Billionaires Taxes And Perspective

A billion dollars is hard to visualize. And that’s a major understatement. Major. Understatement. Yet, billionaires are increasing their influence, increasing their numbers, and accumulating more of the world’s wealth. And then, there are taxes. And a fun idea to imagine, even if it can’t be implemented.

A billionaire, as measured in US dollars, is a relatively new identity. The United States Constitution was written in 1789. It wasn’t until 1916 when John D. Rockefeller became the first US billionaire. Now, there are over 2,000 billionaires, and growing. Whether they are US citizens may be moot considering their tendency to have multiple residences, and their tendency to have even more residences for their assets.

Screenshot 2016-01-18 at 08.31.28

If only everyone else’s wealth was growing as quickly. At the start of this year;

Billionaire fortunes increased by 12 percent last year – or $2.5 billion a day – while the 3.8 billion people who make up the poorest half of humanity saw their wealth decline by 11 percent,” – Oxfam

In 2000, it took 388 billionaires to equal the wealth of the poorest half of the world. By 2016, that was down to 62. According to CNN/Oxfam;

The top 26 billionaires own $1.4 trillion — as much as 3.8 billion other people” – CNN

Well, maybe that’s okay as long as they continue to pay their fair share of taxes. But what’s fair? The Panama Papers proved that billionaires and millionaires have sophisticated mechanisms to launder money and hide from taxes. Those havens aren’t enough, evidently. Tax cuts now mean that;

From The Guardian;
Economists calculate richest 400 families in US paid an average tax rate of 23% while the bottom half of households paid a rate of 24.2%

From my blog Pretending Not To Panic;
In 1960, the richest paid 56% in taxes. The richest are now paying less than half of what they did during the golden years of the Baby Boom.

Over five years ago someone posted a video trying to provide some perspective on what a billion looks like. Even visualizing a billion as a thousand millions or a million thousands is difficult because it can be difficult to visualize a million. Their video inspired several of my friends to find a truly visual way to display a billion. After a lot of creativity and resourcefulness produced some ideas (Concentration Dissipation, Extreme Displays Of Wealth Inequality), we realized the task was so difficult that;

The very fact that this is beyond some of our technological limits is a message.

A tweet went by recently that found another perspective. People have an easier time envisioning $50,000. For some, that’s a salary. It’s also the price of a nice car. It’s a large down payment on a small house.

To earn a billion dollars at $50,000 per year would take – well – let’s walk through it. Ten years would get to a half a million dollars. A hundred years would make that five million dollars, two hundred years is ten million, – really? Does 2,000 years times $50,000 only get to $100,000,000? Well, a billion is a thousand million. Make a million dollars for a thousand years and make a billion dollars.

Repeating what was said above; “Now, there are over 2,000 billionaires, and growing.”

That’s not 2,000 people worth $1,000,000,000. That’s >2,000 people worth >$1,000,000,000. The “poorest” of the top twenty billionaires is worth >$37.7 billion. Make a million dollars a year for 37,700 years and you, too can be worth that much – at least in terms of financial assets.

And yet, many wonder why wealth and income inequality continue to rise – or debate the existence of inequality.

Even billionaires are starting to say billionaires may have too much of a good thing.

There are reasoned plans for reversing tax codes to earlier, more sustainable levels. Tax cuts to the wealthy have been proven to not inspire broad improvements in the economy. Instead of encouraging investment in advances, there are incentives to hoard rather than distribute. Stagnation rather than progress.

And here’s where I returned to having some creative fun. I’m only one voter, and plan to vote accordingly. But, I can imagine and play with ideas.

Currently, the incentives to continually increase wealth far exceed the disincentives, and the disincentives are diminishing. Not sustainable. Negotiating tax structures is realistic but dull. How about this. Once a year, the wealthiest person is determined, and that one person gives up everything except one billion dollars. Jeff Bezos would be taxed about $110,000,000,000 – and still have more money than most people can make in hundreds or thousands of years. Unfair? Debatable. Yet, being left with a billion dollars would have only a very small cadre of people feeling sorry for them. Instead of casually accumulating wealth, there’d be an active attempt to come in second. The ‘sacrifice’ of someone becoming worth ‘only’ a billion dollars isn’t much of a sacrifice considering the billions of people who have no hope of accumulating such excess.

While $110,000,000,000 (left off three zeroes the first time I typed that), is a lot of money; it isn’t a panacea when compared to the US federal budget of ~$4.4 trillion (of which ~$1T is borrowed, debt, spending more than we make as a country. Also not sustainable.)

I’ll repeat the graphic from above. Oxfam produced this, which looks like it hasn’t been updated since 2016. Billionaires who own half the world’s wealth:

  • 2000 – 388
  • 2014 – 80
  • 2016 – 62
  • 2018 – 26 (from the above news report)
  • and about in 2021 – 1

Screenshot 2016-01-18 at 08.31.28

One person with half the world’s wealth. For several reasons that chart will flatten as the wealth concentrates into just a few; but within a few years we have the potential to reduce this discussion to a conversation between a few billion people and a group small enough to fit around a kitchen table. Billions facing billions, people facing dollars. Who should come in first?

Posted in Uncategorized | Tagged , , , , , , , , , , , | Leave a comment

Whidbey Is Changing – Langley – Fall 2019

Affordability and real estate. These are topics that aren’t academic for people trying to find one of life’s basic necessities: housing.

Island life. It’s something romantic for some, too remote for others, not remote enough for those who want an island for theirself.

For the last year or so, I’ve made presentations about the affordability and real estate trends on Whidbey Island. Stereotypes persist, which means I surprise people when they expect a different message from a real estate broker. Now that I know many brokers, I can acknowledge that few fit the stereotype of “bigger is better.” Buyers, owners, and sellers are people, not stereotypes either. We’re all just people trying to lead lives.

Much of real estate revolves around stories, anecdotes that typify people’s concerns and goals – subjective perspectives. While that is a necessity, there is something to gain by looking at the data – objective perspectives.

This presentation, as well as the others tries to describe the story within the data – at least for Whidbey Island. Global issues, like ghost houses, are here, too. Local issues, like rising costs, an aging demographic, and limited options benefit from slicing the data even finer. Each town or city has its story and data. Every property is unique. Hopefully, the presentation provides what one member of the audience described as (paraphrased); “an interesting and unexpected perspective and series of insights”

In general, Whidbey Island has affordability issues, yet has strong demand because it is less un-affordable than other Puget Sound islands; greater name recognition around the world, and an increasing military presence. Supply, however, is barely budging, and is actually dramatically down over the last decade. High demand, low supply, and there’s a reason for increasing prices.

