I keep hearing real estate "experts" say that now is a great time to get into housing because of the low interest rates that are currently available. Let's forget the fact that real estate experts always say it is a good time to buy housing. They said it in 2000 at the beginning of the boom and said it again in 2007 at the peak of the housing bubble.
But let's look at the logic of this argument. There is no doubt that interest rates are low right now. This means that people can generally buy a more expensive house because their payments are going to be less per month as they pay less in interest. So it sounds like a great deal doesn't it? Get more housing at less money.
However, there is a slight problem with this. It isn't just one person who has this opportunity for low interest rates, it is the whole country. This creates competition for housing and drives up demand. This is exactly what happened in the early part of the century. Housing prices rose because people had access to cheap money. As the money became more expensive, and the cost of housing reach unsustainable levels, the bubble burst and housing prices tumbled.
So think about the current situation. Interest rates are once again insanely low. They have absolutely no where to go but up from here. We know that as mortgage rates go up, people can not afford as much home lessening competition. There is no way that interest rates can go much more down from here so that means that they will go up. Since we know that prices and rates are inversely related, this means that housing prices are definitely coming down.
Do you really want to own a depreciating assets? Experts say if you have no plans on moving for several years than don't worry about it. But who knows what your situation will be like in a few years. In the long run, it is much cheaper to have a smaller principle payment and higher rates than the reverse as you can always refinance but you can't easily lower the principle amount on a loan.
So please, to all real estate professionals, quit trying to sell that low interest rates mean its a great time to buy. It just doesn't add up.
Wednesday, August 25, 2010
Wednesday, June 2, 2010
Why Finishing College Might Actually Hurt Your Career
I was thinking about all the people who never finished college and went on to great careers. Just look at this list off the top of my head
The list could go on for quite a while. In thinking about this I actually think this is not entirely a coincidence. On that list are some of the most powerful and influential people in our modern business world.
Now in any sort of argument like this it is important not to confuse cause and effect. It could easily be argued that all these people would have been successful whether or not they completed college. It is not the fact that they DID NOT complete college that they were successful. It is merely the fact that successful people will be successful no matter what.
While I certainly believe that may be partly the reason, I'm not sure there is not some level of causation.
One of the things I have been thinking about lately is how our society is organized and how it has created certain outcomes. One of the things that is readily apparent to me is that our society is not geared to produce creative thinkers. Our education system is very rules based. And rules are in direct opposition to creativity. The more rules you put on someone the more you constrain and limit her creative side.
We have created millions of students who know how to follow the rules and conform. We use standardized test to measure performance and emphasize rote memorization and regurgitation over creativity and original thinking. Those who are able to excel at these things are the ones who do well in school but they are not necessarily the ones to change the world. You cannot change the world if you are constrained to thinking like everybody else and by following the rules that others have laid out for you.
I am not trying to be negative about our education system. I am someone who benefited greatly from the current system as my strengths lie in taking standardized test and in rote memorization. I therefore excelled in school. But I am also not (yet) lighting the world on fire like the list above. We as a society have emphasized this type of learning and environment to produce exactly what we wanted; a group of workers who would excel at doing exactly what was asked of them. This was exactly what was needed for the majority of jobs that we created during the twentieth century. Factory workers need to follow instructions exactly. So do accountants (the last thing we need is "creative accounting".
So while I think our education system is great at producing this type of worker, it is not so great at creating the Steve Jobs and Mark Zuckerbergs of the world. As we move away from a world where the good middle-class jobs are no longer available in the factories of Detroit but only via the screens of Silicon Valley, can our education change with it or will we be doomed?
- Bill Gates
- Steve Jobs
- Michael Dell
- David Geffen
- Larry Ellison
- Mark Zuckerberg
The list could go on for quite a while. In thinking about this I actually think this is not entirely a coincidence. On that list are some of the most powerful and influential people in our modern business world.
Now in any sort of argument like this it is important not to confuse cause and effect. It could easily be argued that all these people would have been successful whether or not they completed college. It is not the fact that they DID NOT complete college that they were successful. It is merely the fact that successful people will be successful no matter what.
