The Nanny Tax

This NYT article about the Nanny Tax is awesome. Though it's called "Do the Right Thing by Paying the Nanny Tax," I think it's pretty easy to come to the opposite conclusion. The author catalogs the numerous, expensive steps it took for him to actually follow the crazy Nanny Tax law, and finally recommends outsourcing that as well, for 400-$1,300/year.

I don't pay the Nanny Tax. My maid operates on an all cash basis, well, for many reasons. We're right at the absurdly low limit of $1,700, but she has an assistant, so maybe we're below. I have no idea. Do subcontractors count?

$1,700 is way too low. That's pretty much anybody cleans your house, your yard crew, and your babysitter. It would probably cost me more to comply with these ridiculous laws than I pay my maid.

We have three other employees in our small business. We give them 1099s like all other contract employees. If I could just do that with the (theoretical) nanny, no problem! But when you have to do a full-on payroll with workers' comp insurance and tax withholding and so on, forget it. I totally understand why even celebrities blow off these laws. They're absurd. Really, what's wrong with a 1099?

The article estimates 80-95% of people who employ "baby sitters, housekeepers and home health aides" don't pay the tax. That's the first sign that it's horrifically broken. Besides, what happened to Zoe Baird anyway?

Net Worth Jan. 08: Hemorraghing Cash

Net Worth Feb 1, 2009: $74,058 (-2,233, -2.93%). Hooray! I'll take it! I was sure we would be down more.

This is our most expensive month since I started blogging. This might be our most expensive month ever, even with those big tuition payments back in the day.

* $1,500 investment losses (with $700 invested!) OUCH!
* 6K to Uncle Sam for Q4 2008
* 6K for a practically new truck
* 12K on the business
* 8K on the wedding, 2/3 of the wedding is now paid for
* 1.5K on the honeymoon
* over 1K on clothes (incredible sales!!)

That outlay is just insane. The only reason we weren't in the black more was Señor Dog's excellent performance this month.

This is also the first time that red ink doesn't mean more debt. We're still debt free. Now a bit of red means we spent some cash or lost some investment value, not that we took on more debt. That's pretty great.

College For 18 Kids

This one is Fabulously Broke's fault. It's her fault that I Tivo'ed the wedding special of the eldest Duggar from 17 Kids and Counting. And now my Tivo thinks even less of my trashy reality TV habit.

I almost didn't watch because I think it's wrong to put kids on reality TV, from Real Housewives to the Bachelor, but especially wrong if the kids are on reality TV as a freak show, like this show. The Duggars think it's wrong to show your knees, so different value systems, I guess. Anyway, this kid was over 18, plus, it was a train wreck, so I couldn't help but watch.

They didn't say what religion these people are, but it sure has a lot of rules.
* They don't drink or use birth control (hence the 17 kids).
* Tons of makeup is OK.
* Women do all the cooking/decorating/details. I'm not sure what the men do.
* The happy couple didn't even kiss before the wedding. I have no idea what religion doesn't allow kissing, just wow.
* The women have really long frizzy hair, and they wear frumpy full length skirts.
Ladies, that's the worst silhouette possible!

The bride got married in a home-sewn polyester T-shirt with a train. Wouldn't a jacket be nice? Or a wrap? Or a nice bolero? Or, heck, actual sleeves. But they only wear T-shirt sleeves, sometimes with 80s shoulder puffs.

Everything about this show is awkward. Their first kiss was awkward, almost painful to watch her body language. All the (homeschooled) kids speak with their mother's odd pauses and vocabulary and inflections and her mannerisms that she is always right. The kids interacting with the other (also homeschooled) kids is just awkward. The man-to-man talk about women's language, yikes. The very confused trip to the fancy restaurant where it has "real" plates and forks. The poor groom tries to figure out something called an Alfredo. I was so embarrassed for the poor kid.

I figured out how the Duggars will pay for college for all those kids. They won't! An added benefit of their flavor of home-schooling. Their eldest isn't going to college, instead he's getting married and not using birth control (it was even in the vows). Isn't that great?

The math is very fuzzy on this show. The Duggars are giving (selling?) a small former rental house to the happy newlyweds. This kid, who looks like he can barely shave, owns a used car lot somehow. Since their religion doesn't allow debt, I guess someone somehow managed to at least buy the cars and rent the ground. That's pretty daunting when you've never had a real job.

The money really doesn't add up to me. They have a huge mansion, a fleet of cars, so many people to feed, and no jobs. Somehow, their son owns a car lot, which means he bought at least another car or two. They say they rent out commercial property. You'd have to have a heck of a portfolio to spin off the kind of money needed to support all that. And suddenly I see the appeal of putting your kids/wedding on reality TV.