The following post includes the presentation slides, and a bit of the narrative that follows.them. Want to see more? The same presentation will be made at Freeland Library (10/15) and Coupeville Library (10/28). Maybe this time the live-stream will be more cooperative.

Stay tuned.

About Whidbey

Formal Disclosure:
I am a real estate broker with Coldwell Banker Tara Properties in Bayview.

Thanks to everyone who attended the event in Langley, especially while a candidates’ forum was being held. Apologies to those who hoped and tried to attend online. My Windows laptop and Google software couldn’t agree on what “Go Live” meant. Say hello to a spinning icon that spun for most of the hour.

Whether you were there or not, whether you tried online or not, you’re here now. Welcome.

As usual, the presentation is based on sales data and colored with anecdotes. Only presenting the slides can be drier than a desert and harder to decipher than a scribble in the sand. So, here is the presentation as well as some of the narrative. Hopefully, the computers will play nicer at the Freeland and Coupeville events (Freeland 10/15 at 2PM, Coupeville 10/28 at 5PM).

View original post 2,180 more words

Posted in Uncategorized | Leave a comment

Bread And Circuses

What are you and your friends talking about most: climate change, impeachment, social injustice, the economy? These are important issues, and they aren’t alone considering soil depletion, extinction events, and various – oh, you can probably fill in with your own list. (Hey, that’s one reason there is a Comments section. Keep it clean, eh?) Check social media and maybe get a different perspective. At least my YouTube, LinkedIn, and Twitter feeds come with sidebars listing the top topics. The differences are something to keep in mind as I manage my personal finances.

It is easy to think that the things that are affecting governments or the planet should be top priority. If that was the case, encouraging wise financial policies or investing in renewable energy would make the most sense. Find smart banks, or companies that are installing solar panels. They should be in demand, and eventually getting priced at a premium. I’ve quit investing in banks. Their finances are too byzantine. I’ve invested in energy efficiency companies; but the solar power company basically evaporated, and the one that promises to “do for electric cables what fiber optics did for phone lines” hasn’t done much.

So, what are people caring about the most, or at least, which topics get the most attention?

The lists change every second but the common concepts are: entertainment, sports, celebrities. So much for global considerations.

As:

  • climate changes, 
  • injustices prevail, 
  • and institutions wither.

People still spend time and money on

  • buying things that others say they need
  • watching other people play sports because others told them to
  • pursuing comforts for themselves and not necessities for others.

Some are distracting themselves from news they don’t want to hear. Can you blame them? For them, it is easy to spend hours on Sunday watching football (regardless of whether the football is round or oblong.) If someone spends that much time watching documentaries or political debates they’re labeled weird. What’s weirder: sitting on a sofa watching young millionaires run around on artificial grass in an artificial stadium, or better understanding the dramas played out in the real world? 

Bread and circuses was a term Romans used about how to distract the public during difficult times. The Roman Empire may fall? Appease the people. Concentrate on food and a show, and they have less time for contentious issues, which makes them less likely to do anything about them. Good thing that didn’t undermine the empire. Oh, wait. Well. Hmm.

Historically, providing necessities haven’t been as profitable as providing luxuries. Bread is a necessity, but in a modern context think more about the ads you see. Salt was important and less available in Roman times. But the greater profits were in the spice trade, and exotic goods like silk (the production of which was kept a secret – really? caterpillar silk? No way.)

Look at how much money is made by the top performers in sports and movies. They make that much because so many people pay attention to them. They’re celebrated. And some celebrities are celebrities because we celebrate the fact that they’re celebrities. And people buy “their” perfume, as if they were actually doing any of the work.

The world needs more efficient energy transmission, but AMSC’s grid products aren’t making them a stellar performer. Solar panels are increasingly popular (Yay!), but Real Goods is no longer a publicly traded provider of those systems. My portfolio would be performing better if I’d held onto my shares of Apple, which now seems to be marketing primarily to a young elite; or held onto my Pixar shares as they were acquired by Disney.

It is hard to buy shares in Greta Thunberg, or a NOAA research crew, or the ACLU. There are organizations that are changing the world. Giraffe Heroes invests in people (from what I can tell.) Newground Social Investment has found ways to use investing to inspire change. They aren’t alone, but a glance at the interests of the majority of the population shows them to be in an undeserved minority.

Personal finance is personal. I’m an advocate for investing in your interests. Your values matter, and investing according to them makes it easier to pay attention to your investments. But, don’t be surprised to find that your friend who buys some “sin stocks” has a portfolio of companies whose products are in greater demand by a larger portion of the population.

The Romans consciously instigated the bread and circuses strategy. Those colosseums weren’t built for practical purposes. Our stadiums are rarely are used for anything useful, maybe fun, but not useful. And the rationale for spending billions of dollars on something discretionary while ignoring larger issues probably isn’t as conscious a decision. For over two thousand years our societies have practiced generating distractions. It is now considered normal.

“Normal” is another way to say common and another way to label the things that attract large crowds, or customer bases. I’ll continue to invest in what I think are positive, disruptive, maybe even necessary companies and their technologies; but I don’t assume they’ll be as popular as sugary drinks, cars built to break the traffic laws, or the next billion-dollar-blockbuster movie. Hopefully, they’ll be good enough. Stay tuned for that.

Personal finance is personal. So are your values. So are your necessities. If you want something to celebrate, celebrate that you can invest accordingly. Just don’t be surprised if there’s a lot larger crowd attracted to something else. (Hello, tailgate parties with beer and nachos!)

Posted in Uncategorized | Tagged , , , , , , , , | 5 Comments

Roof Roof

You know your roof needs work when… you can see the rafters from on top. Earlier this year, the patch over a patch was blown off by a wind storm. The next day I stood on the roof and could see wood where there should be, well, roof. Oops. Uh oh. Go with the flow sounds like a good idea until it means water washing down the interior walls. A new patch and some new research found an old solution that’s frugal and that wasn’t suggested by any of the professional fixers I know. Not surprising, for many reasons. Let’s see how my fix works.

dsc_3189

A good roof is important. Duh. This and other understatements are available for a small fee. ‘Having a roof overhead’ is the catch phrase for what homeless people hope for. Walls and floors are very nice, too; but the roof is the thing that gets mentioned first. Windows and doors get to take their turns, later.

A leaky roof is a major annoyance, and a structural threat even when the roof is working for 99.9% of the rain. I was annoyed for months when I lived in a relatively fancy neighborhood in Bellevue, WA because there was one leak, we couldn’t find the source outside, but inside the leak flowed down a vent pipe, then dripped onto the electrostatic starter for a gas cooktop. The rains would start. The drips would follow. Throughout the night, the starter would tick, tick, tick. Very annoying. Even more annoying was crawling into the barely-crawlable attic at the other end of the house to empty and replace a bucket that was in the attic over the kitchen. Eventually we found the cause: a six foot gash in the roofing paper under the shingles. Someone probably sliced it up during installation, and it sat there for years until it separated enough to let the water through.

