Very sneaky

Has anyone else recently noticed that prices on iTunes have suddenly changed? What once was $0.99 across the board has quietly risen to $1.29. At first, I thought this was just for the more popular songs, with artists trying to cash in on song popularity. But then I went to download "California Dreamin'", and noticed that it, too, was $1.29. Now, unless the Mamas and the Papas are making a sudden comeback, I'm guessing that iTunes is starting to make the jump for all songs.

It's funny, because 30 cents doesn't seem like that big of a deal. But psychology works in strange ways...I really find myself contemplating whether I NEED certain songs, because $1.29 seems like more of an investment than $0.99.

I get that with the cost of living increasing, the cost of songs must increase, too. But it seems a little sneaky. I think I would have been less shocked - and resistant to the price increase - if it was announced on iTunes. Just let me know that things are going to be a-changing.

Save the pennies

My friend, Abby, and I have said for years that there should be some sort of basic money management course that is mandatory for all high schoolers (or even junior highers, for that matter). The basic principle is that few people know the basic principles of saving, of not spending more than you earn, or how credit works.

Forget home-economics, let's talk personal economics. With a little basic education, perhaps our country could have avoided the mortgage and credit situation we now find ourselves in. While yes, you could argue that banks may have taken advantage of situations and people, I also think we are partly to blame. If we would have exercised prudence and some basic principles of spending, perhaps things would have been a little different than they are today.

These classes may sound simple, but they are important in setting the foundation for financial education. Basic topics like: "How to properly use a credit card (ie, a credit card is not a free loan)" and "The latte effect: don't buy that $5 coffee drink if you don't have $5" and "Let's talk about saving: some simple definitions" may be some of the most important classes high schoolers ever take. After all, when was the last time you used a cosine? But I bet you more recently needed a cosigner.

And while our banks may have good intentions to help us save, I think they are missing the boat in helping to change our attitudes. Take Wachovia's "Way to Save" or Bank of America's "Save the Change." These programs, in essence, help you save money every time you use your debit card. For each purchase you make, money from your checking account is automatically transferred to your savings account.

The issue here is that we are propogating the underlying problem in our personal economic culture. I thought you saved money by not spending it. Instead, these banks are saying that the best way to save money is to spend it. Not quite the right message in these economic times.

So we need a revolution. An economic revolution on the most microcosmic scale. And I think it starts when most of us start our first jobs and are beginning to become responsible for ourselves. Mandatory classes in high school might be a good idea. After all, how can our future leaders be responsible for our country's finances when they can't even handle their own?

Good news, bad news

With GM's announced bankruptcy yesterday and the loss of about 20,000 jobs that will come with it, it was nice to hear that Wal-Mart will be back filling some of those losses this coming year. According to a new press release, Wal-Mart plans to fill about 22,000 jobs, some of which will be in Michigan.

I'm not a big fan of Wal-Mart; in fact, I avoid it as much as possible. It's large, it's always busy, I can never find anything, and it takes approximately 3 weeks to check out.

But there are some good things that they are doing, including some environmental things that may have some big impacts. You can't deny that they are one of the largest employers in the nation, and so anything positive they do will have a big impact. It's nice that this announcement comes as a media-painted-bleak time.

It was also interesting to see GM's new PR commercials, launched the same day as their announcement. They are good. It's inspirational. It's patriotic. It's hopeful. I'm not a GM fan in particular, but I'd like to see the American car companies survive...but they have to be able to compete. Hopefully, this means that the American car companies have seen the light and will start to give the American people what they want and give the foreign car companies a run for their money.

Let's see if the good PR campaign can become a reality.

No more investing?

I was reading an article in this month's Atlantic (Why I Fired my Broker, Goldberg) and it brought up an interesting thought, which, admittedly, goes completely against my investing paradigm. However, now I'm wondering if it's time for a complete paradigm shift, given the current state of the economy and how we got here.

To date, my husband and I invest in the stock market, even if indirectly. We max out on our 401(k)s and we invest a monthly amount with our broker. We don't have too much debt, but should we even have any?

Over the past year, we've seen our 401(k)s plummet and our market investments drop. Granted, these are unrealized losses, but for how long will the market continue to drop?

Goldberg argues that only serious investors should invest in the stock market, rather than people using the market to build a future. In other words, only those people who can afford to lose everything they invest should invest. If you're saving for a child's college fund and can't afford to lose all that money, then you shouldn't invest in the stock market.

This goes against everything I believe in. Over the long run, the market evens out and you should expect about a 6-8% yearly return on average. But is this all different in this new environment? 

Goldberg also argues that brokers are bias in what stocks and industries they recommend, sometimes to the detriment of investors (as we've seen in th news lately). So if a broker is recommending a certain portfolio, is it really in my best interest? Aren't they tainted, to a certain degree, by their own agenda? Who can you really trust and where can you get that unbiased information?

