How does it feel ...

Little Haven just turned two. As my dad always did when I was growing up, I asked her, "How does it feel to be two?" She responded, "tall". He he, kids...

Inflation and Financiers

While reading Can Friedman's Money Rule Stabilize the Economy?, I read these paragraphs:

An increase in the money supply out of thin air sets in motion the so-called "counterfeit effect." It lays the foundation for nonproductive activities, which consume and add nothing to the pool of real funding or real wealth. These activities divert real funding from wealth generators, thus weakening their ability to grow the economy.

The diversion occurs once various individuals that are the early receivers of newly printed money are able to push the prices of goods higher. Wealth generators that didn't receive the newly printed money discover that they can now secure fewer goods than before.

Since the Federal Reserve makes money out of thin air by "buying" treasury securities from the central banks, the central banks are the first ones to receive the newly minted money. It seems that others in the finance industry would receive this new money relatively early compared to the rest of the country. So, to what extent does the counterfeit effect account for high wages in the finance industry? It would be interesting to see a study quantifying the size of this effect.

Self Insuring for Disability

I'm a pretty cautious person (one might even say risk averse), so I've thought a fair amount about how to provide for my family in case of accident or injury. While preparing firewood this year (as I do each year), I dropped a large log on my left hand. For about two weeks, I wasn't able to type with my left hand. It made me think a little bit harder about providing for my family in the case of disability.

Disability insurance is much too expensive. My goal is to have disability savings worth at least 6 months living expenses. I could save that money in a money market fund, but I know myself and that's too easy to spend. Wherever I put this savings should meet the following criteria. It must:

1. be difficult to spend
2. safe through inflation
3. be easy to sell at any time
   
4. predictably retain value
5. have a low cost of ownership

CDs don't meet the second or third criteria. Stocks don't meet the fourth criteria over short time intervals. Corporate bonds don't seem to meet the second or fourth criteria. I'm morally opposed to Treasury securities. Gold and silver have a fair amount of market volatility, so they might not meet the fourth criteria in the short term either. Precious metals don't seem inclined to the dramatic price swings of stocks though, so they seem a little bit better for what I have in mind.

My current inclination is to use the savings to buy gold bullion from a reputable online dealer. If push comes to shove and I need the money to pay living expenses, I'd sell it piece meal on eBay. That's because the eBay price is routinely higher than the spot price.

So what do you think readers, is that a good way to go? Have I overlooked something important?

Sound Financial Management

I'm fascinated with what people say they will do if they win the lottery. One answer I heard recently, from a clerk in a convenience store, was, I sure wouldn't be working here. The part that confuses me is why she is still working there if she doesn't like it. Why is she waiting to win the lottery when she can solve her problem right now? This particular convenience store is an area of Wyoming where jobs are plentiful. She certainly could find a new job if she really wanted one.

Of course, there are some dreams that one may not be able to fulfill without a financial windfall (more likely obtained through hard work and ingenuity than gambling). For instance, I know a man who grew up on a ranch and works in ranching today. He mentioned one time in passing that if he were rich, he'd buy a particular ranch that he knows of and improve upon it. That particular dream is much harder to accomplish than the earlier example of finding a new job.

RateItAll has an interesting list, where people vote for the things they would do if they received a financial windfall. By my count, only 16% of the top 25 answers require a lot of money. The rest are possible to do right now. Of course, many may already be doing the things on the list. They might just be saying, I'll continue my current course but on a larger scale.

This morning, as I read about people winning the lottery, I realized that the question What would you do if you won the lottery is a good one to help set financial priorities. One's net worth isn't as important as the goals one sets. If you have a prioritized list of financial goals, you can pursue those goals regardless how much money is coming in. Sure, some of the lower priority items may never be accomplished during your lifetime, but that doesn't mean you should forget those dreams entirely.