Eating Out Too Much

Krystal's challenge this month is a food budget. You know what, I can't do it. I just have no idea. Not even within a couple hundred bucks.

As our schedules have gotten tighter and tighter, our old budget buster, eating out has only gotten worse. We're to the point where we had to pawn off the dog's vet visit to a friend, we're so overscheduled. We usually eat out lunch for work and either expense it (me) or write it off (him). Or, we're working so hard we don't have time to eat.

On Monday, neither of us had eaten all day when we got home. We went out, at 8. We blew $70 on dinner and a couple drinks, and I didn't even think about it. On Tuesday, we heated up a $5 pizza and some hot wings from Costco.

Señor Dog is a very good cook. He cooks with fresh ingredients, and he's very experimental with cuisines and whatever we have laying around. We even eat left-overs, if we have them. But when he doesn't even have time to go to the grocery store, our food takes a hit. We can either sacrifice quality (frozen pizza) or cash (eating out or take-out).

Reading the blogs, the solution is the Crock-Pot. Who are we kidding. We might not make it home at all, and we might not even eat it.

Eating out is probably costing us a fortune. I'm scared to even do the math.

I think our solution is to buy better, easy premade frozen foods (burritos, tamales, stuffed crabs, so on) or even to make some freezable recipes. Señor Dog doesn't cook from recipes, he finds them too confining, so this would really take more planning than usual. I think I might try it anyway. I think I might make a couple days of frozen entrees. Maybe meat loaf. We'll see if they go to waste. They probably will.

Big Milestone

This is big! We've pretty much been hemorrhaging money for the business this month. Something like 12K in business expenses in just this month. OUCH! But, they're equipment expenses, so they (hopefully) last a couple years.

But the really good news is this. For the first time, Señor Dog's business grossed more than I grossed this month. Hooray! Wowza!

This isn't a competition or something, that's not the point. The point is that my gross is a very high target, and he's made it this month, which is no small feat. Assuming our equipment doesn't get stolen every five minutes, 2009 is looking like a very, very good year for Señor y Señora Dog!

Review of Ramsey, Total Money Makeover Live

I went to see Dave Ramsey Total Money Makeover Live tonight in Houston. I promised a relative we'd go, so we went.

Life happened, and we were 1.5 hours late to the five hour event. This was a problem because there is no assigned seating. There were VIP tickets (100$+???) and some sort of floor seating (50$+), but we had the cheap seats with no assigned seating.

Because we were so late, there was not a seat in the house!!! It was crazy. We went in two or three entrances, and stood there looking for three seats. Everything was full, even the seats behind all the jumbotrons where you couldn't see anything. I thought about just leaving, but I had made it that far.

So, I did what I learned to do at some point in grad school. I walked down to the VIP section like I owned the place. I asked the usher to seat us, and he did! (Well, not together, but in front of each other.) So, we got VIP seats after all, and they still weren't that great. I would have been really irritated if I had paid $100+ for them.

An hour an a half late, we only missed Baby Step 1. If I could do it again, I would probably have come 2-2.5 hours late. And even then, he made the crowd chant about saving $1,000 a billion times.

It came with a workbook that looked like it was made for grade school: the kind where you fill in the noun in the sentence at size 30 font in your best block print. I was next to a woman who was diligently filling it in, and taking notes in the margin. At the break, she was telling me how hard it was to save $1,000. This is the VIP section!!!

Most of the presentation was the evils of credit cards and debt and car loans. Nothing new. There really wasn't anything I hadn't heard on the show. Even the jokes were the same. Oh, there was something new. He was really trying to sell a lot of product. I would say 15 minutes each hour was shilling the other products (FPU, Financial Peace Jr, books, so on).

I appreciated the background information, like he actually explained the gazelle analogy, and it was pretty neat really. He also explained the nerd/free spirit roles he talks about sometimes on the radio. That was nice too. Señor Dog said he liked the free spirit/nerd part. Obviously, I am the nerd.

Mostly, it was the radio show. If you listen to Ramsey regularly like I do, there is no new content except all the selling. Dave Ramsey is dynamite on radio, and he was very charismatic on stage. It didn't seem like that long! He is really an excellent speaker.

But ... There were no concessions, they said that Ramsey made them shut it down. After 4 hours (plus coming early for seats), people started to go to the event next door, the Boat Show, for food and drinks, which is INSANE. A guy near us was diabetic, and he had to just leave because he couldn't go 6 hours without food or drinks. No concessions is just stupid. That alone made this seem very amateur, and people seemed grouchy because we were all starving. At hour 4, about 1/3 of VIP was gone. They just left.

