Voice Mail Tricks and Easter Eggs April 30, 2001January 26, 2017 Ed Biebel: ‘I have the same voice mail problem that you described Friday. Although I use Cingular for my provider, I decided to try ‘337’ just to see what would happen. It worked! You have saved me countless hours spooling through long messages to get to the one I need.’Steve Gilbert: ‘Using 337 to skip and delete a message works on Sprint PCS, too.’ Sandra Wilde: ‘This also works on my home phone voicemail from Qwest.’ Eric Batson: ‘You are probably on a standard Octel system. They are the market leader. Some more detail: 1 goes back 10 seconds, 11 goes back to the start of a message . . . 3 skips forward 10 sec, 33 goes to the end of a message . . . 4 slows down playback, 6 speeds it up, and every time you press those it goes even slower or faster. These are very cool. The longwinded guy… just hit him with 6 twice…. then when that crucial call back number zips by, hit 1 to rewind, then 444 and he says it slowly while you write it down.’ ☞ The only thing more amazing than how great this is is that AT&T’s ‘quick reference card’ doesn’t say a word about it. Jonathan Hochman: ‘These controls work on most voicemail systems, even though they are not always revealed in the instructions. Undocumented software features are sometimes called Easter Eggs. Most software has some. You can search at Yahoo for pages about Easter Eggs and your favorite software. Here’s an example for excel.
AT&T Wireless April 27, 2001March 25, 2012 A tiny idea, and useless unless you use AT&T Wireless. But if you do use AT&T Wireless, you may be as astounded and grateful as I was when I learned this. You know how frustrating it is to call in for your messages and have to listen all the way through a long, long, LONG one before you can delete it? Someone is going on and on and then you lose your cell connection just before the end, before you can delete it – because you’re in Manhattan, or Washington, say, where a lot of calls get dropped as you round various corners, or even as you stand still – and so you call back in for your messages (one of which you really do need to hear) but before you can get to the one you really do need to hear (the address of the event!) you have to listen to that long, long, LONG one again because you hadn’t gotten to the end to delete it – and again you lose your connection just before the end . . . well, you get the idea. And the thing is, you hold in your hand technology that is basically magic – you put this rock to your ear and can locate anyone else in the country with a rock and make that rock catch your friend’s ear (a tone that says, in effect, ‘put the rock to your ear!’) and then have a conversation with your friend as if she were standing right there in front of you – and yet no one figured out a way to delete an unwanted message without waiting til the end? HEL-LO! And the answer is, of course there’s an easy way to do this, they just don’t tell you about it (or didn’t tell me, anyway – and I’ve asked). Well, yesterday they let me in on the secret, which I now pass on to you: 33. Just press 33 and you go instantly to the end of the message, where you can press 7 to delete it. So 337 gets rid of it right away. You save two minutes of blather, you find out where the event is, you walk in just in the nick of time, sit down at the piano, and begin to play. All because of 337. Have a good weekend.
Uh-Ohs April 26, 2001February 19, 2017 H2 . . . UH-OH Bryan Norcross: ‘To clarify. Federal Flood Insurance covers damage from rising water from any type of weather event. It does not, however, cover water damage from above; if your roof blows off and it rains in, for example. The triggering event for the windstorm coverage varies company by company and seemingly event by event in how they interpret the law, but it normally requires that the storm be designated a hurricane by the National Hurricane Center. It does NOT require that the damage be done by hurricane force winds. This all stirred quite a controversy after Hurricane Irene in 1999, when there were no hurricane force winds over land (top winds were 60 mph), but there was lots of damage. Because it technically was a hurricane that caused the damage, the windstorm policy kicked in and that meant that deductibles went up to 2% or more and there was no replacement-value insurance on personal property.’ TIV . . . UH–OH Nothappy: ‘In response to Bob Smouse yesterday re: Tivo. The Sony box comes with a 90 day labor and 12 months parts warranty. My box froze up 4 months after I bought it. I was on the hook for one way shipping and $92 to fix it. I’m not sure how Bob was able to get Tivo to foot the bill, but I think people should know the reality of getting these things repaired. Also, people should be forewarned that Tivo is still a relatively new product and, if my friends’ experiences are any indication, tends to have problems. All that said, it is an amazing product that does change your life, although not necessarily for the better. My Tivo crashing did have an upside — my wife and I actually talked with each other.’ Alan Rogowsky: ‘I am on my 3rd TIVO since early March. In each case it has been the same: the internal modem burned out. I finally got some good advice from their customer service line (which I agree is absolutely the most extraordinarily helpful group of people I have ever dealt with over a phone!). It seems that power surges through the PHONE-line can all too easily do serious damage to the inner workings of TIVO – but that with the help of a $19 Radio Shack super duper 1000+ joules-rated surge suppressor – which takes both power, phone AND cable lines – I feel confident that my troubles are over. They also credited me back for a month and a half’s service in addition to my ‘lifetime’ membership.’ ☞ I’ve bought four TIVOs; two for us, two as gifts. So far, all have worked fine. (Wish I could say that for Creative.com’s lousy stinking Nomad Jukebox and their lousy stinking customer service. But that’s another story.) Cooking Like a Guy with a Credit Card Like to eat, hate to cook, got a freezer, a microwave and a credit card? Try: greatmeals.com. I was so disappointed that I missed the $50-off promotion – a free lunch – that I couldn’t bring myself to try it. But it sure smells good.
