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December 31, 2006

Bridget Flynn

Apropos a telephone conversation I had with my mother a little while ago, I was reminded of this tune you can find on All's Fair:

I've a nice little house
A cow or two with grass
I've a plant garden runnin' by my door
I've a shelter for the hens
A stable for the ass
Now what could a man want more?

… I don't know, maybe so
But a bachelor's life is easy and it's free!
Well I've lots to look after, but I'm livin' all alone
Sure there's no one lookin' after me

Well me father often tells me
I should go and have a try
To find a girl that owns a bit of land
And I know the way he says it
There's someone on his mind
And me mother has the whole thing planned

I don't know, maybe so
It would mollify them greatly to agree
Now there's little Bridget Flynn, it's her I'd like to win
But she never has an eye for me

Now there's a little lass
Who's worth her weight in gold
And that's a decent dowry don't you see
And I mean to go and ask her, as soon as I get bold
If she'll come and have an eye for me

Will she go? I don't know
But I'd love to have her sittin' on my knee!
And I'd sing like a thrush in a hawthorn bush
If she'd come and have an eye for me

Looks like they have an active performance schedule for the next few months. Wish I was in the area to attend one.

Tolerance Alive and Well in Texas

Wow. Excellent all around. Love the openness about saving face and the show-must-go-on spirit. The story exudes an "everything worked out fine" atmosphere. More of this, please.

Net Worth Report - End of 12/06

This month's numbers don't look very good. The most important factor was a >5% decline in Intel's stock price, but I also had some large charitable outlays and a large gift to family. Instead of ending the year with an exclamation point and crossing the half-million-dollar mark, I'm actually down $5,000 from last month. C'est la vie. Very strong odds on hitting that mark by the end of February, though.

Net Worth Figures

The new year exposes a discontinuity in my modeling, so take next month's target figure with a grain of salt. On the surface it appears to be a big jump but most of the change is due to the fact that my employer contributes to its profit-sharing plan at the end of January and I'm estimating the size of that contribution.

Goal-Tracking Figures
Adjusted Net Worth$460,187.07$457,304.04
Next Month's Target$462,638.34$467,162.22
Estimated Contribution-$124.34-$4.82

I have some amusing credit card news. About a month ago I applied for another 0% credit card and used my entire available credit line for a balance transfer. When I called to activate the card they noted that my credit limit only allowed me to transfer a portion of my request. They asked if I wanted to apply for a larger credit limit. Well, sure. I asked for a $20,000 limit but expected to get much less than that. Nope, I got all of it. In an odd coincidence I got a letter in the mail today from Discover saying that they're increasing my credit limit too. I didn't even ask them for it. They even included some lovely 1.9% balance transfer checks. In a third strange turn of events, I've been getting mail and phone solicitations to apply for a business credit card with very generous terms. I told them that I don't run a business; they said that didn't matter and I could apply anyway. (Huh?)

It's like they're encouraging me. I thought I understood this industry. I thought they paid more attention and had data mining tools and could differentiate between customers that will make them a lot of money versus customers that will leech value from incentive programs.

Whatever. It's their dime. If they want to give it to me, I won't complain. But if I worked at a bank, I think I'd be more careful.

Credit Card Arbitrage Figures
Balances @ 0% APR$12,991.99$25,012.71
Monthly Payment$259.84$500.25

You can keep track of other personal finance bloggers at NetWorthIQ. I've updated my entry there.

December 28, 2006

Coney Christmas

I'm not much into Christmas but I did give one very important gift — the gift of safety.

The proliferation of safety cones at work has become something of a running joke among a few of my co-workers. There's virtually always some kind of maintenance or construction happening where we work, so we see a lot of safety cones to illuminate hazards or to … okay, sometimes we can't tell why they're there. And that's why they're funny. Sometimes they look like they're simply warning about the existence of another nearby cone.

