Category Archives: Financial

Financial Roadmap

Laura and I recently had dinner with a good friend and the topic of finances came up. Our friend is being really smart with her money and doing a lot of the right things to be responsible. However, after Laura and I got home, I got the sense that our friend just wanted someone to tell her what to do with her income, because starting out on a financial plan can seem so daunting and confusing.

I’m here to tell you that it doesn’t have to be either, and if we can do it, you can do it too. It doesn’t matter if you are young or old, rich or poor, savvy or carefree. We don’t have all the answers, but the Dave Ramsey plan works for us. I want to layout some simple steps and good tips to get you to the end goal: debt free living and financial peace.
Continue reading Financial Roadmap

Bring on the cool air

The entry date of this post is August 9th, 2009 and today is the day we finally turned on our central air conditioning this year. All the global warming has kept central Ohio pretty cool this year. There were several days earlier in the spring and summer where it got fairly warm, but we found that with some fans blowing on us, there was no reason to run the A/C. It’s been a real financial blessing. We are on a yearly budget plan for our electricity and right now it’s only $44 a month. This is partly due to the fact that last year during the two hottest months of July and August, we were in Hong Kong with our house empty. This year has been nice and cool so the savings has been huge.

Today’s high was 96F (36C) so we decided that since we had held out until August, we could turn on the A/C. :o) Man, does the cool air feel great! If you are also on the Total Money Makeover like us, the warmer house feels tolerable because the thought of saving $$ makes it feel okay. Just a few degrees saves hundreds a year, and that’s hundreds that can be spent on paying down debt, giving to charity, or enjoying nights out. Since our Total Money Makeover, we look at our money in a whole new way, so we’re stoked about it being well into the month of August before we utilized our central air. How about you? Can you spend a few days getting used to 77F (25C) instead of 75F (24C)? If so, you’ll be glad you did.

Cord Camera = Terrible

I won’t be shopping at Cord Camera ever again. They are a popular photo store in Ohio who has lost my business. With the emergence of places like Shutterfly, Target, and even Walmart, Cord is slipping farther and farther into irrelevance.

My favorite place is Shutterfly (follow the link above) because you can upload photos to their website, and then anyone you give access to can order prints. Yeah, but shipping costs? Laura ordered two 5×7 prints from Shutterfly with tax and shipping, and it was still cheaper than ONE 5×7 print from Walmart. Shutterfly also offers glossy prints, something that Walmart won’t do with 1-hour service. My second favorite place is Target, simply because they offer glossy prints in 1-hour. Because of their higher price and matte finish, Walmart comes last.

Behind Walmart, though, is Cord, with high prices paired with no increase in quality. But that isn’t even why I now dislike Cord. Laura bought me a camera bag for my birthday back in February. She didn’t realize that the bag wouldn’t hold the camera that I own. We had the receipt, so no biggie, right? Wrong. Where Cord falls flat on their face, is that they have a ridiculous return policy. With a receipt, one only has 14 days to return a product for a refund. After that, with a receipt, one has 30 days to get an in-store credit for an exchange. After 30 days, you own it. Sheer idiocy!

So let me get this straight: If I buy a birthday gift 10 days prior to a birthday party, the recipient has 4 days to return the item for money? Holy cow, that is obtuse.  With our camera bag that we purchased, we were beyond both the 14 day return time and 30 day “exchange our item for any item in the store” time. When I return something, the last thing I really want is more crap from the store, I just want my money back.

I guess my burning anger showed on my face because the clerk was nice enough to extend the 30 day exchange policy for us, so we could walk through the store trying to find $50 dollars worth of crap to take with us. We got three picture frames with the intention of returning them at a different store, heh heh. When we tried that return, we still didn’t get our money back because we bought them with a store credit — only returnable for another store credit. Blast! Now we have a $50 dollar credit we don’t want or need.

However, the final Pièce de résistance is that Cord is an irrelevant retail store. I don’t remember the last time I purchased anything photographic in a retail store. They are high priced with terrible service and even worse return policies. With places like Amazon, Adorama, and BHPhoto, who are extremely reputable internet retailers out of New York, that have a wider selection of items, with free shipping, no sales tax, and hundreds of dollars cheaper, there is no excuse to buy anything photographic from a loser retail shop like Cord. I would think that as excellent online retailers make Cord more irrelevant, that Cord would be working harder to keep their customers with smart policies, but I guess not.

I occasionally make a mistake and buy something there, but I won’t be making that mistake again. With a ridiculous return policy aimed at keeping your money, I hope you’ll save yourself heartache, sales tax, and hundreds of dollars as well, by shopping at these online retailers.