What You Didn’t See on ‘Meet the Press’ April 25, 2001February 19, 2017 I have ‘Meet the Press’ TiVo-ed every week, but here is one I missed: BUSH ON HEALTH CARE: THE SMOKING GUN! By Matthew Miller For release 04/23/2001 Tribune Media Services ‘Insurance Plan Would Help Six Million, White House Says,’ Washington Post headline, Friday, April 20 Tim Russert, I’m begging you. Ted Koppel, make ’em squirm. Jim Lehrer, get tough! Thanks to a White House leak the other day – a leak Team Bush obviously thought would make us think even more highly of their compassion – we’ve finally got the goods. Let’s go to the cross-examination – I mean, the videotape – the nation needs: Tim: … Back again with Vice President Dick Cheney. Let’s talk health care. You’ve just issued more details on your plan to expand health insurance. Dick: Yes, the president is very proud of this effort to help those who need health insurance. Tim, we all know how important health coverage is for any family’s peace of mind. I know it from the expensive procedures I’ve had myself recently. The president will devote $70 billion – that’s billion, Tim – over the next 10 years to help lower-income families buy good plans in the private market. We expect this will cover 6 million more people. Tim: That’s very interesting. Mr. Cheney, I have in my hand a 94-page document dated Feb. 6, 1992. It’s entitled, ‘The President’s Comprehensive Health Reform Program.’ Do you recognize it? Dick: No, but … Tim: But you were in the first George Bush’s Cabinet – you do recall he put out a major health plan in 1992? Dick: Yes, of course. Tim: Now here’s what I’m having trouble understanding. There are 43 million Americans without health insurance today. You say President Bush wants to help 6 million buy coverage. But back in 1992, when there were 34 million uninsured, the first President Bush said on page 30 of his plan that he would help 30 million of them get insurance. Why does today’s President Bush want to help so many fewer uninsured Americans than his father did, even though more of them are in need? Dick: Look, Tim, I don’t want to get into a Washington numbers’ game. We think the president has a very solid plan that will help millions … Tim: What about funding – you’re spending $70 billion over 10 years, so that’s about $7 billion a year, right? Dick: That’s right. That’s billions, Tim. Tim: But when phased in, Bush’s father was proposing $35 billion a year. When you adjust for inflation since 1992, that’s $50 billion. Every year. Why did Bush the Father offer a plan seven times richer than the one Bush the Son is offering – when Bush the Father was facing $300 billion budget deficits and the son has come in with huge budget surpluses? Shouldn’t the American people think there’s something wrong with this picture? Dick: Well, Tim, 1992 isn’t 2001. Different times demand different solutions. And we’ve learned from a lot of failed liberal experiments that throwing money just isn’t the answer. Tim: What does this administration suggest people use to buy health insurance if not money? Dick: Well, that’s not what I meant, Tim, if you’re going to twist my … Tim: But wouldn’t you agree the problem is bigger now, and we have more money to address it? Dick: Yes, that’s why we’re taking decisive action. Tim: But how decisive is it for the 37 million uninsured Americans your plan, by your own admission, ignores? Dick: Well, but … Tim: And the $70 billion for health care is less than one-twentieth of the size of the tax cut you offer mostly to wealthy Americans … Dick: That’s a totally different … Tim: Dick Cheney, is that your final answer? Dick (flashes villainous grin; he’s snapped): OK, YES, YOU’RE RIGHT! WHAT TOOK YOU SO LONG, SMARTY-PANTS? WE’VE MOVED THE DEBATE SO FAR TO THE RIGHT, IT’S DIZZYING! AND NO ONE’S