Sunday, September 30, 2007

What Would Indiana Jones Read?

Why, a 1939 edition Paideia: The Ideals of Greek Culture.

The Strand bookstore is one of my favorite places to buy books. Apparently, it's Indiana Jones' favorite as well. The current issue of The New Yorker has an article, Books in Bulk, that begins-

    "Between digging for artifacts and dangling from cliffs, Indiana Jones must have very little time to read, never mind to buy books Luckily, he has a team of people to do it for him Dr. Jones—as represented by the set decorator for the forthcoming film “Indiana Jones and the Kingdom of the Crystal Skull”—recently engaged the Strand Bookstore’s Books By The Foot service, which provides ready-made libraries for private homes, stores, and movie sets."

The Books By The Foot service (my new dream job) can be used for sales or rental, and there's eighteen different types of service. "Bargain Books" service nabs you random hardbacks for ten bucks a foot. A "Leather Looking" library for your bookshelves in the Hamptons will set you back seventy five bucks a foot, while the real deal "Antique Leather" is a mere four hundred dollars per foot. Egads.

I go to The Strand for bargains and the occaisional migraine, who knew you could pay money for someone to browse for you?

Friday, September 28, 2007

Now Calling, The Google Phone!

Just when you thought you'd have to wait two presidential elections before you could afford the iPhone, Business Week just announced that Google has been working on a phone of their own. You have to wait until the second half of 2008 to become an advertising whore.
    "That kind of 24/7 advertising engagement--on a phone, no less--may sound like a nightmare. But what if you could determine the kinds of products you get pitched? Or, when your flight gets canceled in a faraway airport, text messages pop up for the best hotel deals in town? No random insurance ads or airline deals for trips to places you never visit. Best of all: Watch or read the custom ads, and your phone minutes are free. For big cell carriers, that's the real nightmare. And it may be coming in the form of a Google phone."

There's already GOOG-411 and Google SMS for free info texted (is that a word??) to your phone. Does the cell phone trauma never end?

These Are A Few Of My Favorite Things (a song you don't want stuck in your head, sorry...)

Last night M and I finished up watching the TV series The West Wing. It was sad to see our friends leave our living room, but I, who loves a good rebound, immediately went to my computer and re-ordered our Netflix queue. Netflix just happens to be one of my absolute favorite everyday parts of my life that are here simply because I was trying to save $.

So here's a list, in no particular order, of my favorite things I can't live without, and how they got there to begin with; by saving me money.

*Netflix. I love that I have access to the worlds largest cache of DVDs. I love zenning out to queue accumulation. I love finding great flicks off of my Netflix friends' queue. And the cost benefit? Prevents me from getting cable, and if you could have only seen the Blockbuster fees I was racking up every month! Sure, I could have been better about returning my movies on time, but hell wasn't freezing over anytime soon.

*The Park Slope Food Co-op. Okay, this is a tough one, and anyone who lives here will laugh at me, but I am hardly above group riddicule. Food Co-ops serve their community with stocked shelves of goodness, and they are a fraction of the cost of the over-priced Whole Foods. So the Russian breadline-like checkout aside, I eat better for a lot less money.

*TJ MAX and Marshall's outside of the city. While I don't do it frequently, I do like shopping. I know the Marshall's exit off the highway between New York and Boston, I know there's one in suburban CT near M's folks, I know that I can drive 70 mph and dodge traffic and be mid-sentence and still spot one off the side of the highway. And I know that there's nothing like grabbing a coffee (shopping outside of cities seems to always happen in shopping plazas), and losing a good two hours of my life in that elevated state of elation that shopaholics know all too well.

*Matinee Movies. In downtown Brooklyn there is a large movie theater that has $7.50 matinee movies. With my free Regal Cinema card, I get points for buying tickets. One of these days, perhaps after I see a thousand films, I will get a free movie ticket. The only real benefit to the card is the free popcorn. And the fact that seeing an afternoon movie for under eleven bucks, eating free popcorn, guzzling down the water I brought from home because I just ate a pound of salt, and sneaking into another movie afterwards, is what I call blowing an afternoon with a smile.

*Downloading CDs from the public library. Last month I downloaded Iron & Wines's new album, an old Wilco album, Dinah Washington, Count Basie, Thelonious Monk, and an African hip-hop compilation. I don't know if it's legal, but it sure is fun.

*Blogs. Last but not least. The information highway is free. Sure, there's some tolls to get on it (ie Verizon online), but for the most part it's an inexpensive way to kiss hours and hours of your life goodbye. It also holds an incomprehensible amount of information, and it's bloggers who break it down for me. I love writing about things I would normally never write about. Ditto that for reading blogs. And if writing and reading things isn't just the happiest thing a person could do, then I don't know what is.

So what makes your list of favorite things you can't live without, that you got by way of trying to be frugal?

Thursday, September 27, 2007

US Stocks at a Bargain

It may have slipped my mind that there is a bright side to recent economic news, money managers view US stocks as undervalued and prime for buying. Especially US large caps (big a$$ companies=large caps). The WSJ article, Money Swings Fail to Deter Money Managers, opens-
    This summer's wild market swings didn't damp money managers' enthusiasm for U.S. stocks, according to a survey set to be released today. In fact, 28% of managers responding to Russell Investment Group's quarterly Investment Manager Outlook now believe U.S. stocks are undervalued, up from 21% three months ago."
Of course, 28% is hardly a resounding endorsement, but still. I think I'm just bummed about my puny interest rate on my savings account, and the low dollar is dragging down my super ego a bit. Who knew I had a currency complex?!

