Lazy Man and Money

I Lost My Job

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Last week, on May 8th, Lazy Man and Money turned one year old. In that time I have received nearly 1000 e-mails, but none like the one I received on that day:

Hi Lazy man, tell me how do you create a blog to get help to pay my bills. I was recently layed off work because of budget cuts with a non profit organizations that I was working for and I just purchased a home, and would like to keep it. I have been applying for job but have not be successful just yet need some help. Thanks, [Joyce, the made up name that I will call her to protect her anonymity].

I don’t possess the writing skills to explain how this impacted me emotionally. The desperation in the e-mail just oozed into all my waking thoughts. That night, I ended up getting about 4.5 hours of sleep instead of usual 6.5. I have mentioned this a couple of times in passing, but I’ve been pretty close to this situation. No, I didn’t own a home, but I was nearly at the point where my checking account was down to zero. I would have had to start withdrawing from my retirement accounts to pay the rent. It was back in the dot-com boom in 2001. I went 2 years without finding steady work as a software engineer. I had found three or four short-term contract jobs during that time – the longest being one month. I had been employed at another company for three months, before they cut their headcount from 100 people to 6 (I had made the first several cuts, but not the last one). I was not one of the 6.

Here are some thoughts I had after digging up the pain of that experience:

It’s incredible hard to have any kind of social life when your friends typically want to go out to a fancy restaurant. I remember one time getting invited to dinner amongst friends, and, in not one of my better moments, wrote a pretty scathing response, questioning why society dictates that we must go out and spend 10 times the cost for food at a restaurant (I still feel that way, but things change considerably when you have money in the budget for the experience). It was even harder trying to date.

If you don’t have an income, there’s a constant process in your head that calculating costs. With the dot com bust, everyone talked about “burn rates.” And now it wasn’t my company having a burn rate – it was me! Even today I count every cost. The skill I needed to get by back then, has become a habit that I can’t drop. Today, I often annoy myself with ultra-frugal thoughts.

Everything can easily spiral downward leading you into a deep depression. Not having an income is terribly depressing in it’s own. Not being able to do things with friends and getting angry at the situation doesn’t make things better. Whenever someone buys themselves something nice, it draws resentment from deep inside. It doesn’t get much worse than being alone and pennyless.

The story for me has a happy ending. I found a part-time job in the autumn of 2003 that paid more than many full-time jobs. In Feb. 2004, a contact from the old dot-bomb asked me if I was available to work at a new start-up. Knowing the people, I jumped on the opportunity and made more than average person, but still a disappointing salary for a software engineer. In the same month, I met a woman whom I would eventually ask to marry me. Last year, she got a big promotion to move out to Silicon Valley. As a software engineer, I saw my salary jump when we got out here as well. Now that things are moving in a much more positive direction, I’m taking action by trying to grow my alternative income sources. If put in a similar situation, I’ll be much better equiped to handle it.

So what did I learn that I can pass on to Joyce… these survival tips.

Weekly Financial Review #16

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There was a lot going on this week this week, so let’s get to it:

  • Last week, I mentioned Energi Gal and I were going to have a Financial Day. The idea was that we were going to pour through our financials. Well we got through a portion of the financial planning. I was hoping I could get her finances in a spreadsheet like mine, but we didn’t get that far. I think it’s best to wait until the middle of next month as that’s when I do my monthly expenses. Then we’ll have things in sync and it will be a matter of just combining the spreadsheets to get a good total financial picture.
  • Sometimes customer service surprises you. Earlier this week, I mentioned the mess I had getting my car repaired.  Well, Mic’s Auto Body in Redwood City installed a new bumper today in 45 minutes – while I waited.  I didn’t have to wait for a rental car or anything.  They went as far as offering to pick up the car from work, but I figured I’d save them from that.  So even though they had an accident in the first place, they went above and beyond and it’s why I’ll use them in the future.
  • I have a pair of questions for you:
    • I had mentioned the problem with my Treo 700P in the past. It’s a $600 phone, so if I had to replace it without the warranty, it would be expensive. I could buy insurance for around $7 a month, is it worth it? Simple math seems to suggest yes, but it’s a $50 deductable to get a new phone and I could probably pick one up on Ebay for much less than $600. It’s also been around for a year, so chances are a new model will come out in the next 6 months, making the current model I have cheaper.
    • I didn’t realize that MLB and the cable companies came to a settlement, so I can now order all the Red Sox games for $160. Last year Energi Gal and I probably watched over 120 games. However with the games being on from 4PM to 7PM local time, I’ll be at work most evenings. So should I get it or not? What would you do?

Let’s Play “Invest Lazy Man’s Money”

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The deposit for my Tax Year 2006 Roth IRA just went through. So now I have $4000 sitting an account waiting to be invested. I’m looking for an ETF to invest in. I have $8000 in Vanguard Small Cap ETF (VB). I have another $8000 in Vanguard Total Market Index (VTI) and another $4000 in Amex Technology Spiders (XLK).

I’ve been thinking about iShares MSCI EAFE Index Fund (EFA). I feel the economy getting more and more global every day. If people overseas can do the same job as Americans for 1/10th the money, then business will follow. The American economy will either suffer or those countries will have great wage inflation. Perhaps I’m wrong about this, but I can’t see how the wage difference can go on forever. I’m also thinking about Vanguard Health Care (VHT). America has more aging people than ever – and they are living longer. Everyone will need more medications, more health care. That means more dollars going to the companies that provide solutions. Lastly, I wouldn’t be opposed to expanding the small company or total market portions of my portfolio either.

I like to be diversified in ETFs. They generally have low expenses and allow for easy diversification. What would you suggest?

Best Financial Gift for a Friend’s Newborn?

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I have several friends who either have had or will have a baby in the next coming months. I’d like to get a gift that would give the child a good financial start. Bonds have been the traditional gift for years, but I’m not sure the return on them makes for a very good long term investment. I’m looking to give something around $75.

The next question is whether I should give the gift to the child or the parents. I’ve heard that financial gifts in the child’s name could limit his/her ability to get financial aid when the time comes. On the other hand, there are rumors that my fiancee’s parents used money given by her grandparents for themselves (not that they didn’t raise her, spending much more money overall). Any thoughts on this?

Lastly, I wouldn’t have a social security number for the gift and wouldn’t want to use my own – it would probably just confuse things. So hopefully this won’t be a problem. I appreciate any ideas you might have.

Update: For grandparents, aunts, uncles, and other relatives: do you and the family of the newborn live in Canada? Consider opening an RESP Canada savings plan for the future post-secondary education of the baby. Money can grow tax-free until it is withdrawn, and anyone can contribute over the years. It’s a thoughtful gift idea that should help the new parents worry a little less about starting a savings account for their child.

Cheap Shuttle From Oakland to San Mateo County?

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I had just called Super Shuttle, who I’ve used in the past, and the $90-95 that it quoted seemed to be more than usual. As I’m going by myself, I can’t take any advantage of a group rate. I started making calls from the Oakland airport list. I found that Lucky Shuttle seems to be $45, but it didn’t really sound like they were on the ball. They didn’t ask for my credit card or anything to hold the reservation. I get the feeling I’ll show up and the price will be different from what they’ve said.

Anyone have any particularly good deals? I could always take the Oakland bart to Cal-train and then get close to my place. However, with it being the day after Thanksgiving, I think it’s a special schedule and I really don’t like to take six switches after a red-eye flight. That’s just looking for travel nightmare.