Do NOT Stop Contributing to your 401k

After the big drop in the stock market earlier this week, all I heard about on the news was that “things” had fallen to their November lows again…

That struck me as a little odd.

Without even looking it up, I was pretty confident that my 401k balance was considerably higher than it was when everything tanked four months ago.

And it is!

My November “low” was $43,498.02. That was on November 21st.

Sure, I was upset that that was $21k less than it was just 8 weeks earlier, but I kept on contributing at my regular rate anyway.

Now I know that, in reality, I’ve technically been losing money on most of my contributions since then…but I’m a pretty simple guy — it’s the bottom line that matters most. That’s my balance.

Right now, my balance is $51,807.72.

Not even close to those November lows….

And why is that?

It’s because I never stopped contributing.

Posted on February 12th, 2009 at 7:40 pm by Brainy Smurf
401k, Current Events, Finance | 3 Comments »

Mid-month Financial Report

We’re nearly half way through February now and even after yesterday’s market drop (I ‘lost’ $1900), things are looking pretty bright.

Best of all, I haven’t even earned a paycheck this month!

That’ll change tomorrow, it’s pay day, but to be this deep into the month and see that I’m actually up over $1k across all accounts, well, that feels pretty good.

Of course, the bills will roll in next week and I’ll be grounded some, but… so far, so good.

And, barring any unexpected expenses, I’m on pace to have my savings account top $10k for the first time ever *and* I should also be able to wipe out the remaining credit card balance (from last month’s baby furniture purchase) as well.

Woo-hoo!

So, while my net worth is much lower now than it was one year ago, I’d be shocked if I lead off my next net worth update the bland way I did then: “Well, not much to report for February…”

Posted on February 11th, 2009 at 8:35 pm by Brainy Smurf
Finance | No Comments »

Playing the Economy Card

Today, at work, I botched a T-SQL script big time.

As it turned out, without getting too geeky, I was looking for a ” (that’s a space) when I should have been looking for a null.

They should be the same, as they are in many other languages, but they’re not in SQL.

Dumb mistake.

Needless to say, it took me some time to debug and a project that was supposed to go live this morning didn’t get started quite as early as I would have liked.

With no where to turn, I jokingly blamed…the economy.

Seems everyone is playing that card right now…

Near my house, there’s a small steel fabrication plant. Small is a relative term, though. The building is freakin’ huge. The parking lot is even ‘huger’.

They make blades, springs, gears, and other sprocket and cog type things — I think. I’d also venture to guess that it’s one of the top ten employers in town.

At least, it was…

Back in November, the laid off their 3rd shift employees. Every single one of them.

The place used to be crankin’ 24 hour per day, but by Thanksgiving, the place was dead as soon as the sun set.

The company blamed, yep, you guessed it, the economy.

Then, right around Christmas, they had an extended holiday shutdown. It lasted three weeks, during which time the company announced that the second shift wouldn’t be coming back.

They didn’t even plow their parking lot during this time — really, the place looked abandoned.

Again, they blamed the economy.

Then, last week, they laid off 50% of the few remaining employees and announced that those that were still employed would be taking an across the board 5 percent pay cut.

Oh yeah, they only have a 32-hour work week now too so…make that a 25% pay cut. Across the board.

It doesn’t take a scholar to come to the conclusion that the economy is apparently to blame.

I drove by today on the way home and it’s just crazy…

A little over two months ago, this place had a full parking lot, a staffed security gate, and blinking lights flashing through the windows (I’m guessing from forklifts driving around inside or something.)

Tonight?

The security gate was up, there wasn’t a guard, and there were just three cars in the parking lot — one still covered with snow. The place is dead.

And that got me thinking… Besides the headlines and all of the doomsday proclamations, what’s really changed, materially, in the past 3 months? The past 6 months? The past year?

It’s almost as if a supposed mood or an outlook can cause job losses like this.

That’s messed up.

And to explain it all, the best they can do is play the economy card?

I don’t get it.

Posted on February 9th, 2009 at 8:46 pm by Brainy Smurf
Current Events, Rants | 4 Comments »

Photo of the Week: Honeywell T87 Thermostat

As I’ve mentioned before, my home is old. Definitely over 100 years old.

Probably even over 125 years old.

And while my furnace is only a few years old now, my thermostat is probably around 50 years old. That’s just an educated guess. In reality, I have no idea how old it is…

Oh, and you don’t have to email me to let me know that it looks like crap and that I should get a new one. I already know that.

But if you’d seen the room that surrounds it, well, the aesthetic appearance of the thermostat is the least of my problems…

And, hey, the old thing still works like a charm!