A Good Time to be Frugal

Your financial picture is being assaulted right now. Your savings account has an interest rate that’s got more decline left than Romulus Augustus, the stock market seems like one big drama queen, and who even has money to invest right now when your student loan is more expensive than a brand new Maserati GranTurismo (and not nearly as sexy).

Well, I think we already covered the fact that you need to save for your retirement. Hell, I even suggested that you shove your money where the sun don’t shine (a Roth IRA that, after the Baby Boomers get done sucking Social Security dry because someone forgot to tell the US government to save that money, we won’t even be able to touch until we’re eighty). So I started thinking about just how important diversification is, because when it rains it pours but it doesn’t rain everywhere at once unless you’re Noah. So, short of currency trading, what could I, the average person with PiggyBankBlues, do to protect myself?

First and foremost you need to make sure you are invested in international companies. Also, in the age of a global economy and multi-nationals, many large US companies receive nearly half of their revenue overseas, from Hollywood to oil to technology. Of course, it doesn’t replace investing abroad, but it does hedge your risk to the full tilt madness in our own markets.

Diversification normally applies to the stocks and bonds a person is invested in, spreading the risk to many sectors/markets/countries so that your whole portfolio doesn’t go in the toilet at the same time. But my take on it right now is that investing in frugality is another way to diversify. I have only so much money, and quite frankly it aint a helluva lot right now. Sure, I look at my IRA and make sure I’m diversified, but I think the best thing to do right now is be frugal, save money, and pay down debt. Of course, that’s what one should always do, but there is usually emphasis on investing and you feel bad if you can’t do that right now. Well you can rejoice, because frankly this is the best time in the world to feel better about the fact that you may have no money to invest and you’re just taking care of business; paying down the credit cards, saving for a rainy day, or honing your budgeting skills by wearing the same damn winter coat yet again. If credit card debt is savings in reverse (paying an APR instead of earning an interest rate), then I say this is a grand time to save!

So I’m going to do the little things. Call my credit card companies and try to get them to lower my APR and increase my credit limit (one of the largest components of your credit score is debt to credit ratio), vow to never pay another ATM fee, figure out if I can eat the entire pantry this winter without adding to it.

Investing in frugality is a sure thing- eventually paying no APR, a paid off student loan, a little cushion in your crash landing pad- and I don’t see anything even close to a sure thing out there.

Wednesday, September 26, 2007

Cramer Gone Wild

James Cramer has a loud article, In Bernanke We Trust, in New York Magazine this week. He's a big fan of the rate cut and and thinks it will prevent a recession. He also rails against everyone from Greenspan to Bush, but is thankful Bernanke found his cojones.
    "I’m not surprised by President Bush’s sunny economic outlook—this president would praise the Weimar Republic’s hyperinflation as great for Home Depot and the wheelbarrow industry. But Hank Paulson? I expected better from the ex–Goldman Sachs chief. One of the few honest-to-Betsy revelations in The Age of Turbulence was Greenspan’s acknowledgment that the position of Treasury secretary, once a post for the best and brightest businesspeople and economists, has under Bush been reduced to nothing more than White House water boy for the “fundamentals are sound” mantra."

King Lear

There are some evenings where the stars align just so and you get to see that proverbial performance of a lifetime. Last night I witnessed on stage such an act. King Lear is playing at BAM's Harvey Theater with Ian McKellen as Lear. If you live in the city, you probably know this already because it is a short run with a big name and tickets to the UN's General Assembly were easier to score. You can see a snippet of the play here. Thanks to our friends, H&S, M and I were able to go. Many, many, many thanks.

The Brooklyn Academy of Music is only a twenty minute walk from our apartment. We stepped off the noisily trafficked Flatbush and into the narrow tree-lined streets that tuck in BAM's spotlit buildings. Other theatergoers started to fill the sidewalks. As we approached you could sense the electricity in the air.

I've never had such great seats to a performance, and the stage was only eight rows away. We first saw Vanessa Redgrave in the theater lobby, and once we were seated we looked up and saw Vanessa Redgrave and Lynn Redgrave help Lauren Bacall walk gingerly down the stairs. They ended up a few rows ahead of us, and I can now say I was with the Redgrave sisters and Lauren Bacall for a night at the theater.

And what theater it was. Drop dead gorgeous ball gowns, fantastic lighting and staging (though I didn't quite get why it looked so wooden barn-like), a rainstorm on the stage, and the jarring violent noise of gunshots, murder and mayhem. And all because brazenly greedy offspring twisted money and love and fought over their Kingless Kingdom (there's Buffet's critique of dynastic wealth live and on stage right there). The entertainment factor alone made the three and a half hour play fly by for this Shakepearean neophyte. I thought William Gaunt's Duke of Gloucester was breathtaking. In fact, I was pretty impressed with almost all of the acting. And the star of the show delivered. McKellen's Lear is pompous, funny, humiliatingly human, and a stark raving mad old man in the descent of his own folly. The trap is money. And while language, costume, and era have progressed well beyond the play's moment in history, the humanity of us all has not changed. And that, in and of itself, is our own tragedy.

    photo by Manual Harlan

Tuesday, September 25, 2007

NY Times Op-Ed on US Dollar

The NY Times has an opinion piece by Stephen Roach today, titled Save the Day. The Op-Ed page is finally weighing in on the dollar's downturn:
    "Optimists may draw comfort from the vision of an export-led renewal arising from a more competitive dollar. Yet history is clear: no nation has ever devalued its way into prosperity. So far, the dollar’s weakness has not been a big deal. That may now be about to change. Relative to the rest of the world, the United States looks painfully subprime. So does its currency."