Photo Gear

If you are looking to buy a new camera this holiday season, look no further than Ken Rockwell’s website for advice on choosing the right camera. He is an avid photographer that buys and then reviews just about every camera on the market and does a great job of explaining what is important, and what is marketing fluff.

Wether you are a novice, or a pro looking to buy a $10,000 camera system, Ken’s site is the place to start. If you love photography as much as I do, you’ll really appreciate his site. Click his photo to be taken to his “Recommended Camera’s” section, updated for November 2008. You can see his entire site, at


P.S. This is the camera that I want. Yikes, I better start saving!

Financial crisis (?) perspective

The following article is from and can provide some great perspective during this financial “crisis” we find ourselves in today.


John D. Rockefeller founded the Standard Oil company in 1870. He was the first American billionaire and one of the richest men to ever live. I am sure many people today wish they could have walked in his shoes. If, somehow they could, I think some would find it to be eye-opening.

Are you richer than John D. Rockefeller?

As wealthy as he was, Rockefeller might have had anything that money could buy. But what a few hundred dollars may buy today, couldn’t be bought with millions 150 years ago.

Today, we have central heating and air conditioning, cars, planes, Tempur-Pedic mattresses, iPods, and millions of other gadgets. Even Rockefeller in his day couldn’t buy air conditioning. Maybe he had fifteen people fanning him on a hot summer’s day (because he could afford it), but I would rather have air conditioning. He probably had chauffeurs to take him by horse and buggy all around town, but I would much rather be riding in a ten-year-old Chevy. Wouldn’t you?

If we change the way we think of “wealth” and compare our standard of living to Rockefeller’s, we’re doing pretty good. In fact, I would go as far to say the majority of Americans live an all-around more “comfortable” life than Rockefeller did. Who then, is actually richer?
How much do we really need to be happy?
If your household annual income is over $50,000, then you are in the top 1% richest in the world. (See for yourself at the Global Rich List.) And if we can agree that most of us are living a more comfortable life than a billionaire at the turn of the Twentieth Century, then shouldn’t we be happy with what we have?
Should the fact that someone is living a more comfortable life than we are make us less comfortable? Or couldn’t we be satisfied knowing that we live a more comfortable life than 99% of the world’s population, or the richest man 150 years ago?
And maybe we aren’t complaining — maybe we are just using our credit cards instead. Do we really need all the junk we are buying or are we forgetting how good we actually have it?
Why not keep up with the Joneses?
What’s the point with all this? Why spend energy trying to be grateful for the things we have? Why not just try to keep up with the Joneses? Here are a few reasons:
1. Life is far more enjoyable when you are grateful.  Grateful people divert their energy to seeing the good things they’ve been given rather than focusing on what they don’t have. This alone makes them much happier and far more enjoyable to be around.
2. You can save a lot of money.  When you are thankful that you have a car rather than having to ride the bus everyday, it makes it a lot easier to break the habit of buying a new car every year. This can apply to anything — HDTV is great, but so is color TV. Remember when that was the new break-through technology?
3. Forgetting about the Joneses can set you free.  Doing things to impress and appease other people is a dangerous trap. So many people voluntarily become “puppets” to those they are trying to impress — trading control of their lives for temporary social approval. Having been enslaved by it for years, I suggest forgetting about what the Joneses think. They’re overrated anyway.
4. You can actually enjoy the things you have.  Everything loses a bit of its appeal as we get used to it. From a new pair of shoes, a new car, a spouse, or anything else — they are all really exciting while we are anticipating them. But, once we have them for a while, they just aren’t as exciting as they once were. By truly appreciating it and focusing on the benefits of it rather than the “greener grass” elsewhere we can truly enjoy what we have.
I don’t say all this to suggest that we all should live like we are hovering around the poverty line. I merely want to suggest that maybe, just maybe, we have it a little bit better than we think. Regardless of whether you have 60″ HDTV and new BMW or a 19″ Sanyo and a 10 year old Chevy — be grateful. Either way, Rockefeller would be jealous.

“It’s not having what you want, It’s wanting what you’ve got.” — Sheryl Crow

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Bar Stool Economics

Suppose that every day, ten men go out for beer and the bill for all ten comes to $100. If they paid their bill the way we pay our taxes, it would go something like this:

The first four men (the poorest) would pay nothing.
The fifth would pay $1.
The sixth would pay $3.
The seventh would pay $7.
The eighth would pay $12.
The ninth would pay $18.
The tenth man (the richest) would pay $59.

So, that’s what they decided to do.

