First Time Charitable Giving

Posted by T.W. Hanson - Mar 20th, 2008 at 21:03

charity

Out from under the guidance of parents and maintaining a steady source of income, many people give their first autonomous charitable financial gift as a vicenarian. Done in the right way, this is healthy for all parties involved. There are clear and tangible benefits to the organization receiving the gift and intangible gains for the giver. Benjamin Franklin framed what he believed to be the noblest question, “What good may I do in the world?”

I have learned a few things from my previous gifts.

  • Find a cause about which you feel passionately. Focusing giving on a subject where you have a real interest increases the impact of your donation. Spreading funds widely has no moral flaws, but if it causes you to lose interest and stop giving, it isn’t good.
  • Don’t choose a cause for social status. You can worry about that when your last name is Kennedy or when you marry into a family that came over on the Mayflower.
  • Spread your gift out throughout the year. This protects you from unforeseen events that may put you in difficult financial shape. You also get the excitement of giving on a monthly or quarterly basis as opposed to once a year.
  • Don’t give beyond your means. There are seemingly an infinite number of worthy causes all of which would benefit from your charity. However, taxing yourself into a state of misery is ill advised. Use your budget to compute what you believe to be a reasonable amount and stick to it.

Giving should not be a chore. Your gifts should dovetail with your interests, making them a natural extension of your life.

How To : safely use your work laptop at home

Posted by Tad Johnson - Mar 19th, 2008 at 18:03

My employer gives me (and the rest of the IT department) a laptop for work. This decision was made in the hopes that it would make travel easier (we can bring all our work with us) and allow us to work from home. I have my reservations on both claims, but it is what it is.

laptop.jpg

One of the sticky questions that develops when you give your employees mobile computers is how to differentiate work from personal use. The official policy, as you might guess, is that our work laptops are to be used exclusively for work related tasks. As you might imagine, this is rarely the case.

I occasionally use my work laptop for personal use at home, and I know more than a few people who use it exclusively as their only computer. This may seem like a great way to save money and reduce the electronic clutter in your life, but there are some very troubling implications.

For example, what if your company is involved in a lawsuit and they need to scan your hard drive as evidence? Do you want them finding photos of Fluffy mixed in with your TPS reports? What if you’re using your laptop (at home) for activities that run afoul of your company policies? Can they distinguish between the times you’re online at work versus the times you’re at home?

Fortunately, a few new technologies may save the day :

  • Use web apps. Keep your personal data in “the cloud” as much as possible. Use Gmail, Google Docs, Hulu, and any other web apps you like to ensure that your personal data stays off your hard drive.
  • Use an alternate browser. Keep your work links, history, and cache separate from your personal stuff by using a totally separate browser. (Such as Firefox).
  • Boot Linux. Most of the popular Linux distributions offer Live CDs that allow you to boot into Linux and use all the standard apps without touching your hard drive. These work surprisingly well, though you will experience a slight performance hit compared to a regular OS installed on your hard drive.
  • Boot Linux from a USB key. As a more advanced offshoot of above, some Linux distributions (including my favorite, Ubuntu) allow you to install and boot from a USB key. This is an ideal solution, since it offers good performance and it saves all your data. [Believe it or not, I’m using such a scheme right now!]

As a vicenarian, you hopefully haven’t been forced to deal with a company lawsuit. Just because you haven’t been bit doesn’t mean you shouldn’t be cautious. If you’re using your employer’s laptop for personal use, please be safe and make smart choices.

Exxon Vs. Venezuela, Round 2

Posted by T.W. Hanson - Mar 18th, 2008 at 20:03

oil platform

So you are the world’s largest company and operate oil wells around the globe. You wake up one morning, and you are told that your $5 billion investment is no longer yours. Apparently, Venezuela has decided to take away your oil assets in their region. Fortunately for you, the financial wherewithals of the two parties are about equal. They have a military, but I hear Blackwater is available for hire.

Step 1: Sue them everywhere in the world.