I wouldn't go again. If you want the Dave Ramsey experience, you can get it in your own home by listening to the show. Or, buy a copy of Financial Peace University on eBay or something. But, if you insist on going, definitely show up late and bring a snack and some water.

Second Thoughts on Ramsey

It's 9AM on Saturday, and I've already done three errands, and I have a pile more, and there's just not enough time.

I feel like we've been running non-stop with the business expansion, my day job being a disaster, and the zillion details that never end for the wedding. AAAHHH!

And then I look at my calendar and realize Dave Ramsey is 1-6, FIVE FREAKING HOURS. Five hours??? I don't think I've ever listened to one person lecture for five hours. Dear lawd, I could read the book three times in five hours.

This is a total pain. We have to show up early, and then it's five freaking hours. If we hadn't promised a family memeber we would go, we would skip it. I guess we can leave early, I hope.

Not Doing So Good

Yesterday, I posted a very positive post about the business and then not so great when a critical piece of equipment got stolen.

And then, one day before I'm going to see Dave Ramsey, I had the worst day at work ever. I am kind of hot and cold about my work, that's not new. But today was ice cold.

I got treated like trash, blamed for things that weren't my fault, it was just really, really bad. I was so upset, I was beyond crying. I texted my mom, even though I know she can't read texts. On days like this, I am so unhappy with my job that I wish I could jump ship or jump out the building, or something. Obviously, there's nothing I can do until the economy is better. But even if it were, I don't know where I would jump.

Sometimes I think about just quitting and working with Señor Dog and throwing out all of this: my education, all of this "experience". Sometimes, I just wish I worked for myself. But then we'd have no health care, which is a pathetic reason to stay in a job in a civilized country.

It's just been such a bad day at work, and I'm feeling really discouraged.

Three Steps Forward...

Well, I posted earlier today bragging on the business, and it got smacked down by karma.

A 2K piece of critical equipment got stolen. At a client site. OUCH.

This equipment is pretty much useless to whoever stole it, so I hope they get ebola. WTH?

Worse, the show can't go on without it. So, Señor Dog had to overnight a replacement, which is a giant pain. He can't really complain to the client because, well, it wasn't really their fault, and that's just not the way he rolls with clients.

It seems like we keep getting targeted by petty thieves. I have no idea why. Well, yes I do, part of it is our own fault. But this one is just ridiculous. This thing can't even be pawned. I'm feeling really discouraged at the moment.

Expanding Bizness

Well, who knew what a little upgrade in a 6.5K piece of business equipment could do? And who knew what could what could happen if you started a bold, creative, risky business in the middle of a recession??? We've expanded the business. A lot.

Señor Dog took on some serious contracts this month. It will take all of our resources (employees, equipment, time) to get them done. And they're right before the wedding. Yuck. Last night, we had his new employee (contractor, says the accountant) over for dinner.

His third part-time employee. Three more employees than we've ever had before. There's something very scary about being an employer in this kind of economy, maybe to be an employer at all. Your employees depend on you. You have to find the work, and you are responsible for cutting checks for someone else's job. It feels very heavy to us. Gulp.

Anyway, we spent even more on the business this month. 5K more to expand for the new plans. Gulp. As if this month weren't expensive enough. Good news is, the business is totally separate, and it runs debt-free.

We've heard that a company that is kind-of-sort-of Señor Dog's competitor laid off five employees. He's been slowly taking away their customers before he even went on his own by delivering a better, cheaper, faster, more creative product, and since then he's only gotten better. That's a huge beast of a company, but five still seems like a lot to me.

That's business. I like to think that we can all be successful, that our success doesn't necessarily correlate to someone else's failure. This time that isn't so true. On one hand I'm glad Señor Dog and his employees have "won," I'm so proud of his success! But I still feel for those families, especially in this economy.

Thinking About Meta-Ramsey

OK, so I have some issues with Dave Ramsey. That said, I think his overall message is sorely needed and is correct.

The guy is on the radio three hours a day. It has to be predictable. He has to be consistent, even when it really doesn't make sense for an individual. I get that. So, his specific implementations are not always my favorite.

But the overall, meta-message is simple and so difficult. LIVE WITHIN YOUR MEANS. While Suze tells you to run out and get a two-year car loan, Ramsey says cash. He doesn't putz with same as cash or 0% credit cards or single stocks. It's really very simple. Don't buy things you can't afford.

I resist his guidelines on a house (20% down, 15 yr mortgage, 25% of take-home). That seems really limiting! And, whhaaa, I want a nicer house. But I get it. We don't need stuff. We need to save for a future. Suze was all over the place a couple years ago with piggyback loans to avoid PMI. She doesn't seem to mind if you're in debt to your eyeballs or have no down payment. She told us what we wanted to hear.

