Monday, November 3, 2008

You Need an Emergency Fund. Now.

All too often than not life has a sense of irony. Or at the very least kicking you when you are already down for the count, just to make sure you're getting the full experience. As the recent economic downturn has taught us, everything fiscal is linked on an intimate level to everything else. A poor housing market will drag down the retail industry, which drags down the manufacturing industry, which raises prices on consumer goods, which feeds back to the retail industry and so forth.

As such you should be prepared for the worst case scenario. In turbulent times a relatively insignificant problem with your finances can spiral out of control, leaving you in a situation wherein you have to take on more debt than is healthy. Take the current situation for example. The folks losing their homes right now fall into two categories. Those who planned for the worst, but clearly didn't have a realistic image of a worse case scenario and those who did not (or were unable).

Regardless of which category these people fall under, it's a pretty terrible time for them. But straying away from predatory lenders aside, they had the opportunity to prepare for the crisis back when times were good. All they had to do was squirrel away some of their income.

An emergency fund is apart from any other. A vacation fund is drained every year, likely. A retirement fund is only touched (hopefully) in preparation for your golden years. A college fund is emptied during several years after high school. You don't touch an emergency fund. It remains unmolested until the worst case scenario happens.

Whether that's a death of a spouse, the loss of a job or some other disaster is immaterial. It's there for you in your time of need and not your time of want. A lot of people skirt around the issue, claiming that it's easier to live off of credit cards or small loans until everything is back on track. Which is true, in part. A credit card can stave off the power going out or the car being repossessed.

What it can also do is enslave you for a number of years if used improperly. Suddenly that $150 spent on your Visa to keep your heat on for another two weeks balloons into $300 as it becomes increasingly interest laden. Now add groceries, rent, car payments, insurance, the phone bill and the power bill. If your financial situation does not improve you're on the fast track to bankruptcy. A single month of living purely on credit can take a really long time to pay off, depending on the interest rate involved.

An emergency fund is not only always there for you (unlike credit, which may dry up due to inactivity, poor management or poor economy), but it works for you. If dwelling within a savings account at your local bank or credit union it'll earn you interest instead of the other way around. So suddenly your $1,000 worst case scenario cash becomes $1,100 and so on.

A lot of people suggest somewhere between 3 - 6 months of income packed away for an adequate emergency fund. I think this number is just about right, especially considering the most common need is due to sudden job loss. A job, especially in a poor market can take a long time to find. And even then you might need to take a cut in pay to keep food on the table.

But I like to take it a couple of steps further than that. People are fickle and emergencies come in many varieties. The car needs a costly repair, you have an accident while uninsured, your dog needs surgery because he ate a particularly unhealthy diet of sneaker and Christmas tree ornament. So in any given year there are bound to be a couple of fully justified reasons to dip into the emergency money.

I like to suggest several savings accounts that you regularly contribute to until they've reached a predetermined ceiling and all together they should equal roughly 3 - 6 months of your current income, matched if your income raises.

  • Job: A savings account established in the event of your company going under, being laid off of you being fired. This should arguably be the biggest fund at your disposal due to the fact that loss of primary income shuts down the flow of money.

    Also keep in mind certain factors such as your industry. If you're employed in a volatile niche such as real estate you're going to need a bigger fund because hard times will likely be longer. If you're employed in an industry that has a great demand for workers, such as nursing you can afford to redirect some of your money elsewhere.

  • Car / House: While these can of course be divided if needed, they go hand in hand. This account should be roped off for the harder times involving your home and car. While insurance typically handles most things, some states don't require insurance. And some insurance plans only cover a tiny fraction of possible scenarios.

    Imagine your car's muffler rusts out due to inattention. Or you find yourself driving over a couple of cases worth of broken beer bottles leaving a party. Or maybe your roof develops a pretty steady leak and needs repair (and mold mitigation.)

  • Pet: The hardest thing a pet owner has to do is put down their companion because they can't afford to have a costly, live saving surgery performed. Think of how many hours of enjoyment and love your dog, cat, ferret or bird has given you over its life time. Now imagine how gut wrenching it'd have to be to put it down because your credit has dried up and you don't have the means to help it.

  • Health: Hopefully you have insurance, but even if you do there are many costs involved. Co-pays, tests, studies and medication will wind up costing you a lot if they come out of left field and are unaccounted for in your weekly budget.

    Using the logic that you're young and thus won't need very much medical care doesn't carry much weight. Especially if you find yourself falling on a patch of ice and breaking your ankle or getting into a car accident.

    While it's impossible to save up enough to cover every medical emergency, a couple of thousand dollars will more than cover the co-pay you may have to pay if you need an emergency room visit and a barrage of x-rays.
Not only will different accounts help you keep yourself organized, but it'll also prevent you from dipping into your emergency fund more than you need to. If you're not used to dipping into the pet fund (which you hopefully won't be) you'll be less likely to access it in less than critical times. Any the good thing is if a really terrible disaster is there and you need to use your best judgment, you can still liquidate any account for any need.