EVEN NOTICED! EVEN ‘LIBERALS’ LIKE TED KENNEDY AND JAY ROCKEFELLER FEEL THEY HAVE TO SAY THEY WANT TO ELIMINATE THE NATIONAL DEBT AND RAISE DEFENSE SPENDING BEFORE GIVING HEALTH CARE TO THESE FOLKS! AND YOU PRESS PEOPLE ARE SUCH FOOLS YOU CAN’T SEE WHAT’S HAPPENED UNLESS THE OTHER SIDE SPOON-FEEDS IT TO YOU! WE’VE WON! ISN’T IT AMAZING? Tim: Next up on our ‘Meet The Press’ minute: Republican Richard Nixon proposes universal health coverage – in 1972. Back after this break. Matthew Miller’s e-mail address is mattino@worldnet.att.net. © 2001 MATTHEW MILLER DISTRIBUTED BY TRIBUNE MEDIA SERVICES, INC. If you want, you could print this out and mail to: Tim Russert NBC News 4001 Nebraska Avenue, NW Washington, DC 20016
TiVo and Tax-Frees April 24, 2001January 26, 2017 TIVO Bob Smouse: ‘I bought a Tivo about 1 1/2 years ago. It worked perfectly and was a wonderful advance over using the VCR. It went bad about a month ago. I called Tivo service, they made arrangements to replace it (no charge except for mail cost) quickly and efficiently. I got the replacement, hooked it up, and it had some problems. I called Tivo service, they made arrangements immediately to replace it, even paying for the mail cost to send it back. As soon as I got a tracking number from UPS, they immediately started the process to send me a replacement, so I was without my Tivo for the shortest possible time. I have never had such good service from any other company, and I highly recommend Tivo, both for its spectacular flexibility in recording TV programs, and for the wonderful service they provide after the sale. Your recommendation for Tivo is right on the money.’ ☞ Full disclosure: After recommending TIVO to all of you (and buying several myself), I became a small shareholder. I’m not at all sure the stock is a good buy, but I remain as enthusiastic as ever about the product. How did we live without it? Imagine watching a TV – in a hotel, say – without TIVO. You mean, I can’t pause Tom Brokaw? Can’t play back something I wasn’t sure I heard? Have to sit through commercials? It’s the Stone Age! TAX-FREES Ed Shoben: ‘The idea of taking out a mortgage and investing in Tax-frees is a better idea than your column lets on. If one is careful and buys low-coupon or non-callable munis, then the outcome can be better than you imply. Suppose, for example, that interest rates continue to decline. Then you can refinance your mortgage and keep your bonds (which have risen in value and haven’t been called away) so you win both ways. If rates rise, then you feel smug about your lower mortgage and can either hold your bonds (maintaining the after-tax spread between their coupons and your effective mortgage rate) or you can sell the bonds for a tax-loss and put the hedge on again at now more favorable rates. It’s certainly better to do when rates are abnormally high (as they were in the early 80s when I first did this), but given that neither of us knows where rates are going, it’s really a very good and VERY low-risk hedge.’ ☞ Good points. Just be careful not to borrow against the house and then use that money specifically to buy tax-free bonds. The IRS disallows the tax advantage of borrowing to buy tax-frees. On the other hand, people with home mortgages may certainly own tax-free bonds. Remember, too: (a) Unless they are ‘general obligation’ bonds, be very careful what bonds you buy. (b) Buying in small quantity – which anything under $100,000 or even $1 million is – is easy to do, but selling at a fair price, especially for more obscure issues, is likely to involve your taking a small beating. So unless you plan on holding to maturity, you might want to go with the most actively traded municipals you can find. (c) They’re only free of your own state income tax if they were issued within your own state.