Anyway…

It looks like your standard round Honeywell thermostat, right? If you grew up in North America or western Europe, it should be pretty familiar. It may even drum up some warm fuzzy memories.

If you were born in the 1990′s, well, this is how we turned the heat on in the dark ages, you know, before everything went digital and became programmable.

My thermostat is a very early version of the T87 — a model that Honeywell released in 1953. If it were in better shape, it might even be worth something. Apparently one is even displayed in the Smithsonian.

But look closely… There’s a feature on there that isn’t on more modern versions…

See it?

I’ve lived in this house for over six years and I just noticed it earlier this week while researching my BFO post about turning the freakin’ heat down.

At the bottom, just above where it says “Honeywell”, they’ve highlighted a so-called “Comfort Range” between 72 and 78 degrees Fahrenheit.

Apparently, heating the home in the 1950′s didn’t cost so much…

It’s about as warm as it gets in here during the winter months and I’m still 4 degrees shy of the “comfort range”.

Posted on February 8th, 2009 at 12:31 pm by Brainy Smurf
Home Improvements, Photo, Retro | 3 Comments »

Have You Reached Your Savings Threshold?

Okay, enough with all of the negativity, you know, like getting screwed on my taxes, insurance companies attempting to stiff their customers, and ING lowering their rate…

In short, I’ve added another automatic savings transfer to my very successful “weekly” schedule.

Every Wednesday, I’ll be transferring $15 from my checking account to my ING savings account currently earning a dismal 2.178 percent.

Fifteen bucks doesn’t sound like much. It’s not.

It works out to $780 per year or $65 per month. Those numbers are a little more respectable, I guess, but they’re still not real impressive totals.

They’re not meant to be.

I don’t even miss those $15. Not for a second.

I mean, if I weren’t so diligent about keeping track of my checking balance, I’m not sure I’d even notice it missing — that’s how small an amount it is.

But…that small amount increases, slightly, what I’ve already been dropping into savings each week — and that’s the point.

Now that I’ve now settled into my current income and expenses, I’ve found that an additional fifteen bucks each week can definitely be spared without any impact on my day-to-day routine.

Basically, I’m slowly working my way up to my maximum savings threshold, you know, the point where I can no longer afford to “save” any more.

I’m not there yet, but I’m getting closer.

Posted on February 8th, 2009 at 8:25 am by Brainy Smurf
Finance, Savings | No Comments »

Is Your Insurance Policy even Worth the Paper it’s Printed On?

One of my biggest fears while my house was insured by the FAIR Plan was that they wouldn’t step up to the plate if I ever needed them.

Sure, the terrible policy they offered me (which I had to accept) barely covered anything to begin with but I just knew, deep down, that if I were to ever file a claim, they’d fight me every step of the way.

Thankfully, the need never materialized and now I’m with a much more reputable insurer.

But does that even matter?

Living in the outskirts of Hartford, Connecticut, the insurance capital of the world, the subject of insurance is in the news pretty often.

The media’s target this week is the insurer for Peanut Corp. of America (yeah, that company in Georgia responsible for the salmonella outbreak); The Hartford.

Though they’re one of the biggest insurers in the United States, a lot of people around the country are unfamiliar with The Hartford. That is, until you jog their memory a little.

Remember those awesome red plastic fire helmets that we all wore as pre-schoolers?

Yeah, those were all courtesy of The Hartford.

Seems their best marketing tool targets folks that are a little too young to use their services…

Anyway, given that there have been a number of deaths attributed to this tainted peanut supply, the lawsuits are sure to roll in.

This is where The Hartford comes in:

The peanut processor at the center of the nation’s deadly salmonella outbreak could be in an even stickier mess because its insurer — The Hartford — has rushed to court to limit what it might have to pay on lawsuits.

Hartford Casualty Insurance Co., part of The Hartford Financial Services Group, is asking a federal court to determine what its responsibility is on three years of policies it issued to Peanut Corp. of America.

The peanut processor makes peanut butter and peanut paste, which is used in baked goods and other foods.

The salmonella bacteria outbreak has sickened about 575 people nationwide, and at least eight have died. Connecticut’s Department of Public Health said nine cases of illness here may be associated with Peanut Corp. products.

The Hartford could be on the hook for up to $31 million in claims under the liability insurance policies at issue if it gets only unfavorable court rulings. It might cost the insurer millions more in legal costs, depending on how the policies were written.

Rather than wait to be sued by its customer, Peanut Corp., The Hartford asked U.S. District Court for western Virginia this week for a declaratory judgment on the policy dispute.

