April 2008 Recap

Okay, my net worth at the end of April was $372,870, up from $357,891 at the end of March for a 4.2% increase. The main factor driving last month's change was my 401k bouncing back after a few really dismal months. I also managed to save some cash, and I was paid back for a fairly large expense that I'd covered for a friend-- I knew I'd get that money back but I hadn't counted the accounts receivable as an asset, so last month's net worth was sort of artificially low.

As for April expenses, here's some categories of note:
Dining: $641, under my $650 budget for a change!
Education: $120 (French class: tuition and an expensive book)
Gifts Given: $377 (some family birthdays)
Household: $123 (some cleaning and gardening supplies)
Clothing: $6 (I bought an expensive pair of jeans, but returned some other items bought in March)
Entertainment: $6 (Netflix)
Subscriptions: $70 (internet and daily newspaper)
Utilities: $114 (electric and telephone)
Housing: $2,314 due to this continuing craziness with the property tax escrow being wrong.
Miscellaneous: $310 (includes a haircut and my genealogy obsession)

I don't know what I was doing all month, but I wasn't really spending too much money, at least compared to some other recent months! That's good but I have to keep reminding myself that I've got an expensive trip with another payment due soon... must not get lazy about saving! Until next month... onwards and upwards!

Prize on the Eyes

My friend Mortimer has been doing a lot better lately-- he's gotten past his apartment crises, hasn't had any major health crises, and has been steadily employed. He's managed to pay off his credit card bill, and is now feeling more comfortable spending money on a few things he's wanted for a while.
One of these things, which I think actually qualifies as a need, not just a want, is a new pair of eyeglasses. Mortimer hadn't been to an eye doctor in several years, but he finally went, and then asked me to come and help him pick out new glasses.

I was expecting the search to be painful, but we actually found Mortimer a very nice pair without too much trouble. Of course they turned out to be Paul Smith frames that cost $365. But if you think that's bad, wait til you hear what the total cost was: since Mortimer needs bifocals, now known as progressive lenses, and also wanted the lenses that turn dark in bright sun, the final bill came to $1,200!
I was a little shocked when I heard the number, but when you figure that he saved himself having to buy a second pair of prescription sunglasses, it doesn't seem that bad. And since he'll probably wear these glasses for several years, the cost could work out to less than a dollar a day-- not much to pay for looking good and seeing well.

I Have More Money Than I've Ever Had in My Life!

How often can you say that? My goal is to be able to say it every month, and the last few months, I haven't been able to do so. But although I haven't yet pulled together a full monthly wrap-up, my net worth at the end of April was around $373,000, which is higher than it's ever been. It's a nice feeling!

It's Spring, Do You Know Where Your Wallet Is?

I obviously don't. For the 2nd time, I've gone out to lunch on a nice warm day intending to spend a full hour out and about, enjoying the sun, doing errands, etc. But then it turns out that I've forgotten to bring my wallet with me!
I have a small wallet where I keep my cash and most-used cards. (See "what's in my wallet" details in this post.) It tends to be in my jacket pocket, and when I went out to lunch today, I didn't bother to bring my jacket! I did have my bag with me at least, in which I keep another small card holder which has a couple back-up credit cards and less-used things such as insurance cards and mini subway maps. I was at least able to buy my lunch with a credit card, but I couldn't do the errand I'd wanted to, as that involved filling prescriptions which were in the wallet I'd left behind.
It was annoying to have to use that alternate credit card-- I usually only use it when I order something from LL Bean, as it gets me free shipping. If I was going to charge lunch, I'd rather have done it on the card where I'm racking up frequent flyer miles. On the flip side, I now know that the favorite deli where I usually pay cash for my salad is happy to accept a credit card, so maybe I'll start using one on a regular basis!

Anyway, now that the weather is getting nicer, I'll have to make myself a little lunchtime checklist:
Sunglasses?
Water bottle? (so I don't have to buy a drink)
Bag with book, notebook and/or crossword puzzles?
Wallet??????