I think I like (most of) the Dave Ramsey lifestyle better. Mostly, I like the mindset. I'm not going to borrow money again for anything but a house. There's something liberating in that, to actually have limitations. We haven't exactly stuck to the letter of Ramsey, (like our brief 30K car loan and 20K in business debt), but we thought about it in a more Ramsey kind of way. We wanted it GONE.

Today, now I'm debt free, don't owe anyone a dime. I don't owe the exact mechanics to Ramsey, but I do owe Ramsey that mindset. So, that's why I'm going to see him Saturday.

One Last Problem with Dave Ramsey: Tithing

I've already railed on his position on student loans and credit cards. Well, he's coming to Houston on Saturday, and I have one last complaint.

Tithing.

It drives me crazy when he tells people eyeball-deep in debt, people taking benevolence from the church, people offloading their debts in bankruptcy, people on welfare, that they should still tithe.

My personal views are from my parents' tithing when I was a child. Today I would describe my parents as non-religious, and I think the tithing had something to do with it. At the awful church my parents attended, it was well-known who didn't tithe. Through gossip, through some kind of list, it was one step from a fully functioning phone tree. My mother was always deeply shamed when she made it in the gossip, correct or not. She is a very proud person.

When I see people like, say, JW tithing when they give so much already and they probably can't afford it, I'm puzzled. I assume they have the same level of gossip my parents' church did, maybe even more pressure.

When I worked Meals on Wheels as a teenager, almost all my deliveries were to old women who had tithed their entire lives. In retirement, they couldn't even afford food. Now, THAT is humiliating.

I'm all for giving, but in today's world where you should plan to live past 60, taking care of your own house means saving for retirement. It means saving for the future. If you can't take care of yourself (including your future self), I think you have to consider long and hard whether tithing is correct. It isn't a stock one-size-fits-all Ramsey answer that everyone must tithe.

What The FICO?

According to Transunion, I currently have a fantastic FICO score of 815. Hooray!

I used the free trial Jonathan posted for Equifax, and my score is 752. WTF? According to Transunion, my score hasn't been that low in a year! And 815 vs. 752 is a HUGE difference. It's the difference between the highest bracket of scores and the second highest.

This is just BS. I'm starting to think the free trial is artifically low to convince you to buy more products.

Got Contacts

I decided to enter the crazy world of contacts. My insurance covered $60 of the exam, and $60 of the first order of contacts. The doctor repeatedly said that disposables were best for my "lifestyle" so that was an easy choice. The exam ended up costing $23, and the first three months cost $88 ($148 without insurance!).

Because I had used up my insurance, I went to Costco. I mooched off a girlfriend's membership to Costco, I heard they have the best prices in town. Sure enough, it was $90 for three months. Sweet.

This benefit might even be enough to convince me to get a Costco membership.

Higher FICO!

These scores are from a lousy Wamu credit card, the only Wamu product I still have left. I kept it (purchase or two every other month) because it lets me see my FICO score for free.

I'm worried about my FICO with our possible house-buying adventure later this year. But, I'm just confused by my score fluctuations. You can see a big bump in April when I paid off the credit cards. That makes sense. But paying off the car in November did nothing. Hmmm. The big spike this month makes no sense at all. Maybe it's when my Amex balance happens to be reported, so maybe I need to pay it down more often.

To prepare to buy a house, I used Oprah's special code to buy Suze's FICO kit. Only $25 for all three credit scores is as cheap as it comes (code only good until 1/22). The kit lasts until 1/2010. Hopefully I will need the scores by 1/2010.

More Issues With Ramsey

I'm going to see Dave Ramsey soon. My biggest beef with Dave Ramsey is his position on student loans, but there's a lot more to hate in one-size-fits-all personal finance.

I hate Dave Ramsey's 100%, no exceptions, no credit card rule. It's just ridiculous for me.

I get that Amex collectors were awful in the 80s to Mrs. Ramsey. As for me, Amex was incredibly nice and helpful. Amex accepted a dispute on over 1K in foreign hotel charges. I was overcharged about 20%, just sent a letter, easy as that. In the end I didn't have to pay a dime.

Debit cards are not the same as credit cards. There are problems with protections (like this one). Oh, and then there's things like this where Macy's charged debit cards twice causing bank accounts to overdraft. Nice. Amex would have taken care of that one, easy, without even asking.

I use disposable or temporary credit card numbers when I'm shopping online all the time. Can't get those with a debit card. I often don't feel comfortable giving my credit card online, I would NEVER give a debit card!