Your fund should also remain available at a moment's notice and should not be tied to anything volatile. It shouldn't be invested in the stock market or stuck in a 6 month CD. A regular savings account is more than adequate for most people.

Not only will it be there for you when you need it most to lend you some flexibility, it'll give you peace of mind when you don't. Which is crucial, especially in dark economic times.

Thursday, October 30, 2008

Independently Employed: Straight talk

I'm starting a business venture with a friend of mine. I have a significant amount of marketing and writing experience and he probably is coding a web enabled version of HAL. It's a small web design operation by the name of Cail Design. We know were starting in a pretty terrible market, but we're confident we can get the project running on all cylinders in a respectable amount of time. Why? Because we've both been independently employed in the recent past.

We know what to consider when it comes to plans and contingencies. And we're also used to working in self starting environments. But all too often people see the tag of "self employed" and imagine a wholly different picture. One filled with a conspicuous lack of alarm clocks, noon breakfasts and leisurely trips to the bank to cash in inordinate sums of money. I elaborated on a number of myths and misconceptions a couple of months ago here. But then I elaborated on social misconceptions and practicalities. I didn't really touch upon the pros and cons of working independently outside the realm of promised corporate paychecks.

While there are a number of pros and cons to consider before you begin your solo adventure, there are a number of cold, hard facts that are neither negative or position that should be examined nonetheless.

  • Taxes: You cannot avoid taxes. If you try you're going to wind up burned. So throughout your first year of being self employed keep a lot of records. More so than you think you need. Track how many hours you work, how much you make, how much you drive for your business, everything.

    Not only will this help you figure out how much profit you're pulling in but it'll also allow you to contribute some of your income to a bank account reserved just for Uncle Sam.

    I lucked out. My first year of being self employed started in the middle of fall. By the time tax season rolled around I only needed to contribute under $1,000 in my tax return. While I hadn't been saving especially for it, I was able to afford the drain on my bank account.

    If you're married it might be a good idea to file jointly. Especially if your missus or mister has a conventional occupation that they typically receive a tax return for. You'll be able to either reduce or eliminate the amount you need to shell out at the end of the year.

    If your self employed nature involves a lot of billing, either inbound or outbound it might be a good idea to hire an CPA to assist you in your venture.

  • Hats: Being self employed in any industry means you're going to have to wear a couple of hats. This can be a good thing because you may find a wide array of things you weren't aware you were good at. It can also be a bad thing because you will inevitably wind up doing something you're not too keen on.

    Regardless you have to be prepared for it. Simply neglecting things that lie outside of your realm of expertise isn't going to get you anywhere. You have to be your own boss, but also your own secretary, tech support and peon.

  • Motivation: Your motivation switches gears when you become self employed. Neither positive or negative, regardless of your industry you're going to notice a significant change in your outlook and behavior. Most people find themselves a lot more motivated because they notice a direct correlation between work put in and money earned.

    But a select few individuals learn quite quickly that the unmotivated, slack off time checking personal email on company payroll is going to be sorely missed.
That being said there are a number of distinctly negative things about being your own boss. I touched upon this a bit in my previous article, but somethings bear repeating and elaboration.
  • Your credit score hurts: This one blind sided me completely when I first abanadoned my 9 - 5 job in favor of a more liberal atmosphere. If you are responsible for your own income banks are less likely to lend to you because they consider you a higher risk than someone who has been employed by a Fortune 100 company for 15 years.

    So you may wind up paying slightly higher interest rates than you did before. A good way around this is to keep a healthy savings account and just practice sound personal finance. If married, one of you may want to keep a conventional job just so you can apply for loans jointly and keep those interest rates low.

  • You lose "bennies": Say goodbye to the company insurance plan, paid holidays, over time, sick days and pensions. Living the American Dream means you have to become the essence of America, capitalist. If you're self employed you're going to have to pay for your own health insurance, contribute to your own retirement fund and generally take good care of yourself on your own dime.

    While this is liberating and allows for a great deal of personal choice, occasionally that 401k matching your old company offered is missed.

  • Slacking off is not an option: If you slack you're only hurting yourself and your employees. Period. Your revenue is directly tied to your productivity. In some jobs it's possible to stare at your monitor all day or check Twitter, get paid and no one will be the wiser.

    While you're self employed you're able to choose whether or not you want a long lunch, but most often than not you wind up working through it and then some.

  • Industry collapse: If you're working full time for a bank and it suddenly goes out of business and kicks you out on your rear, the federal government is there for you. They'll help you get back on your feet with unemployment funds.

