Money Won

It's the week of Christmas, and instead of deciding on thoughtful gifts for my friends and loved ones or contemplating on the birth of the world's savior, I am agonizing about which runningback to start in the flex position. Yes, it is another fantasy football post and, yes, technically this is still a personal finance blog, but just barely. As long as I somehow connect these ideas to money in the next five minutes, I think I still get to attend FinCon next year.

The Upside of Spending

So we are in Paris, as I type up this blog post on my phone like a putz. It is foggy and raining and to a soft punk Arizonan, pretty cold, too. I shouldn't complain about any of this, either the typing on a tiny computer that fits in my pocket, the weather, or the supposed danger of going to Paris or Brussels. How can you be sad in a place that is so beautiful and where all the food is cooked in butter? I am ridiculously lucky and I intend to roll around in my good fortune, slathering it all over, enjoying as much as I can of it.

As I Accelerate Towards the Earth

"What are you thinking right now?" asked the man with the ponytail and the GoPro on his head, and the parachute on his back.

"I'm thinking, 'Why is my seatbelt unbuckled, and why is the airplane door open, and why I am not strapped to the guy with the parachute yet?'"

He gave me the double thumbs up, obviously not listening.

When a Sprinter Hits the Wall

I promised myself when I started blogging that I wouldn't be one of those writers who started out every piece the same way, apologizing for not writing in so long, and promising never to do it again. But here we are, with over a month between posts. I can at least be good enough not to give you some flimsy apology. I know what happens during times of procrastination, and you do, too.

Let's just move on.

The Miracle of the Commons

It is hot in Arizona right now. Every day, the temperature creeps up from its balmy low in the mid-eighties, as the sun pours its terrible heat down upon us, and punishes everything that still has the audacity to live here. Before we know it, it's above 100 and stays that way until the sun gets tired of beating our poor, dumb asses, and takes the night off. There is no escaping it. I walked Mrs. Done by Forty from our car to her building on campus this weekend, when our car thermometer showed a temp of 115. Delirious, I pondered our situation as we took shelter in the shade for a bit.

Football is Coming

A little over a month ago, our long time renter moved out. It was time. We'd been sharing a house with her since 2011, and at the four year mark we'd found the space too small for all of us. The quirks we found endearing about each other for the first year or so turned out to be annoying in the end. It's the way of things. But we parted as friends. She still comes over on Sundays to hang out, catch up, and play board games.

Oddly, I don't mind missing out on the $400 of rental income. I know this makes me seem like a rich jerk, but we make enough that we don't really need the money. Especially since we have the mortgage paid off, the rent was always seen as 'extra'.

A Defense of Price Optimization

A while back, I heard about insurance companies using price optimization for the first time. This is when an insurance company strategically raises prices on only some of its existing customers, hoping that the price hike is not so large that the consumer picks up and leaves. The rub is that the price increase in, say, auto coverage, is not actually based on how risky that particular driver is. The higher price is based on the kind of consumer the company thinks he is: whether he's likely to shop coverage and switch if hit with an increase.

Linear Assumptions are Bullshit

I have a good buddy from college that I still keep in touch with. We went to the same school, during the same years, and we even had the same major: English. Obviously, we also had the same crap judgment when it comes to our education. We both taught for a while English, too. (Well, I did for a short time, while he foolishly refused to sell out and chase money, instead pursuing "passion" and "meaning".) We both love football, enjoy some of the same hobbies...you get the idea.

Recently, he lost his job. In a climate of shrinking education budgets, this sort of thing can happen regardless of how good of a teacher you are. Even though we graduated over a decade ago, we still talk regularly. And these days we chat about the different directions his career might go in, now that he has this transition moment.

Being self-centered, the next thought I had was about how this sort of thing might affect me.

When in Rome, Tip 10%

Okay, I know we're not in Rome.

But the saying doesn't sound as good with "when in Krakow." We are finishing up our time here in Poland. As expected, we love everything and now we want to live here, along every other place we've visited. Our list of places to live is going to exceed our years left to live pretty soon. Traveling reveals a lot. But when it comes to Mrs. Done by Forty and me, it mostly reveals that we want to live in all the places, and do all the things...and eat all the things.

(Oh, and before I forget, this week I was lucky enough to be on the Stacking Benjamins podcast, talking about our worst investing mistakes and more. Please click and listen to me blather. Now, back to the post.)

And We're In Europe...

The last couple weeks have been hectic. Scrambling to finish work projects before taking nearly three weeks off, planning out the last minute details of our trip, and, of course, there's the packing. It is amazing what can be accomplished with a hard deadline. Parkinson's Law at work.

Anyway, last Thursday we woke up at four a.m., and swindled a ride to the airport for my wife and I, along with our couple friends who will be hopping around Europe with us, and before we knew it we were in the air. I still truly love flying. It takes so little to make me happy in general, that the reality of flying through the air in a metal tube is something of a small miracle to me. Like a small child, I still don't get how there are windows in planes. How do they not break from the air pressure? Why aren't we sucked out into the atmosphere? Our engineers are incredible. Plus, if you ask nicely, the flight attendant will give you a  whole can of free soda that can be enjoyed thousands of feet in the air. We live in an amazing time.