Peanut Corp. could face hundreds of millions of dollars in claims of various kinds, said Bill Marler, a Seattle trial lawyer specializing in food-borne illness lawsuits. Only three suits had been filed by Thursday afternoon on behalf of salmonella victims — two of them by Marler — but more are expected. The peanut company will also face massive claims from businesses for the cost of food recalls and lost profits, he said.

With the company facing all that and a federal criminal investigation, “it does seem a bit like The Hartford is kicking their insured under the bus at a time when they probably need a little support,” Marler said.

Now I can’t claim to know all of the details of their policy, and maybe the Hartford has a good reason for doing this, but the purpose of an insurance policy is to cover your arse if anything goes awry and, in this instance, the insurance company is pro-actively covering their own and trying to dodge their responsibility.

That’s wrong. On a number of levels, in my opinion…

In the unlikely event that something goes horribly wrong, the insurance company is supposed to have your back.

That’s the whole purpose — that’s exactly what insurance is for!?!

Seriously, if the insurance companies are still willing to sell the policies and the customers are still paying their premiums on time, should anything go wrong that’s covered in the policy, it’s the insurer’s responsibility.

What do these companies think people pay the premiums for?

If my house burns down tomorrow or if I’m in another car accident, will my insurance carriers pull this same type of move?

At this point, with news like this, I’m not exactly confident in saying that I’m “actually” covered for anything… even though I pay my premiums every time a bill comes in.

Seems now, maybe, I’m just sending them money for nothing…

Can’t anyone hold up their end of a contract these days?

Posted on February 6th, 2009 at 9:28 pm by Brainy Smurf
Current Events, Insurance, Rants, Retro | 3 Comments »

My PMI Battle: Re-Ignited

So I started doing my taxes this week and, while going through the motions, I stumbled across something that drove me bonkers last year.

I’m in shock that I didn’t blog about it then. Perhaps I did, but I couldn’t find any mention of it…

And, honestly, I wasn’t going to blog about it this year either until reader Doug Hill posted a comment on one of my better entries regarding my PMI battle with Countrywide — the one I eventually gave up on.

See, last year there was a “new” deduction that homeowners could take. You could deduct your PMI!

How about that?

I was pretty pumped — until TurboTax told me that I didn’t qualify for the deduction.

It didn’t indicate why, so I just assumed that it was because I was too awesome, um, that it was because my income was too high. You know, something positive.

But this year, the same thing happened and I made a lot less. For a minute or so, I got all excited when it allowed me to enter that I’d paid $1021.80 for PMI in 2008, you know, thinking that I’d get most of it back from Uncle Sam.

No dice. I don’t qualify. Still.

So, modified slightly, here’s what Doug Hill said to get me all fired up:

Only those that took out a loan after 1-1-07 can deduct the cost of PMI through 12-31-10.

I took my loan out in August 2005…

Look up P.L. 110-142. Newest version of section 3 (b) doesn’t say anything about when you took out a loan; but IRS Code Section 163 Section H (iii) says the loan must be after 1-1-07.

Now we have two classes of homeowners who pay PMI — Deductible and Non-Deductible.

He’s right.

Like Doug, I’m getting hosed because I bought my house before the market started to falter. As MoneyMateKate so eloquently stated in another post, “No good fiscally responsible deed goes unpunished these days. Grrr.”

Grr is right.

Once again, it feels like I’m getting the shaft for making a wise move and paying my mortgage bill on time and in full for all of these years… while the people who are walking away from their mortgages because they bit off more than they could chew could potentially be “bailed” out…by the taxes I’m paying.

Posted on February 5th, 2009 at 8:48 pm by Brainy Smurf
Finance, PMI - Mortgage Insurance, Rants, Taxes | 5 Comments »

OT: Did you hear about Jessica Simpson?

No, no, not about her growing waistline.

This isn’t even about her attempt at making mom-jeans fashionable… though I do wish her the best in that effort.

See that little graphic over there? The little one, not the big one up top…

Yeah, it popped up on the right-hand side of my Facebook profile this afternoon. I’m not sure exactly why, I mean, I don’t list her as a favorite of mine or anything.

In fact, I’m not sure I could name a single Jessica Simpson song.

I know “who” she is but I’m not really sure “why” she’s as popular as she is, um, as she was…

But that’s not what this is all about…

Can you believe that her IQ is apparently 111?

Okay, that’s not what this is really about either…

Take another look at that little advertisement. It’s apparently for an application that I’m sure can be added to your Facebook page. Though I didn’t actually click on it, I think that much is clear.

Now, take a closer look…

See it?

Obviously, to me anyway, the person who created the advertisement has an IQ significantly lower than Jessica’s.

