Filler, Fluff, and Drivel

A lot of our friends and family are recently retired, being Boomers, or are looking at it coming down the road.  It's best to be prepared for such a big life change, and being prepared starts with being accurately informed.  Woe to him who tries to reach such a state by reading, over time, dozens of articles in media such as magazines, the internet or from broadcasts.  What you will find is generalized to the point of uselessness and will only confuse you with reference to things as how to use short term bonds in your investment/retirement income strategy.  If you just have a pension and/or a 401(k)/IRA, and have not been playing the investment game actively with a broker, you don't even know if you have those or not, or how much or what kind. And the volumes of printed information your IRA provider sends to you will never give you those facts.  You're sent thousands of words and numbers and percentages of this and that, but no specific information that would be useful.  Ever.

You do need to know some very important terms and figures in order to proceed that you will never get from the popular media, because once you have those you can use the internet to educate yourself.  And you must, because ignorance in general or an ill-informed mis-step in particular can cost you big time.  An example is called for here -- the one which spurred this post. 

Most people know you must begin to take money out of your plan, in a "Required Minimum Distribution," as it's called, beginning at age 70 1/2, whether you need to or not.  That is because the purpose of an IRA is to provide income during your retirement, after all, and not to be a permanently tax-deferred savings account to pass down to your heirs.  I have always wondered what that amount would be and the rules about how to comply, so I've waded through countless articles trying to find out in advance.  It's been like wading around in a vat of marshmallow fluff.  It took until a few days ago for one writer to slip and actually mention the specific term which would allow me to search for the answer:  it's the "IRS Multiplier."  With that little gem, I found the instructions and the chart (on www.irs.gov) which explains, as Clarissa did, everything.   And on one concise page.  Note to Vanguard (and the rest):  you can do this, too.  It looks like you must have a reason not to let us amateurs in on How Things Work.  All the writers say to consult your tax advisor or financial planner. You might as well be advised to stick your hand in the crocodile's maw.

Lost in trying to understand how to use two types of depreciation and/or expensing when preparing my tax return due to having a rental property, I once ignored my own advice and best instincts and consulted a tax advisor.  That genius missed my two biggest deductions and I had to redo it and submit an amended return the next year after ruminating a while over the large amount that was, uncharacteristically, owed.  If there's information out there, in plain English, about how to properly figure depreciation yourself, I sure could not find it.

Many retirees are urged by those "advisors" and "planners" to keep or get a mortgage and put the amount that would have paid it off into investments -- often annuities -- instead.  Articles in the media do this all the time also.  They call such a move capturing "opportunity cost," which sounds impressive, but it's a terrible idea, and really just a device to generate fees.

And would Grandma lead you astray?  I'm talking about the single worst source for financial and real estate guidance:  AARP.  I have no idea why we're members, except that we must need more junk mail pushing their insurance, cell phones and Rascal electric scooters.  Those 10% discounts on some things like bus tours or bad chain motels must have been the reason for giving in to their long campaign to sign us up.  AAA has those, and more we can actually use locally, along with actual services like towing (since we're avid collectors of nails in our tires, we've used it several times.  And if you actually follow any of the advice in their publications, you're being played for an idiot.

The financial world is like a casino.  No clocks, no windows, a layout like a rat maze, and no indication how to find an exit that doesn't dump you in the trash bin area.  Getting out with your money in your pocket is not the desired outcome for you, dear consumer, in either world.  Real estate ads for new developments sell the sizzle while being short in the specifics; in all the advertising you won't find figures and facts they would prefer you don't know until it is time to sign those papers.  I tried to find out what the HOA fee is for a new village style development outside Mechanicsburg, PA, called Walden (oddly, there's no pond) just to see if that information was accessible.  Guess what: that number is nowhere to be found.  I would be more interested in doing business with people who were up front about the essentials, if I were in the market for their product, but that is not how things are done.  You must enter the selling zone to find out more.  Smiling faces of models and puffy white clouds aplenty in the ads and brochures, though.

