least two key trends have been made possible by IT and Internet. The first trend is going electronic in as many fields as possible, eGovernment, eHealth, etc. The general rule is any jobs that need in person service in health care, like doctors and nurses, cannot be outsourced.

The second trend, also made possible by the Internet, is more and more companies are seeking for global solution, which means seeking globally for cheaper solutions and high profit. The fast development of IT and Internet opens unlimited possibilities for the way a company organize and runs its business.

Face this fact, if you think you can put on a white uniform working securely in a lab, chances are someone in other countries can do a similar job or even better job than you, all at a fraction of your paycheck. There is nothing to stop the off shoring of this whole lab. This is only one possible scenario. Not that far-fetched when you are in dire need for cheaper solution. That is, until everybody’s labor gets cheaper not by dozen.

Tax Audit, Tax Return, Real Headache

The weekend was so freakingly un-relaxing when I had to freak my brain out on 2008 tax return and financial aid application for my son, one built upon the other. The deadline is 4/15, the coming Wednesday, being aware of the approaching date further pounding blood into my swirling head.

The cost of higher education is higher than sky — reaching nearly 60K per year, the thought of which frightens my shrinking wit out of my body when I look ahead to the years when my daughter will be there.

We were so unfortunate last year to have our tax audited and had to render a fine of a few thousand sweet dollars. How crazy can things become? I have no idea. Right now, I only need to collect all my brain power and focus on getting the tax return and financial aid application forms out of the door before the threatening deadline.

Good thing I had one return complete, the federal tax, still need to work on state tax return.

My daughter said I could pay professional tax help over $300 to get it out of my head. Last year I had a coupon and had an Indian tax guy estimate the cost of my tax preparation, which reached $480. Forget that help. How I wish to stay away from torturing my head! Well, for that price? I guess I have not loved my head that much yet.

Medical Information Technology — a windfall for IT Industry

The President plans to pour in $17 billion out of his $787 billion economic stimulus package for incentive payments to physicians and hospitals that adopt electronic medical records (EMRs).

After its implementation, everything in patient’s chart go electronic, including filing to government for Medicare and Medicaid patients and to insurance companies and to drug stores. No more paper report on lab result, CT, pathology, operation, hospitalization, radiation, doctor’s exam and diagnosis, prescriptions, etc.

It is not only an environment-friendly gesture, paper-saving and tree-saving, but also hugely money saving, too much to be listed here.

To be sure, there is a huge upfront cost of hardware, software, installation, user training, data transfer, followed by the long term cost of maintenance, IT support and enhancement. Uncle Sam will foot part of these initial bills as an incentive for physicians. If not going with the eHealth, penalty will follow in the form of decreased reimbursement for Medicare and Medicaid patients. There are too many details to be mentioned here.

I think it a piece of good news for IT folks, only if these jobs are not shipped overseas. I know it is a heavy IF, especially at the time when everybody looks for cheap solution. Still, eHealth initiative will be a real bonanza for IT support and Internet security jobs. A little knowledge in medical record and terminology might put you above the average IT applicants in job-hunting.

My dear friends, not all of them, only those who work in IT field and are among job-hunting troop, be armed and be prepared. Be the lucky one when opportunity knocks at your door.

“Survival Job” Not A New Concept

Recently, you often heard people talking about a not-so-new term “Survival job.” It means you pick up whatever job you are offered after you are laid off in order to be able to pay the bills or to put the food on the table, even if it is not in your field, or it is unrelated to your previous work experience, or it means a step-down from your last job in pay and status. It is expected to be temporary in nature, as you are waiting for a chance to jump back to the previous cushion. The belief is it is better to have a job than without, whatever it may be.

Or rather in order to survive the layoff, as in the example of a laid-off senior manager, he takes up a job as janitor while hoping to hop on another management position. This is from USAToday website, a man made “six figures and supervised employees” two years ago. “Now, the laid-off Sun Microsystems manager sells plumbing supplies at Home Depot.”

The term was once used on artists or actors who have to have some means of living while seeking for opportunities to have their talents recognized and profitably employed. But artists and actors make up a tiny percent of population. Now with the swelling army of unemployment, people feel grateful even with a survival job because even survival jobs are hard to get.

I like the action of taking a survival job to help tide over the hard time. Meanwhile, you have to work hard preparing yourself to leave this temporary job. Otherwise, you are likely to become a permanent fixture at your survival jobs. Not a bad thing if that is what you want.

After all, financial independence is better than its opposite. Uncle Sam must be smiling counting the tax dollars that we pay, regardless how. A step-down? No. It is called adaptation and survival of the fittest. Be proud of your independence and survival.

The Inevitable Demise of 137-Year-Old Boston Globe

Last weekend I read a piece of news from the Internet, saying the New York Times, now $1.1 billion in debt because of purchase of Boston Globe, the 137-year-old money-loser, threatened to close the Globe. The article says, “Faced with the global recession and declining revenues, the newspaper business is reeling — one major paper has already folded this year and several others are seeking bankruptcy protection…. ‘It is a huge warning shot across the bow of the newspaper industry. If this can happen to the storied Boston Globe, pretty much nothing is safe,'” a professor said.

I am overwhelmed with a sense of sadness over the inevitable demise of such a senior, respectful tradition or even the newspaper profession. Like so many trades and tricks, they all will become obsolete and on the way to become history, brought about by the advance of technology. Thus, people spend more and more time in physical isolation.

