Double Journey

I was chatting with a friend today that I hadn’t talked to in a while.  We were just discussing how things were with each other and the conversation eventually turned into how she was doing at her job.  She has been in the job for a while, and I know she has been thinking about leaving for a long time.  But as we talked it came up that she was thinking of looking for a job out of state.  I couldn’t believe what I was hearing until she explained that California has just gotten to expensive to live in.

And to a large degree she is right.  She is, like me, part of Generation Screwed.   She does OK by most standards, but she is, like me, a renter.  She wants to get married, raise a family, and eventually own a home.  Of course those in the generation face the daunting problem of saving a small fortune to buy a house.  Coupled with the high taxes and high gas prices in California, no wonder she is thinking of leaving.

It really makes me wonder how bad it is for those in California less fortunate than me.  I have started thinking about how I can save money when faced with these economic uncertainties.  Now for me, most of this is psychological in nature (more on that later), but for many many people it is a stark reality.    California is a very expensive place to live.  For many people, all the benefits of living in California don’t outweigh the lower standard of living. How does the average person achieve the American Dream in California?  How is it possible to start out, pay off loans, stay out of debt, save enough to buy a house, save enough to send your kids to college, and then save enough for retirement?  I find it difficult enough as is with a high salary, no kids, and no debt, I just can’t imagine how it must be for those faced with multiple challenges.

So what happens when more and more people start feeling this way?  Is it possible that we see a migration out of California?

I went to the dentist today.  Unlike some people, not a huge fan of the dentist.  Today was a prime example of why I am not.  I’ve had a number of cavities in my life and it appears that its time to redo some of those fillings, so I’m going back next week to go take care of it.

Here is the thing though.  I am just doing whatever it is they tell me I need to do.  It’s not cheap.  It will cost me out of pocket about $350.  Lucky for my, this is coming out of money I still have in my HSA from Microsoft, so in reality, I’m not really paying for it, but that isn’t the point.  I could imagine for a lot of people, spending $350 when nothing is obviously wrong would be a very difficult thing to do.

So what do most people do in this situation?  Would they just spend the money and get everything fixed or would they ask a lot more questions and only do the things they absolutely had to do?  It’s easy for someone like me to just do whatever is advised, but I really wonder what people do when they have to make choices about their health.

I often think that my generation is getting the very short end of the stick.  I’m sure lots of people feel that way about their respective lives, but it is an odd thing for me.  You see, I’ve always done very well, but I think I’ve done very well despite some pretty big obstacles put in front of people my age, 30.  Here is the quick list of what 30 year olds today have a right to gripe about

•  Tech Bust of 2000 -  Right before I graduated college and was about to enter the working world, the tech bubble was in full swing.  the Dot Coms of the world were producing millionaires for people with my exact skill set.  Of course, right when I graduated, tech mania subsided, the bubble burst, and lots of my peers lost their jobs.  I even technically lost my job.   So right when it was most important to have a job, since few, if any, of my peers had a safety net, we were losing our first jobs.  The jobs that would set a foundation for the things to come.
• 9/11 - One short year after I graduated, we had 9/11.  This changed the face of the United States and brought on an even wider economic slowdown than the tech bubble bursting.  Our lives became a little more frightening and a lot more inconvenient.  It brought changes to our government and our lifestyles which I frankly don’t really care for.  A few years down the road it even helped re-elect one of the biggest idiots we have ever had as President ….
• George Bush - Can you believe that this has been the man who has been President of the United States my entire adult life?  If that doesn’t show you how screwed my generation is, I don’t know what does
• The Housing Bubble - This one might just be the worse one of all.  My combined household income would, according to wikipedia, qualify me to easily be in the top 5% of households in the United States.  If we took into account how much I have in savings …  Well let’s just say I’m not doing half bad.  Yet I don’t own a home.  I don’t because ever since I was able to afford it, it hasn’t made any economic sense to buy.  Prices were just too high.  Most people my age probably could not even really afford it until about 2005, but by then housing prices had skyrocketed to unprecedented levels.  To make matters worse, many of my peers bought anyway!  So now, they are losing their shirts as home prices fall.  Since they just bought, they have no equity.  Many of them will be foreclosed on, ruining their credit for years to come.
• The end of Pensions and the Collapse of Social Security - Pensions as we know it are done.  My generation now faces the very daunting taks of an unsecure retirement.  Many of our parents have guaranteed income the rest of their life thanks to generous pension benefits.  My mom retired in her early 50’s and has a pension that will pay her 1/2 her salary for the rest of her life.  No such luck for me.  I’ll be saving for retirement by myself with no such guarantees.    To make mattes worse, my generation will be the one to have to deal with the Social Security mess.  Fantastic!
• Inflation - I’ve written before and I’ll say it again.  Inflation is very, very bad.  It has been dormant for almost my entire lifetime.  But right when it matters most, when people my age should be starting to accumulate wealth for retirement, it springs back to life.