The ten men drank in the bar every day and seemed quite happy with the arrangement, until on day, the owner threw them a curve. “Since you are all such good customers,” he said, “I’m going to reduce the cost of your daily beer by $20.”Drinks for the ten now cost just $80.

The group s till wanted to pay their bill the way we pay our taxes so the first four men were unaffected. They would still drink for free. But what about the other six men – the paying customers? How could they divide the $20 windfall so that everyone woul d get his ‘fair share?’ They realized that $20 divided by six is $3.33. But if they subtracted that from everybody’s share, then 
the fifth man and the sixth man would each end up being paid to drink his beer. So, the bar owner suggested that it would be fair to reduce each man’s bill by roughly the same amount, and he proceeded to work out the amounts each should pay.

And so:

The fifth man, like the first four, now paid nothing (100% savings).
The sixth now paid $2 instead of $3 (33%savings).
The seventh now pay $5 instead of $7 (28%savings).
The eighth now paid $9 instead of $12 (25% savings).
The ninth now paid $14 instead of $18 (22% savings).
The tenth now paid $49 instead of $59 (16% savings).

Each of the six was better off than before. And the first four continued to drink for free. But once outside the restaurant, the men began to compare their savings.

“I only got a dollar out of the $20,”declared the sixth man. He pointed to the tenth man,” but he got $10!”

“Yeah, that’s right,” exclaimed the fifth man. “I only saved a dollar, too. It’s unfair that he got ten times more than I!”

“That’s true!!” shouted the seventh man. “Why should he get $10 back when I got only two? The wealthy get all the breaks!”

“Wait a minute,” yelled the first four men in unison. “We didn’t get anything at all. The system exploits the poor!”

The nine men surrounded the tenth and beat him up.

The next night the tenth man didn’t show up for drinks, so the nine sat down and had beers without him. But when it came time to pay the bill, they discovered something important. They didn’t have enough money between all of them for even half of the bill!

And that, boys and girls, journalists and college professors, is how our tax system works. The people who pay the highest taxes get the most benefit from a tax reduction. Tax them too much, attack them for being wealthy, and they just may not show up anymore. In fact, they might start drinking overseas where the atmosphere is somewhat friendlier.

For those who understand, no explanation is needed.
For those who do not understand, no explanation is possible.

David R. Kamerschen, Ph.D.
Professor of Economics
University of Georgia

This obviously pokes fun at our tax system. Though not 100% accurate, I feel it is a good reminder about our tax system, during this election cycle. For even more on the fact that the rich pay all the taxes, thus the rich need the tax breaks, go here. What do you think?

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Congress, not Big Oil, is to blame

Notice in the graph above, (click on it to see it better) the U.S. oil companies are among the smallest in the world!

From the Powerline Blog:

The Senate Judiciary Committee summoned top executives from the petroleum industry for what Chairman Pat Leahy thought would be a politically profitable inquisition. Leahy and his comrades showed up ready to blame American oil companies for the high price of gasoline, but the event wasn’t as satisfactory as the Democrats had hoped.

The industry lineup was formidable: Robert Malone, Chairman and President of BP America, Inc.; John Hofmeister, President, Shell Oil Company; Peter Robertson, Vice Chairman of the Board, Chevron Corporation; John Lowe, Executive Vice President, Conoco Philips Company; and Stephen Simon, Senior Vice President, Exxon Mobil Corporation. Not surprisingly, the petroleum executives stole the show, as they were far smarter, infinitely better informed, and much more public-spirited than the Senate Democrats.

One theme that emerged from the hearing was the surprisingly small role played by American oil companies in the global petroleum market. John Lowe pointed out:

“I cannot overemphasize the access issue. Access to resources is severely restricted in the United States and abroad, and the American oil industry must compete with national oil companies who are often much larger and have the support of their governments. We can only compete directly for 7 percent of the world’s available reserves while about 75 percent is completely controlled by national oil companies and is not accessible.”

Stephen Simon amplified:

“Exxon Mobil is the largest U.S. oil and gas company, but we account for only 2 percent of global energy production, only 3 percent of global oil production, only 6 percent of global refining capacity, and only 1 percent of global petroleum reserves. With respect to petroleum reserves, we rank 14th. Government-owned national oil companies dominate the top spots. For an American company to succeed in this competitive landscape and go head to head with huge government-backed national oil companies, it needs financial strength and scale to execute massive complex energy projects requiring enormous long-term investments.

To simply maintain our current operations and make needed capital investments, Exxon Mobil spends nearly $1 billion each day.”