That was shingles. I’m not a great handyman, but I can fix shingles. (Roof shingles, that is.) This house has something else.

“Does the roof need to be replaced?” “Yes.” That’s the essence of the conversation I had with a few roofers soon after I bought my current house. That response, however, was like that I usually receive from contractors. Why would they answer No to potential business? Maybe the work needs to be done, but maybe it’s just a business decision for them.

20190918_175532

I originally researched replacing the roof of the 1964 era beach-ish cottage (that can see the beach but isn’t by it) when I bought the house in January 2007. My net worth was diminished by the large downpayment; so I hesitated. Surely my portfolio would return me to full retirement soon. Wait a year and my portfolio would surely grow by more than enough to pay for a new roof, and it did, then it dramatically didn’t. (Details in My Triple Whammy.) Twelve years later, I wonder if I should’ve spent the money or whether I’m better for saving those thousands for when a perfect storm of bad luck hit.

It was obvious there’d been a leak before. The living room ceiling just happens to have a patch under a patch on the roof. Probably not a coincidence. Patches don’t last forever. Their patch was some type of tar glopped onto a crack in the roof material. After years it dried, hardened, buckled, and cracked. The patch was such a mess that there was now a ridge of useless tar. Chipping that off would probably make things worse because the roof looks like it is mainly some roofing fabric rolled out and glued together. But hey, if it works, it works. I tried sealant foam, which worked for a while.

20190918_175542

Eventually I upgraded to a beefier version of duck tape (which conjures images of a beefy duck, or a duck the size of a steer.) That worked for a season or two. When I got worried, I’d add another row of tape. After a few rows of tape, the roof looked like it was growing shingles. Then, the wind caught an edge, peeled back a few feet of rows of tape, and repeatedly slapped the roof with the mess for hours during a storm. The next day I climbed up there and saw wood exposed to the sky. I checked in with several hardware stores, got much more pragmatic advice from the shopowners, and ended with a re-application of the tape. At least for a while.

Ask around enough and answers change, and hopefully spiral into a solution. Roofs age. Mine was more than twelve years old, looked decades old when I bought the house, and would benefit from an upgrade. Unfortunately, it was constructed in 1964 using a technique that no one wanted to repair or replicate. Total roof replacement estimates came around to about ten thousand dollars. Ask some more, and get repair estimates of a thousand or two, but no one wanted to work with such material – especially when new roofs and new materials are easier and more profitable. Ask some more and … accidentally find DIY videos on YouTube about waterproofing flat roofs. Hmm.

My house’s roof isn’t flat, but it isn’t steep enough for shingles. The videos were about flat roofs, but one or two made mention that the paintable sealants worked on slight slopes, too. Hmm. Hello, hardware store, again. I’d just (almost) finished painting the outside of the house thanks to old paint, discounted mis-tints (where someone didn’t like that particular shade could you make it more mauve), and finally a color match and a custom mix of a couple extra gallons. I went back to the same salesperson, asked about roof paint, and put in yet another custom order. This time it was for fifteen gallons of very thick, glaring white.

Several years ago, the EPA conducted a study that proved that painting roofs white was a simple way to save energy. The answer was so simple yet so significant that it faded, possibly because we expect more remote, complicated, and painful solutions to big problems. The idea that painting a roof white would help would also require actual action by homeowners. Sadly, complaining and finger pointing are more popular than actually doing something personally. A white roof can’t reduce my air conditioning bills, they’re already zero; but a white roof that can reflect some of the sunshine can;

“help roofs to absorb less heat and stay up to 50–60°F (28–33°C) cooler than conventional materials during peak summer weather” – EPA

Sounds good to me; especially because my west facing windows can raise the living room temperature into the nineties. Very tropical.

20190919_131609

Some smart supplier realized the benefit of making a paint that is reflective and contains waterproofing. A gallon of it costs about the same as a gallon of regular paint. They make more per square foot, though. A normal gallon of house paint can cover about four hundred square feet. A gallon of roof paint is much thicker. It can only cover about one hundred square feet. My 868 square foot house plus carport plus utility room roof looks like it will require those fifteen gallons. Buying in bulk will bring the price down to about four hundred dollars, much better than thousands or tens of thousands.

The work’s not done, yet. I started with ten gallons (two five-gallon buckets), and they covered the living area. Hopefully the rest gets covered this weekend.

Some tips:

  • Wear sunglasses. After about three hours of painting, my world had a red tint. I started by painting the south section, where the patch was, which meant sunshine reflecting into my face even when the clouds came by. My eyes were getting a sunburn.
  • Don’t back up too far. Duh, again. It’s a roof. I was making great progress at one point, realized I was more than halfway past the peak – and am glad I stopped when I did.
  • Work in batches. A five gallon bucket of thick paint weighs a lot. I sacrificed a relatively clean bucket to be able to work two and a half gallons at time. Carrying more up the ladder probably would’ve artistically modified my deck paint job.DSC_0291 - Edited
  • Buy into throwing things away. This is paint with plastic in it. It’s waterproofing. It is roughly four times thicker than regular paint. I had to cut the roller off the handle. Throw away a paint roller versus throw away a roof. Take your pick and pay for it.
  • Expect to do it again. Waterproof paint probably doesn’t last as long as a metal roof. But, at these prices, that may be a fine solution.
  • Look forward to better days. Repairs and resourcefulness take time and money, too. I look forward to some day when I have the spare money to buy a new roof, effectively buying myself more time.

Painting a roof may not be a compelling story, unless you have a leaky roof, are frugal, or want to see what simple solutions can provide. In the meantime, I have plans to protect my house this weekend, then apologize to the garbage collectors that will pick up a heavier than usual can on Monday.

Posted in Uncategorized | Tagged , , , , , , , | Leave a comment

Population People Supply Demand

There’s a lot of people running around this planet. We passed seven billion and are climbing towards eight billion. That’s a lot of babies – and think about how many people worked (and played) so hard to make that happen. It isn’t mentioned as much in the media as I think it should be, but that trend is influencing more than ‘just’ the planet. The number of people alive affects personal finances. Supply and demand demand something changes.

Screenshot 2019-09-21 at 11.01.08

My father passed away about four years ago (Donald L. Trimbath, Sr.) He never understood the need for worrying about the climate, limiting our use of resources, or even why one country should worry about what another country is doing. For most of his life, there was little need to worry about how we lived on the planet. Other countries and other people were involved, but that was primarily World War II, a short time that he spent as a Merchant Marine seeing the world and hoping not to get sunk. His world was like that for fifty years, why shouldn’t it be that way for the next fifty?