Floods and the Tooth Fairy April 23, 2001January 26, 2017 FLOODS Rob, re floods: ‘This was a MONDAY kind of column, not a FRIDAY kind of column! But thanks for not blaming the Republicans for hurricanes.’ ☞ Global warming is currently considered a wash in its expected effect on hurricanes, Bryan tells me. Chuck Smith: ‘According to my State Farm agent, flood insurance does NOT cover water damage caused by a tropical occurrence. Damage in this case would be covered by the windstorm policy which, in Florida, may be issued by the Florida Windstorm Underwriting Association in certain areas.’ ☞ Ah, the FWUA. I know it well – and should have been less generic Friday. I believe what usually happens after a hurricane is a lot of wrangling between flood insurers and windstorm insurers, and, yes, you need both. THE TOOTH FAIRY Some of you helped with my story in yesterday’s PARADE – ‘Teach Your Child to be Smart about Money.’ Thank you! Unfortunately, almost all your wonderful stories were left on the cutting room floor. I hope I may have a chance to use them elsewhere someday. In the meantime, six of my favorites: Mike Hanlon: ‘When our younger son, Tim, was 8, he still got visits from the Tooth Fairy. He’d put the tooth under his pillow, and when he was asleep my wife would roll up a dollar bill, tie it with gold thread, sneak into his room when he was asleep and replace the tooth with the money. One day Tim lost a tooth and had another that was very loose. He put the lost tooth under his pillow when he went to bed, but when my wife tried to exchange the money for the tooth, she also found this note: Dear Tooth Fairy, If I can get more money by giving you two teeth at once, please don’t take this one yet. Love, Tim ‘My wife decided the Tooth Fairy doesn’t give multiple-tooth bonuses, and left the dollar. Tim never mentioned the note or the response to us – but I think he may be headed for a career in finance.’ Marian Calabro: ‘Best thing my parents ever ‘taught’ me about money was by this example: They never spent a dime they didn’t have. So I’ve never spent a dime I didn’t have, unless you count the mortgage (paid off last August, hooray). This valuable lesson has helped me survive and even thrive as a full-time freelancer writer for half my career. There’s a certain security in being debt-free that is very satisfying.’ Vicki Walters: ‘My wonderful but spontaneous parents taught me that, unless you do a little planning and saving, when the money runs out, you will have people from the bank show up at your house one day (as they did at ours when I was in the fifth grade) and walk around appraising everything you own. A really sad moment for my parents and all of us kids. I am happy to say that Mother and Daddy did finally recover and eventually (over years) paid off all of their debts without going bankrupt – a real point of pride for my father. So I would say that they taught me to always have an emergency fund and to not live beyond your means and to be responsible for your debts. They also taught us to tithe and share our good fortune (they weren’t always broke – when they had money, they gave generously). I can remember collecting for UNICEF on Halloween and being exasperated with Mother for signing us up for this. But now I understand and am so proud that she gave us the gift of a social conscience. While my tithing goes to environmental and women’s rights groups instead of the church, I still can’t feel good about myself unless I make those donations. And, lastly, being the child of my parents, I think that sometimes you just have to spend some money to have a wonderful time – my husband and I just put the deposit down on a cruise to Alaska and I can hardly wait.’ Vine Crandall: ‘I was lucky. When in First Grade or so, in the early 1950s, I was fascinated with Scrooge McDuck and his roomful of money, which I always envied. My parents pointed out that if I saved all the bits of cash relatives gave me, that would be a good start. Then they introduced me to the stock market, and we first bought 5 shares of Pepsi Cola, which I was then swilling, followed by 5 shares of Corning Glass, which was only 40 miles away and could be visited. That prompted me to start following prices in the Wall Street Journal, which led to actually reading an occasional article. I still don’t have the room full of money, but do still have the Corning (now 120 shares) and a few other issues which enable me to keep the wolf from the door without gainful employment. Executive summary: find some way to catch their interest early, teach them about compounding, and set an example of living within your means in the first place.’ Robert Merrill: ‘My father offered to pay me $1000 on my 21st birthday if I did not start smoking cigarettes before that day. As a ten year old, that seemed like a fortune and something I wanted. It was truly motivating. Unfortunately he died before then but I have never started and was never tempted (the smell was bad enough)! Even before I was 21 though, I saw the real value of his offer and stopped caring about the money. Neither of my parents was very disciplined financially but I feel like that was his best ‘investment’ ever. I have, of course, saved thousands of dollars as well as my health. I just found out that my mother has lung cancer from her 50 years of smoking. I’m not sure how I became such a saver but that trait will serve me well to help her pick up what Medicare doesn’t.’ Dan Nachbar: ‘Allowance isn’t pay. Don’t link allowance to specific tasks. Work around the house is a responsibility. An allowance is a privilege. Give an allowance once a month rather than once a week. The dollar amounts will be higher, and lessons on managing your cash more real.’