Wine & Money

An article in today's Dining section of the Times talks about whether enjoyment of wine is affected by outside factors such as the circumstances in which you drink it, or knowing how much it cost.

The researchers scanned the brains of 21 volunteer wine novices as they administered tiny tastes of wine, measuring sensations in the medial orbitofrontal cortex, the part of the brain where flavor responses apparently register. The subjects were told only the price of the wines. Without their knowledge, they tasted one wine twice, and were given two different prices for that wine. Invariably they preferred the one they thought was more expensive.

“Forget those blurbs about bouquets, body and berries,” one newspaper account crowed. “A meticulous new study found that the more people think a wine cost, the more they like it. And the less they think it cost, the less they like it.”

Big surprise. Sommeliers all over know that the hardest wine to sell in a restaurant is the cheapest bottle on the list. “Yeah, clients don’t want to be embarrassed in front of a date, so they don’t order the cheapest wines,” said Fred Dexheimer, the wine director of the BLT restaurant group. The fact is, the correlation between price and quality is so powerful that it affects not just our perception of wine but of all consumer goods.

Studies like this seem to come up every so often, so this is no big surprise. But what these studies have never taken into account, as far as I know, is the subjects' attitudes towards money. I think that a frugal-minded personal finance blogger might be more likely to enjoy a cheap wine just because it's cheap. I know I can be this way-- sometimes I probably like things just because I am so happy I got a bargain when buying them. Someone who really values saving money might not enjoy an expensive wine just because they want to believe that a cheap one is just as good.
On the other hand, someone who is very focused on attaining wealth and luxury goods and projecting a certain image of their financial status might be more likely to enjoy an expensive wine, because they believe expensive things should be better, and because they want to feel like their hard-earned money is buying them the kind of rewards they deserve. After all, if expensive things aren't better, there's no value to being rich, right?

Obviously, the answer is for some researchers to set up a study comparing the wine tastes of personal finance bloggers to those of the rest of the population at large. I hereby volunteer to be your first guinea pig!

Life and Death and Money at the Kentucky Derby

I couldn't help noticed this bit of an editorial in today's Times:

There are, of course, owners and trainers who love thoroughbreds for themselves and for their ability to perform on the racetrack, which is a reasonable test of sound breeding. But the real race increasingly seems to be to capitalize on a horse’s success — to move a horse through its career as quickly as possible. The sums involved are immense, so much so that the horses seem more like financial vehicles than animals with an existence of their own. The life of the money comes to seem just as important as the life of the horse.

It's certainly sad to think that greed was could have been responsible for Eight Belles' death.

Good, Clean, Money-Saving Fun

I had dinner the other night at Joya, a Thai restaurant in Carroll Gardens, Brooklyn. I've written before about its sister restaurant in Park Slope, called Song. Both places seem to have found a recipe for success in offering a hip atmosphere and really low prices-- they always seem to be jam-packed with a diverse crowd, people of every age, race, class, and orientation all chowing down on generously sized $7-8 entrees.

After enjoying some veggie dumplings, chicken masaman curry and a shrimp/portobello mushroom special, with a couple of drinks, all coming to about $50 for two people, I decided to stop in the bathroom on the way out. While I was, ahem, seated, I looked down and noticed a shiny quarter on the floor! As longtime readers will know, I love finding money and will stop and pick up a coin of almost any amount. A quarter is especially exciting, as it can be used for laundry.

But this quarter was on the floor in a bathroom. The bathrooms at Joya seem quite clean as New York restaurant bathrooms go, but the quarter was on the bathroom floor in a slightly puddly looking area, which was kind of sort of really near the toilet. This gave me pause. I stood there for a minute and thought, "should I just give up on this quarter? Is that too gross?" It also occurred to me that this might be one of those jokes where the quarter is super-glued to the floor and if I try to get it I'll end up on Candid Camera or YouTube as the crazy girl who's willing to scrape a quarter off a dirty bathroom floor.

