Rebate Checks - Will they Matter?

I'm kind of torn about the idea of tax rebate checks, and not just because I probably won't be getting one.

Anything that gives less money to the government and more money to the people, I'm all for. I already think that the government is too big, and philosophically believe that people should keep more of their own money and give less to government.

That being said, I'm also no idiot. Without equal spending cuts somewhere, less tax dollars for the government simply means bigger deficits in the future. It is either pay now or pay later, and I would rather know what we are getting ourselves into sooner rather than later.

I think my biggest gripe with the tax rebate checks is that I honestly don't think they will matter. They definitely will not accomplish what Bush wants them to accomplish which is to stimulate spending and jump start the economy. Here is the thing. A lot of Americans are just struggling with the basics. Food and gas prices are getting to the point of ridiculous, and $600 isn't what it used to be. For most people, that is just a few weeks of food and gas, and I think most people are going to spend their money this way.

Besides, it will just exacerbate what is going on in the economy. To pay for the tax rebate, the money has to come from somewhere. There is no such thing as a free lunch, the money comes from somewhere, and it comes from abroad, namely China and the Middle East. So what happens? The government is just going to borrow money for the rebate from these countries, and see the American consumer give it right back. The typical American consumer is going to spend it on something either made in China or the gas that comes from the Middle East. It's a great deal, if you are one of these other countries.

Living Debt Free

Is it possible to live debt free?  It was a questions I saw on the front page of MSN Money today.  Since I am probably in the 1% of Americans who is 100% debt free, I felt qualified to answer this question.

Yes, it is possible to live debt free, and it really isn't all that hard.  I have found it easy becasue

1. I grew up without much money


2. I was determined not to grow old without money

So throughout my whole life, I have planned.  I made sure that I would end up with the right job and that I would live the right lifestyle.  So when you combine a high salary with a simple lifestyle, it becomes very easy to be debt free.

Right now, I have no debt of any kind unless you count my credit card which I pay in full every month.  I have no mortgage, no car loans, no student loans, nothing.  It's fantastic.  You just live within your means.  You do it long enough and lots of possibilities open up.  For example.  This weekend, my girlfriend and I decided to buy some furniture.  We saw a TV stand we really liked.  Like all good furniture it is expensive.  In total it cost me $1400.  This wil shortly be paired with a TV that cost $2500.  That will be followed up with a living room set that will probably cost around $2000 and that will be followed by a bedroom set that some more as well.

Now I don't ever spend money like this.  This is highly unusual for me.  But the point is, I can do it, and I can do it all without incurring any debt.  This is coming straight out of savings.  Now to be clear, debt isn't a bad thing if used correctly.  However, I believe it should only be used for productive reasons.   That is, the debt you incur should only be used if the money will be used to earn more money later or to finance a purchase that would otherwise be impossible.  This generally only means

• Student Loans


• Buying a house


• Buying your first car

Student Loans is obvious, this directly leads to you being able to earn income later.  A house falls under the impossible to do without category (although this wasn't always the case).   The latter I allow for simply because it is a big ticket item that a lot of people just starting out can't afford to buy without a loan.  And since most people have to drive to work, I think it is acceptable to take out the loan.  Every car after that though I think you should have the ability to pay for it in cash.  I qualify with "ability" because even though I could now buy pretty much any car I wanted to in full, I doubt I would buy a BMW M5 in cash.  The money could be used better investing rather than laying it all out for a car.

What do you think?  How close are you to being debt free?  Do you find it hard to live with or without debt?

Monthly Bills - To Spend or Not To Spend

Today, I decided to upgrade my gym membership. I have access to all 24 Hour Fitness Sports. These are generally the highest level club for the chain. However they have a few limited Super Sports which are a little bit bigger and nicer. In particular the regular sports around me don't have full basketball courts but the Super Sport does, so I joined.

Now, it wasn't an easy choice for me. One thing I'm pretty adamant against is having too many financial obligations that you have month to month. It is almost a sure way to spend more money without knowing about it. It's important that most of your costs are variable, not fixed. That way, when you have to scale back, such as when you quit your job, it is much easier to do.

In the end, I decided to do it because I would use the gym a lot less if I didn't. I haven't been going to the gym as much as I would normally and it is important to me to be in good physical health. Since I love basketball as much as I do, it is really important that I have this option available. It will cost me an additional $32 a month to go, since I'm paying for me and my girlfriend's membership. That comes out to almost $400 more a year. I also had to pay $160 in total initiation fees, that kind of sucked. But it is a month to month membership, so if I decide to cancel, sometime in the future it shouldn't be a big deal.

That's the key. If you are going to take on another financial obligation, make sure you can get out of it easily. That's one reason I'm hesitant to sign up for DirecTV service even though thy probably have the best HD service around. They force you into a two year commitment.

Building Empires

I did an odd thing several months ago when I came to this job.  I freely and without complait relinquished my headcount.  I had to let the person go and it turned out that we weren't going to replace him.  I didn't know it at the time, but when it was told to me I didn't complain very much.  I've learned to do more with less my whole life.

I don't know why, but people have a hard time doing this.  I sit in meetings discussing personnel and I always hear people saying how they need more people to do whatever it is they are supposed to do.  And it always seems to be the same people doing it.  You can always find these people.  They are the people who measure how important they are by the number of people who report to them.