What if people were well educated about finance, housing and even the best choices in education itself, during their student years?  Or the popular media became a reliable source of real-world guidance? Wouldn't big and small business welcome rational, informed customers who weren't clueless deluded suckers?

What's with all the laughter?

 

It's Come to This

Remember those Sinatra songs, "September Song" and "It Was a Very Good Year"?  I always think of them as autumn falls into winter; the progress of the year is such a clear microcosm of the progress of our lives.  You do have to work at it and maintain some objective self-examination for it to be progress in the other sense of the word, but time and change will move along with your active cooperation or without it.

They say your brain doesn't really reach maturity until your 20s, despite your conviction at the time that you're a fully functioning adult and probably know more than anyone younger or older.  As your physical plant and senses decline over the decades, your experience (if you're paying attention) just slightly makes up for the losses.  And your tastes change, which is interesting to observe; your political views almost always do too, which is sad and not flattering to your supposed more mature intelligence.  Can't win them all.

As a child, you probably liked sweet flavors and bright colors; an older gentleman finds that more complex flavors, deeper colors, and tradition suit him well.  Wine Spectator magazine has been going on about the recent stellar vintages of Port wine, which for some reason I now wanted to learn about (uh oh, old brain at work, I observed) despite never having given it a thought before.  So, I got a bottle after a little research, and liked it very much, thank you.  Not one of the $100+ ones, aged 20 or 40 years, but I would like to try that someday. 

Much like with the whiskies, there are many varieties and many ways to make it.  The art of blending is passed down; devotion to art and care and knowledge is required.  Port is racked, aerated, and blended with old vintages at different times during its often long maturation.  I decided to try the Tawny first because it is aged in oak barrels rather than in bottle like the Vintages (there's also Ruby and White and other subvarieties).  Thirty types of grapes can be used to make port, but it is mostly from two Tourigas and three Tintas, and all from Northern Portugal's Douro Valley.  And if you become a connoisseur, you can now purchase two leading examples of the 2011 vintage which are not supposed to be opened until 2030 or 2040.  As a senior's, not a youngster's, evening pleasure, I'm not sure how that timing would work out.

Age appropriateness has its limits, though.  I'm not going to get a Cadillac, chest-high pants, or on a televangelist's mailing list!  As the Most Interesting Man would say, choose carefully, my friend.

 

Land of the Lost

We sent a wedding present, hand made by a local artist, to our nephew and his new bride in Tampa a few years ago, and it never arrived, went to the wrong address or just disappeared from their doorstep.  A while before that, we sent a valuable book to a San Francisco address, and the same thing happened.  The pattern changed in the last few weeks when we sent a magazine, containing a well-illustrated article on Scotch whisky to our friend Gene in Richmond, and although it also disappeared in the mail, it was not in itself valuable. 

We never found out what happened to the two previous packages, despite trying to follow the tracking, but the Amazing Journey of the Magazine in the Manila Envelope to suburban Richmond can now be told!

Tracking service for a "media mail" package costs a little extra, and comes included with a Priority shipment.  Despite having found that queries to the tracking service doesn't always, or often, solve mysteries about disappearances, this time DW (dear wife) got her hackles up and decided to go all Sherlock Holmes on the USPS.  She found that the last record of it was when it was scanned here at the local post office on October 27.  Several phone calls and e-mails over time showed that it had arrived at Jersey City, NJ on November 23, and then at Capitol Heights, MD on November 25.  Today it is at Henrico, VA -- mere miles from its destination --and should, unless Fate takes a final, deadly swipe and ends the journey at the last moment, be in the recipient's hands tomorrow.  USPS, mess with DW at your peril!