Scroll back through history and see his perspective. Prior to 1970, prior to the first Earth Day, most people, especially Americans, didn’t worry about using unrenewable resources. He drove trucks for, then managed, petroleum deliveries for more than one company. There was plenty to go around. Prices were low, like $0.37 per gallon, basically one-tenth today’s price. Countries weren’t obviously intertwined, partly because the news didn’t emphasize the complexities, partly because the speed of business was only starting to speed up thanks to jets and telecommunications. Flying was a luxury, and long-distance calls cost a lot. Shop local was the norm.

When he was born, there were fewer than two billion people. There was room (and yet we fought over land.) There was more than enough for everyone – or at least it looked that way.

Annual-World-Population-since-10-thousand-BCE-for-OWID

About the same time as the first Earth Day we also reached the first Earth Overshoot Day.

Earth Overshoot Day marks the date when humanity’s demand for ecological resources and services in a given year exceeds what Earth can regenerate in that year.

The fact that people were inspired to celebrate Earth Day and track Earth Overshoot is proof that some people were raising the issue before we even landed on the Moon. The major environmental success on a personal level in America was the anti-littering campaign.

Those people born after 1970 were born into a world where we’re using more than the planet can sustain. That’s been happening for about fifty years. The message is taking a long time to spread, and it has far too far to go. There were just about four billion people in 1970.

We’re approaching eight billion.

Double the supply, and don’t be surprised if prices go down. With population, however, ever bit of supply also creates a bit of demand for the necessities, as well as some luxuries for the fortunate.

One issue captures two aspects of the implications: affordable housing.

Those four billion new people need new housing. The need (demand) has grown while the supply tries to catch up. But, building housing is a risky business. The supply doesn’t always meet demand. It’s too risky because some builder will be the one that builds too many. Too few houses means prices rise. Prices also rise because builders make more money on larger houses, but in modern society, larger houses don’t necessarily house larger populations. Two people living a 6,000 square foot house? Sure. It happens, and frequently such a house is only temporarily occupied.

Those four billion new people need some way to support their lifestyle. They won’t all get jobs, but almost all will work officially or unofficially. In a sustainable environment, maybe the increased population would demand and absorb a larger workforce, but the increased population is happening as we introduce increased automation. Labor-saving is a relief, but on a corporate scale it means greater profits but less spent on labor. While increased mechanization has usually increased the number of jobs, there’s reason to believe that this time is different. “Humans Need Not Apply” is a video that articulates the impact well.

The value of a worker, of a life may be diminishing; at the same time that profits are concentrating. Wealth and income inequality are expanding. Inflation adjusts the numbers, but instead of the current population of billionaires of over 2,000, there were about 200 back then.

billionaires

Affordable housing may seem like something that can be solved with more housing (sufficient supply can drop the price), but the ‘affordable’ part reflects the other aspect of the reality. People aren’t making enough to buy the houses, though some are making so much that they can buy several regardless of whether they are going to use them.

We are no longer in my Dad’s world.

Population will continue to grow. It’s projected to eventually stabilize at about eleven billion in about 2100, a time frequently used in the news when describing sea level rise and such.

world-population-1750-2015-and-un-projection-until-2100

In that time:

  • population will increase, possibly lowering the perceived value of each worker
  • automation will continue, possibly reducing the demand for workers
  • climate change, soil depletion, and several other unsustainable trends will continue, possibly reducing the usable and available for food and housing, thereby increasing the demand and value of the remaining land
  • while the only way we have to find more room is on or in the ocean, in space, or on other planets, moons, and asteroids.

At the same time, wealth and income inequality are concentrating those assets in fewer pockets leaving less money to flow through the economy that’s trying to sustain a massive and growing population. Half the wealth of the world is held by fewer than forty people. The other 7,731,901,949 get to divide the rest, and then try to meet basic needs like housing – and food, and education, and health care, and something for fun.

The trend to more people, fewer resources, more disparity, and more powerful technology is something I consider when I look at my personal finances. My Dad understandably lived his life based on his experiences from the majority of his life, even as the fundamentals changed. I’m regularly challenging my assumptions because the change has accelerated. Positive things are happening, like renewable energy and greater social awareness, but those have little direct effect on my life.

I’m no longer as surprised to see how hard it is to get a good job. Many applicants but few are chosen, and those that are chosen are more likely to get a wage that doesn’t fund their necessities. Benefits are treated as luxuries, even as they supply necessities. A few will be lucky enough to get the jobs that pay extraordinarily well. There are enough of them to make the news, but I get the impression that they aren’t the majority.

I’m less surprised that some people see other people as expendable, as if the loss of a life is easily accommodated because there’s such a great supply.

Look back to 1776. The new United States of America had a population of about 2,500,000; basically less than 1% the current population. The “Founding Fathers” are portrayed as icons and visionaries. They were. It was also easier for them to stand out, find common ground (which was easier than today, but far from easy even then), and enact action. Now, standing out when there’s more than one-hundred times as many people is numerically more difficult, though telecommunications helps. Common ground is less common because there’s much greater diversity and awareness of it. Action is interrupted by hundreds of millions of cooks in a very messy kitchen – and we aren’t all cooking to the same menu.

Within the time it takes to add another billion people the climate will have continued to change, there will be fewer resources (unless we mine asteroids – hopefully simultaneously reducing a planetary threat), and technology will continue to advance. I consider these influences as I plan my future, knowing that what worked for my father eventually didn’t work for him, won’t work for me, and that my own assumptions should be challenged regularly and my plans adjusted accordingly. Hang on. I suspect this ride is about to speed up and get very bumpy. Pardon me as I adjust my seat belt.

Screenshot 2019-09-21 at 12.24.23

Posted in Uncategorized | Tagged , , , , , , , , , , | Leave a comment

Poised

to hold supported or suspended without motion in a steady position” – Merriam-Webster

We stand poised. The world feels weird because it is shifting eras. Anachronistic cultures continue, for a while. Uncertain cultures are being defined. The previous tide tries to pull us back. If we stand, we still must prepare for the next wave which may push us in unexpected directions.

Life is a wave. Your attitude is your surfboard. Stay stoked & aim for the light.” – Drew Kampion, editor Surfer and Surfing magazines

DSC_5323

How to spend time and money in the meantime, (or as some see it, the mean times)? Frugal folks have an advantage.

Oh, politics. Whether it is impeachment now, or re-election soon, or a redefinition of government, there’s a lot of energy and jostling going on. Bandwagons are lining up, trying to fill themselves with supporters. It’s enough to make it easier to step away from social media, and maybe let the phone screen the calls. The direct cost of politics is time now, and taxes later. I have political opinions, and have even thought of running for office, but for now I’m an occasional spectator waiting for the day when I get to participate: when I mail in my mail-in ballot.