    There is no bailout for Joe Smith, Realtor. If the real estate market tanks (like it is) Mr. Smith is caught in the cold with only himself to rely on and the hope that he'll be able to recover. Self employed people are very vulnerable to fluxuations in the economy, so a heavy duty emergency fund is not only important but required.

  • Not being able to self start equals fail: There's more to being your own boss than not having a manager shout at you. You literally have to be your own boss and some people find themselves unable to do this.

    Most people need occasional guidance, motivation and support an authority figure provides. If you're on your own time clock you need to be able to motivate your self, start projects and direct others. Because no one is going to tell the boss what he needs to do, when to do it and how to do it.
But of course the benefits occasionally have to out weigh the negatives. Otherwise no one would run micro to small businesses at all. It'd simply be impractical. I've found that the benefits far out weigh every other consideration. And even though I've had to take the bad with the good I've found it to be more than worth it.
  • Freedom: This is the flipside of my negative point about self starting. If you are the type of person who can work on their own without any direction, you'll almost always succeed at what you set out to do. Granted, the business may come before you most often than not. But you can influence the business to cater to your own personality, making an all nighter at the office seem like a breeze.

  • Income: Sure, industry collapse can spell disaster. But industry expansion means profit. If you're working hard in an environment that is favorable to your industry, you're going to be the first to notice a bigger paycheck.

    If you were employed under someone else you'd find yourself getting a raise, but nothing as substantial as they're making in a good market.

    And since you're in direct control over your earning power you know that every hour you invest is an hour closer to a great vacation, a new home, or a bigger retirement fund.

  • Flexibility: Being independently employed gives you a tremendous amount of flexibility. The smaller the business the better. This means that if your partner is away on business you are able to arrange your schedule to accomodate child care, errands or house chores.

    And if required it allows you to be a stay at home mom or dad. Even if you can only do it in a part time capacity you'll save a bundle on child care costs and spend more time with your family.

    ....and of course if you're not into that you can arrange your schedule so that you're always "very busy."
Being self employed is by no means easy. But it can have fantastic benefits if you're well informed on your industry of choice as well as the pros and cons of being your own boss. While I would not suggest it for everyone I meet, I do believe that everyone is capable of at least making a go at it. Any specialty can be adapted, just some more than others.

Tuesday, October 28, 2008

Itty Bitty Homes: Promoting a frugal life style

Alternative housing has been an interest of mine for several years now. I don't know why the subject appeals to me. Maybe it's just a breath of fresh air after constantly seeing row after row of more or less cookie cutter homes in my neighborhood. Or maybe the life style of those who typically dwell in them is so unique and rare.

I wrote an article on eco-frugal homes about a year ago here on the minus sign blues. I really enjoyed researching and writing it. But I neglected something that's a bit less eco-frugal, but not so much to warrant it being barred from a discussion. The Itty-Bitty home. They come in all shapes, sizes and building materials. From ISBU styled homes made of steel shipping containers to more conventional wood and nail creations, just built on a tiny scale.

If you live in an itty bitty home you're the polar opposite of most people. You've thrown off most of the shackles of materialism and embraced a low square footage life style. You don't wind up collecting useless junk simply because of the fact that you just can't. You don't have enough storage space to hold onto your woefully out of date 1976 collection of Encyclopedias or that "antique" kitchen table that's more or less collecting dust in the basement. It's a clean life style. I'm convinced that this is very cool, although I do admit it's fairly hard to imagine myself becoming that type of person.

It's take a fair bit of work to shoe horn myself into this type of life style. But I have to admit that I've changed a lot in the past couple of years. Our credit card debt has taught me that living close to the edge isn't very fun most of the time. But it's also taught me to be a bit more humble as far as my expectations go. That things, while pretty freaking awesome, are not what define a person. And someone's earning power occasionally correlates with the decline of one's morality and self control.

So who knows. Another year and a half in debt might teach me that yes, small and humble (but comfortable) might be the way to go as far as a home goes. I certainly never wanted a McMansion, but I think my requirements for a home have changed substantially.

Itty-Bitty style homes are occasionally portable simply because of the fact that it's quite easy to slap some wheels and a towing hitch on something so light and tiny. But they come in a variety of shapes and sizes from a wide array of builders. They're gaining popularity. Not just among retired snowbirds and nomads, but people looking for permanent residences on their own lots of land. Some of these folk even call the suburbs home year around and just prefer to keep their interests vested in other endeavors.

For example, if you live in an itty-bitty style home you don't have to worry about heating a lot of empty space and disused guest bedrooms in the depths of winter. Or cooling 4,000+ square feet in the middle of summer. You just have to worry about a relatively small space. And since they're typically constructed from specialized builders who have a lot of experience in this small subniche you're going to get the best insulated new construction possible.