Our favorite example of cone use is once when during a heavy storm some water had leaked in underneath an emergency exit door at the bottom of a stairwell. This water was not mopped up. Instead, a cone was placed near the water and the water allowed to evaporate. I think it was weeks before the cone was finally removed.

Any casual observer can see that cones make dangerous situations safe. The water is no longer a slip hazard because the cone is there, neutralizing the danger.

In this spirit I purchased a set of authentic but desktop-sized safety cones for several co-workers:

6-inch safety cone

These cones were manufactured by the Allsafe Services & Materials Company, who offer a whole series of cones in this style, from 6" (what I purchased) to 36" for those times when observability really matters. They also make several other styles of cones. I purchased them from Fastenal which, interestingly, has a storefront within walking distance of the campus where I work.

I thought about getting a "supercone" (a collapsible cone with a blinking light on top) instead, but it would be too easily mistaken for a misplaced cone and redeployed where we'd never see it again. Given the frequency of cone retrieval this probably would've have been a huge risk, but I'd rather be safe.

I briefly came into work on one of my days off, wearing a Santa hat, to distribute the cones. Loren immediately thought of the perfect thing to do with his:

I placed the safety cone on top of my DTO. All normal rules of safety are self-contradictory at this point:

  1. The cone surely weighs more than 8oz, so it is unsafe to place on the DTO.
  2. The safety cone is defined as being safe. If anyone is injured by a falling cone, I'm sure it's their fault.

I believe there is no logical resolution to this safety conundrum. I expect to find a safety monitor weeping in the fetal position on the floor of my cubicle before long.

I don't worry about the fate of the safety monitors. I worry more about how we'll prevent this from happening.

Interestingly, the process to create these cones appears to be very manual. Each had differences in the thickness of their base, how they were trimmed, and how the hole on top (for storage on a rod) was cut.

SarbOx alert: When I went to pick up my cones after they were delivered to the Fastenal outlet, I had to sign the shipping receipt. Surprised that I'd have to sign a shipping receipt for something shipped to the store (not to me), I asked why that was necessary. The guy behind the counter sounded annoyed as he told me it was for Sarbanes-Oxley compliance.

Sarbanes-Oxley: Making Christmas a little less merry.

December 27, 2006

Worthy Causes

'Tis the season to be charitable … and even if you're not filled with the Christmas Spirit, perhaps the tax deduction is a good motivator.

I'd like to call out three worthy causes that I'm making end-of-year donations to. They deserve greater public awareness and support.

The Alliance for the Separation of School and State is an organization whose goal is to remove government influence from education. If you're curious about how government influence is harmful to education, see their website.

The Voluntary Trade Council is an organization whose goal is to expose the harm caused by antitrust laws and to advocate for their repeal. They are active in current litigation and frequently file briefs on behalf of companies prosecuted under antitrust.

The Cascade Policy Institute is an Oregon-based free-market-oriented think tank. They work to influence the local political landscape to protect individual liberty and to encourage economic opportunity.

December 25, 2006

Power Outages

Okay, now I'm upset. You're probably familiar with the windstorm that swept through the Northwest last week and cut power to hundreds of thousands of people.

That affected me. I lost power for about two hours.

A few days later there was a substation fire that left me without power for an entire night.

All this had me thinking I ought to buy a UPS to protect my computers. But I didn't want to go out into the throngs of Christmas shoppers.

I should've. On Christmas Eve I had four power outages, each brief (the longest only a minute or two) but each caused my computers to reboot.

Under ordinary conditions a power failure isn't going to destroy any data because computers are usually idle and the disk cache doesn't usually have any pending writes. Unless you're at your computer restarting things after the power outage five minutes ago. In that case your disk might be quite busy. And you might lose data.

I lost data. I was restarting my e-mail application at the time of the third outage. Fortunately it doesn't look like I lost any e-mail… but I did lose the indexing of that mail. Now I have thousands of e-mails sitting in my inbox, instead of being nicely organized how I wanted them.