Because foreign companies and governments control the overwhelming majority of the world’s oil, most of the price you pay at the pump is the cost paid by the American oil company to acquire crude oil from someone else:

“Last year, the average price in the United States of a gallon of regular unleaded gasoline was around $2.80. On average in 2007, approximately 58 percent of the price reflected the amount paid for crude oil. Consumers pay for that crude oil, and so do we.

“Of the 2 million barrels per day Exxon Mobil refined in 2007 here in the United States, 90 percent were purchased from others.”

Another theme of the day’s testimony was that, if anyone is “gouging” consumers through the high price of gasoline, it is federal and state governments, not American oil companies. On the average, 15% percent of the cost of gasoline at the pump goes for taxes, while only 4% represents oil company profits. These figures were repeated several times, but, strangely, not a single Democratic Senator proposed relieving consumers’ anxieties about gas prices by reducing taxes.
The last theme that was sounded repeatedly was Congress’s responsibility for the fact that American companies have access to so little petroleum. Shell’s John Hofmeister explained, eloquently:

“While all oil-importing nations buy oil at global prices, some, notably India and China, subsidize the cost of oil products to their nation’s consumers, feeding the demand for more oil despite record prices. They do this to speed economic growth and to ensure a competitive advantage relative to other nations.
Meanwhile, in the United States, access to our own oil and gas resources has been limited for the last 30 years, prohibiting companies such as Shell from exploring and developing resources for the benefit of the American people.
Senator Sessions, I agree, it is not a free market.
According to the Department of the Interior, 62 percent of all on-shore federal lands are off limits to oil and gas developments, with restrictions applying to 92 percent of all federal lands. We have an outer continental shelf moratorium on the Atlantic Ocean, an outer continental shelf moratorium on the Pacific Ocean, an outer continental shelf moratorium on the eastern Gulf of Mexico, congressional bans on on-shore oil and gas activities in specific areas of the Rockies and Alaska, and even a congressional ban on doing an analysis of the resource potential for oil and gas in the Atlantic, Pacific and eastern Gulf of Mexico.
The Argonne National Laboratory did a report in 2004 that identified 40 specific federal policy areas that halt, limit, delay or restrict natural gas projects. I urge you to review it. It is a long list. If I may, I offer it today if you would like to include it in the record.
When many of these policies were implemented, oil was selling in the single digits, not the triple digits we see now. The cumulative effect of these policies has been to discourage U.S. investment and send U.S. companies outside the United States to produce new supplies.
As a result, U.S. production has declined so much that nearly 60 percent of daily consumption comes from foreign sources.
The problem of access can be solved in this country by the same government that has prohibited it. Congress could have chosen to lift some or all of the current restrictions on exportation and production of oil and gas. Congress could provide national policy to reverse the persistent decline of domestically secure natural resource development.”

Later in the hearing, Senator Orrin Hatch walked Hofmeister through the Democrats’ latest efforts to block energy independence:

HATCH: I want to get into that. In other words, we’re talking about Utah, Colorado and Wyoming. It’s fair to say that they’re not considered part of America’s $22 billion of proven reserves.
HOFMEISTER: Not at all.
HATCH: No, but experts agree that there’s between 800 billion to almost 2 trillion barrels of oil that could be recoverable there, and that’s good oil, isn’t it?
HOFMEISTER: That’s correct.
HATCH: It could be recovered at somewhere between $30 and $40 a barrel?
HOFMEISTER: I think those costs are probably a bit dated now, based upon what we’ve seen in the inflation…
HATCH: Well, somewhere in that area.
HOFMEISTER: I don’t know what the exact cost would be, but, you know, if there is more supply, I think inflation in the oil industry would be cracked. And we are facing severe inflation because of the limited amount of supply against the demand.
HATCH: I guess what I’m saying, though, is that if we started to develop the oil shale in those three states we could do it within this framework of over $100 a barrel and make a profit.
HOFMEISTER: I believe we could.
HATCH: And we could help our country alleviate its oil pressures.
HATCH: But they’re stopping us from doing that right here, as we sit here. We just had a hearing last week where Democrats had stopped the ability to do that, in at least Colorado.
HOFMEISTER: Well, as I said in my opening statement, I think the public policy constraints on the supply side in this country are a disservice to the American consumer.

The committee’s Democrats attempted no response. They know that they are largely responsible for the current high price of gasoline, and they want the price to rise even further. Consequently, they have no intention of permitting the development of domestic oil and gas reserves that would both increase this country’s energy independence and give consumers a break from constantly increasing energy costs.

Every once in a while, Congressional hearings turn out to be informative.

If you don’t read the Powerline blog, you’re missing the story!

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