Since these homes are typically built with efficiency in mind they usually come equipped with wood pellet stoves, which have also been gaining popularity in the recent months as fuel prices reached record highs (although they've since for the most part dropped with the rest of the market). By no means do they all require wood pellets, though. Propane is another commonly used fuel throughout this niche. While not nearly as popular (or arguably cheaper) propane is a widely availible, relatively clean burnig gas that you can purchase anywhere from Costco to most local gas stations.

And depending on the style of construction you use, small wood burning fireplaces are also quite possible. While I'm not a fan of wood stoves (chopping wood and regularly stoking a fire throughout the night is not my idea of fun), they're by far one of the cheapest methods to heat your home. So long as you own your lot of land, an axe and know how to spot a dead free standing tree you have a ready supply of free fuel.

While burning hardwood may not be terribly environmentally friendly, it's my opinion that it's better than purchasing heating oil (which requires an industrial refining process) or more electricity (which in all likelihood is produced by a coal fire plant). So it's the one of the lesser of necessary evils.

Of course regardless of the fuel used to heat an Itty-Bitty home you're going to use a lot less than any conventional style variety fresh off of the market. If you're a hardcore green oriented person, these are also a perfect match to an alternative energy life style. Depending on your locale and means they're perfectly adapted for solar (passive or direct), wind or hydro. Since they're so small and built efficiently a lot less power is required to keep it lighted. Their footprint takes up so little room you can easily mount solar panels elsewhere on your lot in a sunny, but out of the way location.

As far as space goes many of them are surprisingly roomy given their tiny dimensions. If you purchase plans from a respected firm that specializes in the field of small home construction you'll find that most things in the home serve more than one purpose and are built with their size in mind. By no means is it common to have full dishwasher, sink, restaurant sized fridge, six burner stoves and microwaves large enough to cook a Thanksgiving day turkey but most are built with the average person in mind and as such have ample room for the required appliances needed in every day living. It's common to find full sized refrigerators tucked into surprisingly efficiently locations, or stoves placed in just the right location.

Most also take advantage of vertical space, which is sorely under used in many conventional style homes. Cathedral ceilings may be nice, but are ultimately unnecessary. The average person is no taller than 6 feet, so anything beyond 8 feet is completely wasted space.

Loft bedrooms and second floor living spaces are incredibly popular, as well as folding or collapsing staircases. These all make well use of rising heat, keeping it close to the ground to maximize efficiency. It also keeps clutter away from the main level and promotes a sense of privacy to certain areas of the home, something that newcomers to the style believe is lacking upon initial investigation. Few people like guests sitting on a futon that also happens to be the their master bed.

The vast majority of special built small scale homes certainly come with running water, water heaters and electricity. Although occasionally they may be a bit unconventional compared to what most people are used to on a regular basis. Since space is of the utmost concern small toilets may be used, sinks with built in wall recesses and stand up showers typically replace bath-shower combos. But this also opens up a potential money sink. When your special built wall recessed sink is broken, who are you going to call? Will the average plumber be able to fix such an unorthodox contraption? Or how hard is it going to be to find an especially small toilet if the one the house was built with suddenly stops working properly? Will this special toilet cost more than the average run of the mill one you can find down the street at Lowes or Home Depot?

Although the cost for smaller homes are by far significantly lower than average home prices. Simply because of the fact that less labor is required to construct a smaller space, which also means there are less building materials used. The average home runs about $25,000 to $40,000. Which may sound like a lot, but that's the typical down payment for a more conventional home, which usually run $200,000 to $300,000. With the money saved initially (in loan costs, not counting reduced energy and heating bills) you can afford to purchase an especially nice lot of land to place it on. Or invest the money that you'd otherwise be spending on a $1,500 to $2,500 a month mortgage into a retirement fund.

While I don't believe I don't have it in my to make my first real home something from TumbleWeed or one or their competitors, it's certainly an interesting idea. Perhaps when I'm in a better financial position it'd make for a nice vacation home or something to consider when I'm ready to "upgrade" after building some equity in my first home.

Sources, credit and further reading:

Monday, October 27, 2008

Becoming an entrepreneur: How to avoid disaster

I read an inordinate amount of things from online. While I do frequent one or two social networking sites (Facebook and LinkedIn mostly), the vast majority of my reading is made up of blogs somewhat tied to personal finance. I frequent a number of high volume blogs, but I find the more interesting and quirky stuff comes from stay at home mom's and debt laden college students looking to share their stories and maybe get a couple of AdWords click throughs to line their pockets. These people typically have well below 100 readers.

The most common theme I seem to find is a strong desire to make money through unconventional means, like blogging or starting a small business. While I believe these people have their hearts and minds in the right place, you inevitably see a wide array of failed plans, plots and schemes.