Are You Ready for the Flood? April 20, 2001March 25, 2012 It’s always fun to talk with my friend Bryan Norcross when he comes back from a hurricane conference. (Bryan is the guy widely credited with minimizing the loss of life and property damage from Hurricane Andrew – NBC even made a TV movie of his story.) It seems, there are a few places you really don’t want to live if a hurricane is headed your way. You think you’re OK living in Manhattan? Read on. But let’s start with New Orleans, the worst of them. New Orleans sits 13 feet below sea level, with a huge levee around it, so that the city is like a dry soup bowl. Dry, that is, until a serious hurricane, driving massive volumes of storm surge over the levee, hits dead on and fills it up. Even after the storm, there’d be the small problem of draining the bowl so those who survived could come down off their roofs and out of the trees. Imagine a night or two spent in complete darkness on top of your roof, with nothing but snakes and insects to keep you company. The city’s massive pumps, if they could all be made to operate, could drain the bowl – more than 13 feet deep, because of course the lip of the bowl, the levee, is purposely built higher than sea level – at the rate of about half an inch an hour. So it would take a mere three weeks or so, in optimal conditions, to get rid of the water . . . beginning, I suppose, only after you dynamited the levee, so that the extra water, now trapped inside the levee, could rush back out to a once-again tranquil sea. And what if everything isn’t working optimally? We are talking about a pretty massive catastrophe. Let’s hope it’s 50 hurricane seasons, rather than this next one, before – as is bound to happen sooner or later – it hits. Then there’s South Florida. Broward County (Ft. Lauderdale), for example, had a population of 14,000 in 1926, I think Bryan told me, versus 1.6 million today. And New York? If a hurricane identical to the one that hit in 1938 were to hit again this summer, Long Island would be toast. (Very soggy, salty toast.) Nor would many of its 2 million residents evacuate. You try persuading some guy out on a languid, sunny beach, after working hard all week and fighting traffic to get out there – you try to persuade him to pack up, turn around and go home, just because there’s a hurricane down around Daytona Beach, Florida, that could be headed north. Not gonna happen! He’s not gonna go. Yet do you know how long it took the 1938 hurricane to get from Daytona Beach to New York? About 24 hours. Even if everyone would evacuate, how would you get 2 million people off Long Island in 24 hours? And of course, most of the time, the hurricanes around Daytona don’t hit Long Island, or aren’t fifty-year type storms – so the guy who didn’t evacuate had a nice sunny weekend after all, and feels even less inclined to evacuate the next time there’s a scare. Plus, he could always go to a shelter or a Home Depot or something. (Big boxy flat-roofed buildings don’t do well in hurricanes.) Yet most of the buildings on Long Island, Bryan tells me, were not built to withstand a hurricane. I’ll get to Manhattan in a minute, and a link to a map. But what, exactly, can reasonable people living along the hurricane coast do? Well, be certain their flood insurance is paid up. And maybe think twice before spending a lot of money on an asset in a high-risk zone, especially to the extent it can’t be fully insured. And take the hurricane warnings and evacuation notices seriously, even though most of the time they’ll be false alarms. That one unpredictable time it isn’t, you could, well, die. (‘Can’t you just tread water for a few hours?’ I asked, naively. Charles and I have a place on the edge of the dune. ‘It’s possible,’ Bryan said, ‘but when the storm surge comes in, the force of those millions of tons of water rushing at you at 25 miles an hour is murderous.’ And hard, blunt, things are flying around and slamming into you. Bryan displays a photo of a large palm tree, perhaps two feet thick at its cement-like core. Sticking all the way through that cement-like core – like an arrow throw a cowboy – is a six-foot piece of wood that must have been flying through the air at more than 100 miles an hour.) Everybody should have one of those no-batteries-needed radio-cum-flashlights you can operate by cranking the little dynamo generator. If you live anywhere you could lose power – California comes to mind – you might want one in each room. This one lacks the hand-crank generator but would work until you ran out of batteries. This one isn’t cheap, but it runs on batteries, stores solar power, or, if need be, runs forever with nothing but your hand cranking its generator. Here’s another kind for half the price. A large inflatable raft couldn’t hurt, either. (Look at the poor folks along the banks of the Mississippi this month.) So what could happen in Manhattan? ‘A hurricane that comes up the coast and pushes water into New York Harbor would take out the financial center of the world,’ Bryan explains. It would flood lower Manhattan, flood the tunnels in and out of New York, flood the subways – they would become submarine ways – and wreck the underground power and communications systems. Have I mentioned buying tuna fish in bulk, lately? To see how you might fare in your neck of the woods, from Texas to New England, click here.