While I certainly believe that may be partly the reason, I'm not sure there is not some level of causation.
One of the things I have been thinking about lately is how our society is organized and how it has created certain outcomes. One of the things that is readily apparent to me is that our society is not geared to produce creative thinkers. Our education system is very rules based. And rules are in direct opposition to creativity. The more rules you put on someone the more you constrain and limit her creative side.
We have created millions of students who know how to follow the rules and conform. We use standardized test to measure performance and emphasize rote memorization and regurgitation over creativity and original thinking. Those who are able to excel at these things are the ones who do well in school but they are not necessarily the ones to change the world. You cannot change the world if you are constrained to thinking like everybody else and by following the rules that others have laid out for you.
I am not trying to be negative about our education system. I am someone who benefited greatly from the current system as my strengths lie in taking standardized test and in rote memorization. I therefore excelled in school. But I am also not (yet) lighting the world on fire like the list above. We as a society have emphasized this type of learning and environment to produce exactly what we wanted; a group of workers who would excel at doing exactly what was asked of them. This was exactly what was needed for the majority of jobs that we created during the twentieth century. Factory workers need to follow instructions exactly. So do accountants (the last thing we need is "creative accounting".
So while I think our education system is great at producing this type of worker, it is not so great at creating the Steve Jobs and Mark Zuckerbergs of the world. As we move away from a world where the good middle-class jobs are no longer available in the factories of Detroit but only via the screens of Silicon Valley, can our education change with it or will we be doomed?
Monday, May 31, 2010
Too Many Lawyers?
I went back to my ten year college reunion this weekend. Princeton has reunions every year. The big reunions are every five years (the biggest being the 25th reunion) and as such, I decided to go down for the day since I was in New York City. Quite a crowd turned out. Despite it being her 25th, Michelle Obama was not one of them. It was more enjoyable than I would have predicted. Last time I went to reunions for my fifth, I did not have a particularly good time. I decided to go for the entire three day event. By the end of the second day I really was wondering what the heck I was doing there. This time, I decided only to go for the day (and none of the nighttime activities) and it ended up being the perfect amount of time to see the campus and a few of my friends I wanted to catch up with.
One of the things that sticks out to me though was a fact that was given at the end of the P-rade. As my classed marched down I heard two facts. One was that my class, the class of 2000, was setting attendance records for the 1st, 5th, and 10th reunions (all reunions I attended). But the more interesting fact was that the number one profession of my class was being a lawyer. To be exact, it was stated that 14% of my class had become lawyers.
Now, I went to an Ivy league school and you would expect a large percentage of my class to be in high paying jobs. Since law is a high paying job it does not surprise me that it is a profession many in my class pursued What surprised me was that it was number one. And as I thought about it I though what a sad commentary that actually is for our society.
Don't get me wrong. I think lawyers are necessary in our society. I also don't think all lawyers are scumbags like others might. But for me, law is an ancillary profession. It is best as a supporting function to the creation of value and wealth to our society. It is in the same class of profession as accountants and clerical work. These are jobs that are absolutely necessary but at the end of the day is overhead to the actual creation of wealth. This is in contrast to things like medicine, manufacturing, or the creation of intellectual property that actually drive the economy and create value in our lives.
So what does it say that the brightest mind in the country if not the world are pursuing careers that are not creating wealth to our society?
I think it says a couple of things. First, I think it says something about how the cost of obtaining a world-class education has skewed the choices we make. Most of my class graduated with quite a bit of debt. This problem is only getting worse has college becomes more and more expensive and having a college degree does not make you stand out anymore. It used to be, for my parent's generation, that having a college degree was not the norm. Now, all my friends have one and that in itself means you have to find other ways to differentiate. Most people are finding it necessary to get a post-graduate degree to really make themselves stand out and earn the money needed to pay back these college loans. This is a true fact. I am the ONLY one of my college friends that does not have a post-graduate degree. Think about that for a second. I'm the only one. I have lots of friends from college and they all decided to pursue even more education.