(Closing sound cue:  the Hound of the Baskervilles howling across the foggy moor)
 
 

Numbers Don't Lie

While looking a few things up for the last post on the ubiquity of advertising, I tried to find a good estimate of the number of ads, on broad average, we Merkins are bombarded with every day.  There are studies, going back decades, but the results ranged from 74 to 600.  So I couldn't really use any of those figures as they are all over the place.  Other than Mr. Silver's accuracy in surveying voters before the last presidential election, surveys and studies are often so biased by their purposes and agendas, as well as being compromised by small samples, that you might as well pull numbers out of a hat.

If you're paying attention, you can likely figure out what is going to happen yourself.  But people will try to make things happen their way by misusing numbers at every opportunity.

Let's look at a corner of the business world that is somewhere between the financial sector and used cars on the shadiness scale: hotels.  As you, my longtime reader, know, I had the eye-opening experience of working for a Marriott franchise hotel for five years as chief engineer.  Number one number: send $5000 a month to Marriott for the franchise fee.  With business travelers in the winter and tourists in the summer often filling the place up, as well as a convenient and safe location, that was no problem.  I watched my departmental budget numbers, and justified overages or highlighted under-spending with the best numbers I could, not made up but from the actual prices of parts, supplies and the probable life and usage level of each.  No problems until we were sold to a real estate investment (cough, exploitation) firm from Florida.  Then, my new budget according to those shiny, tanned folks with a resume of white collar crime and a stash of drugs in the Mercedes arrived, with numbers that did not correspond to reality at all. 

I.E., commercial washing machines and dryers work nonstop at least two shifts all day, every day, at hotels, and the parts are quite expensive.  If you buy exotic imported machines (which I would not have done), the price for anything is always several hundred dollars apiece.  My new laundry machine maintenance budget was $40 a month!  And soon enough, we received the instruction that profits were to be increased by double digit percentages monthly, while expenses were to be reduced similarly.  In what world is that possible? We had an 11-building campus, 5 acres of grounds, three parking lots, all of which when new might have squeaked by with a lower budget, but at halfway through its life and having been notoriously badly built (my predecessor said he saw them cutting the 2x framing lumber with chainsaws, and there were gaps in some roofs), it was a no-brainer that maintenance and replacement was going to get more expensive, just as with anything over time -- roads, buildings, cars or even your own self.

The actual amount of the fees and charges levied on your retirement or investment accounts seems to as closely guarded a secret as any of Merlin's spells or potions, especially if it's a 401(k) from your employer.  It's a complex arrangement, designed to obfuscate, like the closing on a home sale or buying a new car -- but at least in those two situations the numbers are sprung on you at the last minute, not off in a fog somewhere.

Other number games, past and present:

Remember when Secretary of Defense McNamara said that by any quantitative measure, we should surely win the Vietnam War?  That was what he was going by, and it was completely irrelevant.  But he had also been head of Ford, so he must have been an authority -- and highly educated authorities must know their facts and figures better than we ever could, right?  Numbers are only one tool, not the only tool, that is necessary to understanding a problem or situation.  Recently, I saw a program on the war where it was stated that 300,000 North Vietnamese turned 18 each year, and you can bet most, not just a few, were drafted.  That figure may be just pulled from thin air, too, but it's a number that we never heard at the time.

In the current noise about the Keystone XL pipeline, the usual suspects are claiming that its construction will mean 300,000 jobs.  Mmm hmm.  First, figures like this, hyped in the media, are made up.  An earlier estimate, when the project was more in state of limbo, was for about 35 to 350 full-time jobs after it was built.  And my numbers sense tell me that's probably a fanciful highest estimate, because the Koch Brothers and their buddies do not go in for pipeline maintenance (since there are 5000 leaks or breaks a year or more due to postponed or ignored maintenance requirements).  There will be a lesser number of on-call contractors, not legions of full-time employees gleefully spending their paychecks and enjoying their wonderful benefits in Small Town USA.