Radio Free Europe

I have one grant due in 24 hours, the NYFA grant due Monday, and three literary magazine deadlines Monday as well for good measure. Basically, I have a week-long excercise in futility. I'm clearly blogging to procrastinate, but I thought I'd pass along some of the small pleasures of being chained to a 1000 character description of a 300 page novel. No, it's not the writing, it's the music- the free music singing in my laptop.

Started in East London by music promoters and based on a computer science project, bills itself as the social music revolution. Type in an artist, and it will start playing music that is similar. It plays music based on recommendations by both you and millions of other listeners, a system they call "audioscrobble". For example, I just typed Arcade Fire and started playing Editors, a Brit rock group that I happen to also like, so on the radio bar I clicked on the heart. When you are registered and signed in, tracks the music you love and hate, then filters it through a statistical comparison with millions of other listeners. You don't need to register to start listening to music, but I would suggest it, plus registration is free. Every time you are signed in and listening to music and giving it a yay, nay, or skip, tracks it and audioscrobbles the results. The more feedback you give it, the better your own personal radio station will be. It's alot of fun, especially when you start mixing artists and genres, and I've discovered some great music because of it.

The social bit comes in because you get a music profile that is shared with millions, and you can flit around the site, kind of like myspace. I don't do that so much, but every now and then I'll check out what music people who are statistically like me listen to. It really kills the unique factor of one's personal taste.

If you do want to subscribe ($3/month), you can customize your own radio station, and make your own playlist from their massive music library. They used to let you put in multiple artists and listen to different genres at once. Now you can only put in an artist at a time, so making a playlist with the songs you love is one way to be able to listen to both Jay Z and Bettye Swann.

The catch? Not a whole lot. While registering and listening to music is free, they have 20 million listeners so when the servers are jammed it's the subscribers who get first dibs on the "airwaves". I don't really have a problem with it because I listen when everyone else is at work here. That said, they do have listeners in 232 countries, it's just past rush hour somewhere in the world. Also, is not TiVo, you cannot play a song on demand. There is no downloading, either, unless the artist allows it- and most don't.

And last but not least, a jazz radio station in Paris, TSF, streams its music live. Just click on "Eccouter L'Antenne" and you'll hear some of the best jazz being played. They do a lot of old school stuff, and a little bit of the new. This is no elevator jazz, TSF is the real deal.

Monday, September 24, 2007

The Falling Dollar Fallout

With all the brouhaha over the dollar's freefall, it's not always easy to parse out what, exactly, that means. Today at CNN/Money they have a succint article on the winners and losers of the falling dollar. One currency expert is quoted as saying he expects the dollar to go as high as $1.45 to the euro by the end of the year, so despite Friday's record low many expect the skid to continue.

Speaking of things falling, I recently did a post on laddering your savings with CDs, and just a few weeks ago the interest rate on a 9 month CD with ING was 5.25%. Today it sits at 4.90%, and there's no reason to think it won't slip further. Thankfully, I have most of M and my emergency fund locked in at the higher rate, but I'm not looking forward to re-investing. If I wasn't unemployed, I'd move practically all of our money into 6, 9 and 12 month CDs (all currently 4.90% at ING). Again, there are no minimums to open CDs at many online banks, so I say you carpe diem while the carpe is still good. With the housing market, credit markets, and stock markets all riding one helluva roller coaster, the plain vanilla savings account is still your safety net. Unfortunately, it just become less profitable.

Saturday, September 22, 2007

Saving Money on Music & Movies

Sure, you can download music for free. But if you're like me and you actually like buying stuff, head on over to the worlds most dangerous marketplace, eBay. eBay's marketplace makes the NASDAQ seem staid, so bid carefully.

I buy discounted iTunes cards there, usually at a 30% discount. Do an all categories search for "iTunes cards" and almost 200 will come up any given day. Mixed in among the iTunes cards are iTunes codes for a free song, which I prefer. These are delivered to your email and then you input each code into your iTunes store account on your computer. It's very easy, but the caveat with the codes is that they're usually one code per song, so you cannot use them to download whole albums (unless you download song by song). Keep in mind that if you bid on an iTunes gift card just make sure that has the PIN unscratched on the back of the card. Also, if you are willing to buy music within a short period of time, you have a better chance at scoring a deal- all codes have an expiration date and some are only a week away.