It's going to be a lot of work to reorganize that mail. I am not happy. I might have to brave the horde on Tuesday to get a UPS…

December 24, 2006

Health Savings Account Improvements

A few days ago, President Bush signed the "Health Opportunity Patient Empowerment Act of 2006" into law. A Treasury Department press release has a very useful summary of the improvements to HSAs:

  • Allows rollovers from health FSAs and HRAs into HSAs through 2011.
  • Increases the annual HSA contribution limit.
  • Full HSA contribution regardless of month individual becomes eligible.
  • One-time transfer from IRAs to HSAs.
  • Certain FSA coverage treated as disregarded coverage.
  • Earlier indexing of cost of living adjustments.
  • Allow greater employer contributions for lower-paid employees.

Read the press release if you're interested in more information on those points. I'd like to call out special attention to the increase in the annual contribution limit:

Previously, the maximum HSA contribution was the lesser of the deductible of the individual's HSA-eligible plan or a statutory maximum. The new rules make the limit the statutory maximum contribution, regardless of the individual's deductible. For 2007, the maximum contribution for an eligible individual with self-only coverage is $2,850, and the maximum contribution for an eligible individual with family coverage is $5,650. These limits are indexed for inflation.

I am a strong proponent of high-deductible health care insurance and HSAs. I've been covered by one of these policies since 2005 and during the recent open enrollment period I decided to stay with it for another year. My plan has a $1,200 deductible for 2007, so I expected my maximum HSA contribution to be $1,200. Now that this legislation has decoupled the deductible and contribution limit, I will be able to contribute $2,850.

Because I'm in the 28% Federal and 9% Oregon tax brackets, I originally expected a 2007 tax savings of $444.00 by contributing to my HSA. Due to this legislation, I will actually save $1,054.50.

Yes, I just got a $610.50 tax cut. Outstanding!

It's notable that my $1,054.50 tax savings is nearly as large as my $1,200 deductible. Looking at it another way, my 2007 health care just became approximately free.

(I am not at all concerned about the possibility of accumulating too much money in my HSA. As a technology and medicine optimist I expect to spend every penny of it on life extension therapies someday.)

Unfortunately, this legislation was signed after the open enrollment period had ended. The new incentive structure may induce many people to switch to HSAs, but due to the timing they'll have to wait until next year.

2007 Marginal Tax Rates

A long time ago, I posted an article about 2004 marginal tax rates. It was a handy reference and I used it several times. This post is in the same mold, but for 2007. None of the tax rates have changed since the earlier article; only the brackets have moved.

Here are the 2007 federal income tax brackets:

  • 10% on the first $7,825
  • then 15% up to $31,850
  • then 25% up to $77,100
  • then 28% up to $160,850
  • then 33% up to $349,700
  • then 35% on the rest

(Here's an interesting page that charts the top marginal rate since the creation of the federal income tax in 1913.)

FICA tax rates have been stable for many years. I list the self-employment rates because that's the correct measure of the tax. It's only true that "the employer pays half" in an accounting sense; it's still part of the cost of employing you. (Instead of "coming out" of your paycheck, it simply never "goes in", but either way you're still paying it.)

I was not able to find 2007 figures for the Oregon income tax, and the 2006 figures I found here and here disagree on where the top bracket starts ($6,650 vs. $6,550) so I'll split the difference.

  • 5% on the first $2,650
  • then 7% up to $6,600 (see above)
  • then 9% on the rest

And here are the numbers tabulated:

TaxIncome Bracket

(Shouldn't I get some kind of recognition for using the word "tabulated" in its most literal sense? Nobody does that…)

December 23, 2006

Comments Available

Unlike the typical times when I post infrequently, this time I've been working on the blog. I've implemented a comment system. I've tested it as much as I care to, so now it's your turn!