A few years ago, Hershey dropped two new products because they did not meet projected figures.  Both were selling and profitable, however, and many things take a while to develop an audience and grow; remember "Seinfeld" was ignored its first season, and "It's a Wonderful Life" was a disappontment at the box office.  But someone blinded by numbers pulled the plug, and all that R&D and production run-up was wasted.  Mr. Hershey discarded a lot of products as tastes changed over the years, too, but he had intuition and instincts that his successors probably disdain, while poring over the numbers.






















 

Post No Bills

Some tourists notice these old signs in Rome and think they are street signs, since those are attached to buildings also -- and wonder why so many streets have the same name.  But both simply say, "post no bills" and usually look like they have been there a long time (well, like most everything else there).  Note the statute cited on them.  I found that the deal is, if you pay a fee and install the sign, people must leave your wall or building alone forever when they're putting up posters, signs or advertisements.  Unfortunately, the out-of-control graffiti sprayers can't be stopped (I saw a pair of massive 16th-century wood doors covered in squiggles of silver paint -- I guess we don't have all the idiots on this side of the ocean).

What if we could, in some similar way and under protection of the law, keep ourselves inviolate from invasive "bills," that is, marketing, advertising and all-pervasive commercial noise?  It's said lobbyists spend around $1 million a year to convince the Vermont legislature to allow roadside billboards -- it's one of the few places that believe that kind of pollution has no place in what they consider a nice-looking countryside (we'll agree with them on its quality).  We travel on Route 581 a lot to do our local business, and I can hardly believe how many billboards are on either side, blocking, almost, a view of the sky.  But gigantic advertising has rights that we residents do not.  The city of Santa Barbara, CA, keeps them at bay, along with other kinds of big, gross commercial signage.  They have a lot more to lose when it comes to obliterating the scenery than we do, but I do envy them and the Vermonters.

Maybe there is no causal connection, but in an age of hysterical, relentless marketing, in your eyes and ears and on every square foot around you, we have people losing it and spraying others with bullets or killing themselves.  The news and broadcast programming is mostly, "we'll be back, stay tuned," because most of it is promos and ads -- over a dozen in a row on cable stations.  When they start, I (and I hope others) search for something, anything, on another channel that's not trying to sell me cell phone service, cars, furniture of Gerber child life insurance.  How many ads are inside and outside a city bus?  Your mailbox is mostly full of...what?  An internet page takes quite a while to load because of all the ads, some of them with motion-sickness inducing shaking and jumping.  I "x" them pretty quickly.  The mute button on your TV remote may be the modern invention that has benefitted our mental health the most. 

And it's all lies.  You can ignore every bit of it and never miss one useful thing.  A blogger checked out the math on that Gerber life policy, for example, and guess what, it's not a good deal.  As soon as reviews showed up on the internet, there were paid shills and "groomers" (like ww.Reputation.com )  moving negative reviews about a company or a product to the bottom of the search results and pushing the positive ones to the top places.  Not only search engine optimization, but Google itself, controls what you see and can find.  The fact is Google and Yahoo allow known scammers to advertise with slick come-ons when what they really want is your credit card number or other information to screw you with.  If there's a "trick to a tiny belly," it's not going to be found by clicking on that flashing ad during a Google search.  You need a lot more carefully tuned b.s. detector and cynicism than Joe Average.  It's not enough to possess just good common sense, but you always, at every waking moment, need that at a bare minimum.

Imagine you were living in 1750.  There were other concerns, like Indian raids or bad teeth, before you, but can you imagine no billboards along the road and no screaming ads dinning your ears or blinding your eyes?  Well, everyone would look like a Tea Partier, but still...






















 
 

It's Tempting

What you find irresistible changes over your lifetime, somewhat.  I, like many others, could not for years resist buying a beckoning book or record, but then I stopped cold like a successful ex-smoker when I realized enough is enough, already.  Other favorites will never leave your desirous gaze, but you can leave it at the gazing stage.  If I had a nickel for each time I've resisted the siren song of the bakery, I could probably well indulge other wants.  I wonder if one descriptor of character is how you act around cookies... Dark chocolate has grown on me to where now I can't resist it nearly as well as that scone.  It's always something unless you're internally as content as a Buddhist monk. 