I could go on and on.  These problems aren’t like the Great Depression or a World War (although we have had to deal with a very long, protracted war even though we reached “Mission Accomplished” years ago) but still.  While these problems haven’t really affected me personally, I’ve seen their effect on my friends.  It makes me think that things are even worse for us than I believe since I myself have never felt the pain first hand.  What do you think?  Am I part of generation screwed or am I making a bigger deal about this than it really is?

Because I follow the market so much and because I’m fascinated (from an economics perspective) with the rising price of gas, I find the calls for Saudi Arabia and other oil-producing nations to produce more oil to be pretty silly.  Yes, I get the fact that American consumers are feeling the pain at the pump.  This is causing all sorts of other problems and will probably lead to the double whammy of inflation and recession, stagflation.  Believe me, I don’t want to see that.

But I find the whole situation amusing for a few reasons.   First off, I really think it might be in the best interest of the United States to just let oil stay this hi.  There are already signs that America is pulling back on their gas guzzling ways.  By most accounts, SUV sales are down anywhere between 20%-40% as Americans switch to smaller cars.  Air travel is also down as more and more people are opting to stay at home.  I think in the long term, America will be better off weaning itself from our oil loving ways.  If oil stays this hi, alternatives will be found.  Nothing motivates people like money.  When oil is cheap, nobody has any incentive to find another alternative.  With oil this expensive, the alternatives start looking a lot more attractive.

But here is the kicker.  The oil producing countries get this! I really don’t think they want the world’s addiction to oil to end any time soon.  But it is hilarious to me to see the United States ask, cajole, and demand these countries to produce more oil.  These countries have every incentive in the world to pump more oil.  Oil, even hard to reach oil, probably only cost about $50 a barrel to produce.  Yet it sells on the market for almost triple that.  Now think about it.  What would you do if you could produce a product and sell it for triple what it cost you to produce?  You would make as much of it as possible as fast as you could!  There really is no reason for the US to keep asking to increase production.  However much the oil industry is a “cartel” believe me, they cheat when they can.  Although they artificially keep supply low on purpose, all the OPEC countries have a huge incentive to cheat on the quota.  They have done it in the past when oil wasn’t this hi.  The incentive to cheat is even greater now so what makes anyone think they won’t?

So let OPEC do whatever they want to do.  I honestly think the United States, it its smart, can win either way.   Then again, that may be asking too much.

Despite the fact that gas is soon going to be $5 a gallon, I’ve decided that I’m done with the train.  I’ve been trying to take the train
on and off for the past few month but decided today that I have had it.   Like a typical Californian, I’m addicted to my car.

A couple of things killed the train experience for me.  While it is generally more convenient for a majority of people who can get on it easily, it really isn’t for me.  My commute isn’t that bad.  I do hit some traffic, but I know enough of the side streets to be able to get around any traffic jams.  The money hurts a little bit, it is taking me about $60 a week to fill up my tank, but it isn’t horrible.  Two things did it for me.

1. The train takes longer.  Door to door, it takes me 30-40 minutes in my car.  The train takes me about an hour.   Round trip, I can save 40-60 minutes a day.  That really starts to add up.
2. I get a headache when I ride the train.  Don’t know why, it isn’t bumpy or anything like that.  It just gives me one.  it usually takes me about an hour to recover from it when I get home, sucking up even more time.

So that’s it for me.  I was trying to do my part to help the environment and the horrible traffic congestion in Los Angeles, but in the end, my own convenience and comfort wins out.  I know, I’m a horrible human being.  Was it the right thing to do, or did I give up too easily?

In fact the deal can be bad for you in multiple ways. Here is what I’m talking about.  I went to get a sandwich today at Quiznos.  I decided to get a small sandwich because I wasn’t that hungry and I find that the small is a good size for lunch.  Anything more than that is too filling.

But as I was ordering my sandwich,  I noticed that the large was only $7.00, only $2.00 more than my small.  This must be a recently reduced price because normally the large is about $9.00.  The part of me that loves a good deal was tempted to just order the large.  After all, it was only $2.00 more and I would have gotten much more sandwich.  But that’s the problem, and actually it is two fold.  First off, I didn’t really want more sandwich, but we love a good deal so we are willing to spend more money for something we don’t really want.

The bigger problem was that the sandwich would make me bigger.  As I’ve gotten older, I definitely have to think about what I eat.  It would have been so easy to just order it and eat the whole thing.  American’s love of a good deal combined with our desire to “finish what’s on your plate” definitely isn’t helping America’s waistline.  So not only would I waste money, I would be getting fatter, and I would eventually have to deal with all the consequences of getting fat.

Do you find yourself doing that too?  Do you buy things you don’t really need just because you can get a good deal on it?  Why do you think you do it?