The environment is trickier. Everything we do affects the environment we’re in. A drive to the office costs time, fuel, and eventual maintenance. But, make a good enough income and it’s easier to afford a more fuel-efficient vehicle and maybe not have to work as many days. I don’t know of any cookbooks that list the energy and time costs, as well as the impact of shipping ingredients around the world. Vanilla is a natural ingredient, but it certainly isn’t something I’m growing in my backyard. What’s the true cost of shipping a bean? Which is better: slow roasting a cheap cut of beef, broiling a salmon, collecting a diverse set of ingredients for vegetarian or vegan casserole, or going raw? Better becomes personal because each person’s body and therefore diet is different. Is heating with wood better than heating with fossil fuels? What if a tree fell in the backyard? Getting rid of it otherwise might burn more energy than the wood could provide as heat. It is doubtful that there’s one answer that fits all people.

noaa-mauna-loa-chart

Culture is changing, as it always has. This time is different. It only takes seconds for themes and memes to wrap around the planet. New ideas took months, years, or decades before the Internet. There’s great hope that some sudden awareness will switch perceptions overnight, or at least within a news cycle. Finally, injustice is being rapidly relayed, but sometimes that’s too fast or too slow or too skewed. We’re getting better at it, in my opinion. In the meantime, or the mean time, paradigms are being energetically uprooted while defenders and deniers energetically try to block the change. (See politics and environment above.) With over seven billion people, there’s no way there’s one answer. And somehow, people pay attention to celebrities who are celebrated for being celebrities. Nice gig.

None of this is new, and if you read this far, congratulations.

I write this because of where we stand. Politics has swing through an era that cheered democracy and inclusion, into global surges in nationalism reminiscent of the preludes to some of our worst wars. The environment arguably passed the point of no return a few years ago when atmospheric carbon dioxide passed 350 ppm. Culturally, we’ve run out of room for communities to exist without impacting each other because those seven billion people, and their lifestyles and choices, are bumping into neighbors and overlapping territories. If you feel pulled and pushed and challenged and resisted, then again, congratulations. You’re aware of the world.

A frugal approach to personal finance has some unintended consequences. Becoming aware of personal values means I’m more aware of my values, particularly in contrast to what I see in the news, the ads, and social media. It’s almost as if they’re talking to someone else, like someone with health benefits, secure income, and a desire to compete with everyone they know. Understanding my personal values means a different balance of my impact on the world and the world’s impact on me. Your answer will be different. I haven’t found a church, political party, or non-profit that exactly reflects my values. For decades I saw that as a failure of my part. I couldn’t fit in. Now I’m glad that my exploration of my values during these more recent decades means I’m more likely to hold positions that don’t have to be negotiated with a clergy, politicos, or other peer pressures. I accommodate and adapt, but I do some from an understanding of my fundamentals.

It would be nice to recount a particular tale, or to show numbers behind some of these assertions. That would make a better literary argument; but that’s not my goal. My goal is simply to pass along encouragement to those who feel so many conflicting pressures from so many influences around them. I’m glad frugality has made it easier to at least partly find a few certainties within an increasingly uncertain world. I’ve found where I want to stand, know where I want to go, and am ready to move. At least to some extent, I’m poised. I hope the same is true for you.

Posted in Uncategorized | Tagged , , , , , , , | Leave a comment

Switching To ATT

The first bill arrived. The suspense is only partly over. At the end of July I made many people happy by switching from Sprint and my flip phone to AT&T and a smartphone (Flipping To A Smartphone). Finally, they can text me!, they cheered. After horror stories about charges, coverage, and customer service I made the change; and have waited a month and the first bill before making a judgment. As with most of life and personal finance, there’s a bit of good, a bit of bad, and a bit of something different.

My biggest worry was the bill. AT&T has some sort of automated system that estimates the first bill. The folks in the store told me to ignore it, but they had to provide it. The folks I called in Customer Service said the same. That estimate was for over $300 for the first month and over $200 for every month after that. Ouch! With estimates like that I kept my phone usage to a bare minimum. No new apps. No streaming video. Mostly phone calls, and only a bit of web browsing when real estate required it. The real answer: ~$168. Kind of high, but not bad considering it included one month plus the pro-rated part of the first month.

20190905_094325

If I read this four page bill correctly, it looks like next month’s bill will be under $100. That’s almost double my Sprint bill, but cruise back through the prior post to find how poor the service had become. AT&T is said to have dropped calls, but Sprint wouldn’t even connect sometimes.

Without the rumors and stories, I would have little evidence of any problem with AT&T service. There’s only been one place where I couldn’t place a call. I’m sure there are others, but that’s not bad. Without friends and coworkers, I would probably still be trying to figure out how to answer the thing. Thanks to everyone who didn’t produce a video of me punching fingers at the screen. Swipe, dude. Swipe. At least now I can answer the phone, receive texts, and sometimes get into voicemail. (Still working on that one.)

Eventually, I’ll learn how to take and move photos without having to remove the microSD card. Eventually, I’ll add apps (particularly the real estate ones.) Twitter will follow, and I’ll set up an Instagram account. But, I’m a minimalist. The fewer apps the better, as long as it isn’t too few apps.

But back to that bill.

The bill arrived within about ten days of its due date. I haven’t set up bill pay for AT&T yet, so I called the contact number on the bill. Pay by phone? Sure. That sounds quick and efficient. Step one, call. Result one, they sent me a web link. Nope. I want to talk to a person. Stay on the line with an estimated wait time of seven minutes – which turned out to the just about right. Verify ID, and he tries to send me to the web site, too. It’s simple; all I need is my PIN which should be 5 or 6 or 7 digits. I recall making one in the store. It was 8 digits. How about I just pay my bill? Not yet. Dive into Settings, read off numbers, pass along financial info, and get back a 15 character confirmation code. Fifteen characters? That’s over 10^24 possible combinations. How many unique confirmation codes do they need for a planet with a population of fewer than 10^10? Is AT&T getting ready to take over the galaxy, the universe, the rest of the universes? At least the bill got paid. It only took about ten minutes.

20190905_094400

The bill is longer than usual, possibly because it is the first, but also because the AT&T Help Desk people had to undo things the people at the AT&T outlet signed me up for that weren’t necessary. Add this, then subtract it, then add in the right thing. Then try to understand it.

Still it looks better than I thought it would.

And then I noticed the equipment costs. As I mentioned in the prior post, I had a specific phone in mind when I arrived. Its main feature was that it was cheap. But.