Like many callers to the Dave Ramsey show, I have to front thousands of dollars of travel. Ramsey's solution: Ask for a company card! Or, ask for the money upfront! If I did that, my boss would laugh me out of the room. Even people a lot more senior than me operate this way. It's good -- I get the miles/point/frequent user points, and I get paid back in 3-4 days. Also, my Amex allows me to search my bill. Thus, I can submit only "Radisson" entries on my Amex for reimbursement without everyone up in my whole business. My debit card can't do that, for sure.

Ramsey's most persuasive argument is that people, statistically, spend more with plastic. That's probably true. But I don't shop much in actual stores. So, I guess it would cut our grocery bill and our restaurant bills. But we use cash for bar tabs, and that doesn't really seem to be so limiting.

Anyway, I'm not ditching my plastic, no matter what some collector said to Mrs. Ramsey. I'm sure she's a nice lady and all, but plastic has always been good to me.

How I Paid for $250K in School: Part 4

When I got to grad school, already over 100K in student loan debt, I was supposed to teach a few classes, get a small stipend, and have no tuition. It didn't work out that way.

My first semester, I got caught up in a campus-wide cheating scandal. The school didn't even let the student government handle it, they just silently let the kids retake all the classes because of who those kids (well, their parents) were. I taught that class; those kids cheated. And they cheated badly! Anyone could tell!

I was livid. With the support of my supervisor, I threatened to go to the school paper. The board offered me another semester of free tuition and my stipend, and I wouldn't have to teach again. I took it. In retrospect, I had no idea how much power I held. I should have argued for more, I bet I could have gotten all of grad school for free. In retrospect, I also should have never dragged my supervisor into it. I had no idea how all-consuming and nasty university politics can be.

The whole situation clouded my view of academia, of the power of the rich, of administrative bodies. It crushed my dreams of academia, the kind all grad students have. It took me a few months to decide whether I even wanted to stay at that unprincipled school. I never thought life was fair, but that scandal changed my view forever of the advantages the rich have. Advantages that you (supposedly) can't buy.

Bad news: school was expensive after that first year, and I was running low on my savings. Good news: I had a whole lot of time, more than I had ever had before, and I'm not the type to just blow it.

Parts 1, 2, and 3

To Do List, 2009

I was waiting for Single Ma to update her "To Do List" to see if she thought of anything clever, but looks like she didn't make one this year. I love Single Ma's To Do List because it's for things that are either done or they aren't. They don't really lend themselves to progress bars. So, my To Do List.

Not Wedding-Related:

* make sure parents' estate documents are in order.
* document home for renters' insurance
* get business insurance for business assets Done 7/09
* look into first steps for international adoption (too soon??) Done 3/09

Wedding-Related

* add Señor Dog to my company benefits Done 3/09
* updated estate/medical forms
* change FSA for Señor Dog and new glasses and conacts Done 3/09
* get life insurance for both of us for 500K
* change beneficiaries on policies to each other Done 7/09

I'm exhausted just writing all that out. Yuck.

Proud of My Six-Digit Student Loans

Rants like these about evil student loans (these examples by ToughMoneyLove) are how holier-than-thou people feel about student loans. Student loans are for the poor (just use your college trust!) or for the wasteful (why not a state school like Mississippi State?).

Well, I'm proud of my six-digit student loans.

I'm going to see Dave Ramsey later in the month, and I've been thinking about my beefs with Dave Ramsey. His position on student loans is, by far, my biggest beef.

I have over 200K in education from two elite private schools. At one point, my loans were well over 100K. Today, I'm in my mid-twenties and debt free. I have followed (or could have followed) Ramsey more or less except for this major deviation.

I think Dave Ramsey has two problems with student loans: (1) too much risk and (2) he sees no value in high-dollar schools.

The latter is a different discussion. But, if I were forced to generalize for millions of people every day, I would probably agree. Most expensive schools aren't much different than state schools. Some are. Mine was. I knew that, heck Ramsey would too, but in general most aren't. That's the problem with one-size-fits-all personal finance.

As for risk, Ramsey hates all student loans, even modest ones, because he sees people fail. They drop out of school, they change their mind, and they're stuck with huge loans. Fair enough. College isn't for everyone. Me, I knew I had to succeed and put my skin in the game to back it up. When Ramsey says, "don't take out medical school loans," he says, "I don't think you are going to finish. You're not going to make it." Fine, maybe that's true for some. Maybe it's true for most, but it's not true for me.

My biggest beef with Ramsey is that in Ramsey's world, the only way to go to med school or any really expensive school is to have a trust fund. I am grateful for the many, many student loans that were extended to me. They were the price of admission to a new world. They allowed me to be near, befriend, and learn from trust fund kids, from brilliant professors, and from brilliant alumni.