It’s not a total loss, I mean, they evidently knew the difference between “then” and “than”, but c’mon, if “you’re” creating an ad for an application that compares IQ scores, you’d better make darn sure that “your” copy is correct.

(For those that are confused but this entire post, the copy should have read, “Jessica Simpson scored 111 on the IQ Challenge! See if you’re smarter than her now!”)

Sorry, seeing errors like that in prominent places drives me bonkers…

Really, someone was paid to put together that graphic. Talk about shoddy work…

Posted on February 4th, 2009 at 8:38 pm by Brainy Smurf
Current Events, Music, Rants | 5 Comments »

ING Lowers Rate… some more…

Man, they did it again…

I understand the reasoning, but that doesn’t mean that I have to like it. And this latest one, yesterday, was a biggie.

Interest Rate Change to 2.178% (2.20% APY)

Ouch.

Just two weeks ago the rate dropped to 2.374% (2.40% APY) from the 2.472 (2.50% APY) that it had dropped to just 3 weeks earlier…

And to think, it was just one year ago that I was complaining that the rate had dropped to 3.590% (3.65% APY). I’d take that in a second now!

Posted on February 4th, 2009 at 6:15 am by Brainy Smurf
Finance, Savings | 4 Comments »

Toyota is Number 1! Even in my Book…

At this point, you’d have to live under a rock or something to be unaware that Toyota has overtaken General Motors as the most popular auto company in the world.

Nothing against the domestic automakers but I think there are some real concrete reasons for their fall, and today, I received the proof that I needed to be certain that Toyota is, without a doubt, the best car company out there.

My wife took her 8-year old Toyota in for service today and she left the dealership with a 2007 Prius as the loaner.

Can you say upgrade?

When I was young, after the Malibu, my parents owned a series of Fords.

First it was a Crown Victoria station wagon and then it was a Bronco II — both in a horribly embarassing shade of metallic brown with, ugh, brown trim…

More embarassing, though, was when my parents would take one of them in for the service. The “rental” from the Ford dealership was always an Escort or something with the dealership’s logo on the doors with the word “LOANER” emblazoned below it.

Talk about humiliating…

The only thing that could have been worse would have been a Ford Festiva.

Later, when I had my own car, I experienced the social stigma of a “loaner” first hand.

My first car was a Volkswagen Jetta and the dealership I bought, errr, leased it from would do just about anything to avoid even offering a loaner to a customer, but after they totally screwed up my exhaust system, they caved-in and gave me the keys to a Golf for a few days.

It wasn’t so bad, but it was still trading down. They had my 1997 Jetta. I had their 1995 Golf. At least it didn’t say “LOANER” anywhere on it.

My experiences with my BMW have been better. Their service department makes the claim that that you’ll always receive a car comparable to the one you’re having service done.

Considering that BMWs are over-priced by a 5-figure number, that’s the way it should be, in my opinion.

The first time I took my car in, I received the keys to a manual transmission 5-Series BMW. I don’t remember the exact model, but aside from being white, it was a pretty nice car. I was impressed.

So much so that I was actually excited to take it in the next time I was due for service just to see what they’d give me (while crossing my fingers that it wouldn’t be white again).

The next time they gave me an automatic Toyota Camry. A Camry is a nice automobile, I guess, and I enjoyed driving it around for a day, but it was no Z3.

Overall, I was disappointed. It was NOT comparable to the car I dropped off.

As a result, I haven’t taken the BMW back to the dealer since…

My current car of choice for driving to work is a Toyota product, but I haven’t had a big enough service done yet to warrant a loaner.

But now that I know that they loan “up”, next time I just might mention that sometimes the brakes sound like crap when the car hasn’t warmed up and that the stock interior neons don’t always light up the way they’re supposed to when I push the button…

I mean, my wife’s car is 8 years old?! She didn’t even buy it at the Toyota dealership where the service is being done and they gave her the wacky looking key to a Prius?! How sweet is that?

Now for my review…

She took me for a ride in it tonight. I’d never been in a Prius before but have always wanted one since I first saw Brian driving one on Family Guy.

Yeah, that’s right, an unpaid product placement in a cartoon show made me want one…

On the real car, the first thing I noticed was that the key isn’t a key. You jam this keychain like contraption into a hole like an old Atari cartridge and then hit a power button.

Really, it’s like turning on a computer or something.

I guess, in some ways, it is a computer.

The shifter is just a little knob on the dash. I didn’t actually drive it but that seemed a little strange.
It’s definitely not your typical car.

I mean, I’ve never come across a car or truck that I haven’t been able to jump into and drive immediately but I think that if I were to jump into a Prius, it would take me a few minutes to figure out how to, um, make it go.