To be sure, the decline started not with the recent recession but with the rise of other medium of communication, radio, TV, then Internet in that order. First, when radio, TV, and Internet are free, it makes incomplete sense to pay for newspaper for news. Not me.

Second, with pressing crunch of time, people can get news from radio while driving or cooking or eating or walking, who will allocate a special moment for newspaper? Even if newspapers are free, well, time is not.

Third, unlike the non-interactive mode of newspaper, radio and TV, Internet is the most attractive and interactive media of all. It is so attractive that people start devoting more time on the Internet than the combine of newspaper, radio and TV. After all, you can do almost everything on the Internet, from shopping, to watching news and video clips, investment, research, reading, gaming, broadcasting, chatting, dating, all sorts of entertainment that you can imagine, with boundless possibilities.

Have you heard of this? A 16-year-old boy, posed as a 25-year-old young man, totally grapples the heart of a mid-30s wife. Not that absurd, right? Indeed, anything’s possible in virtual reality. All this happened before recession set in.

When I talked to my daughter about this, she did not pay much attention. Upon further asking, she said, “You will surely lose readers. Who will read it? It’s so boring. You just cannot write anything interesting.” What a feedback! So lovely expressed, and so encouraging to learn of this. Hey, it is not a newspaper.

Misfortune and Counting our Blessings

Last Friday, 4/3/2009, my daughter hugged goodbye to a skating buddy, who told my daughter that she was not coming to skate because her dad lost his job. While talking about this girl, my daughter commented, “I am very lucky.” My mind rushed back to those who got laid off in recent economic downturn, especially both adults being unemployed, its impact on children and their future. For my daughter, other people’s misfortune seems to remind her of counting her blessings.

Yesterday was another busy weekend, art lesson in the morning, skating from 12 noon to 3 PM, Border’s after that, then to library, to an Oriental grocery store.
PS. I finally created some categories and retrospectively categorized some of the old postings, not all of them yet.

Use Credit Card to Pay for College Cost

My son called on Fool’s Day that his spring semester fees was due on that day. He told me it was a 5-digit number bill. And there would be late payment fee if payment came after 4/1. I still remember last year that I paid nearly a hundred dollar for late fee charge. Why didn’t he let me know a little bit earlier? I am sure he always has more important things to attend to. Talk about the cost of procrastination!

I heard from one of the monitors that came early March that there were quite a few students who used credit cards to pay for college tuition and only paid the interest. Now as we see a sharp climb in credit card interest, even as high as 25%, why don’t these students get student loan with a far lower rate than using credit cards? Talk about financial decision! Nothing can be more absurd than this! One of my co-workers paid an agent to take care of all her monthly bills when she is living from paycheck to paycheck.

I am daily dazzled by the remarkable choices that people make in their lives. This makes the world so diverse and never suffers from boredness. They are wonderful choices only if we don’t have to pay dearly for it.

It is high time for the young people to learn to behave reasonably and responsibly regarding their money or their parents’ money. Perhaps financial responsibility will come, if it ever comes, when they are on their own. For now, enjoy this Spring Friday and don’t forget to pay your bills, tons of them.

An Opportunity to Exploit Future Generations

The latest not-really-new news about US deficit, according to US Congressional Budget Office (CBO), the deficit will hit $1.8 trillion this year, $93 billion more than foreseen by the White House. That would equal 13 percent of GDP, a level not seen since World War II.

What does it mean to us? Simple. Raise tax to pay the debts. The government got to raise money in some way at some point, probably after the country climbs out of recession. It is simply unsustainable in the long run to maintain this debt-to-GDP ratios.

Funny everybody talks about borrowing money and never worries about the heavy burden on the future generation. Whatever package the government tries to sell, it is all funded by borrowed money. No one ever thinks of cutting expenses everywhere to save money, then use the saved money to fund the package. That’s how we have event like AIG using government $170 billion aid for $165 million bonus, as ridiculous and outrageous as the government. This only shows AIG did not need anything extra to survive at all. This is how the borrowed money is spent!

The package is nothing but an opportunity to exploit future generation. Whatever we spend and waste today will be conveniently taken care of by our children’s generation. How irresponsible can we become? A sweet legacy to future generation — a big and deep dip into your paycheck to pay your granddaddy’s debts. Oops, sorry, there are five Dips.

My Middle-School Age Daughter Is Smarter Than The US President

No kidding. Yesterday while taking our evening walk, we talked about the president’s $800bn stimulus plan. I said it was like tearing down the eastern wall to amend western wall, giving people more money so that their consumptions will stimulate production. My daughter responded with the depth of wisdom that is so much lacking in president.

“Worse than this, you don’t even have the eastern wall to start with. You have to borrow walls from other’s to amend all your walls. Americans have to change their lifestyles in order to get to the root of the problem. Otherwise, it is like a vicious cycle — they borrow more and spend more and are locked in this borrow-consume cycle. It is simply not right to spend more than you can afford. Those who spend more than their income should not be helped and should be held responsible for their failure. After all, they made bad decision and should suffer as the result!” A tough punishment, yet fair enough. The president never advises the people against spending more than their income.

There is a naked folk truth to what she said. Responsibility is one of the life skills that we adult constantly hammer into children’s head. Yet, how can we teach our children to be responsible for the consequence of their decisions if we adult fail to do the same? I feel like a double-faced hypocrite.

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