Before the crash came, I remember real estate agent after real estate agent saying what a great time it was to buy into a house.  If you didn’t buy soon, you would soon be priced out forever.  Housing was the best investment ever (it isn’t) and it would never go down because it never had.  Hurry, buy now.

The latest housing numbers are pretty grim.  New housing starts fell to their lowest levels since the started tracking the number.   Housing in my neck of the woods is down 27% year over year (they aren’t down enough).   Yet I keep hearing real estate agents say that now is the best time to buy.  Their reasoning, prices have dropped so much and there is so much choice for buyers.  What does that make real estate agents?  Are they just dumb because they couldn’t see the fall of housing coming when it was pretty evident to anybody who was paying attention.  Are they just naive because they don’t understand how horrible the current situation is and how much worse it is going to get.  Or perhaps they are just like every other sales guy out there, willing to lie and say whatever it takes to get a sale.

I keep looking at housing prices in my city, and they just aren’t all that great.  There are some houses which aren’t outrageous, but none I would say is affordable, and I earn way more than the average American household.  For me, I would need to see prices drop at least another 30%-40% from here before I would even consider buying.

This may seem obvious to a lot of people but it wasn’t so obvious to me until today. You see, I don’t sign up for a lot of credit cards. In fact, I have only one credit card. Ironically, I was talking about this very fact with Jenny today. We discussed some statistics that showed that a group of people had as many as ten credit cards each. It was shocking to someone like me because I have no need nor do I have any desire to have more than one credit card.

But today, I wanted to add my girlfriend to my credit card so that I could better manage our expenditures and I can pay for things when she is the one actually going to the store. A pretty common thing for us which we have gotten around the last few years by me just paying her back. I decided I had enough of tracking all of this, so decided to just sign her up on my account. The process couldn’t have been more easy. I logged in to my account online, filled out about 5 questions, and they are going to send me a second card with her name on it.

I was dumbfounded by how easy they made the process. Having been in charge of a sign-up process in the past, I can appreciate how hard they actually worked to make it as simple as it was. Of course they make it this simple because it is crucially important to them to make sure people have as many credit cards as they want. The more steps you put in any process, the more likely someone is to drop out. In reality, I’m glad the process was easy, I wanted to get one and I don’t like being bothered with things that are hard to do. But it made me think of a television show I recently watched about how easy it was for people to get cards and how they got themselves into trouble. Now don’t get me wrong, I don’t feel a lot of sympathy for these people. I’m all about personal responsibility and hate it when people blame the big bad credit card companies for doing what they are supposed to do, make money.

How about you, how many cards do you have? Do you find it really easy to just sign up for new ones?

DirecTV + Panasonic 50PZ800U = WOW!

Before I go more in depth in this, wanted to say sorry for all the post about my new TV. I don’t have a lot of time outside of work, and most of my time this past week has been playing with my new toy, so I haven’t done a lot of thinking about things outside of work and this TV.

So today the DirecTV guys came around to install the system. I got one HD+DVR (H21) receiver and I got one standard receiver for the bedroom. They hooked up the H21 to my Panasonic via HDMI and fired it up. It took a few minutes for the receiver to do what it had to do and it was up and running. I started scanning through all the HD channels that are part of my basic package, and there are a lot of them, and was amazed by how great everything looks.

Not everything is roses. I’m not in love with the response time of the receiver. I don’t like it when I hit the button on something and there is not an immediate response. I also HATE the way you have to set up the channels on HDTV. This normally involves unselecting a bunch of channels that you don’t actually get or removing channels you just don’t want to watch. Not sure why they haven’t found an easier way to do this yet.

So I’ve spent the day with my plasma, and I grow to like it more and more.

The TV got its first major test today, as I watched Game 3 of the NBA finals.  One of the major reasons I got this TV was because I watch lots of sports, and I can’t stand watching fast action sports on LCD TVs.  I have to say, the set looks fantastic.  I’ve been watching the games on my 24″ LCD monitor, which is actually pretty good.  Now I don’t want to compare an LCD monitor to an LCD TV, as they are different beast, but nevertheless, I didn’t know how great the game could look having never really watched a true HDTV in the comfort of my living room.

Every Kobe drive and all of Sasha’s Daggers were brought to me in crystal clear High Def.  The TV produces an unbelievable picture with amazing color accuracy.  The dish installation comes on Thursday, so I will have to wait a few days to get dozens of HD channels, but the OTA broadcast is pretty good.  Not much beats a Lakers win, the only thing that might would be watching a Lakers win on this HDTV!

Once you get HD, its hard to go back.  I only have two true HD sources, OTA broadcast and a few 1080P films I have on my computer.  Other than that I only have my DVD player, my Wii, and my old Xbox, none of which will output a true HD signal.  The TV does an adequate job of upscaling the picture, but compared to HD it just isn’t the same.  Pictures are of course noticeably softer, but what else can you expect?