Are You Ready for a Heart Attack? April 19, 2001February 19, 2017 Sorry this was posted late. The dog ate my computer. This is the web site that gets you free Handspring Visors, suggests stocks that sometimes go up (generally, the ones I am short), inspires conservatives to be even more compassionate, and offers time-saving recipes for Cooking Like A Guy™. How to top all that? Well, by saving your life. This has been going around the Internet, attributed to a newsletter from one of the chapters of an organization called Mended Hearts. Let’s say it’s 6:15 p.m. and you’re driving home alone after an unusually hard day on the job. You’re really tired, upset and frustrated. Suddenly you start experiencing severe pain in your chest that starts to radiate out into your arm and up into your jaw. You are only about five miles from the hospital nearest your home, unfortunately you don’t know if you’ll be able to make it that far. What can you do? You’ve been trained in CPR but the guy that taught the course neglected to tell you how to perform it on yourself. HOW TO SURVIVE A HEART ATTACK WHEN ALONE Since many people are alone when they suffer a heart attack, this article seemed in order. Without help, the person whose heart stops beating properly and who begins to feel faint, has only about 10 seconds left before losing consciousness. However, these victims can help themselves by coughing repeatedly and very vigorously. A deep breath should be taken before each cough, and the cough must be deep and prolonged, as when producing sputum from deep inside the chest. A breath and a cough must be repeated about every two seconds without let up until help arrives, or until the heart is beating normally again. Deep breaths get oxygen into the lungs and coughing movements squeeze the heart and keep the blood circulating. The squeezing pressure on the heart also helps it regain normal rhythm. In this way, heart attack victims can get to a hospital. Tell as many other people as possible about this, it could save their lives! — From Health Cares, Rochester General Hospital via Chapter 240’s newsletter So I went to Mended Hearts, just to be sure to give them proper credit, and found this: “How to Survive a Heart Attack When Alone” was initially published in a local chapter newsletter, without first verifying a medical source. The American Heart Association does not endorse the coughing procedure, and does not teach this as part of the core curriculum in any course. This procedure has been used in a medical setting (not related to heart attacks) with physicians available to diagnose the specific problem, and to instruct the patient how to cough. Therefore, it is not a recommended procedure for the general public. We encourage the public to call 911 in the event of an emergency. I’ve considered this seemingly contradictory advice and come to the following conclusion: quit smoking, eat smart, exercise, and don’t let the stress get to you. Tomorrow: Are You Ready for a Flood?
Gunning for a Tax Cut April 18, 2001February 19, 2017 ‘Where one party rules, tyranny follows.’ – Alan Gottlieb, Chairman, Citizens Committee for the Right to Keep and Bear Arms ☞ The context of this statement was a fundraising letter to New Yorkers. ‘It’s up to you to save the gun rights of every New Yorker,’ it began. ‘After 28 years as Chairman of the Citizens Committee for the Right to Keep and Bear Arms,’ he was ‘scared to death’ when ‘the anti-gun Democrats seized nearly every statewide office’ in New York (well, not the governorship). The latest threat? ‘A Democrat Assembly bill forcing you to buy and install trigger locks on your handguns and rifles so that they can’t be used when needed for protection.’ (That’s exactly the goal of the trigger locks, I’m sure – not to reduce accidents, but to render you powerless the next time in the course of city living you would normally fire your rifle at someone.) ‘As you can see,’ Gottlieb writes, ‘NEW YORK IS IN A GUN CONTROL CRISIS!‘ Of course, all I could think of when I read this letter – “Where one party rules, tyranny follows” – is that one party controls the House, the Senate, the White House and, saddest of all, the Supreme Court. I don’t think tyranny will follow; I think you’ll all send me checks for the Democratic National Committee and we’ll restore some checks and balances in 2002. “The Bushes’ tax cuts have bankrupted Texas and Florida. Is the country next?” — The New Republic cover line, April 2, 2001 ☞ This is really interesting. Floridians, of whom I am one, pay no income tax. We do have an annoying “intangible property tax,” which is two-tenths of one percent of your stocks and bonds, basically — $2,000 for every million you’ve got (but not, if I remember right, cash or retirement plan assets or Treasuries or Florida municipals). Of course, this only applies to rich folks – someone with essentially no wealth pays no