The thing is stealthy too. I mean, if you turn off the radio, and the fan, and you’re sitting at a stop light or something, you can’t even tell the car is running.

Really, it’s like it’s all lit up but dead at the same time. At one point, I was sure we’d stalled.

When you’re driving, it’s like you’re in the Jetson’s car or something — the lack of vibration from a real engine is more apparent than I ever would have thought.

On the inside, it’s got this huge video touch screen in the center of the console but it all seemed a little confusing so I didn’t mess with it too much.

My only complaint is that it was tough to figure out how to turn the heat on… There’s a big button on the touchscreen for A/C, but it’s freezing outside and I didn’t see a “Heat” button anywhere… Maybe I’m just an idiot…

In the end, though, even without heat, the Prius gets a big thumbs up from me.

Toyota, as a whole, gets a big thumbs up too.

Now, I realize that many of the experiences that I’ve described say more about the quality of the individual dealerships than the actual car companies but the car companies need to realize that the typical consumer’s only actual contact with the automaker is at the dealership.

In my experience, the Toyota dealership is representing the automaker exactly the way I believe they’d like to be represented. Better than BMW, better than Volkswagen, and way better than Ford.

Now, if only the Prius didn’t cost so much… We’d get one.

Posted on February 2nd, 2009 at 8:34 pm by Brainy Smurf
Current Events | 3 Comments »

Net Worth Update: February 2009 (-$2,951)

Hmmmm… Not much went right in January.

I shouldn’t say that — the news was all bad in Pants-in-a-Can land…

The most noticeable update is that I’m once again carrying some credit card debt.

Okay, it’s a lot of credit card debt — due entirely to the purchase of baby furniture a few weeks ago.

It’s bothering me a bit, like an annoying lump in my sock, but I’d really prefer to hit the $10k in my savings, you know, to finish off the 2008 goals, before pulling some out to pay the bill in full.

I’d be surprised if I don’t have that back down to zero by the end of this month. Best of all, if I manage that, I’ll end up paying absolutely nothing in finance charges! Hooray for grace periods!

Alright, here’s the breakdown:

Cash:
Things were tight this month. I had to sweat it out for a few days waiting on the second paycheck of the month and though the balance right now looks pretty hefty, there’s a mortgage bill looming and I won’t be getting paid again until February 12th.

The main cause, I believe, is due to the fact that we didn’t invoice any of the clients for my side business this month because of sheer laziness, ahem, I mean the holidays.

Savings:
ING may be fighting me every step of the way by lowering their rate every few weeks, but my balance is still going up, up, up! Another good month here, though I must confess, I did withdraw $500 on January 21st to pay a few bills so it should have been even better!

Gov’t Bonds:
Hey, when $600 earns you $3.36 over the span of a month these days, you can’t really complain.

401k:
C’mon Barack! I thought you were supposed to get the ball rolling again?

Actually, I was having a pretty good month until this past week where things tanked.

That said, I’m also considering lowering my contribution in the near future, partly because I “lost” $22k last year and also because my employer drastically reduced their match.

Combined, it doesn’t feel like “free” money anymore…

Home:
This looks to have stabilized a bit. Hey, as long as it never approaches what I paid for it, I’ll always be happy.

In fact, it amazingly *still* hasn’t hit the price I paid for it PLUS the cost of all of the improvements I’ve made.

Auto 1 & Auto 2
The value of my daily driver fell quite a bit this past month and you know what? It’s understandable.

This past month was the first month where my 2005 Scion xA didn’t feel “new”. I noticed a few knicks in the hood, there’s a crack in the plastic molding on the inside of the door, and it just doesn’t drive like a new car anymore.

I’m happy, though, that it took nearly 4 years to get to this point.

Now it’s time to stop baby’ing it and drive it into the ground.

Credit Cards:
As Carol Ann would say, “They’re back…”

Yes, I’m carrying some credit card debt again. No worries, it will be short term. I promise.

Unless of course I go out and buy a HUGE television at Circuit City today for the big game or something…

Hey, it could happen…

Auto Loans:
Paid off.

Other Loans:
I truly hope that I never ever have to write anything under this heading in the future. Personal loans are easily one of the stupidest financial moves a person can make. It’s how we financed our roofing project in 2006. Never again.

Mortgage:
Still not moving as rapidly as I’d like it to be, but I didn’t make any effort to improve the situation. I don’t foresee making any effort this month either, so it will just contine to fall around $500 per month.

Posted on February 1st, 2009 at 8:02 am by Brainy Smurf
Finance, Net Worth Updates | 1 Comment »