This is a shame. These one person microbusinesses run from desktop computers and raw ideas are not necessarily bad. All too often people just make a couple of cardinal mistakes and let their potential fall to the wayside. While these microbusinesses may not exactly earn these folk a $100,000 a year income, they could make a poor situation a little more bearable and foster a sense of intellectual curiosity that could potentially lead to self improvement. I've convinced myself through research and positive feedback that my newest endeavours won't fail due to negligence.

Here are a couple of points I've seen made in the past and some I've made myself.

  • Time: A lot of small time entrepreneurs have lots of ideas. Ideas can be thought of in a wide array of situations. On the bus, while in the shower or while doing a particularly mind numbing work related task. This is great, but if you feel you need to allow an idea to grow the primary ingredient is time.

    You need time to flesh out ideas without distraction. You need time to set up the framework of your microbusiness venture. And you need to sit down with pen and paper and work out a timeline.

    This is how microbusinesses fail the fastest and hardest. If you don't have enough time to maintain an endeavour such as a microbusiness, you wind up wasting the hours you initially invested in it to begin with. Not only that, but you find yourself disheartened against future experiments.

    So when you start a small money making project, make sure you start as tiny as possible so you don't become overwhelmed.

  • Capital (money): This is the life blood of any business. And you'll need a lot of it if you intend on starting your own hole in the wall restaurant or retail space. But the good thing about being a small time entrepreneur is that you don't really need it. A lot of people don't realize this and wind up investing a fair bit of hard earned money into a venture that will ultimately fail.

    Try your best to invest as little money as possible in the beginning. Utilize tools already at your disposal, you'll find a surprising number of them. If you need business cards for your brand new apartment decorating business, don't have them professionally made. But instead use some card stock and your old laser jet printer that's been sitting in the closet for three years.

    If the venture ultimately fails and you invested little to no money, you'll wind up in a better position to try another idea out in the near future both mentally and fiscally.

  • Motivation: This is a finite resource. You start with a lot of it but eventually your supply becomes depleted.

    It's easy to become disheartened when you don't see immediate success. Or your immediate success turns out to be a bust. If you're going to do anything, remain as motivated as humanly possible. If you plug away at something eventually it'll play off, no matter what is it.

    If you have a partner, meet with them frequently to discuss possibilities. If you don't, discuss the situation with a friend you know will support you. Set small and realistic goals you know you'll be able to meet with a little work and celebrate them.

  • Research: All too often not enough of it is done. Do a lot of it and do it weekly. It's nice to have the time to build your newest eco-friendly creation, the intelligence not to spend $5,000 advertising it right away and the motivation to make a thousand of them, but if you don't do your homework you'll inevitably find yourself abandoning your venture. Whether your items or services are over priced, don't fill an immediate need or may not be as clever as you think you'll find all three of your most precious resources depleted.

  • Promotion: You need to be seen. Humans are hardwired for networking and if you're working under the radar you're not going to find any success in any microbusiness. All the time, money, motivation and research in the world isn't going to do you a lick of good if you toil in the dark.

    Promote yourself and your project. It can be just to family and friends if you want, or you can take out a newspaper ad. But the important thing is to be seen.

  • Failure: Sometimes it is inevitable. But that's okay. Failure is part of life and just because your microbusiness didn't take off now doesn't mean it can't take off six months from now. And it certainly doesn't mean you should forgo future experiments with earning an extra little income on your own.

    Sometimes the situation is beyond your control. But it's always a learning experience for next time.
If you have additional points to make, post them in the comments and I'll place a permanent link to your blog in my side bar.

Friday, October 24, 2008 Aptly named

Maybe it's because of my recent past and trouble with the credit industry. Or maybe it's because I tend to cheer for the underdog in any given situation, or maybe it's because I really hate nonpassive advertising. But I've grown to hate with a zeal and passion that likely rivals that of a madman.

The concept behind it is simple. Provide an online market place where people can find the perfect job for themselves and apply at home at their leisure (perhaps in their underwear). There are a number of competitors, but has done a superb job at cornering this niche in the realm of online cash cows.

This system is sponsored by a number of passive advertising methods, such as banner ads. This in itself is fine. But they also don't do a terribly good job at screening those who apply for access to your personal information. Pretty much any entity legitimate or not can access your resume, contact information and marketing preferences instantly provided they fork over a roll of cash to Monster.

This is an enormous problem. Granted, a large array of legitimate recruiters trawl Monster every single day looking for their next marketing director, registered nurse or marine biologist. But it seems an increasing number of shady pyramid scheme oriented folk are right alongside them, peeping at your telephone number, email and home address.

My situation several months ago was simple. I was looking for a part time job to replace an increasingly unpleasant retail position. I was religiously reading the classifieds, scanning craigslist and sifting through monster's established want ads.