tax. (There is even an exemption for the first $20,000 or so.) And for rich folks, it means that instead of growing their wealth at, say 6.8% a year, they might grow it at 6.6%. Still beats the pants off having to pay an income tax (or having to be poor). I was happy to see that Jeb Bush, my governor, cut my tax in half this year, from two-tenths of one percent to one-tenth. But as I was enjoying this Bushian windfall for the rich, I was wondering: Do I actually need this tax break? No. Is Florida running a surplus? No. Might it be more fair to cut the sales tax a bit, which everybody pays, rather than halve taxes on the rich? Yes. Is the Republican Party not extraordinary in its success at getting elected by a majority (or a near-majority) when it is so focused on improving the lot of a few? Yes. “The problem with making a large tax cut our nation’s top priority, rather than saving Social Security first, is that it may be far more difficult to save Social Security later.” – Clinton national economic advisor Gene Sperling writing in the New York Times, March 21, 2001 Few things are as important to the president, or his brother, as tax cuts for the wealthy. “President Bush’s budget . . . raises the prospect not merely of mainly benefiting those already at the top of the income heap but also of doing so directly at the poor’s expense.” —Washington Post editorial 4/17/01 (“A Squeeze on the Poor”) ☞ Well, the money’s got to come from somewhere.
A House of Cards — and a Plain Old House April 17, 2001February 19, 2017 Chuck Smith: ‘A friend asked me today about ‘Tri-West Investment Club.’ The idea is you give them $1,000 (minimum) for a year and they start paying you 10% a MONTH! And you get a bonus for referring people. With the bonuses, my friend’s friend made a $2,000 return on a $1,000 investment in one year. They claim to invest it in bank debentures. Sounds like a pyramid scheme to me.’ ☞ And to me. A classic Ponzi scheme, in which the funds of new investors (not any actual investment activity) are used to pay old investors. A house of cards. It will end badly. Josh: ‘We are in the position to sell our house and net about $250,000. We want to buy another house at approximately $250,000. Should we do an all cash deal or put a sizable down payment (40, 50, 60%) and invest the rest? And if so where do we invest? We are in our late thirties with two kids entering school.’ ☞ Buying your new house for all cash is a wonderfully conservative thing to do, and will leave you that much more for saving that otherwise would have gone to the mortgage (and ‘points’ at closing). It’s also good for your peace of mind, and leaves you plenty of borrowing power for a home equity loan, should you ever need one. If you have the opportunity to get, say, a 7% fixed rate mortgage, then NOT getting one is the same as investing your money in a completely safe 7% bond. Right? Not having to pay 7% interest is like earning 7% interest. The questions are, first, what is your true cost of borrowing, after taking the mortgage interest deduction on your taxes? If you were, for example, in the 40% bracket, between federal and local income tax, then your true cost of borrowing (not counting fees) is 7% less 40% – 4.2%. What if you could turn around and invest $200K in a completely safe “general obligation” municipal bond issued within your state that paid you 5% tax-free? In theory, you’d be making a small profit on the difference between your 4.2% cost of borrowing and the 5% you were earning after tax. (The IRS doesn’t allow you to deduct interest on money borrowed to buy tax-free bonds. But especially if the two transactions weren’t closely linked, you could certainly deduct interest on money borrowed to buy a house – even if that did leave you free to invest some of your cash in tax-free bonds.) I wouldn’t advise this, because the difference is small, and, well, just not worth enough (in my mind) to forgo the pleasure of owning your home free and clear. Nor would I rush to put much of the money into the stock market, on the assumption you will easily outperform that 4.2% after-tax cost of borrowing. You should fully fund your 401(k)’s, etc., and a Roth IRA if you qualify for one. If that pinches too much and you need a mortgage, so be it. Plus, if you’re really confident as an investor and business person, and know the risks, then of course you can throw this advice out the window – 4.2% after tax is a low rate, and, over the long-run, many smart people could do nicely borrowing at that rate and using the proceeds to invest in something else. Or open a Wendy’s – all manner of things. But a lot of people who try their hands at these things LOSE THEIR MONEY. So I wouldn’t rush into anything at all. One day, there might be a compelling reason to borrow against the house. But until there is, enjoy your prudent good fortune. Reminder: Free advice is worth what you pay for it.