Sometimes it works to give in to that tempting something just once in a while, which allows you to enjoy the warm feeling of virtue also, knowing you're in control of the situation and not the other way around.  Little things are easier, as such a lapse is easier to correct.  Let's say you have been jonesing for a boat or motorcycle or vacation condo so long that once it's affordable you stuff caution in the closet and make the plunge.  The best way to prevent this scenario is to admit that the law of hedonistic adaptation is like all those other laws of the world or physics, that is, it's always there and will hit you with an unpleasant dose of reality soon enough.  The thrill of finally possessing that shining something you've been wanting fades quickly.  You must either trade up to regain that feeling or continue the excess in some other way; hedonism, or feeding your desires, is a process that waxes and wanes like the moon, and eludes your grasp just like that silver satellite in the night sky.  Remind yourself before any decision that anything you own owns you more.

Will Rogers said that the road to success is dotted with many tempting parking spaces.  Funny, today we walked through a parking lot next to a tony golf resort, and the whelled hardware on display was any materialist's fever dream.  I was curious, but not envious.  A rear-engine Ferrari had its window down and the owner's EasyPass just lying on the console.  Did he really just take his quarter-million dollar possession so casually?  No doubt he had several other steeds in the stable. We also saw a super-high-end Mercedes, an S 550 (there were a few other letters, but I forget).  That brought a wry smile, as I'd read a remarkably frank article about S-series Mercedes recently, in which the author detailed the insanely complicated and expensive technology contained therein.  For example, you can't jump someone else's car from its battery, as its setup is so exotic that if you do so, you will short out your S's electrical system.  He also mentioned that the ignition switch assembly, which does not fail on your affordable Toyota, will probably do so on the Merc and cost you $500 for the part alone.  The foregoing is a wordy way to make the point that giving into expensive, blingy temptations is just like the mouse going for that piece of cheese in the trap.  It's going to cost you big time.  It's not going to be as much fun, by a long shot, as you thought it would be.  Walk away.

But you can give yourself a hall pass once in a while, if your house is in order.  Or rather, if your house is paid off, with no other debts.  That is the essense of freedom -- owning yourself and your assets outright -- and I think freedom to do or not do what is right for you, not what is temporarily distracting for you but really right for the lender, the corporation or the employer, ought to be the goal of your efforts in life. 

I can't say (like most of you, admit it) that I had any clear idea about what was worth getting obligated to when I was younger.  A hard road it is, Yoda would say, to learn only by experience.  A little quality insight earlier on in life's journey would have been great.  At least we can say the lessons eventually penetrated our hard heads, and temptations are seen for exactly what they are now, and a bad bargain is quite obvious.  A $100,000 loan on an RV when you're 68 years old?  A boat (they're the only thing just as bad as an RV -- well, and an airplane)?  An $800,000 house with about 70 windows and a lot the size of a big tarp like we saw next to the golf course today, built out of the same crappy materials as everything else today?  A car that depreciates 50% in five years, and costs as much as that boat to maintain and insure?  Those baked goods may ruin your health eventually, but choosing one of the above will put you under a lot faster.  Better work 70 hours a week, and lie and cheat, so you can get into one of those deals prisons. 

If you spend your days in the house of Desire, you will be his slave.

I almost bought one just like this once and am so glad I didn't.  Boy, was it fun to test drive, though.

 

The Getaway

They really are that polite.

So, we went to Canada and didn't see one moose!

Despite the lack of 1000-lb. wildlife (in the urban area of the Niagara Peninsula, so that's probably a good thing), we had not made a neighborly visit across the northern border since the late 70s and thought it was past time to do so.  Back then, we went to Montreal during a beautiful summer week, discovered Salade Nicoise and the beauty of hearing French spoken all around, then (pre-GPS) got hopelessly lost in its southern suburbs, but had a great time overall.