Perhaps my husband and I should pull everything out and become debt free. Or, at the very least, stop investing in the market and use that money, instead, to pay off our debts. And then just save in a safer, albeit lower yield, investment. Of course, if I cash out now, I realize those losses, but if the market keeps tanking, isn't it better to cash out now while there's still something left?

Maybe the morale is that we all might need to do something a little different. Maybe investing in the markets is not the best way to go anymore. Is it time for a whole new change in thinking?

When bad things happen to good people

Oh, please, Mr. Stanford. Welcome to this world we call reality.

Allen Stanford, the Texas billionaire whose assets are frozen by the SEC due to allegations of a massive Ponzi scheme, had this complaint:

Stanford said the seizure of his assets had left him with little money or even clothing. He had to fly on a commercial plane for the first time in nearly 20 years after the government took his six private jets.

"They make you take your shoes off and everything, it's terrible," he complained about airport security that seemed to surprise him.

Take off your shoes during security? Lions and tigers and bears, oh my! There are two things I have no tolerance for: stupidity and arrogance. In this case, his arrogance is causing his stupidity and ignorance.

Yes, Mr. Stanford. This is how the rest of us live.

If you can't beat 'em, join 'em

With the recent state of the economy, this twitter was, er, tweeted:


Or you can by a share of Citigroup and have change left over for a small McDonald's coffee. I'm thankful that my husband and I have a steady jobs right now. If only I could just stomach the fast plummet of our savings and 401(k)s.

Maybe it's safer to invest in fries...if only I didn't give that up for Lent!

Girl Power

I heard an interesting tidbit the other day:

For the first time in history, women are about to be the majority in the work force in about a month. This is according to analysts who have been looking at patterns and industries effected by job cuts. More men have recently been laid off due to the nature of the jobs/industries (e.g. manufacturing, labor, etc.) whereas women tend to have jobs that are more representative of services or are working part-time.

So this got me thinking: if this is true, then I wonder if this will have bigger implications down the road, to the benefit of women. In the 1940s, women started to have a larger presence in the work force due to men being deployed overseas to fight WWII and I wonder if that later led to women having the confidence (and men realizing the value that women bring to the workforce) to assume larger roles and later, career paths. Now, if women are becoming the main breadwinners, I wonder if this will lead to an increase in gender equality and pay in the workforce. Perhaps this is the silver lining to the economic crisis we're in - closing the remaining gap between women and men, at least when it comes to careers, especially in upper management which seems to be dominated by men.

Regardless, I think now is a good time to remember that women are classifed as minority group under the law. And this means that women need to help one another, especially when it comes to boosting one another's careers and helping one another rise to upper management positions. No one is more critical than a woman, especially of other women, myself included. But we need to support one another, champion one another so we can become more powerful and confident.

Yes, we should do this for everyone, regardless of gender. But we should especially do this for our own and help one another become the very best a woman can be.

Tough times for the mistress

In these financial times, it seems as though the wealthy are hurting, too. In a recent market research study among individuals with a net worth of $20 million (alas, we did not receive this survey...it must have gotten lost in the mail), it was found that 80% who had extra-marital mistresses were planning on cutting back on their gifts and allowances. 12% said that planned to give up their lovers altogether because of financial reasons.

It seems that these millionaires are curtailing their spending, and their lovers are included. I guess it's harder to hide expensive gives from your spouse when there are fewer dollars in the bank account.

It should be noted that questions about curtailing gifts to lovers came at the end of a longer survey about wealth management. The full survey was administered to 518 people, with 191 opting to answer these "extra" questions. There were some gender differences found, with surveyed wealthy men more likely to curtail gift giving to their lovers than wealthy females. However, because only one third of the survey respondents were female (about 63 total), I don't think this difference is statistically significant.

The full story is here. I guess it's nice to know that the rich, or those in bed with the rich, are suffering just like the rest of us!

It's beginning to feel a lot like Christmas

It is officially December, which means it's now appropriate to pull out the Christmas decorations and start playing the holiday music. While I had previously believed that Black Friday kicked off the holdiay shopping, I am now informed that it was, in fact, Cyber Monday. I've never heard of Cyber Monday before and I wonder if any other days of the week will soon get their own holiday adjective, as well.

Our firm is doing something a little different for its employees this year. Usually, it gives out holidays gifts to everyone (we're a small firm of about 40 people). Last year, for example, everyone got Wiis. Scott and I were excited about this for about a month; neither of us were allowed to have video games growing up, but the novelty of the Wii soon wore off and it's now sitting, dusty, in our living room.

This year, because of the economic downturn and the resulting effect on our communities, the firm is doing away with employee gifts and using that money to sponsor 10 families - 5 families in Atlanta (where our second office is located) and 5 families in Durham. So our employees have been busy playing Santa Claus and it has been touching to see what we have purchased for these families.

