January 2010

Umbrella Longevity

I work downtown, and when the weather goes bad there is a torrent of wind between the buildings, and umbrellas do not last very long.

I have had several umbrellas in the few years that I have been commuting to town. The first one was a tiny thing about 4 inches long. In order to be so small, it was folded in on itself and then folded in again. It was rather delicate. It only lasted a few months before it came apart.

My next umbrella was about twice as long as that one, about 8 inches. It lasted a year or more and self-destructed only just this week.

I am beginning to see a pattern here, that the longevity of an umbrella is directly related to its length.

I now have a new umbrella, and it is nearly 15 inches long. It is a bit difficult to fit into my backpack, but I am hoping for a bit longer life out of it. I will report back when I find out the results. Stay tuned.

The Cost of Coffee

I got a raise in my salary this year. I was deemed to be an EP (Exceptional Performer) in my performance review, and hence I actually got a small raise. It was a pleasant surprise. Raises are difficult to come by these days, and just having the job is a blessing, much less getting a raise.

However, after they deducted the increased Social Security, and the increased Federal Income Tax, and the increased State Income Tax, and the Truly Increased Health Insurance Tax, my raise resulted in an increase of $2.68 in my weekly pay check.

A cup of coffee where I work now costs $1.87 per cup, so my raise amounts to 1.433 cups of coffee per week. If the cost of coffee goes up, I could be in trouble.

That said, I do have a job.

Blue Cheese

Does blue cheese go bad?

On the package it says, "Refrigerate After Opening".

Why?

When you open up a package of blue cheese, there it is all shot through with streaks of mold. And yet we eat it and nobody dies.

If I don't refrigerate it, will it go bad? Will it get moldy? How am I going to tell?

It was a brave person who first ate blue cheese.

"Look, Martha. The cheese has grown ugly gray cultures of mold all the way through it and it smells funny. What should we do?"

"Why don't we just eat it anyway".

"OK. Yum. Let's call it 'Blue Cheese'".

And don't even ask about yogurt.

Cold Weather - Cold House

It is cold here in New England. It was 7 degrees outside when we got up.

When the weather outside is cold, this old house is cold too. And we have little, localized climates here in the house as well. For example, up here at the computer it gets so cold that mittens are required to keep your fingers warm, which makes typing difficult. Meanwhile, downstairs in the library it is toasty warm. Perhaps the new house will have more even heat.

Or maybe I should stop typing and go read a book.

Retirement Housing

We are in the process of building a new house. This involves spending our retirement on the new house. The reason is that we are currently stuck in a house that is falling apart, so we are forced to spend the money on housing now or get into some serious housing issues later. I will chatter more about the actual house issues in a future entry. For now, I have been looking at the retirement funds, and found something interesting.

Part of our 401(k) is invested in a Lifecycle Fund. A Lifecycle Fund is a mutual fund which automatically reallocates the money between equity and income investments based on our age. The point of it is to minimize the risks of losing the money before retirement actually happens.

In the most recent annual report from this fund there is a section called "Principal Risks". Here is the section, quoted in its entirety.

The fund is subject to asset allocation risk, market risk,
company risk, foreign investment risk, style risk, growth
and value investing risk, large-cap risk, small/mid-cap
risk, interest rate risk, income volatility risk, call risk,
credit risk, market volatility and liquidity risk,
prepayment risk, extension risk, index risk, the special
risks of investing in inflation-indexed bonds, active
management risk, quantitative analysis risk and derivatives
risk. For a detailed discussion of risk, please see the
prospectus.

If those are the principal risks, I wonder what the hidden risks are. I am now truly afraid to read the prospectus, as suggested.

For this, we are paying the investment company 0.66% of the net asset value each year. That means, that the first 2/3 of a percent of the return on this "investment" goes directly to the people who are running it, not to us. That is true even if there is no 2/3% return at all. Sounds like we are the only ones subject to any of the risks.

I think maybe the house is a better investment.

Happy New Year

Happy New Year.

I am hoping to be a bit more active on the blog this year. We will be building a house, and that should provide for some interesting commentary.

Stay tuned.