I'm not bashing state schools. I'm just sick of people bashing or fearing my path. If you don't like/are scared of/can't afford student loans, don't take out any. I don't want pity, and I don't want disdain. I'm grateful every day for all the doors my education opened. The only way I could have gotten there (at least back then) was student loans.

Expensive Month!

Wowza, has it been an expensive month!

* 6K on a new truck
* 6K to Uncle Sam for 2008 Q4 (OUCH!!)
* 6K to replace business equipment (with some offset)
* 1K on clothes. We hadn't bought clothes in a long time, and the sales have just been incredible!!
* 5K in wedding/honeymoon expenses

Whoa, and the month is not even half-way over! I'll be shocked if we come in black this month; that would take some astounding performance in Señor Dog's small business. At least we're still debt-free!

Honeymoon Booked

We booked the honeymoon.

A while back, I contemplated 10K-ish honeymoons. Today, that just seems silly with all the domestic travel deals. We booked Vegas, baby!

Vegas must really be suffering, the deals are just incredible. We booked six nights in a super-posh hotel, plus a really fancy suite bigger than my grad school apartment with 3 TVs (why?). Total cost, with airfare, for both of us: $1,400

Obviously, we have to eat and go to shows, maybe play a little. But not so much. Vegas sounds great, minimal stress. Everyone will speak English; no currency exchange; plenty of food and drinks and things to do. This is last call for a super-VIP suite, well, ever.

A New Truck

We got a new truck yesterday!

Señor Dog needed a truck. He was hauling things around for the business, borrowing a truck every week. Señor Dog and I hate trucks. Yuck. They don't really go with our urban lifestyle, and neither of us could meet clients in a truck, but we didn't have a choice. So, we traded in Car #1, my sports car, now an older sports car, for a practically new truck that some guy traded for a luxury sedan.

My client Jim, who owns the dealership, gave me a great deal on Car #1, certainly better than I could have done. Plus trucks are down. We got a 2008 truck with 5,000 miles for Car #1 + 6K. This was way, way more upgrade than 6K. Hooray! I'm thrilled.

Could we have gotten a cheaper truck? Sure. But a 24K truck is not unreasonable, this one was a steal, Señor Dog loved it, and we can afford it. If we have to have a yucky truck, it can at least be the least yucky one.

When I bought Car #1, the dealership must have laughed over the loudspeaker at my rip-off loan, plus all the stupid add-ons I fell for. Not this time.

* I paid cash, just wrote a check. I didn't have to bring a paystub, tell them my rent, write down "references" and the name of my boss. Nobody was up in my business.

* I had someone I trusted. Jim really took care of me. He signed me up for one warranty (1K of the 6K) and he just glared when they tried the Lo-Jack/windshield/other upsells. That was really nice, radically different than the aggressive upsell from Car #1.

* In Texas, you don't pay taxes on the amount you traded in. Hooray! So, I was only taxed on the difference. If I had sold the car myself, I would have taken a 6.25% hit when I bought another. Ouch!

We're really happy. We now have an older, very flashy luxury sports car and a practically new truck. The best part, they're PAID FOR. I don't owe anybody a dime. (And yes, Barb, I still have 10K in emergency fund in addition to the wedding fund months in advance.)

If I Were A Rich Girl

These posts are the most honest, touching, thought-provoking pieces I've read in a long time. Bravo. Meg contemplates how her life would have been different if her family weren't rich. This question (well, in reverse) has occupied my thoughts my entire life.

As a child, I didn't know we were poor. It was normal to put back things at the grocery store check-out. I didn't know any different. As a teenager, I saw but never spoke to the rich people in the big city. And then the new-fangled Internet brought all kinds of information.

I knew I had to get out of that town unless I wanted to manage the Walgreens, so I fought tooth and nail. The thing Meg doesn't understand (because it just wasn't her experience) is how truly hard it is to overachieve your whole family and your whole town. Everybody else thinks managing the Walgreens is pretty darn good. To go to college, elite private college at that, was far outside everyone's comfort zone and life experiences, and still is. It took a whole lot of cojones and drive (and loans!). It's still awkward around my family.

When I got to college, my roommate had a maid for our dorm, a cell phone, got her laundry delivered, and called her dad's assistant for flights to London and movie times. I was years behind her in math, I didn't speak Chinese. I didn't know the ballet or the opera or which Four Seasons in Europe is the nicest. To say culture shock is an understatement. (Today, kids are exposed to this kind of wealth, well the materialistic part, like it is normal.)

Since I got to college, I have constantly wondered what my life would be like if I had gone to a Sidwell-like school, if I had learned Chinese at 12, if I could play golf convincingly, if I had taken calculus in 11th grade. If I hadn't been limited by my family's poverty. I like to believe that people with personalities like mine from rich families leverage it for greater things (Hillary, Donald Trump). But I've seen the dark side of those spoiled rich kids too clever for their own good (think Spitzer). I often wonder what happens to the laziest, least ambitious kid at Sidwell...