For cheaper movies do an all category search for "Fandango tickets". The seller will email you a code for a free movie ticket to be used at checkout on Fandango's site. In NYC, Fandango has just about every movie theater, with the exception being the art houses. Also, since our ticket prices are so sky high, I find that I can win most auctions because $12 for two tickets is nearly half off for me, but more expensive for others. Read the fine print on the Fandango auctions, for many codes you can only use one code per transaction, so you'll have to go through a separate purchase for each ticket. Any eBay item is feast or famine, and right now there's not a whole lot of Fandango codes. Just periodically check back.

You can pretty much look for a gift card from any big box store. Read all similar items and make sure yours has the same fine print, like the unscratched PIN on the iTunes card. Check the expiration date and if it's not posted ask the seller. Just remember that eBay is eBay, so make sure you check feedback and ask questions before you bid. I only bid from sellers who have sold the iTunes & Fandango cards/codes recently and have stellar feedback to show for it. I also only bid on items that have free shipping. Request that any codes sent via email are emailed to you with eBay's emailer, so that there is a record within your eBay account and a seller doesn't claim they sent it and it got lost in the effluvia of your spam filter.

And remember, since eBay brings out the inner fiend in all of us, pick a ceiling and walk away. Do not get in a bidding war. That is so un-PiggyBankBlues.

Friday, September 21, 2007

The Dollar is Falling, The Dollar is Falling!

Yesterday's NY Times reported that the dollar continues its swan dive against the Euro, resting at $1.40 per 1 Euro. In fact, the greenback pretty much sucks against all major currencies. Our friends to the north, the Canadian ones, are now even stevens with us. That's right, one US dollar equals one Canadian dollar. Now you know times are tough.

Forget the trip to Spain, forget the supposedly cheap trip to visit friends in Montreal, I'd pretty much have to go to the Third World to afford to travel. But enough about me, back to Bernanke. The Fed's unexpected half point rate cut sent markets scrambling to correct. American tourists aren't the only ones fretting. A strong Euro makes it more expensive for EU companies to do business globally;

    "For example, big importers and refiners of crude can expect a shot in the arm, maybe even enabling them to hire more people. But manufacturing employees who get laid off because sales ebb on the back of a strong euro cannot simply go into the energy business."

One of the benefits to a strong Euro here in the city, aside from having to sidestep every middle class European tourist and their mother logjamming the sidewalk, is their investment dollars on our square footage. On NPR this morning, Brian Lehrer spoke with Jonathan Miller about his study linking foreign exchange rates to NYC housing inventory. Between Europeans pied a terring Uptown and Israelis bankrolling blocks in Brooklyn, the dollar falling might not be so bad after all.

Thursday, September 20, 2007

Bubble? What Bubble?

New Yorkers like to think that they are immune to the housing bubble bursting because, well, quite frankly, have you looked at the cost of a two bedroom co-op in Brooklyn? But for those who are really paying attention beyond the affordability of half a million dollars and still not enough closet space, it's not about if the bubble will burst, it's about how painful it will be. And if you rent? There's no bubble because there's no space. Rents climbed 7.2% last year. Make nice with your landlord.

This week's New York Magazine's cover asks The $1,333,316 Question: How Long Before Our Real Estate Bubble Pops? What's with the price tag, you say? Well, that's the average sale price of all co-ops and condos and Manhattan, so you'll forgive us for choking on our leftovers, but for those with PiggyBankBlues that's a little too Lifestyles of the Rich and Famous. The article goes on to break down the risk factor expensive neighborhood by expensive neighborhood (it is real estate obsessed New York Magazine, after all). Williamsburgh prices are down by almost 10 percent, Bed-Stuy/Bushwick has 225 properties on the auction block, while Park Slope has zero.

    "But brownstone Brooklyn’s real hedge comes from its mix. Park Slope and its ilk are home to a highly mixed demographic, with bankers next to teachers next to Safran Foers, notes Corcoran’s Deborah Rieders. That lends stability if, say, financial-industry bonuses go south next year. The locals are also stable in another way: Though plenty of residents cashed out during the recent run-up, many more have been here a while, which means not everyone bought at the top. In other Brooklyn hot spots, Gallant says, quite a few recent buyers could soon “wake up and say, What was I thinking?” (The wild card, of course, is Atlantic Yards. If 6,000 apartments are slammed into the neighborhood in a few years, they’ll play havoc with both the area’s makeup and its supply-and-demand equations.) The danger zones are likely to be areas that have glommed onto the cachet of these old reliables, where asking prices may be overreaching: the bottom edge of the Slope, say, or the fringe where Carroll Gardens fades into Red Hook."

* photo of David Blaine at the Lincoln Center by Knut Vidar Siem

Wednesday, September 19, 2007

Alan Greenspan with Jon Stewart

Head over to Boston Gal's Open Wallet for a great clip of Alan Greenspan with Jon Stewart on The Daily Show.

Shelter from the Storm

There's a lot of howling in the winds that blow down Wall Street, and it's a perfect time to bring up the inevetable. There will be a moment when you're just plain $h*t out of luck. You won't have the Fed discount the rate at which you can borrow in order to bail your lame a$$ out of monetary self destruction, no, your credit card will probably increase its APR when all is said and done, so unlike Wall Street, there are no handouts for you. We all need a little shelter from the storm.