I receive a call completely out of the blue from the assistant to a "Mr. Wolf." This Mr. Wolf saw my resume online, explained this lovely young receptionist. He was very interested in my credentials and would absolutely love to see me the very next day for a job interview to discuss the day I'd be able to start work.

I was excited for a split second before the skeptic in me took hold. That's not how things work in the real world. The offer sounded too good to be true. I inquired as to where he saw my resume, as his company name did not match any I had recently applied to myself. She quickly and discreetly mentioned a rigorous screening process, but that they saw me on

This in itself was odd, considering I had made a new profile live mere hours prior. But I made an appointment politely regardless. I immediately jumped in front of my computer, loaded their company website, logged onto and searched.

Their website was suspiciously vague about their industry and their hiring process. I dug and dug. I discovered that the company as a whole was owned by a Fortune 500 corporation, but it was as close to a pyramid scheme as you could be without being explicitly illegal. The job that I had been "cherry picked" for was an insurance salesman (I had no experience in the insurance industry, nor sales). Which is in itself fine, but research revealed that not only would I have to live wholly on commissions, but those responsible for bringing me in will always, no matter what receive a significant cut out of every sale I make, regardless of their involvement.

Dozens of former folks duped by this scam told tales of "one on one interviews" consisting of little more than a receptionist pitching a rah-rah-rah speech to 20 or more applicants in tiny conference rooms. Several former employees told of hidden licensing fees in the thousands of dollars, months until "residuals," high pressure office environments and pretty much endless cold calling.

Needless to say I blew off the "interview," deciding to not waste gasoline. Thinking that was that I simply continued about my business until recently. I discovered a coworker had the exact same experience. No experience in sales, no experience in insurance, a call from the blue immediately after posting to monster, an immediate interview. It turned out to be the same Mr. Wolf, but his experience happened several years prior to mine.

Talking to the missus about the issue revealed the exact same thing had happened to her.

In itself, this was fine. We were all smart enough to smell a scam and dodge it. But what if we were really desperate? What if we let wishful thinking cloud our judgment, because we were so desperate to escape a poor situation? We'd be stuck in a paper moon situation either cold calling with no hope of immediate pay or hiring people so we could leech off of their hard work, like Mr. Wolf.

How many people had been suckered into this scam, either too desperate or inexperienced to spot a quasi-illegal money sink? Mr. Wolf has quite the apt last name. He is a predator and he preys upon those who need the most protection. And facilitated his disgusting mobius operandi. It'd be one thing if he really was cherry picking those with "experience" in sales or insurance. But he isn't. He's casting the widest net possible and luring every new comer to Monster into the gaping maw of his organization. And he was doing it, quite clearly for a number of years.

I complained to Monster, citing my research and the testimonials of my coworker and wife. Not only did I not receive a timely response, but I didn't receive one at all. Not even a prepackaged automated "Sorry. We're looking into it." I complained again. Still no response. I'm still waiting, It's been four months and six emails.

Am I surprised? No, not really. I'm not even that angry that it happened to me. It wasted a total of fifteen minutes on the phone and some research. What really irritates me is that this guy has likely duped people in my neighborhood. Good people who just don't have all the common sense in the world, or maybe fell victim to him on a day he happened to be on a roll. This is especially important in this kind of market.

Who's to say that stable jobs haven't been left over this guy and his lure? In especially desperate times people become more and more frightened. Maybe you're looking for a more secure position, looking to bail from an ailing industry. Or maybe you've been laid off and you need to pay the rent RIGHT NOW. When people are scared judgment tends to take a backseat. But it's critically important to keep a skeptical mind, especially when your career is on the line.

I'm not saying to blow off everything on the internet. Far from it, it's one of your most powerful tools in looking for a new job. But take it with an extra grain of salt than you would something from a newspaper. And for god's sake, research anything that looks fishy.

Further reading on, job scams and general things to look out for:

Monday, October 20, 2008

Good progress so far

It's been a little while since I've updated the debt counter in the right hand column of MSB. Last week we received the majority of our statements and I've compiled a list of what's been paid in full, what's been reduced substantially and what's been knocked out of the park.

I've also reexamined some of our more crucial finances for my own benefit. While I don't believe this is a catch all and it isn't exactly a super detailed look at the world of our personal finances I believe it sums up the recent past, present and near future fairly decently.

  • The Cards:

    • American Express: Amex is no more. The two accounts that have given us the most hardship and heart ache are now a thing of the past. Over the spring and summer we funneled well over $3,000 at our two previously delinquent American Express accounts. They are now paid in full and we have canceled our memberships.

      Good riddance.

      Our experience with Amex was a weird one. We were first contacted in regards to our Green card account. These ruthlessly trained outsourced folk in India with strange accents and very white names. They were extremely pushy, manipulative and very obviously trained to deal with deadbeats. We refused to deal with them, opting to ignore their calls and make out payments directly to Amex online.