This statement by N. Eldon Tanner summarizes it pretty well (emphasis added):

I have discovered that there is no way that you can ever earn more than you can spend. I am convinced that it is not the amount of money an individual earns that brings peace of mind as much as it is having control of his money. Money can be an obedient servant but a harsh taskmaster. Those who structure their standard of living to allow a little surplus, control their circumstances. Those who spend a little more than they earn are controlled by their circumstances. They are in bondage. … The key to spending less than we earn is simple—it is called discipline.

It seems that these principles have become less popular in recent years. The Federal Reserve's loose-money policy of the last several years has tempted many to use cheap credit to live outside of their means. Lew Rockwell's commentary on Bush's economic address, offers a telling contrast between the two philosophies of financial management, starting with a quote from President Bush:

As uncertainty has grown, many banks have restricted lending, credit markets have frozen, and families and businesses have found it harder to borrow money. Imagine that! We might have to live within our means for a bit.

I suppose the take away message is to prioritize your financial goals and accomplish the ones that are within your means.

LDS Online Tech Talk

The Church held it's first online tech talk tonight. The Church's CIO (Joel Dehlin) conducted the meeting. He started with a description of some of the ways the Church is currently using technology such as:

• Stake presidents may request that broadband internet be available in the stake's meetinghouses. The Church provides a small network appliance which provides a firewall, router and internet filtering software so that the meetinghouse internet connections can be relatively free from undesirable content.
• Audio conferencing facilities for bishops and stake presidents to facilitate meetings over large geographic areas
• Video conferencing facilities for stakes so that stake meetings can be broadcast to other meetinghouses
• A new website for stake and ward clerks that provides useful training and troubleshooting info

Facilitating members who would like to volunteer their technology talents to the Church was a main theme of the talk. The Church has established various resources such as a wiki and online forums to facilitate communication among the tech-savvy members.

The most exciting announcement to me was that the Church has a subversion repository set up to host the Church's open source code. To access the repository, you have to create an LDS Account. The link given in the webinar slides seems to have been incorrect (or not active yet), but visiting LDS Account should get you there. I just signed up for my account and it looks like the account information hasn't yet propagated to the svn server. I'm still getting a "403 Forbidden" message. I'll keep trying. Now the race begins: who can set up a Git mirror of that repository first?

Joel suggested that members will most likely be encouraged to work on administrative software such as that used by the wards, stakes and members. I'm waiting for the day that the MLS source code is made available. Just last night, the Bishop and I discovered a quirky behavior when reconciling the unit financial statement. It would have been nice to go home and verify our suspicions against the source ... and then send in a patch to fix it.

The final segment of the broadcast was a question and answer session. Here are some questions and answers that I found interesting:

• What are the plans for the local unit websites? They current only serve the United States, but they will eventually be available worldwide. In answer to another question, Joel indicated that maps.lds.org will be expanded (perhaps integrated with ward websites) so that users could see a map of all the members in their ward. He said that the map might also show the ward boundaries.
• Is the Church migrating from Java to .NET? No. Java is still the internal standard. That's what most of the infrastructure is built to support. .NET is used when it suits the problem at hand, but there are no plans for it to replace Java.
• I forget the question, but Joel said that the Church is developing secure web services so that developers can create their own applications that interface with these services.
• New software was recently released to help the worldwide mission offices. It helps track and pay the rent on missionaries apartments. It also has a system to help mission presidents during transfers. It provides a graphical way to track which missionaries are serving in which areas and with which companions.

Overall, I found the first online tech talk very informative. I'm excited to take a look at some of this new infrastructure.

Don't Hang up on Telemarketers

My family gets about 4 phone calls from telemarketers each day. Our typical
routine is to hang up as soon as we hear the recording tell us that we are
"$10,000 into credit card debt" or our "factory car warranty has expired".
My new approach is to simply put the phone on the counter and let nature
take its course. I'm no telco genius, but this probably ties up
one of their phone lines for the duration of the recording. If I get really
lucky, it will eventually patch a person through whereupon: "Hello ... hello ..." and they'll get nothing but silence. Ah, sweet justice!

iPhone, You Almost Have Me

Now that the iPhone App Store is live, I can follow up on my earlier post about why I don't have an iPhone. Here's my original list of missing software and how the App Store has provided (or not) for each case.