Okay, maybe its heresy to work Bob into a blog about $$$, but that is the best way to describe an emergency fund. A financial emergency is when you need more money than you are making (or not making, as it may be) in order to eat at your table and sleep under your roof. You can get canned, downsized, change jobs before you actually find a job, lose your lease, lose a roommate and gain the whole lease, have a family emergency that requires a leave of absence, have a kid that requires you take an unpaid maternity leave, break up with your girlfriend, the list is endless. The other problem is that if you have any kind of job that is not bona fide nine-to-five, you have an unpredictable wage, my friend, and you need an emergency fund more than the next guy reading Money magazine and nodding his head saying, yeah I know this already.

I feel like having an emergency fund is tied for first place with having zero credit card debt in the financial must-haves category. Even though it is faster to funnel all your money to pay off any revolving credit card debt (meaning any debt you don't pay off monthly and hence chuck change to an interest rate), some people have debt that will take them years to knock off. You simply can't wait that long to accumulate your emergency fund, because chances are the emergency won't wait that long.

The question now is, how much do you save? Standard answer is three to six months of living expenses. I'm talking rent/mortgage, monthly bills, food. I'm not talking about the monthly cable bill, but I would be talking about the car insurance. I would add student loan payments. Some would argue you could defer them, but if you can save for it I say add it. You want to add up the bare bones expenses, and cut the fat. If you have credit card debt, include the minimum payments. The amount of months you save up for is the amount of months you feel are the most you could conceivably be without work. It's the amount of time you would be unemployed and absolutely freaking out. While unemployment isn't the only financial emergency, it's the most expensive one likely to happen.

But don't be fooled, it's not just about sheltering you from a financial emergency, it's about sheltering you from the financial consequences of trying to survive the emergency; maxing out your credit cards to live, losing your apartment because you can't pay for it, taking on some nut job roommate you found on craigslist while you sleep on the couch, liquidating your IRA or borrowing against your pension, playing lotto to pay the mortgage, taking a cash advance on your credit card, or moving back in with your parents because you got kicked to the curb.

Listen, you're already staring at a computer screen. Go to your internet savings account and start saving a little every month. Set small goals. Let's say you need six grand to cover three month's expenses, just start saving for a thousand bucks. Know the big picture, and chip away at it one step at a time. Trust me, you'll sleep bettter at night.

Tuesday, September 18, 2007

Free the Times

Finally, the local paper is free. The New York Times announced it will drop its pay-to-view-Times Select articles tonight at midnight. They now have 13 million unique visitors a month, just 12,999,999 more than PiggyBankBlues, and did not foresee the amount of traffic coming from places like Google and Yahoo search engines. The increased traffic means increased ad clicks, and now I can finally read the op-ed page for free while someone else just clicked over to the St. Regis.

Not that festival, this Festival!

No Credit Needed is hosting the 92nd Festival of Frugality-Ideas for Saving Money and Increasing Your Income, and PiggyBankBlues is proud to be a part of it. What the heck's a festival of frugality on a blog, you say? Festivals (and Carnivals) are hosted by a blog with a roundup of recent posts in the blogosphere. It's a great way to be introduced to different blogs relating to one topic. In this case, frugality. Not frivolty in white star costumes.

Monday, September 17, 2007

Atlas Shrugged

toothpaste for dinner

Last year I tore through Steinbeck's East of Eden, and became a reader emboldened with the idea that indeed I could still read a big book. So I picked up Ayn Rand's Atlas Shrugged. I read The Fountainhead in high school, as all voracious high school readers have, and remember very little of it. Of course I knew that Ayn Rand was a philosopher-writer, and so of course in my adult life I have avoided reading her for pleasure as much as one avoids Wittgenstein on a beach blanket. But again, Steinbeck wooed me and so I picked up the heavy paperback thinking that I could climb the Great Books mountain once again.

Reading Atlas Shrugged was like rubbernecking on the great literary highway. I was staring at a gruesome accident of literature and couldn't look away. I had a crush on Dagny for three weeks. My own girlfriend would cast sidelong glances at the cover and frown. Friends were like why the hell are you reading that?! If I wasn't a writer I don't think I would have enjoyed it. While I found it a month long frustration with style and content (dear god what else is there?), I thought it was a helluva good story (oh, right, narrative...).

The reason I bring up this not-so-interesting story of my Atlas Shrugged experience is because a couple of days ago I read an interesting New York Times article, Ayn Rand's Literature of Capitalism. Who knew Ayn Rand outsells Jack Welch, and that Alan Greenspan wrote for her magazine, The Objectivist, several times? While I had a fun time reading Atlas Shrugged, I'll take Jay Gatsby over Dagny Taggart anyday, and Sinclair and Steinbeck and Dickens could outwrite Rand with their hands tied behind their backs. But America's CEO's are like any other readers, everybody has a novel where somewhere within the text there is inspiration, and a character becomes your hero.

Saturday, September 15, 2007

2nd Annual Brooklyn Book Festival

It seems like Brooklyn has as many writers as brownstones, so why not throw a block party to celebrate? The 2nd Annual Brooklyn Book Festival kicks off tommorrow in downtown Brooklyn from 10AM to 6PM. Last year's event drew 10,000 booklovers and Brooklyn's finest literary lions. This year's lineup is inspiring. And for those with PiggyPankBlues, all events are free! Of course, you'll have to bring a book budget because in addition to the readings there will be almost 100 booksellers who have set up shop and we all know books are like crack (but not wack).