That sparked an idea for me and Scott - we are fortunate that neither we nor our families truly need anything. So we asked that we don't exchange gifts this year; instead, we'll use the money we normally would have spent on our families on a Raleigh family that is truly in need. So far, we are only halfway through our budget and I'm amazed by the amount of clothes we've been able to buy for these four children. We racked up on Black Friday, finding nice, warm coats at Old Navy for $30 each. Not only is it so much less stressful, but it also embodies the true meaning of Christmas. And, in the end, we will probably buy so much less "junk."

So this weekend, we're off to buy a Christmas tree and finish shopping for the family. This year, the holidays feel so much more like they should be - filled with the joy and giving of the season.

Deck the halls with turkeys and pumpkins

I get it. Really, I do. The economy sucks and retailers are hurting. But that doesn't give anyone the right to put out Christmas decorations three weeks before Halloween.

A few weeks ago, I walked into Crabtree Valley Mall, only to find workers hanging fake garland from the ceilings and assembling a ten-foot tall reindeer-shaped garland topiary. And I didn't even mention the Santa-land that is now positioned by the entrance of Southpoint Mall. Before you even think about turkey and stuffing, you can now have Junior's picture taken with Santa.

Adpulp has a good article about retailers' strategy for the holidays. It sounds like consumers are cutting back on shopping (although, as I've mentioned before, I have yet to actually witness this is Raleigh). But maybe this is a good thing. Just like when gas prices skyrocketed and we saw people curtail their driving and opt for gas-sipping vehicles, maybe we'll see people reorder their priorities and become less wasteful and less consumption-driven.

Of course, no one wants anyone to suffer or to go without things that they need. But at the same time, there are lots of things we buy that we don't need and which we buy just for the sake of buying or having. Perhaps tightening our belts a bit will allow us to better understand what really matters and to just consume those things we truly need. Not only is it better for our souls and pocketbooks, but it's also better for our environment.

So let's turn off the holiday music and take down those hideous topiaries. Let's enjoy the season for what it is and maybe, for just one year, take it easy on all that shopping.

Financial crisis? What financial crisis?

If I were visiting America from another country, I would cry foul on all the newspaper headlines about America's current economic situation. The images I would conjure up are black-and-white pictures of long unemployment lines, parents stealing bread to stay alive - a la Les Miserables, people tightening their proverbial belt buckels and pulling their money out of banks.

But these images are nowhere to be found. I visited two malls this past weekend (Raleigh-Durham has a lot of shopping centers), only to find them bustling with people, their arms laden with shopping bags, taking advantage of all the Columbus Day weekend sales. I went to Charlotte to see David Sedaris this weekend, only to find the hotel - and concert - sold out, ticket-holders sipping their $8 glasses of wine in the lobby. The restaurants are packed - we had to go to four different restaurants before we found one that could seat us immediately.

Where is this economic meltdown we've heard so much about?

Maybe people are drowning their sorrows in restaurant-prepared meals and retail therapy. Maybe employers haven't felt the tremors of the crisis and have yet to cut their balance, and employee, sheets. Maybe this part of the country has somehow gained immunity. I'm just completely surprised by the reaction.

If I was visiting from another country and never read a newspaper, I would have no idea of the chaos that is going on. After all, even my currency would be weaker against the dollar than it was a month ago.

The Subprime Primer

I thought this was pretty funny and actually did a decent job (I think) of explaining the current subprime disaster that we're in. The only thing that's really missing here is the responsibility of the borrower (but that's another post for another time).

Warning...explicit language is used in the presentation, so keep little children away from the monitor!

div style="width:425px;text-align:left" id="__ss_626325">Subprime Debacle Explained

View SlideShare presentation or Upload your own. (tags: mortgage humor)

Holy Dow!

We live in interesting times, indeed.

I've always learned that you play the stock market for the long haul. That there will be ups and downs, but over a multi-year time horizon, the stocks do well and always trend upwards. Over these past few months, as I've watched our funds lose more and more money, I've had to repeat that mantra over and over: "We're in this for the long haul. We're in this for the long haul."

But the end doesn't yet seem in sight. Another "tumble" in the Dow this morning (I love how analysts use that word, like it's Humpty Dumpty sitting on some wall), falling more than 700 points before regaining 300 of those points.

I'm a little sketchy about the details of the bailout plan. One thing I want to ensure, though, is that government doesn't become too involved in our economy. Government involvement in healthcare, surely. Government involvement in the environment, possibly. Government involvement in the market, definitely not. Our markets to very well and the model is good. Of course, it seems like there are things that precipitated this fallout and maybe there needs to be more regulation of some sort, but we start to walk on some thin ice. I know it's unfounded, but I have these visions of our country becoming this communist state and everything that we once held dear and treasured are memories of the past.

A bit gloomy, I know. The strange thing is, no one I know has felt the effects of this economic downturn. We still go on living our lives as normal, driving to work, putting away money into investments. I'm in Kansas City on a project as I type. Nothing has really changed.

I can't decide if that's a good thing or not.