1. To-do list - As expected, OmniGroup release a version of OmniFocus for the iPhone. It's listed at $20 and looks pretty cool. The location aware to-do list feature is probably one of the coolest and most useful features I've seen in an application in a long time.
2. Offline scriptures - there are 11 Bible applications ranging in price from $0 to $30. Some of them look good, but nothing yet that has all the LDS standard works
3. Password tracking - SplashData has released a version of their SplashID application for the iPhone. It costs $10 and looks like it will accomplish everything that I want.
4. Financial tracking - although I don't really need this anymore, SplashData also released a version of their checkbook software, SplashMoney for $10.

So for about $30 more than the cost of an iPhone, I can accomplish the main tasks that I use my phone for. Google and friends had better hurry with their Android phone or they'll lose me.

Why I Don't Have an iPhone ... Yet

I've been an avid Palm Pilot owner for the last 8 years. Every couple years, after I wear out another Palm, I replace it with a newer one. The buzz around the iPhone has me very interested (after all, it has 2 of the 4 sensors that I suggested back in 2005.) There are still some important things I use my phone for that the iPhone can't do … yet. Once the iPhone has these things, I'll consider upgrading:

1. To-do list - more than anything else, I use my phone to keep track of what tasks I want to accomplish each day. The iPhone comes with no to-do application. Boo! (Perhaps OmniFocus for iPhone will solve this one for me)


2. Offline scriptures - I regularly read the scriptures where there is no wi-fi connection and no phone connection. With Safari on the iPhone, I might be able to install raw HTML files for the scriptures


3. Password tracking - I have too many passwords to keep in my head. I currently use an antiquated Palm application to do the job. Certainly there will be something like this for the iPhone, but I haven't seen it yet


4. PMTxl - track my checking account. Now that my wife and I use Mvelopes to track our personal finances, I don't use the Palm anymore. (By the way, Mvelopes is the best personal finance program I've ever seen. It perfectly matches my mental model of flowing water budgeting).

It's been intriguing to look over my old PDA Wishlist and compare it to the iPhone. Only the FM transmitter, thermometer, barometer and bar code scanner are still missing. Give the industry a couple more years and some of them will be available.

Audio Magazines

I've found it really difficult to make time for reading magazines lately. Occasionally, the time-tested technique of reading on the loo has worked well. I've also tried listening to audio magazines. My church publishes MP3 files of all their magazines for free download. I often download a couple articles onto my phone before running during lunch break. That works really well. Are Forbes, Fortune or Popular Mechanics available that way? If not, they should be.

Walmart receipts

I would really like a way to get digital access to receipts of my purchases from Walmart. Each month, when we trek to town for our monthly grocery trip, we come
back with a really long receipt from Walmart. I want to take that receipt, visit
walmart.com, type in the barcode numbers and have it bring up a detailed,
downloadable inventory of things I bought in that particular purchase. It would
be great if I could get a CSV file something like this:

   Name,SKU,Category,Quantity,Price,Total
   "Great Value Whole Milk",12345,Dairy,4,2.30,9.20
   "Oreo Double Stuff Cookies",87443,Dessert,1,3.25,3.25
   ...

Here are some reasons I want that feature:

• Improved grocery budgeting. How much money do we spend on dairy foods?


• Tracking price changes. Is the $30 cleaning supplies budget still reasonable or has Comet been increasing in price lately?


• For business expenditures, I could write a program to automatically create ledger entries in QuickBooks categorized into the appropriate accounts.


• Things I haven't thought of yet

A CSV file couldn't quite capture all the data that's present in a typical receipt, so maybe some other format would be better suited to the task. The format isn't as
important as that I can have access to the data.