That is not to say that I don't like managing people and don't think it is a worthwhile thing.  But I would never go say something like, "I run the biggest department in the company" as justification for anything but I've heard people do it.   I've sat in meetings with these people and they constantly talk about how they need this or that, and never understand that headcount is often fixed, and fixed at the highest levels in the company.  You can't just hire people because you feel like it, nor does that often solve the problem you are trying to solve.  In fact, it normally makes it worse.

I often wish that the workplace would institute efficiency metrics on its managers.  Basically managers would be judged by an efficiency ratio.  All their work would be divided by their headcount and their performance would be measured by how much work they got out of their employees. It would create the right incentive.  It would actually encourage managers to have less headcount and trim their budget.   I believe this actually happens in many industries.  However, it would be next to impossible to institute in my industry since it is notoriously hard to measure the output of a development team.

How would you solve this problem?  What could you do to be sure that managers didn't get employees just to build an empire?

Letting Someone Use You

I was reading an article in a Money magazine and someone asked a question of when they should tell their significant other that they are wealthy.  The questioner was divorced and had a relationship after her marriage where her new boyfriend "used her" for her money and "made her" buy him expensive things.  The writer wanted to know if she should hide her wealth from someone she was getting serious with.

Now, full disclosure time, I was pretty up front with my girlfriend about my finances.  It couldn't have been more than a few weeks before I told her what I made.  I'm not sure I told her how much I have in total for a while, but I certainly didn't hide the fact that I had a lot of money, and I make a good amount.

But that's not the point of this post.  I actually don't really care how or if people tell their significant others about their finances.  I tend to think it is a good idea to because finances are so important (the #1 reason get divorced is because of a financial problem or differences)

What bothered me more than anything was the victim mentality.  How do you "let" someone use all your money?  Nobody can make you spend money on them.  They can't reach into your pocket and force you to buy them nice things.  They may trick you into thinking they like you for some other reason than your money, but only you can actually let them spend your money.  If you think it's going to be an issue, draw boundaries.  I only buy things for my girlfriend that I'm totally willing to give.  I wouldn't be angry after the fact no matter what happens, because I choose to give what I want in that moment.

What do you think?  Would you feel bad if you spent lots of money on someone and then found out they were only with you for your money?

Turning Off Work

I'm once again making the journey between Seattle and Los Angeles.  This time I'm taking it as an opportunity to take a vacation.  We have been traveling down the Oregon Coast and have made it to Northern California as I write this.  It's been great so far.  We decided to take the slow route.  Instead of just taking Interstate 5 all the way down, we decided to take the 101 which hugs the Oregon and California coat.  There isn't a lot on the Oregon coast, but we have taken our time and enjoyed the beaches.  Well enjoyed them as much as possible on these Balmy April days.

The Oregon coast is odd.  It seems so disconnected from the rest of the world.  I say that because we would literally go an hour in the car without seeing another car going in our direction.  And it wasn't like we were driving in the middle of the night.  In fact, we only traveled during daylight hours.   I kept thinking about the towns like those in the Pixar movie Cars.  Everyone takes the Interstate and has forgotten about these little towns that use to be on the main highway.

I've taken three days off of work, this is the second day.  The first day, I kept checking my work mail.  I have a smart phone, and it allows me to stay connected almost anywhere I am.  That is normally a good thing for me, but not a good thing when you are trying to relax and have a good vacation.  So today, I made it a point to not check my mail.  I didn't even look at the subject headings.   This was exceedingly difficult for me.  My whole job is to know what is going on and to be available.  Disconnecting is very very hard for me.  But so far, I'm glad I did.  I'm still itching to check my mail, but I have to admit, I feel a lot more relaxed than I did yesterday.  Hopefully, I can stay disconnected tomorrow and decompress even more.

Attrition - The Vicious Cycle

My new company seems to be having a problem.  We seem to be losing people left and right. The turnover on the dev team seems to be very high and it is very concerning to me and others as having continuity and history on the team is very important.

It got me thinking about when I left Microsoft.  Slowly but surely, the team I left is looking less and less like the team I left.  I wouldn't say the exodus started with me, in fact I think I probably hit the middle of the cycle.  However, leaving in the middle gives me a unique view of the situation.

I could take a whole post about my reasons for leaving Microsoft, and I plan on writing that post someday soon.  But I can say now that it was in no small part to not wanting to be the last one off a sinking ship.  At my job prior to Microsoft, I actually was the last one on the ship.  I held it up as long as I could and it was tiring.  One of the key reasons that smart people work where they do is because they want to work with other smart people.  When you start seeing the other smart people leave, and leave for reasons like they are dissatisified with the team, you have to look around and wonder what is going on.

It's actually something I'm not sure upper-management always gets.  Losing good people reverberates far beyond just the person that is leaving.  I've been in discussions about key people leaving, and it is often not treated as earnestly as I would think it should be in times.  Attrition is a nasty cycle.  Good people leave causing more good people to leave.  Pretty soon, you are left with the people who aren't very good or don't have any other options.

The thing that always surprises me though is that management always sees it coming.  Rarely does a star leave without some sort of indication of his/her dissatisfaction long before a resignation is given.  The thing is, rarely if ever is anything done about it.  Often people just kind of throw their hands up and say, "there is nothing we can do about it."  It's sad how little action those capable of doing anything about it actually ever do anything about it.  I wonder if people get so high up that they  really do see people as interchangeable parts.  Do they really not realize who is responsible for doing the work?  Are they so busy trying to drive the car that they forget how necessary things are like the engine?