The $179 phone from earlier was gone, but there was a special deal for a $1/month phone for people switching service. Nice! Within the next two hours, that offer somehow vanished, and I left with a phone that may only cost me $104. OK, $179-$104 is still $75 less than I expected.

According to the bill, the equipment price is more than $200, and I have 29 more installments to make. Granted the monthly installment is only about $5, something I wouldn’t even notice, but there’s that principle of the thing. How’d that happen?

This is why personal finance advice frequently over-simplifies personal finance decisions. Actions usually create other actions. A decision isn’t confined to the moment it happened. Each step is a commitment to many more steps to make sure the steps are heading in the right direction.

The switch has been a good thing. I would’ve made it earlier, but the delay touches a much longer and older story involving MicroVision. If you don’t know, there’s no need to ask (or you can dive into the rabbit hole of my posts about MVIS.) Real estate on Whidbey Island has been hectic enough that a reliable phone service is a necessity, and an unreliable phone service can mean someone doesn’t get to sell and someone else doesn’t get to buy.

The switch has been a good thing, but I miss my flip phone. It was small, rugged, and simple. The smartphone is bulky, feels fragile, and complicated. I’m sure it will become familiar with practice. For some reason, that form factor works for billions. Go figure. I’ve seen the possibilities of the marriage of a small phone with a big display, but that’s that MicroVision topic again.

For now, my smartphone sits beside me, usually at a distance because I don’t want something that powerful beside me. Glad I bought a headset. Let’s see how long smartphones stay this shape. I hear someone’s working on implanting them inside our skulls. That’s a transition I may never make. So, pardon me when you call. As complicated as the phone may be, the biggest delay tends to be me trying to untangle the headphone cords. There’s a technology that could be improved, or a user that can be educated.

Posted in Uncategorized | Tagged , , , , , | 1 Comment

Have Paint Will Play

Well. (I started that way just to tick off a writer friend of mine.) I did it again. I played with paint. So many of my friends are painters that if I tried to list them all I’d accidentally skip dozens. They paint with purpose and perfection. I paint to use up old paint. At least that’s how it started.

Buy a house and frequently find shelves of paint cans filled with tones, shades, and colors that already cover some of the walls. Paint can be considered hazardous waste, so many folks just leave partial pails in garages and utility rooms. One option is to open the cans and let the paint dry out, ‘naturally.’ Being a bit frugal, it is hard for me to purposely waste anything, especially something that was useful once and could be useful again. So, instead of taking the paint and its can miles away to dispose of officially, I find something to paint. The price is right, which is a wonderfully freeing feeling.

The deck #WOST2012I did this before. About seven years ago I did something similar. The west side of my house gets a great view of Puget Sound and the Olympic Mountains (I continue to have to remind myself that I’m looking at a National Park, weather and lighting permitting.) That also means it gets blasted with photons when the weather is clear, and rain and wind and a bit of salt the rest of the time. Without protection, the wood would need replacing far more frequently than if the house was inland and shaded by forest. So, those seven years ago, when I’d owned the house for about five years, I painted the deck with whatever was in the utility room. Some blue, some beige, and then because I could, I splattered and scattered dots and lines of paint from the dregs of other leftovers. It was a bit Jackson Pollock-y. A nice departure from normality, a nice touch during my stint on the artist’s tour (for my photos, not my deck), all while appreciating a real estate broker who put up with my play time while the house was on the market.

Those who follow my story know the good news. I managed to keep the house.

A while later, the deck needed repainting, which I did; but working seven days a week, typically ten-twelve hour days, meant the deck got a bland but protective coat. But hey, at least it used up more paint and protected the wood, again.

DSC_0292 - Edited

Leap to the present day, or at least the summer of 2019. The deck was peeling. The artwork was gone. There was less paint left, but remnants remained. I’d just finished my required real estate continuing education classes, completed a transaction on a very nice house for some very nice people, watched some deals get outbid (a common occurrence currently), so had some time. Oh yes, and we were in the usual drought the area sees every August.

Eight different paint colors later, the deck is painted, and along the way the house got painted, as well as most of the trim, the deck benches, and the various outdoor stairs.

DSC_0291 - Edited

Evidently, one thing led to another and another and repeat.

Take a look. I had white paint. That was the first two stripes. I also had black paint (for some reason.) That would be too much contrast so that became two boards on the opposite side of the deck. Between them I tried to decide how to blend in a pale sage green, and a bit of blue. OK. Maybe a bit of mix and match.

Here’s where the play gets to come in. Why not put a few boards of green beside the white and a few boards of blue beside the black? Maybe a bit of a blend in the middle. It may look like mud, but that’s part of the play.

DSC_0290 - Edited

Here’s where the serendipity comes in. After painting a few boards of green I noticed a particularly faded wall. Old boards, possibly old-growth, were barely tinted by eroding paint. I felt sorry for them, so I painted them with the green. Step back, wonder how I’m going to have enough for the deck, but realize that’s a nice shade for the rest of the house. So much for only painting the deck. Order up some paint for the walls!

Back on the deck, time to use some of that blue. A sea of blue is appealing for the ocean, but too much of a good thing for my deck was too much. So, several boards of blue; but then a board with mostly black and a bit of blue; then a board with more blue; then repeat until they began to blend back into the main. Well, not quite, but close enough. At least the deck was protected, and a few cans of paint were depleted.

Order up that sage green for the house and get to it. My exercise schedule was replaced with painting from just after work until dark. Truly dark. Some of those sections are a bit sketchy. Three pails of paint, and several days later, I finished the last bit of ladder gymnastics with less than a half inch of paint left in the last can. Yes! No waste, here.

Homeowners are familiar with what happens next. So, with the deck painted and the wall painted, the rest looked weak. Hmm. What colors are left for the screen frames, the door trim, and the stairs and door sills? A bit of grey here, some beige donated by neighbors for the deck benches, and then a mix of the grey and the beige for the bench supports. How crazy is that?

It may be a designer’s nightmare, or a guilty pleasure being able to play with paint; but it was also one of the more environmentally conscious ways to use rather than discard, protect rather than waste.

There are limits though. Upon the advice of various friends, I’ve curtailed my exuberance. You see, there are these cans of primary colors: red, blue, yellow. It would be so much fun to squirt squiggles of color across the banded fields of refined colors, at least on the deck. But, sometimes good enough is best. Though I am trying to find some colors for those doors. Hmm. A blue door, a red door, a yellow door? Let me play with that idea.

DSC_0286 - Edited

It’s possible that my clothing became the real work of art.