In January, Exxon won rulings from courts in London and elsewhere freezing Venezuelan assets around the globe.

Step 2: Wait for a reaction.

Since that ruling, Venezuela has responded by threatening to cut off oil supplies to the West and moved troops to the Colombian border, one of America’s best friends. They also continued to fight Exxon’s legal claims in court.

Today, a London court ruled in Venezuela’s favor. The assets were unfrozen and Hugo Chavez acheived a clear victory.

Step 3: Keep the legal challenge going and look up Blackwater’s phone number.

Sometimes, spending more is cheaper

Posted by Tad Johnson - Mar 17th, 2008 at 19:03

As a vicenarian, and reader of this site, you’ve heard the same adage before : spend wisely, save money, and you’ll end up rich. This equation works well, but that first point is often the hardest to master.

suit.jpgOne common mistake in spending wisely is thinking to always spend less. In many cases, spending less is actually counter productive–to put it another way, you can actually save money by spending more.

The difference, as you might guess, is quality. Often, you’re faced with the choice of spending $5 on a cheap item, or $10 on the more expensive version. You might reflexively reach for the former, and you might be wise to do so. The key question is, will the more expensive item last twice as long (or longer)?

Trouble is, it’s not obvious which items are worth the premium and which aren’t. I’ve written on these pages previously about generic brand food, which is an example where the cheaper version is a great bargain. By contrast, men’s business ware is an area where spending more can save you money in the long run. (I chose men’s clothing over women’s because that’s what I know. By all means, please educate me in the comments.)

When I was graduating from college and ready to start interviewing, I tried to save some money on buying nice clothes. I bought a suite, some shirts, and a few ties at the Men’s Warehouse. Big mistake! Sure, I spent less than I would have at a nice department store, but I ended up with less-than-high quality clothes. The shirts wore out quickly and the slacks already busted a belt loop. (And the tailoring wasn’t exactly top-notch either!)

Fortunately, a good friend of me steered me in the right direction. Since I started working, I’ve been buying dress shirts at Brooks Brothers. I pay a little more for each shirt, but they last much longer, fit well, and are visibly well made. By spending a little more up front, I’ve easily saved money over the long run.

What are your suggestions for buying quality vs. price? Share your experiences in the comments below.

A Market Bubble Collapses: The Slow Motion Train Wreck Version

Posted by T.W. Hanson - Mar 16th, 2008 at 20:03

train wreck

Vicenarians don’t have much practical experience with the troughs in the business cycle. There was the savings and loan crisis in the late 80s and early 90s, but many of us were learning how to read during those years. The Internet/.com bubble collapse of 2000 is our primary frame of reference for distressful economic times. This crisis is appears very different. Although characteristics like increased unemployment seem to reappear each cycle, there are rarely perfect parallels from one downturn to another. One of the macro differences is the speed. The rate at which this credit markets are contracting is much slower than the rapid implosion of the Internet companies in 2000.

Unlike in 2000, today’s irrationally overvalued assets are homes and properties.  Prices for these assets are sticky.  Most are unique and take weeks, months or years to sell.  One result of this is that the securities tied to the value of these properties have fallen at a similarly and painfully slow pace.  Write downs of assets on bank balance sheets haven’t occurred all at one but have been stretched from quarter to quarter to quarter.  This is forecast by some to continue for quarters to come.

bubbleDuring the Internet bubble, company values were wiped out overnight.  Equity values disappeared, companies shut down, people and families felt pain and the economy took a hit.  However, it was over in a relatively short period of time.

The industry this is hitting the hardest is slowing down the bleeding even more.  The financial institutions provide and source the capital for all other industries.  Each day they are operating in a weakened state, other businesses and individuals aren’t getting the financings or financing terms that a fully functioning free market would provide.

When will the market recover and economic expansion resume?  When the financial sector reaches a catharsis resulting from both the final write down and the replenishment of tangible assets on their balance sheets.  Don’t hold your breath.

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