Jonathan Lethem and Jonathan Safron Foer discuss their work; Stephen Carter, Colson Whitehead, and Mary Gaitskill at one reading; Dave Eggers and Valentino Achak Deng (their book, What is the What is astonishing and one of the best books I've read in a long time) at another reading; the list just goes on and on. The weather should be beautiful, get there early and enjoy the day. All readings are (free) ticketed events, and you can get tickets an hour ahead.

Book festivals are all over the country and they are a great way to enjoy an afternoon in your hometown or nearby. You can search for a local book festival here.

Friday, September 14, 2007

Mystery Spending

In a recent study by Visa, nearly half of all Americans blow money on things that get lost in the ether. We're talking about $200 a month for men and women under 34 that cannot be accounted for.

A night (or two, or three) out at the bar, a quick hit and run at H&M, that last belly bruising meal at Astroland (RIP), simply evaporating in your wallet to the point where you cannot even recall the experience. It's that all too familiar moment when you open up your wallet and stare inside for that extra second, and say to yourself, 'What happened to all my money? I swore I had more...'. The cure all for this phenomenom, of course, is to track your spending, make a budget, and actually follow through with it.

I just got back from a gorgeous two day break in Amagansett with friends, so I know exactly where my money went, a clam shack off of route 27...

    Brit In Brooklyn's Coney Island wallpaper found here

Tuesday, September 11, 2007

Calculator Love

I find the Cool Million Calculator a fun diversion on this rainy retrospective day. I'm currently set to be a millionaire at age 66. Well, not really, I need to get a job first... details, details.

Over at Dinkytown they have a Rent Vs. Buy Calculator. I fooled around with the numbers and the difference between renting an apartment for $1500 amonth and putting $30,000 down on a $250,000 apartment is a monthly mortgage payment of $1794. $250,000 for an apartment in NYC, good luck with that.

Poorer Than You posted a little incentive on paying off your credit card; a reality check. Use this calculator to discover just how much that 3 AM dinner at Schiller's really cost you.

And if you want to know why you shouldn't even be going out to eat at 3 AM in the first place and should just take your hungry drunk ass home, this Lunch Savings Caluculator can push you out the door. Of course it was built for brown baggers, but we at PiggyBankBlues eschew the nine-to-five. Substitute Lunch Savings with Eating, Drinking, and Merrymaking Savings, and you're good to go.

Monday, September 10, 2007

Read a Book for Free

One of my favorite things to do is read. I read when I go to bed, when I wake up, when I ride the subway, during breakfast, while waiting on line at the love-to-hate-to-love Park Slope Food Co-Op, I just love reading and that's that. Unfortunately, I also love buying books.

My favorite way to avoid the bank-breaking trip to my local bookstore is to walk a little bit farther up to the park and go to the Brooklyn Public Library. I'll read a review in The New Yorker or the Sunday Times Book Review, then I'll go to the Brooklyn Public Library's online catalog and look up the book I'm now dying to read. I'll put a book request in, via the barcode and PIN on my library card, and have it sent to my nearest branch. Then the library sends out a letter when the book arrives and I have 14 days to pick it up. You can also do it with the New York Public Library's catalog.

I read mostly fiction, but it's a great way to look for books on personal finance as well. I read the reviews on Amazon, then put a request in at the library. All my binging at the bookstore is now done at the library- a little lighter on both my bank account and bookshelves.

    photo by thomas hawk from flickr

Saturday, September 8, 2007

Snowball Calculator- The Great Debt Eliminator

If you have multiple credit card debt, the most efficient way to pay it off is one card at a time. There are two common ways, the traditional way and the Dave Ramsey way.

With both methods you shovel as much money as possible each month to a single credit card, and pay the minimum on all your other credit cards. With the traditional method of snowballing your credit card debt, you would pay down the card with the highest interest rate first. This way you are cutting down the most expensive debt you have first. From a purely financial standpoint, this method makes the most sense and it's the one I personally prefer.

However, Dave Ramsey, writer of The Total Money Makeover, advocates for paying down the card with the least amount of debt, irregardless of the interest rates. The idea behind this is that credit card debt is an emotional trauma of sorts, and if a person can see results quickly they are more apt to stay with the plan. His argument is that if you stay with the plan, despite it being the financially more expensive way to eliminate debt, it's not as expensive as quitting after a few months. Oftentimes the card with the highest interest rate has the highest debt. If a person is sending most of their money to this card, they will not be emotionally rewarded by seeing it go down quickly, and thus will become easily discouraged and fall back on paying the minimum on all the cards.

You need to figure out what plan will make you stick like superglue to your goals, the highest interest rate or the lowest amount owed.

It's important to keep track of your debt. Writing down what you owe on each card on a sheet of paper gives you a snapshot of your overall debt and a map to eliminate it. It is also the first step to regaining control of your finances.

    1. Write down each credit card you have, the amount owed, and the interest rate.
    2. Put the cards in descending order with highest interest rate first OR in ascending order with the least amount owed first.
    3. Make minimum payments on ALL the cards EXCEPT for the card in the number one spot- funnel the most money to this card!
    4. Repeat the list every month, and watch with glee as you burn through those payments and out of debtor's hell.