Posted in Uncategorized | Tagged , , , , , , | 1 Comment

Contemplating Negative Interest Rates

Sounds weird, but it is true, and has been for a while. Bonds and mortgages are being sold that have negative interest rates. Ready for that on your credit card? Probably won’t happen, but I’ve been squinting at articles and scratching my head about this twist in personal finance possibilities. One consequence, a reminder to not physically scratch my head while wearing a dark shirt. Pesky dandruff. As if politics and the planet weren’t going through weird enough phases, welcome to yet another bit of weirdness in finance.

Jyske Bank, Denmark’s third largest, has begun offering borrowers a 10-year deal at -0.5%,…” – The Guardian

So, let’s see. Many mortgage rates in the US are about 3% to 4%, far higher than Denmark, but even lower than the double digit rates the US saw in the early 80s. I wonder how many online mortgage calculators will break because they assume mortgage rates must be positive. I think about negative rates now so my brain doesn’t break if they show up.

Basically, a negative mortgage rate means your remaining debt decreases by more than the principal you pay. For details check out the Guardian’s article or Investopedia or your favorite financial professional. I’m not a financial professional, but I can at least tell you what I think about how it might affect me.

For right now, it won’t affect me directly. I don’t live in Denmark (though I would like to bicycle through the countryside.) It might indicate, however, that mortgage rates have downward pressure as well as upwards pressure. They’ve risen into double digits in the past. Can they fall by double digits in the future? Can they? Academically, possibly, I guess. But we at least have proof that in some countries they’ve already gone negative.

screenshot-2016-07-07-at-08-43-41

Mortgage rates aren’t the only interest rates that have gone negative. About three years ago I posted a series of instances where national central banks were already imposing negative rates on major lenders and depositors. The negative mortgage rates are possibly tapping into those financial instruments, allowing this mind-twisting scenario.

While some argue about wealth inequality and the rights for some to optimize tax havens, some governments have been noticing a tendency for assets to accumulate rather than circulate. As money piles up, there’s less money to move around. The economy relies on money moving between people. That’s how people earn and spend to make their lives livable, not just in luxuries, but in necessities as well. The current economy encourages accumulation. The more you have, the more you can get, which means you can have more. Those who play the game the best end up with the most, leaving less for everyone else. Wealth taxes can be difficult for politicians to pass, but interest rates can be set by bankers who may have some autonomy. Impose a negative savings interest rate and putting money in the bank comes at a cost. Better to move it than lose it, so goes the thought.

Evidently, that hasn’t been a strong enough incentive. Wealth inequality continues to grow, and negative interest rates are reaching further, not retreating. We in the US don’t hear about it much, but negative interest rates have existed in several countries.

Weirdly enough, negative interest rates hit corporate bonds, too.

screenshot from Twitter

There’s so much concern about where to buy into fixed income financing that over 90% of such debt is being managed in America, where rates have yet to go negative.

A second response can be fear. Despite a reputation for finances to be run by mathematics and logic, fear and greed continue to rule. Where do you want to put your money for the long term? Cash under the mattress, or the equivalent, holds its value if inflation doesn’t exist – but mattresses, or their equivalent, can burn. Various assets can hopefully appreciate, but investing is based on some risk, which means there are no guarantees. Layer enough negative options and some investors and depositors are willing to make sure they only lose a little rather than a lot.

Corporations historically spent discretionary case on research and development, but megalithic companies seem more secure buying back stock than inventing new products that will compete against their existing money makers. As they become monopolies, there’s less pressure to compete; so, why spend when your money can make money?

Other assets aren’t as attractive. Despite political posturing, investing in oil and gas and coal is being challenged by those who want to invest in solar and wind. Oil prices are back down below $60/barrel. As solar and wind become more popular, the economy of scale drives down their prices making them more competitive; while the fixed costs of oil, gas, and coal are spread over fewer customers raising their prices and making them less competitive. It was easy to invest in physical commodities like a tanker of any of those things, but there is no tanker of solar or wind. (Except batteries, but that’s a digression too intriguing to follow, now.)

This may be one reason for the flight to real estate. Certain hot markets are attracting buyers of ghost houses, houses that are bought to appreciate. Renting them can generate income, but that income comes at a risk. Renters might damage a property, even accidentally. Also, selling the property is quicker if it’s vacant. Hence, housing shortages for those who actually want to live in a house.

It may also be why gold is reaching new highs.

Screenshot 2019-08-19 at 15.10.16

There are two long term worries that seem unlikely, but then so did the Great Recession and now negative interest rates: currency (in)stability and deflation.

Currency (in)stability may be why Bitcoin refuses to collapse. Bitcoin and other cryptocurrencies are gaining acceptance. To some they are appealing precisely because they aren’t tied to a country, its politicians, or its banks. If currencies were to lose credibility and hence some value, it can be a reason to be satisfied with a small definable loss. This takes some more pondering, but currency collapses are common throughout history. When people fundamentally lose trust in government, currencies lose their value. (Though then, wouldn’t a negative interest rate be paid in a shrinking currency? More dandruff material.)

Deflation is a big worry. If it was tough to get people to spend money in today’s economy, imagine how much more difficult it would be in a deflationary economy. Why buy today when you can get it cheaper tomorrow? I see this almost daily as people try to guess about the real estate trends, holding off on a purchase because they’re hoping for a fall like we saw in the Great Recession. Maybe they’re right. Maybe while waiting for a 25% drop there will be a 40% rise. Take that to a global scale and imposing negative interest and savings rates on accumulated wealth seems like a relatively benign method.

Professionally, negative interest rates will make my job as a real estate broker very educational. I’ve frequently held jobs in dramatically shifting environments. At least I know how I deal with change. Learn. Learn. Learn. Adapt. Adapt. Adapt. Of course, people who buy or sell because they know what they want to do with their lives can get on with those lives sooner than those who are waiting for the right market moment.

Personally, I don’t expect any immediate change. I doubt my mortgage servicer is going to give up a forty-year commitment, even at a relatively low cap of 4%. Of course, I’d be more likely to refinance, but that will be a while. That will be a while partly because I need to pay down a credit card that is charging over 15%. That’s temporary. Pay that down, get back to a good credit score (oh, 824, I knew you so well – until my mortgage issues), and then see what’s happened to credit card companies that have to deal with dramatically lower long-term rates from the competition (not just sweet introductory offers.)

Negative interest and savings rates aren’t aimed at me. I’m not rich enough. I’m not hoarding cash. Definitely am not hoarding cash. If negative rates gain greater acceptance, the fundamental shifts may be in the corporations and coffers and havens that have been out of reach of courts. If that releases money to flow back into the real economy, that may be a very welcome and pervasive consequence that’s more important than my mortgage or credit card rates. Negative rates may not be aimed at me, but I may benefit from them – even if they don’t change my bills.

(Disclosure: I am a licensed real estate broker (with Coldwell Banker Tara Properties on Whidbey Island.)