But the intrepid penny pinching Madame X came through and I told myself, "@#(*&$ it, I want that quarter!" I turned on the water in the sink. I put some soap on my hands. I bent down to grab the quarter. This attempt at germ-busting then resulted in some comical slippery fumbling with the quarter (which perhaps you've already seen on YouTube, but god I hope not...). But I eventually got the quarter to the sink where I washed it and my hands thoroughly with more soap. I then dried off my prize and took it home in my coat pocket.

Yes, it's possible that this quarter might still have been crawling with nasty bacteria but I didn't hang onto it for long-- the next morning I ended up giving it to a friend to use in a parking meter.

And yes, this is how far I'll go for 25 cents. I think it's a good exercise, actually, in adjusting one's financial attitude. Picking up a coin reminds me that the little things matter, and that I don't take financial issues lightly. It reminds me that money is money, and no honest way of acquiring it should be considered beneath one's dignity. But really, if you see me on YouTube, please don't forward it to all your friends.

CEO Salaries

There's been a lot in the news lately about CEO pay packages and how they relate to company performance. The numbers are always mind-blowing, almost inconceivably large. How have we gotten to a point where these salaries are so stratospheric? Anyone who rises to that level in a company must have something going for them in terms of brains, personality, management skills-- at least I'd hope so-- but are they really THAT much more valuable than other workers? Sometimes, obviously, they aren't: the CEOs of companies that have crashed and burned can't possibly be doing their jobs right, yet even when they are fired for it, they walk away with severance packages worth more than most of us could ever earn in many lifetimes.
Why aren't more shareholders up in arms about this issue? How are some of these CEOs themselves not embarrassed by their pay?
I guess the world of corporate boards and compensation consultants is a pretty small circle-- they all think they deserve it themselves, so they vote for it for each other. I came across this chart while looking up a book I'm interested in reading, called Superclass. This chart of connections might strike some people as conspiracy paranoia, but to me, it's just not all that surprising that very rich and powerful people all have connections to each other, and that they would all do whatever they think makes their friends happy, whether that is donating to a favorite charity, or weighing in on how much someone deserves a huge pay package.

Ooh, I Feel So Stimulated!

I just took a look at my savings account and was momentarily puzzled by the appearance of a $19.70 deposit labeled "US TREASURY 220 TAX REFUND PPD." I got my tax refunds long ago, and was wondering if this was the correction of some sort of error. But then I got this warm tingly feeling as I realized that this is my economic stimulus payment!

I've heard people in the office talking about when and how they might get their payments. These are mostly younger assistants who don't make much money and are really excited to be getting $600. I hope they use it well.

As for me, I'm not sure that $19.70 is really going to make much of a difference in my life. I wonder how many millions of people are getting this kind of piddly little payment. If a million people get $20 each, that is $20 million dollars. I'd like to think $20 million could have more impact in other ways, but maybe it doesn't matter.

Have you gotten an economic stimulus payment? What will you be doing with it?

I Loro Portafoglios Apertos

I'm probably butchering that, but it's roughly Italian for "Their Open Wallets."

Apparently the Italian tax ministry posted on its website the name, address, reported income and tax paid of every Italian citizen, neatly organized by city. It's already been taken down, which is unfortunate-- I don't think any Italians responded to my call for salary revelations!

Today in the News

Oooh, it's a good day for finance related news today:
People are cutting back their spending, even in Europe.
Meanwhile, politicians are using taxpayer money to guzzle gas.
Despite inflation, there are still stores where every item of clothing costs less than $10.
Fewer immigrants are sending money back home.
And there's an editorial on why a temporary gas tax cut is a bad idea.

But enough about the world, what about ME!?!?!
My last 5 financial transactions were:
$3.35 on breakfast (cash)
$4.42 on lunch yesterday (cash)
$3.35 on breakfast yesterday (cash)
$23.18 on Chinese takeout for dinner the last two nights (credit card)
$31.19 to ConEd (e-payment from checking account)

Okay, maybe the world is more interesting.