Of course, you could also snowball your debt with Poorer Than You's Alternate Debt Snowball Theory, and simply paydown the most nails-on-a-chalkboard irritating mother of a debt first, and work your way down there. Again, the most important thing is that you pick a plan you will want to stick with AND you alter your spending habits so that you don't crank out your cards to the max again. Money and finances involve a lot of emotion, and perhaps nothing could be more emotional than that itty bit of plastic that haunts your dreams. You're being hung out to dry by both your own actions as well as by those of the credit card industry itself.

Hopefully this week I will start a series of posts on credit card debt. Perhaps it will be a bawling mini-series like The Thorn Birds. One can only hope. In the meantime- Play with a snowball! Use this great Snowball Calculator, watch the eye-opening The Secret History of the Credit Card ,and start to melt the fat in your wallet.

Friday, September 7, 2007

Count Me In!

toothpaste for dinner

The NY Times headlines blares "4-Year Growth in Jobs Ends; Stocks Plunge". Considering I'm unemployed, I'm not suprised. Which reminds me, I better go study for my proofreader's exam :(

Things like job growth numbers, the Fed's interest rate dance-a-thon, and the peaks and valleys of the Dow Jones might sail over some heads like a disinterested breeze, but everybody who is trying to get their financial footing needs to be aware of what's going on. Even if you just get the gist of the effect. Which today might be- Buy some shares of the Dow Jones (DJI) in your Roth IRA, everything on sale, one day only!

For a lighter read, Barbara Ehrenreich, of Nickel and Dimed fame, wrote a scathing commentary, "Welcome to Fleece U". Please pass along to your favorite collegian, or at the very least read for your own special i'm-laughing-out-loud-but-crying-on-the-inside afternoon diversion.

Thursday, September 6, 2007

Laddering Your Savings

When you have a certain amount of money saved and you want to start venturing out to the land of higher interest rates, consider laddering CDs. No, not your music collection pre-ipod, but Certificates of Deposit from a bank.

This means that you would take out CDs that come to maturity over different time frames, let's say 6 months, 9 months and 1 year. When the 6 month CD matures, you put it into a one year CD. Essentially, you are rotating money out of the maturing CDs and bumping them up into longest maturity date you feel comfortable with. In the previous example, eventually every three months a one year CD would come due.

There is no time frame that is best, it is all what works for you. Small investors should not be locked in longer than one year, but that's just my personal opinion. Most articles on laddering, including the one linked to this post's title, deal with 1 to 5 year CDs. That's not such a great plan for the working artist just starting to put their financial plan in order. The length of CD maturity may be very different, but the premise is exactly the same. In the end, you need to find out what makes you freak and what makes you fine. If it would freak you out to pour your life savings of a few thousand into CDs (as it should) and have your money locked in for six months at a time initially, then only put a small amount in. Many CDs have no minimums. You could start with a hundred bucks and call it a day, just dip your toe in and every few months buy another one with more money.

Laddering protects you in two important ways. It prevents you from having all of your money locked in an interest rate at once, and it prevents you from being stranded from all your money at once. Interest rates change all the time. For example, because interest rates change, I personally don't go higher than 9 months, but it is perfectly fine to do 12 month CDs, it's all what you are most comfortable with. Stocks aren't comforting, your savings should be.

If you ladder your CDs you are spreading the risk around. Of course, the risk is still there. Two months after you put your money in a 6 month CD the rate might go up, but if you are investing in a CD every few months, the risk will be minimized. It works is the reverse, unfortunately. The interest rate goes down and you are set to buy another CD. But by spreading the risk around, investing like clockwork despite the rate changes, you are dollar cost averaging. It's a fancy pants term for the plain fact that if you buy four things at different prices, you get an average cost. Typically, that average cost is higher than simply doing nothing or getting Nostradamus on the interest rate and just happening to choose the time when the rate is highest. The reward for the risk is that you have an FDIC insured (up to $100,000) investment that pays a higher interest rate than your savings account.

Online banks, again, almost always give the highest rates. The exception is a bank's promotional rate. "ING's 9 month rate is 5.25%, Emigrant Direct's 6 month rate is 5.10%, IndyMacs 9 month rate is 5.21% and HSBC's 9 month rate is 5.10%. It is probably easiest if you use the same bank that you have your online savings account with, but certainly search around for other rates. If you choose to ladder your CDs with a bank other than your online savings bank, just make sure you do all the CD laddering with one bank. Also, most banks will require you to have some sort of acccount with them in order to invest in their CDs. For a few fractions of a percentage point up or down, I stick with my online savings bank. Laddering CDs, unlike investing in stocks, should be easy as all get out.

Georgia O'Keeffe, "Ladder to the Moon" 1958. Oil on canvas 101.6/76.2 cm. New York, Collection Emily Fisher Landau

Wednesday, September 5, 2007

Sovereign Wealth Funds

I have long assumed that foreign governments use their trillions of US dollar currrency to buy our debt. China (whom the US consumer throws dollars at like money really does grow on trees) buys approximately one billion dollars of US treasury bills a day. However, this morning I was reading an article online by Joshua Kurlantzick that detailed what he referred to as "the next big market catastrophe"- sovereign wealth funds.