Since I saw the power of those private school educations, I have believed that my kid must go to a Sidwell-like school, learn Chinese at 12, and take tennis and golf and calculus. I would have done all of that -- and more -- if it were in front of me. But I wonder if my personality, if my drive, comes from poverty??? Maybe if I had been born rich, I wouldn't care about my Chinese lessons.

In truth, I don't know what happens to kids from Sidwell-like schools. My idealized view from my childhood says they have everything, that they can do anything they want, that they can coast into careers, into connnections, into more money. But I just don't know.

As for my roommate, she married an equally rich guy she met in B-school, the same one her dad went to. Now, she's on charity boards and such in Manhattan. Sounds like a great life, really.

Some Suze Surprises

I previously predicted the contents of Suze's new book, after I paid full retail for the previous one. Well, today Suze released her new book for free today. That I respect a great deal. Suze really puts her money where her mouth is by offering her book for free. That's pretty incredible really. Good for Suze.

I was concerned about reading 227 pages in .pdf, but the thing is written in a massive font and reads like it was written for a 5th grader, so that was no problem. I predicted most of the book, more than I thought I would. It's creepy how dead my prediction is. Emergency fund is 8 months now. She is pitching 3 year car loans as responsible, and student loans are OK going back to school if you have enough savings to live on.

But Suze threw a few curve balls at me...

* Non-deductible IRAs for high income. Suze is still pushing that tax loophole that in 2010 you can convert an IRA to a Roth IRA regardless of income. She mentioned it several times. Wha? How could Suze honestly believe that Obama is going to let that little loophole for the rich slip by. That will be the first thing plugged.

* 100% stocks if you have over 20 years until retirement. I thought she'd be more conservative.

* She is obsessed with having some FDIC savings and not money markets because some rogue money market fund invested in Lehman and lost money. Sorry, FTEXX is not going anywhere. And if FTEXX goes broke, we need to be hording water, not money. This one surprised me. I have maybe $500 in FDIC insured accounts, and I have no fear for my money market.

* Advice for First-Time Homebuyers. One page. This is just garbage. "The best way to figure out what you can afford is to use an online calculator (go to www.bankrate.com) to figure out the base mortgage amount." Then you add 30% and "ask yourself if you can honestly handle that amount." Wha? I don't even know what this means.

I went to bankrate and found the "How Much House Can You Afford" calculator. I'm not sure how I'm supposed to know my house's taxes if I don't know how much the house is, but whatever. Bankrate approved me for 750K, assuming 100K down. Holy Moley! That's obviously crazy. CRAZY!

There's really nothing in the whole book for my situation. My cars are paid for, my credit is good, I have no credit card debt, no HELOC, I'm not paying for little Johnny's college. I guess the only part that really applies to me is the emergency fund and the FDIC paranoia.

There's a lot of mumbo jumbo about truth, about being honest about your money. I think I can see that now. There's something about living without debt that feels honest. Something about paying for things with money that isn't tricking yourself with monthly payments. Being debt free feels like a very honest place. But then I guess publishing your financials to the whole world is really an exercise is honesty -- y'all don't let me lie to myself anymore.

Ripped Off on Etsy

I've bought a whole lot of stuff on etsy -- a whole lot. I've never had a problem, and I've found the etsy ladies to be fantastic! They really care about their customers, their art, the whole experience. I bought a couple dozen things on etsy for the wedding a while back. They've all been great. But -- one of the orders has not come in yet.

I paid $150 for a custom veil and hairclips for bridesmaids. The seller had tons of sales and feedback. I didn't think it was a problem. Well, two months after the deadline, now she's not responding to email and her account on etsy has been deleted. Nice.

Etsy goes through paypal, but there's also an etsy fee, like eBay. Sometimes, I paid directly through Paypal to avoid the fees. These are just small-scale individuals. I never had a problem until now. Paypal only lets you dispute transactions for 45 days -- who knew? I'm not sure etsy could have done anything, even if it had been through etsy. I'm really bummed.

I'm not even sure what to do. I have a phone number and an email, but I don't even want to call. If she sends me a half-butt veil, I can't use it anyway.

I'm just going to have to call this one a loss. This is a crying shame. I had so many FANTASTIC experiences on etsy. It's the only way I could have gotten the invitations, guest book, ring pillow, cake toppers, and so on that I wanted. I am so grateful for the handmade art I have been able to buy. I love love etsy. And then there's this scam artist. Ugh.