Side Stepping the Hustle

Everyone has a side hustle these days. It's doing the thing you're passionate about, after you come home from your day job. Instead of your nine to five, it's your five to nine. The little something on the side. For the most successful of hustlers, the side gig becomes their main gig. And maybe, it even results in more money...along with the additional autonomy, fulfillment, and whole days spent in yoga pants and flip flops.

So when I look at my income and realize how little of it is "on the side", I feel a little left out. Just like in high school, I never got the invite to the party, and don't know what to do with myself after five on a Friday night.

Dunning-Kruger and Other People's Money

When it comes to other people's problems (O.P.P.), I'm always an expert. When a friend is flummoxed over a new job offer, and whether he should stay put or jump ship, I can give cogent advice on the spot. Unsure how to deal with a family issue? Ask away. I've got you covered. And when it comes to money, it's a whole 'nother ballgame. Despite having no formal training or certifications whatsoever, I'm happy to opine on all sorts of financial matters. With anyone. Strangers, even. At length.

Why should I be so confident when helping with other people's problems? For one, because we all are pretty confident in those situations. It's always easier to see the clear answer to someone else's problems. They can't see the forest for the trees, but we can. They're working under a variety of biases, and often don't realize it. But we, their trusted friends and advisors, see them clearly and can guide them to an optimal solution.

Middle Class Wealth

Last week we took a peek at income quintiles for American households: if you lined up each American household from richest to poorest, and broke them into fifths. The results were fairly shocking for me. The main lesson? We could really benefit from earning more. Sixty percent of U.S. households are making less than $66k per year.

Luckily, a lot of Done by Forty readers are doing better. Let's take a look at the poll results:

Middle Class? How about Middle Quintile?

The great thing about America is that just about all of us are middle class. We all make enough money, send our children off each morning to learn in good school districts, and have appropriately attractive significant others. We are a nation living on the shores of Lake Wobegone. It's true: you can ask anyone. 85% of people in a recent Pew Research Center poll claimed they were "lower middle class", "middle class", or "upper middle class".

When five out of six of us are in a middle class, that, folks, is economic prosperity.

The best things about these designations is that there are five of them: lower class, lower middle class, middle class, upper middle class, and upper class. Quintile opportunity!

This Year is Not Average

Confession time. I had never calculated my annual spending before, until 2014. Which is weird, since I've tracked my monthly spending and savings for years. The prior years' data is still hanging out in old tabs of my budget spreadsheet, just waiting to be aggregated and put into nicely crafted formulas. But to pull all those individual spreadsheet tabs together, with all the organizing and copying and pasting...ain't nobody got time for that.

But then I remembered that I was trying to retire in about six years. Might my annual spending figure be important to figure out before then?

No one ever claimed that I knew what I was doing with money.

You Down with ESPP?

First world problem alert: we have an investment decision to make, and one with tax consequences, too. (Remember back when we used to have to choose between paying rent on time or paying our credit card bills before the late fee kicked in? Those were the days.

It's like Kevin Spacey said back in American Beauty. All I did was party and get laid. )

So, my employer generously allows us worker bees to participate in an employee stock purchase plan. Basically, it allows employees to pay into a program, and to buy the company stock at a discount.

Here are the details:

The Full Cost

There are negative externalities in our marketplace. Things that have a hidden-but-real cost, which aren't fully factored into the price of the items we buy. The environmental damage caused by shipping all the stuff we love from Amazon isn't exactly factored into the low, low price. I, as the purchaser, do ultimately pay for the raw materials, the labor for creating the goods, the customs, the insurance, the companies' profit, and the bill from the shipper itself. But the long-term costs from the pollution spewed out of gigantic freighters carrying the containers overseas, or that of the diesel and UPS trucks bringing it right to my door, a whole bunch of people end up paying for that...with their lungs.

Central Europe with Travel Rewards

This May, Mrs. Done by Forty and I will be traveling to central Europe with our close couple friends. We'd all gone to Hawaii a couple years ago and had a fantastic time so, we figured, let's try it again. We'll visit five cities over sixteen days: Vienna, Bratislava, Budapest, Krakow, and Prague. It is hard to express how excited I am about it. And thanks to Brad over at Richmond Savers, we'll be traveling with some (nearly) free flights and hotels, too.

Shifting the Spend

Like so many other personal finance enthusiasts, we have settled into a routine with our monthly budget. Most of our expenses, groceries and gas and utilities, are more or less the same from month to month. The once-a-year expenses, the life insurance and Christmas, don't sneak up on our budget anymore. Everything is ordered, everything is planned for. It's gotten to the point that we barely need to discuss our monthly budget, so much as to simply give it a glance and say, like great God Almighty did all those years ago, "It is good."

Playing with My Emotions

They did it again. The Steelers got me to believe. This year, unlike so many others, I honestly thought they were contenders. They had an offense that could score on anyone, and a defense that kept doing just enough. This year, I said to anyone that would listen, they really could win it all. And then the Steelers made a fool out of me for believing in that lie, along with everyone else in Western Pennsylvania and the Pittsburgh diaspora. We were naive to think this young team, being re-built on the fly, could make a serious run to the Super Bowl. Then Baltimore Ravens took that group of young players, drove them into the Heinz Field turf, and dry humped the poor bastards into submission. It was humiliating...and a little weird, too, since on-the-field humping, while not technically a penalty, is usually deemed poor sportsmanship.