Family and friends, this means I'll start answering my phone and e-mail again. :)

December 14, 2006

Mint Misregulation

The U.S. Mint is issuing regulations to "prohibit, with certain exceptions, the melting or treatment of all one-cent and 5-cent coins."

Prevailing prices of copper, nickel and zinc have caused the production costs of pennies and nickels to significantly exceed their respective face values. The United States Mint also has received a steady flow of inquiries from the public over the past several months concerning the metal value of these coins and whether it is legal to melt them.

The new regulations authorize a fine of not more than $10,000, or imprisonment of not more than five years, or both, against a person who knowingly violates the regulations. In addition, by law, any coins exported, melted, or treated in violation of the regulation shall be forfeited to the United States Government.

Inflation is the deliberate policy of the U.S. Government and has been ever since the creation of the Federal Reserve. The government forced us off the gold standard in 1933, ended silver coinage in the 1960s, and in 1982 even had to debase the penny from mostly copper to mostly zinc. Now the copper content of pre-1982 pennies, and the nickel content of nickels, are worth more than the face values of the coins. People are naturally interested in selling them as scrap metal instead of using them as currency.

The U.S. Mint is overreaching — these regulations are illegal. The proper scope of regulation is only "to make regular" certain things or activities, to lay down rules about how they are to be done. The power to regulate is not the power to prohibit. Only a legislative body like the U.S. Congress has the authority to issue prohibitions and set criminal consequences.

I intend to submit a comment about this rule once I've read it, but the press release is only a summary and the rule itself has not been published yet. I called the Mint to ask where I could find it and they said it won't be published until tomorrow in the Federal Register, despite their press release today saying "The interim rule appears on the United States Mint website."

They should have held the press release until the rule was published. That was bad of them. But I can wait a day…

UPDATE 2007-01-05 15:43:02 UTC: Actually, Congress did give the Secretary this power, and quite explicitly, in 31USC5111(d)(1). Read this for more information.

December 07, 2006

Financial Sanctions Against Iran

The United States is cracking down on Iran … by blocking financial transactions. The article is dated Dec. 3 but the U.S. government began ordering these restrictions at least a week earlier.

I know this because these restrictions reach beyond the banking industry. Even e-gold was forced to suspend access to Iranian accounts. I hoped I could get more information from them, but although they did reply to my inquiry, they couldn't offer any specifics.

This is an attempt to cut off Iran as comprehensively as possible from global financial institutions. There are (at least) three angles behind this:

  1. Punish Iran for its defiant insistence on continuing nuclear weapons research.
  2. Punish Iran for supplying weapons to Iraqi insurgents.
  3. Cut off sources of funds that may support terrorism.

I'm conflicted about this situation. On one hand, I recognize the Iranian government as a major enemy that must be fought. Yet this sort of financial action does serious harm to many innocent Iranian citizens who are being oppressed by their government. These people could be allies; we risk making them enemies.

This is one of the problems with sanctions as opposed to direct military action. Sanctions hurt many more innocent people than bombs do, and for a much longer period of time. Why put millions of people through years of misery when a few bombs could do the trick? When and how did sanctions become the "superior" choice?

Why can't the Iranian situation be solved with a few bombs aimed at its nuclear facilities and government leadership? Why does the international community meet the Iranian threat with so much lethargy and appeasement? If we thought their government was facing imminent collapse or overthrow then delay might be a reasonable strategy but I'm not aware of promising signs in that direction.

December 04, 2006

Net Worth Report - End of 11/06

Another excellent month. Sorry, too busy to add commentary this time.

Net Worth Figures

Goal-Tracking Figures
Adjusted Net Worth$450,256.74$460,187.07
Next Month's Target$452,769.52$462,638.34
Estimated Contribution-$10.86-$124.34

Credit Card Arbitrage Figures
Balances @ 0% APR$12,622.19$12,991.99
Monthly Payment$252.44$259.84

You can keep track of other personal finance bloggers at NetWorthIQ. I've updated my entry there.

Tiny Island