More Bad News, Maybe a Solution

A few weeks ago, some business equipment was stolen from a friend's condo. In retrospect, Friend believes he may or may not have left his door unlocked when he went to work. The locks are very elaborate and there's a doorman, so sometimes he just left them unlocked. Not anymore, obviously. Friend, as before, is wracked with guilt.

Señor Dog went to replace the equipment, and that exact kind does not exist any longer. To meet the business needs, he had to upgrade. The replacement cost is about $6,500. In our new joint tax bracket (2009), the write-off is higher, probably closer to 38%, taxes and self-employment. So, the replacement cost is about $4,200.

Friend feels so guilty. The equipment is very distinctive, and it was custom. He called a few bigger pawn shops without success. If I were a pawn shop, I wouldn't be too eager to check for it, and there are hundreds of pawn shops in the city. But hey, he tried. He has also been watching Craigslist and eBay. What a sweet guy.

We've all been constantly talking about it. We've been talking through options. We've been trying to make it work. Friend is just filled with guilt. He feels bad that the business was delayed by his stupidity, and for more delay while Señor Dog waits for the replacement. Friend wants to split the difference for $2,100.

We were really conflicted on this. I wasn't sure what was going to happen. I felt bad taking from him after the robbery, like kicking him when he was down. But now, since it seems that he left his condo unlocked, it feels different. I'm thinking we should just take the $2,100 and put this behind us.

Alluring ARMs

After I learned there are no piggybacks, I was kind of sad. I went to the credit union's website and poked around. If I put 55K down on a 550K house, I would be way over 417. Sigh.

But at the bottom of the page, there were the ARMs....

Something called a "5/1 ARM Jumbo Conforming" at 5.669 APR. And I could borrow all $495. It features "Conversion to a fixed rate is available."

I have no idea what this means or what this strange product is. But suddenly I understand the appeal of the ARM. It lets you buy more! It lets you reach that little bit further to really get what you want.

I really wish we could buy that 550K house--it's such a steal. But the time isn't right if I have to get something called 5/1 ARM Jumbo Conforming. So many problems with that...

No Piggybacks!!

I went to talk to two credit unions and a big bank today about a mortgage. I gave them all the same scenario.

* 550-ish house
* either 10% or 20% down, but I really want to avoid a jumbo loan

Basically, I wanted this arrangement which Jonathan pulled off in February 2008, eons ago in this year's financial market. This arrangement would have allowed me to have a piggyback loan on top of a conforming loan to get the main loan under jumbo, or $417K in Texas.

The first credit union said no can do. They said piggyback loans don't exist anymore. My only choices were to pay down to 417 or to take out a jumbo. Second credit union said the same thing.

I swallowed my pride and went to Bank of America. (WaMu was closer, but I don't do business with them.) Even Bank of America agreed. Oh, and Bank of America had some awful rates! They weren't even close to the credit unions'.

Well, I guess the credit crunch made that choice for me. I can only borrow 417. So we either get to rent longer, save more, or look at cheaper homes.

Changing My Blog Roll

I'm going to be changing my blog roll soon. I'm going to delete anyone who hasn't left me a comment in the over a year I've been blogging. Those blogs have their place, it's just not my place. I don't accept ads, I'm looking for feedback & interaction.

If you'd like to be added, drop me a comment or an email.

A Very Delicate Situation

A couple weeks ago, some of the business equipment got stolen in a freak burglary of a friend's condo. Some Grinch took his Christmas presents and even his cable modem and his liquor. (Even the Who-Hash!)

After the robbery, his condo building installed security cameras. They think the robbers snuck in behind cars on foot in the garage and were using large suitcases, because his biggest suitcase was missing and somebody saw well-dressed guys with big suitcases.

His insurance won't cover it. They won't even cover most of his stuff because it wasn't documented. Who documents their Christmas presents and their fancy liquor? Was he supposed to take a picture of his nephew's Nintendo DS before wrapping it? Seriously? Anyway, he will be underinsured for his own stuff. Our renters' insurance has a 5K deductible. Thus, the equipment is not covered. At all.

The total value of Señor Dog's stolen equipment was $4,800. OUCH. Assuming about 30% write-off including self-employment taxes and income taxes, it is about $3,400. The accountant said she'll know the exact figure later this month.

This is one of Señor Dog's dearest, oldest friends. This friendship is invaluable to us. But now we are forced to mix the friendship with business. It feels awful, but he has to write us a check for some amount, and we have to decide what is fair.

My first instinct is that $3,400 is fair. But the robbery was a crazy, freak thing, so it doesn't seem fair. He can afford the $3,400, but he's not rolling in money. It's a lot of money. We're going to have to all sit down and just talk about this. I think it's the only way to put it behind us.

So, how much is fair???