      Amex blue was a wholly different story. Maybe because it's a better card, or our balance was substantially higher. We were contacted by a very polite gentleman 45 minutes away. He explained our options, what he could do and allowed me to feel like a respectable human being. Needless to say we made extra efforts to pay off this debt as soon as we could. Two completely different sides of the same coin. But I'm glad they're out of the picture.

    • Macy's: The Macy's card was a relic from our last spend happy Christmas. I used it to purchase a beautiful sapphire bracelet (that was subsequently lost) for the missus. This was paid off immediately after American Express was put to bed. It was our lowest balance account and allowed us to feel like we were really on a roll.

    • Lane Bryant: Our next lowest balance credit card. This will be the next one to go as soon as we can scrape together enough money to blow it out of the water. The balance is only a puny $238. We could in theory kill it anytime we want, but with winter coming we prefer to err on the side of caution and allow our bank account to remain fat, at least until the first snow.

    • Bank One: Our next lowest balance credit card. Standing at around $1,000 it probably won't last very long once we focus our attention on it. While the interest is fairly small in comparison to say, our Bank of America account we'll be happy to see it gone.

  • The Banks:

    • The Old: While our old bank offered the staple services that typically keep every day users happy (online banking, relatively plentiful branches and ATMs, etc) their customer service department handled an issue quite poorly and as such disenfranchised us as happy clients.

      Long story short it took an absurdly long time for a check to clear. Due to a web interface that was hardly clear, a single small check was bounced.

      The bank was kind enough to swallow half of the bill because of their murky web interface. But this occurred on an especially tight week. We have little to no margins. Their inability to reimburse us the full amount caused a chain reaction of bounced payments to rack up, leaving us with a lovely +$300 fee.

      Unsympathetic customer service representatives who refused to budge an inch on anything drove us off.

      The account is still active, but we've since moved to another bank. Once we're satisfied all is quiet our relationship will be terminated.

    • The New: We found lovely little credit union to handle all of our business. Their web interface is more secure, clearer and while their branches are relatively scarce they're not too out of the way for us.

  • The Funds:

    • His: I've experienced a raise in pay of about $4,000 to $5,000 from this time last year. I'm working a bit more, but it's for our best interest. We ultimately want to purchase our own home, so it's doubly important for me to remain focused on the prize. Unfortunately (or fortunately?) this additional income will be immediately funneled toward our outstanding debts.

    • Hers: The missus has made substantial career advancement and will make another in the new year. It's forced her out of the house the majority of the week and her job requires frequent air travel. But it's a thousand fold better than her previous occupation. Both in terms of enjoyment and monetary compensation. This increase in income should more than double the speed at which we pay off our debts.

  • The Cars:

    • His: We had to put some energy into it lately for it to pass an inspection. But thankfully the problem was due to a factory recall and it was fixed free of cost. We're at around 30,000 miles. Which means I've put about 23,000 on it in the two years I've had it.

      It's running fairly well. It gets decent gas mileage and gets me where I need to go. Payments are modest, but still have a long way to go.

    • Hers: We had to pump $400 into it not too long ago, due to a shot alternator. While this car is substantially older than mine, it's also much closer to being paid off. We're looking at paying it off within a year from today. This will free up $3,000 the following year, pending additional repairs.

  • The Future Bumps in the Road:

    • Taxes: There are only two things you cannot avoid in life; death and taxes. The only bump in the road that I can foresee is tax season.

      Due to my occupation I am required to pay my own taxes. This is great throughout the year as I receive my full paycheck with no Uncle Sam horning in on my action. This is bad in tax season, as I typically have to part with what I believe is a substantial amount of money.

      Last year was fine. I was only an independent contractor for a small portion of the year. What I had to pay was almost immediately off set by the economic stimulus package. This year will be a bit more difficult. I've worked a lot and made a lot.

      So Uncle Sam is going to be asking for a lot. This could reset our finances a substantial amount come tax time. We'll have to work at rebuilding our checking account so we can absorb the punch.
So, in short things are puttering along. We're moving at a respectable speed. Looking back on the progress we've made I'm proud of the amount we've grown and the sacrifices we were capable of making. Already we're far more responsible, fiscally conservative adults than we were just a year and a half ago. While it'd be nice to win the lottery, I'm no longer depressed about money.

It's just something that takes time, patience and a keen eye.

Wednesday, October 15, 2008

Home Composting: Preparing for an eco-frugal spring

This year we maintained a relatively small garden. We were quite busy throughout the later spring and summer, but we managed to muddle through with it. The results weren't as nice as I was expecting, but we pulled a fairly decent crop of cucumbers, strawberries, butter crunch lettuce, hot peppers, green onions and various types of tomatoes. Our mini water melons and radishes were a complete bust, however.