Posted in Uncategorized | Tagged , , , , , , , , , , | Leave a comment

Buying A Lottery Ticket

Thoughts that came to mind while putting a lottery ticket in my wallet and walking across a parking lot .

“Buying A Lottery Ticket”, notice the emphasis on ‘A’. Conventional wisdom says don’t spend money on the lottery. Every day experience proves millions of people don’t listen to conventional wisdom. Buying ‘A’ lottery ticket has incredibly small odds. Buying too many lottery tickets can be an unwise idea, and may be the sign of an addiction. (Need to check for that? Here’s the Washington State link.) As usual, reality is in the middle, and there’s real value, there.

Let’s hammer the extreme, first; kind of as a public service announcement. Any addiction is something to manage, and usually not manage alone. Got doubts? Good. Personal awareness is a positive sign. Go check that out.

Screenshot 2019-08-12 at 14.38.49

But, if everyone avoided everyone else’s addictions, the majority would miss out on a lot of living. Use does not equal abuse. Knowing the difference is a sign of maturity. Remember all of those notices about “Use Responsibly”? They mean it.

Let’s get the other downer out of the way. The odds stink. Even the best odds of the lotteries I play, Hit5, are 1 in ~576,000. Even the worst stocks probably have better odds. The smallest odds are 1 in ~303,000,000 for MegaMillions. But then, Hit5’s payout starts at $100,000; not enough to buy a house or even pay off my mortgage. While MegaMillions has almost lived up to its name with jackpots that have reached hundreds of millions. (Seems that a megamillion would be 1,000 kilomillions which would be one million millions which would be a trillion. Finally enough to almost buy out some mega-corporations.) Terrible odds. Why would anyone spend money on such bad odds?

Because, eventually, someone wins. If the odds of a million dollar lottery are one in seven million, and you heard someone won, and you think fewer than seven million tickets or numbers were picked, then your odds are better than one in seven million. The tricky part is that there isn’t always a winner; but when they do, they get that much more. As they say; “It could be you.” Said another way, “If the rest of your hard work isn’t working, then you can at least try this.”

An engineer friend pointed out a long time ago, that the odds of winning are ridiculously small; but the odds of winning go to zero if you don’t buy a ticket. So, buy a ticket and divide a teeny number by zero and get an infinite improvement; but buy two tickets and your odds barely change at all. So, Buy A Lottery Ticket.

If the lottery was all about mathematics, far fewer people would play, and the lottery wouldn’t pay. Lotteries do well, so they must be doing something well.

Buying Hope

“If the rest of your hard work isn’t working, then you can at least try this.” For the large portion of the population that doesn’t have a few hundred dollars to handle even a small emergency, life can be long list of anxiety-filled episodes. A scratch, a leak in the roof or under the car, a computer or phone that’s acting quirky, a long list of getting by every day hoping everything makes it another day and another day. Such levels of anxiety are reasons to talk to a counselor, something they’d probably do if they had more money. The Chinese general and philosopher Sun Tzu cautioned about feeling trapped. People who feel trapped can become desperate. Give people a possibility of escape and they find a reason and a way to live. Whether that’s society’s intent or not, I know that a lottery ticket in my pocket is a piece of paper that buys hope. That piece of paper costs a lot less than an hour with a health care professional. Ironically, if I won the lottery jackpot, I’d probably make that appointment. One friend’s approach is to buy a lottery ticket, check its expiration date, and hang onto it for months; then, just before its time is up, he checks it. For months, $1 provided him a possibility of relief.

Buying Entertainment

How much entertainment does $1 buy? There’s plenty of ‘free’ entertainment online; but it’s truly only free if you’re accessing it on someone else’s computer and internet connection without having to spend time or money getting to it. Time with friends can be free, but scheduling free time usually takes time. Have a ticket in your pocket and even a 30 second break while the computer crunches on some task, or some manager is delivering some boilerplate presentation to your group, your mind can wander off to as many ‘What Ifs?’ as you can fit in that time.

Buying Perspective

While the odds are small, the results are real. One measure of today’s world is a promo catch-phrase displayed on a lottery kiosk months ago. (paraphrased) “When did one million dollars become not enough?” Winning a million dollar jackpot thirty years ago would buy a house, even in the Seattle area. Even after giving up half to take the lump sum and paying the taxes, probably being left with ‘only’ $300,000, it was possible to buy a house, a nice house, or seed a nice retirement. Imagine buying some particular Seattle-area stocks in 1989. Now, today’s Hit5 jackpot of $120,000 is less than some starting salaries, Lotto’s jackpot of $1,600,000 pays out enough to buy a median-priced home in some of Seattle’s neighborhoods, leaving the significant payouts of PowerBall at $138,000,000 and MegaMillions at $65,000,000 with their odds that are similar to randomly picking one person out of the 300,000,000-some people in the US.

Buying Possibility

And, any ticket can be a winner. So, I buy a ticket. I look forward to writing that story.

Buying A Gift

A few years ago, when money was very tight, I bought tickets (Lottery Dreams). A bit of hope, a bit of entertainment, a relief valve from desperation, and a possibility. And then I realized I was buying something else. I’d watch to see when someone won, and eventually check my ticket. I wouldn’t wait months, like my friend; but waiting weeks was common. One time when I found that I didn’t win I thought about the fact that someone did. I felt good about that. Someone else who thought it was a good idea to buy a ticket, won. Maybe they needed the money, and maybe not. They probably had a really good day. I didn’t win, but I realized I helped someone else win. The winners can’t do it without the contributions of the rest. How much would you spend to know you helped someone else feel happy for at least a day? That’s worth much more than $1, to me. It may be sad that they need it in this society, but at least I can help provide it.

My Approach

Washington State’s lottery has a handy feature for a lazy way to play. I don’t buy a ticket a day. I don’t even spend $1 a day. The drawings for Lotto and Hit5 are a couple of times a week. WA State allows players to play the same numbers for up to 25 drawings in advance. I give the ticket clerk $20, and get a ticket that’s good for weeks, twenty drawings. It’s somewhat like dollar cost averaging in investing. Instead of trying to pick the right time to buy, I keep myself covered by visiting the booth or kiosk about once a month or two. I might buy another ticket for overlap, or if I’m having a tough day, or if I think it would be a great story to win hundreds of millions and then give almost (not certainly not all) of it away.

By the end of the year, I’ve spent less than some people spend on one pair of shoes. For that, I get hope, entertainment, perspective, possibility, and most assuredly welcome gifts for several strangers. Those lottery tickets provide a lot of value for a few pieces of paper, and the value far exceeds the costs cautioned against by conventional wisdom.

Posted in Uncategorized | Tagged , | 1 Comment