No such good fortune with the weather this time, but everything else was as delightful as before.  We lucked into a 29th floor room at a Marriott looking directly at Niagara Falls, which is quite a view to have both at night (with the illumination by giant lights and the weekend fireworks) and in the morning.  And not only had the iPad GPS directed us without fail, but some Trip Advisor internet research allowed us to escape the punishing $25-a-day parking fee by using the nearby casino's garage at only $5.  And gas prices are down while our aging car is getting better mileage all the time (why?), and the whole thing was arranged through a thrifty Groupon offer.  It pays to keep up with things.

Speaking of which, we didn't exchange domestic cash for Canadian, but instead relied on the VISA for everything, and that worked out fine.  We brought back the legal limit of wine (which isn't much), but the duty really isn't very high even if we had gone crazy.  The only problem there is that it's illegal to bring it into PA, so if on the very off-chance that we'd lost it to PA's finest, I'd rather lose four bottles than 40.  We did bring back more internally, starting with our waiter Brian's recommendation of a rose from a family operation named Trois Femmes.  We made sure we had one of Brian's tables thereafter, in gratitude.

Tourist season was pretty much over, which made getting around quite easy.  Despite the U.K. heritage, they don't do that wacky driving on the left thing, and the road signs aren't undecipherable European symbols.  Not only that, but the drivers actually obey the rules, yield to pedestrians, and don't yell and honk.  A Philadelphian would be dumbstruck.  But he'd still run the pedestrians down.  I guess there must be some disagreeable people somewhere in Canada, but I challenge you to find one.

 Unlike beach towns in October, though, all the restaurants were still open.  If you're a steak fan, you'd love downtown NF; I counted at least 14 steak places just in the neighborhood.  We, however, had our culinary sights set on getting to a Tim Horton's (Canada's Starbucks), and despite the one by the Falls being closed, you can always find another nearby (just like Starbucks).   It was too early for lots of heavy Canadian-style winter wear, but we felt that hanging out there gave us some genuine northern exposure.

You wouldn't think that a place with such trying winters would be a big producer of very fine wine, but the Peninsula is indeed that, so we set out on the one nice day to find out about it (get into your Eastern Canadian pronunciation here; it's aboot).  Both the Trius and Peller Estate establishments have lovely tasting rooms and impressive restaurants.  We took the tour at the latter to find out about (there it is again) ice wine.  It's a specialty of Canada and Germany, although produced in many other places with an appropriate climate.  After the first freeze, the winery calls the people who have signed up to come immediately and pick the now-frozen grapes all at once and barehanded (they do switch off on jobs, so no one is out long enough to get frostbite!).  After a taste of both their Vidal and rare Cabernet Franc ice wines, I'm very glad they do all that, but I'm surprised they get people do it more than once.  There is very little juice in the frozen grapes, the handling is labor-intensive, and it all depends on weather and timing, so the result is expensive and comes just in the little skinny half-size bottles.  We're saving ours for the holidays to go with that great Collin Street Bakery fruitcake  (and I don't want to hear from you fruitcake haters out there).

 

Old Town, N.O.T.L.  Like Williamsburg, with the occasional stuffed moose.

Last was a visit to a tasting shop in the charming Old Town area of Niagara-On-The-Lake, just a few miles past the wineries, where we discovered that the Wayne Gretzky wines were even better than the wonderful ones we'd sampled earlier.  Who knew?  If you ever find it near you, don't pass it up.  You really can't go wrong with any hockey/beverage connection in Canada, eh?



Canadian-flavor joke we heard at the dinner-theater production, "Oh Canada, Eh?" --

How are the Titanic and the Toronto Maple Leafs similar?

-- Both looked pretty good until they hit the ice!