The second problem I see is that we are emphasizing the wrong things. As a country, we have created a society where one of the best paying jobs is being a lawyer. Now to be fair, this has been the case for quite a while. But I would argue that before it was more a function about the scarcity of the education required to practice law than it was about the voracious appetite to produce lawyers. But we are now pumping out lawyers at a very large rate. There must be an overwhelming demand for lawyers in order to keep salaries as high as they are. This is because we have created such a complex set of laws and a society that is so litigious that it is required for any large corporation to have an army of lawyers ready to protect and to sue.
So rather than create professionals ready to find the cure for cancer or to create the next great product we create an army of people ready to sue others. How on earth can we change this dynamic?
One of the things that sticks out to me though was a fact that was given at the end of the P-rade. As my classed marched down I heard two facts. One was that my class, the class of 2000, was setting attendance records for the 1st, 5th, and 10th reunions (all reunions I attended). But the more interesting fact was that the number one profession of my class was being a lawyer. To be exact, it was stated that 14% of my class had become lawyers.
Now, I went to an Ivy league school and you would expect a large percentage of my class to be in high paying jobs. Since law is a high paying job it does not surprise me that it is a profession many in my class pursued What surprised me was that it was number one. And as I thought about it I though what a sad commentary that actually is for our society.
Don't get me wrong. I think lawyers are necessary in our society. I also don't think all lawyers are scumbags like others might. But for me, law is an ancillary profession. It is best as a supporting function to the creation of value and wealth to our society. It is in the same class of profession as accountants and clerical work. These are jobs that are absolutely necessary but at the end of the day is overhead to the actual creation of wealth. This is in contrast to things like medicine, manufacturing, or the creation of intellectual property that actually drive the economy and create value in our lives.
So what does it say that the brightest mind in the country if not the world are pursuing careers that are not creating wealth to our society?
I think it says a couple of things. First, I think it says something about how the cost of obtaining a world-class education has skewed the choices we make. Most of my class graduated with quite a bit of debt. This problem is only getting worse has college becomes more and more expensive and having a college degree does not make you stand out anymore. It used to be, for my parent's generation, that having a college degree was not the norm. Now, all my friends have one and that in itself means you have to find other ways to differentiate. Most people are finding it necessary to get a post-graduate degree to really make themselves stand out and earn the money needed to pay back these college loans. This is a true fact. I am the ONLY one of my college friends that does not have a post-graduate degree. Think about that for a second. I'm the only one. I have lots of friends from college and they all decided to pursue even more education.
The second problem I see is that we are emphasizing the wrong things. As a country, we have created a society where one of the best paying jobs is being a lawyer. Now to be fair, this has been the case for quite a while. But I would argue that before it was more a function about the scarcity of the education required to practice law than it was about the voracious appetite to produce lawyers. But we are now pumping out lawyers at a very large rate. There must be an overwhelming demand for lawyers in order to keep salaries as high as they are. This is because we have created such a complex set of laws and a society that is so litigious that it is required for any large corporation to have an army of lawyers ready to protect and to sue.
So rather than create professionals ready to find the cure for cancer or to create the next great product we create an army of people ready to sue others. How on earth can we change this dynamic?
Wednesday, May 19, 2010
Macbook Pro Review
I recently got a Macbook Pro for use at work. I'm not sure when I became such an Apple user (I have an iPhone and an iPad) but I now have the trifecta of Apple products. This marks my first OS X computer. I've been a user of plenty of other operating systems such as OS/2, Solaris, Linux, and Windows. I did use a Macintosh SE way back in the day. But I have not used any modern Apple OS so I was interested how it would turn out.
To sum it up, I'm completely unimpressed. I really went in with an open mind. In fact, I really wanted to like it since I like my iPhone and everyone I know who uses Macs love it. They love it so much they won't stop talking about it (which bugs me a little actually). As someone who greatly values easy to use products and products which are designed with the customer in mind, I was hoping that this Apple product would really open my eyes to how computing should be done. It hasn't. Even more disappointing is that I have one of the nicer Macbook Pros. I got the one with an Intel i7 processor, upgraded HD, and upgraded Video Card. This thing should be rocking.