Governments have piles of US dollars and US consumers pretty much drive the world economy. Our voracious appetite for objects and oil is not going anywhere. When we buy goods in US dollars, foreign companies, and therefore banks and therefore governments, then have trillions of US dollars that are worthless as is. So they invest it. US treasury bills are issued by our government to pay for the things we can't/won't afford. They are secure and have various interest rates. Not high, but high enough that interest on a few trillion dollars worth will fund your own government quite nicely.

Sovereign-wealth funds, however, are using their monetary reserves to buy shares of foreign companies. Kurlantzick notes that they have an estimated worth of two times that of every hedge fund put together. The government used funds of Norway have transparency. The government used funds of Russia do not. Imagine China having its own hedge fund, investing trillions of dollars and euros without any international regulatory control, accountability, or transparency. The world markets suddenly look three sheets to the wind in unpredictability.

We should all be thankful that the US government has no room in its budget to do the same.

Monday, September 3, 2007

Eating Pie

The better you bake those pie charts now, the better they'll be when you start gorging yourself on them later. If you are just starting out, and you want low maintenance retirement savings, it is my humble pie opinion that you look at a mutual fund that offers a target retirement fund.

A target retirement fund is a mutual fund that allocates a certain percentage of each share to different markets, adjusting the percentages as your target date of retirement nears. Each share addresses asset allocation, rebalancing, and fund selection for you. For example, the mutual fund company T. Rowe Price has a target retirement fund 2045. This assumes you are retiring within a few years of 2045. The Retirement 2045 fund currently has an asset allocation of 92.25% invested in stocks, the remainder in fixed income (ie various bonds and some cash). Your asset allocation will slowly shift to less stocks and more fixed income as you near (and pass) the year 2045. In contrast, the Retirement 2005 fund has an asset allocation of only 55.25% in stocks, the remainder in various bonds and some cash. Despite it being two years past the targeted retirement date of this fund, the slim majority is still invested in stocks. Today's life expectancy is 80, with a 45% chance that a 55 year old today will live past 90. The aggressiveness, and therefore risk, of today's retirement portfolio reflects these realities.

What exactly is asset allocation? It is basically what types of stocks and bonds you buy, according to how much risk you can/should take. Let's say you are medium risky; you are flat out broke and can handle the up and down ride of the price of Google, but you aren't about to bet the house on it. Let's say you are also 35 years old. So you're young, but no spring chicken. Asset allocation takes into account both risk tolerance and age. A significantly larger portion of your portfolio would be in stocks, because you gotta be in it to win it, maybe even dipping a toe or too in riskier sectors like technology. A smaller but necessary percentage would be in various fixed income assets, ie bonds, because the returns are more predictable and usually do not move in tandem with the stock market. Of course, as your age increases your risk tolerance decreases. Then your asset allocation woud move more money into the less risky bonds, and trim down the percentage of stock holdings. Asset allocation is used to fend off the ups and downs of the market with diversification. Basically, you don't put all your eggs in one basket, because if the basket breaks you're $hit out of luck.

Of course, fact is nobody can predict the future. I don't care what they say to your insomniatic ass on late night infomercials. And while the stock market is a closely studied beast with unpredictable twists and turns, it is asset allocation that forces you to buy low and sell high. "Buy low and sell high"- that famously prescient adage that nobody does when push comes to shove and the Dow just dropped its pants on live national tv. Let's say, hypothetically, that of the part of the pie that is in stocks, 50% is in the large US companies (large caps), 20% in middle sized US companies (mid caps), 15% in small US companies (small caps) and 15% in international stocks. The market obviously has more moves than Usher, so after 3 months you look at your pie and lo-and-behold you're holding the bag with only 30% invested in large companies and 35% in international. Why did this happen? Because the value of the large companies went in the toilet, and places like India and Brazil are wiping the mat with the big boys.

Rebalancing is what keeps asset allocation in check. What has increased in value, and therefore taking up more space in the pie, is sold, and then purchases the underperforming asset that has shrunk its section of the pie. You buy what's in the gutter for what's in the sky, and fall back in line with your original asset allocation. Historically and on average, asset allocation and rebalancing will give you the biggest pie; higher returns. It's also a little much to do in your free time on a quarterly basis, which is why a target retirement fund is a brilliant choice for those who want the money managers to manage their money for them.

But back to T. Rowe Price. I like them because when I first started out I had squat, and most funds require minimums. T. Rowe Price allows you to start with nada, so long as you do automatic monthly investments of at least $50 a month. Again, if you open a ROTH IRA, be aware that this year's maximum is $4,000 a year ($333.33/month), and *** you cannot invest more in an IRA than you earn in income***. In other words, what is reflected in your W-2 and/or 1099. Next year the maximum increases to $5,000. T. Rowe Price is hardly the only company. Both Vanguard and Fidelity have retirement funds, and they are well known and respected companies. Vanguard differs from other mutual fund companies, though, because their mutual funds are index funds. I'm a fan of index funds, funds whose holdings match the index they're tailing, but at the time I didn't have the minimum investment.

I would suggest googling around and learning more about these three companies, what their minimum investments are, and how their asset allocation differs. The highlighted links within this post should be helpful. Even if you only start out at $50 a month, and then every few months you jack it up a little until eventually you can meet the maximum contribution, it is better than nothing. Just start. Start researching, start sending for forms, start making money. Thankfully saving, like spending, tends to inspire more of the same.