In the end I'd say it wasn't cost effective. The produce was completely organic and home grown, but we would have spent less if we had simply gone to the grocery store. So in the end I had trouble justifying the experience. I'm not a big fan of mucking about out doors getting my hands dirty.

The biggest deal breaker was the cost of soil. We went through a surprising amount considering our total harvest this year. I'd say this expense surpassed even seedlings. We used a variety of store bought soil, limestone, manure (bagged, not home produced) and local soil mixed thoroughly. This gave us pretty good results. But costs dictate that next year we'll have to be a bit more frugal when it comes to our gardening expenses, if only to justify the experience in my mind.

As such we've saved all of the soil from this year and started a small compost bin. If our math works out correctly we'll have more than enough to work with in the spring. It turned out to be surprisingly easy.

  • Select an area and method: There are two ways you can compost. You can either utilize the container model or an open pit design. We don't exactly need the amount an open pit compost pile would provide and we don't really have the space. So we utilized an old, disused plastic trash can. We perforated the bottom and sides to provide some (but not too much) drainage.

    We could have bought a special composting bin, but that would have instantly broken our budget for next year. They get upwards of $100 for a couple of dozen gallons. At that point I might as well buy new soil.

    Since even the best kept compost bin will likely start to smell significantly at some point we put it where we put smelly things, next to the trash cans.

  • Get the right mix: Composting is by definition decomposition and is a process by which living organisms break down organic matter. As such some chemistry is required.

    • Carbon: This should make up most of the material in your compost bin. Some pretty handy sources are leaves, fallen branches (broken up), disused mulch, cardboard and newspaper. All of these are very easy to come by in your average suburban yard, especially in the fall.

    • Nitrogen: You should have a fair bit of nitrogen producing material in your compost bin, but not too much. Some great sources are manure (bagged and sold at your local supply store, not home made), dead plants (such as your tomato plants after the frost) and yard trimmings (grass, shrub leaves).

  • Layer: Layer your compost material with moist soil but don't pack it down too tightly. This will prevent oxygen flow, which is crucial to the process.

  • Water: Air flow, heat and the composting process will consume water. If the pile becomes too dry the process will slow. On the flip side if the bin is not covered and becomes too wet (and lacks adequate drainage) you'll find yourself with a lovely smelling soup.

    So make sure the bin remains moist, but not too moist. Treat it like you would a house plant.

  • Turning: Turning a compost pile helps distribute water and oxygen, ingredients that are crucial to the process. So use a shovel to turn the mixture up every week or so. It doesn't have to be perfect, but you'll help the decomposition process.

  • Mixing: When things begin to fall apart and intermingle significantly with layered soil your compost is ready. For best results mix it with used potting soil from previous seasons. You'll be conserving energy, money and resources.

  • Stay away: There are a couple of things you should shy away from when composting. These materials can ruin all of your hard work or at the very least delay your final results.

    • Home "grown" manure: Unless you know what you're doing stay away from manure produced in your own home. This includes human and pet feces. In all likelihood this material will contain harmful pathogens. It'll also increase the smell factor by ten.

    • Some kitchen scraps: Egg shells and potato skins are great for compost piles. Chicken bones, wing tips, fat from your t-bone and fish heads are not so great. Not only will this increase the smell of your compost bin, but you may also find yourself a favorite hot spot for local wild life looking for an easy meal.

    • Some paper: While it may be tempting to throw that latest political mailer into a trash can full of rotting leaves and produce, steel yourself. Glossy paper and heavily dyed card stock will only poison your efforts. Newspaper is okay in small amounts, though.

    • Tainted plants: Did your crop of cucumbers die from a mysterious illness or blight? Don't put them into your compost bin or you'll be in for a terrible surprise come time to utilize your compost. Like wise shy away from plants that have been treated with pesticides. You want bugs and bacteria now, introducing pesticides into the mix will only prolong the process.
Is this the final word? Absolutely not. There are a wide array of composting methods available to you. I found that this works best in a suburban environment where space and time are more or less at a premium. You can certainly scale this up to six or seven garbage disused garbage cans or dig yourself a shallow pit in your back yard if you were so inclined. You can even build an elaborate cinder block bin if you had the materials and desire for A LOT of soil.

But so long as you turn it once in awhile and don't accidentally drag it down to the curb on garbage day you'll have a superior source of soil come next planting season.


The minus sign blues. Updated frequently with first hand knowledge to make your life a little bit more eco-frugal.

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Debt Counter

Bank of America $4,580.18
Providian $5,460.80
Citibank $2,363.90
Capital One $1,270.63
Bank One $1,082.44
Sears $3,854.29
Best Buy $1,631.23
Lane Bryant $238.43
Total: $20,537.65


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Copyright 2007 - 2009 Edward Godbois