Now one thing I will say is that I feel I might feel differently if I had not used Windows 7. Compared to Windows XP, the Windows version most people are familiar with, I think OS X blows that out of the water. If OS X was like this 5 years ago when XP was really your only choice than I can understand the love. Even compared to Vista it is superior although I never hated Vista as much as others. But compared to Windows 7 I'm just not sure the Apple "simplicity" edge is really there anymore. Here is how it breaks down for me.
Stability - This is the one thing I was really interested in seeing. Apple users swear that Macs never crash and make fun of Windows users who experience the Blue Screen of Death. Well I am pretty sure all those people need to shut up. Since the launch of Windows 7 I rarely, if ever see the BSOD. It may have happened over the last year but I honestly don't remember having any issues since Windows 7 went RTM and I'm a pretty heavy computer user so you would think I would run into it. Within the first two days of having my Macbook Pro the thing crashed three times. A week later, I had it freeze three times in a row on me in one hour. This is not an exaggeration. I called over the Mac lovers in my group to show them because they didn't believe me. I let the computer sit for 30 minutes untouched and it sat their frozen. The mouse would move but otherwise nothing was responding. The only solution was a hard reboot. Just yesterday, after giving a presentation, I unplugged the Mac from the projector and then the screen went dark and stayed dark. Completely unresponsive. At least with the BSOD, you know something is wrong. My Mac just decides to die on you with no indication that there is actually anything wrong.
Business Software - If you work in an office that is on Exchange and uses Outlook, forget the Mac. I'm an Outlook power user. As someone in management, my day consists of checking e-mail and going to meetings. All things that I depend very heavily on Outlook for. There is no real substitute on the Mac. Entourage, the Mac Office equivalent of Outlook is a complete joke. I could write a whole post on why it is inadequate but it would probably just upset me. If you use the other Office products like Excel, Word, and Powerpoint don't fool yourself into thinking that Office on the Mac is like Office on Windows. Yes Microsoft makes both products but that doesn't mean they are the same product. They really aren't.
Lack of Software in General - There are some basic things I need to be able to do on my computer and there are programs I have found on Windows to do them. Similar products aren't available on the Mac. It took me a while to find DB client program which would connect to all the various Database servers I needed to connect to. I had several free versions to choose from on Windows but could only find one which I had to pay money for on the Mac. The same can be said for photo editing. Maybe I'm biased because I like Rick's Paint.net program but it really upset me that I found it difficult to edit simple pictures. Those who like iPhoto are crazy. More on that later.
"Simplicity" - The mac is supposed to be easy to use right? I wanted to edit a picture and then save it. I opened the photo in iPhoto and tried to save it. Was unsuccessful. Could not for the life of me figure out why the original photo, which I wanted to save over, had not changed. I called over 4 engineers to my desk to figure this out. 3 of them are Mac users. None of them could figure it out either. How on earth is that simple? Also, why is it that most of the useful commands take pressing 3 keys to do. Ever try to take a screenshot on a Mac. I have to hit three keys. That is if I can remember which three. One button on a PC. And I don't care what anyone says. A mouse with only one button is not easier to use.
Hot Hot Hot - This is the hottest running laptop I have ever had. Seriously, if it were sitting on lap during any serious computation, it would burn me.
The Little Things -Here are a bunch of other things that just annoy me
- No easy way to lock the screen.
- Plugged in a Flash drive. Didn't recognize it and didn't tell me it even attempted.
- I really like the Windows 7 feature of dragging windows to various locations to change size and shape. No such thing in the Mac.
- Windows are very easily lost behind one another.
- Closing a window doesn't actually close the program.
- Force quit is not as effective as good ol' ctrl-alt-delete.
While the overall tone of the tone of this post may seem negative I'm not actually that down on the computer. It is certainly nice but it isn't the life changing thing I was expecting. It's like that over-hyped movie everyone talks about. Ever notice how the movies everybody raves about are never as good as you thought. I think the same thing happened here. I like the computer, it is a solid performer, but I was just expecting a little more.
Tuesday, May 4, 2010
Back After Some Maintenance
Sorry for the VERY long break. Part of it was me being busy but a lot of it was the fact that my hosting company decided to stop supporting my blog and I had to scramble to figure out what I was going to do. I didn't really want to update the blog while the situation was not settled so I avoided making any posts or responding to any comments. I moved over the comments that got lost in the migration to the best of my ability. This site still has some issues after the move but I will try to address this over the next few weeks.
Tuesday, April 13, 2010
The Actual iPad Review
Ok, so I got an iPad. I didn't actually get one myself. Since I work for a web company, and the iPad is supposed to change the way we use the web, I figured I would order one for my group to see what the hype was about. I ordered the Wi-Fi only version, since I didn't plan on walking around town with the thing. I ordered 32GB version, just one step up from the base version, for $599. I posted previously about the iPad in my non-iPad post but now that I actually have iPad in hand, here are my thoughts.
It's smaller than I thought it would be (that's what she said).
It is heavier than I thought and this makes it less useful. It is not comfortable to hold the device in one hand for very long. Since this is going to be used by most as an e-reader, this makes the device impractical for its main use. 1.5 lbs. may not seem like very much, but try holding that up in the air with one had for more than five minutes.The screen is as gorgeous as people says it is. OK, maybe it isn't that beautiful.
The web browser is not a full browser, or at least people aren't treating it that way. I use Evernote to take notes down and I wanted to copy a URL for me to read later. Safari refused to let me use Evernote through the web. It kept insisting I download the app which I didn't want to do.
The web browser seems to adjust the page to fit the screen. However it can do this randomly. I will be reading a page every once in a while and it will change the page. Very annoying. This is not the same as the screen rotating randomly. That is a different problem.
The screen can rotate wildly at times. While it has a screen rotation lock, I don't always have it enabled and thus the screen is likely to just rotate.
Streaming Netflix movies look pretty good. I'm actually kind of impressed with this app and it is very easily the best app on the iPad.
The lack of any really good free apps is disappointing. This is in direct contrast to the iPhone where I have found very many useful free apps. I actually have only bought a handful of apps on the iPhone and I find it more useful than I could ever want. The can't say the same thing about the iPad.
The lack of Flash support is annoying. This has been talked about to death but I was one of those who didn't think this really mattered until I actually needed it. I wanted to watch the masters over the web and couldn't because all the video is in flash. My vet told me to go watch a video on Youtube and of course, I couldn't.
The battery life is probably better than advertised. The device can go all day even with some heavy use.
Final Verdict:
I've used the iPad for over a week now and I think it is a nice little device but would hold off buying one for myself. I'm not sure it is worth the $500 bucks it takes to get it and I'm not sure it is as "magical" and "revolutionary" as Apple is trying to make it out to be. It is definitely less useful than a laptop, less convenient than a smart phone, but it does serve nicely as a "niche" product. I just don't think niche products are worth $500.The device is at its best doing light browsing sitting on the couch. Since it is always on, it is very convenient to grab it to look something up quickly. My wife particularly likes to use it to browse through various shopping websites. She thinks it is very convenient because it is a good size for her and doesn't get hot like a laptop would on her lap.
Some people will love the device just because it is new, different, and of course, it is Apple. But for those of you who hold no such loyalty I think it is best to wait on getting an iPad. Several other hardware manufacturers like HP, Sony, and reportedly Google are getting ready to launch their own tablet devices. They are bound to be cheaper since you won't be paying the Apple premium. Since I have found the apps for the iPad less compelling Apple won't have this advantage over its competitors. So as long as the competition make a solid web browsing device, then I think it best to take a wait and see approach.
Tuesday, April 6, 2010
Calculate Your Social Security Benefits
How sad is it that when I saw this article on determining social security benefits I instantly thought to myself, "I know exactly how much I will make in Social Security, $0"According to the Social Security administration, we will start running Social Security deficits in a little over 6 years. It will go bankrupt in a little over 25. Since I won't be eligible for Social Security for over 30 more years, I'm pretty sure there is not going to be anything left for me at that point.
What is the most sad is that I will have been earning the maximum amount for the maximum allowed time. In other words, Out of all the people in the United States, I'm the biggest payer into Social Security. Ironically, I'm pretty sure I'm never going to get a penny out of it. What a scam. If you ever wonder why I rant against government, this is just one other perfect example.
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