Author: A.T.

Erich Riesenberg: “A friend of mine is backing kaboombooks.com. Basically, the company buys overruns of scholarly and academic books such as from MIT and Harvard and sells them at huge discounts. I compared their prices with the prices found by pricescan.com and bestbookbuys.com, and kaboombooks sold several titles for 30-40% less than the lowest prices those services found. I’d really appreciate it if you would mention the site.”

☞ The selection is quite limited — this is NOT Barnes & Noble — but it’s fun to browse, the kaboomers seem like nice folks, shipping is only $3, and “for a limited time” you get your choice of a free book with each order. If only they could supply some free time to read it.

Chris Peterson: “I read your column regarding annuities and why there are a bad deal. You state at the end that educators shouldn’t be alarmed because TIAA annuities are a better deal. What makes them a better deal?”

☞ Their expense charges are lower, and profits are paid back out to annuitants as dividends. TIAA-CREF, as it’s known, is the combination of two sister non-profits, Teachers Insurance and Annuity Association and the College Retirement Equities Fund, set up earlier in this century to provide educators with a good deal. For more, see the excellent TIAA-CREF website: http://www.tiaa-cref.org/.

There’s a whole investment world out there beyond the stock market called real estate. And at one time, you could hardly turn on the TV at 3am without seeing an infomercial from a guy — one of several — who could make you rich beyond imaging for no money down (except the $295 for his audio tapes, “normally a $795 value”).

Well, John T. Reed publishes a newsletter for folks who buy/run rental properties. He has had his good times and his bad times investing in real estate, and is quite candid about it all. Now, as faithful reader George Fescos pointed out to me (thanks, George), he has a web site on which you’ll find a list of every real estate guru you ever heard of, and many you haven’t, along with Reed’s comments: http://www.johntreed.com/Reedgururating.html.

For those who wonder, “what ever happened to?” or “could a deal like that really work?,” this page gives some answers. The word bankrupt appears in bold face several times.

John is not exactly all sweetness and light — in reading his newsletter from time to time I find myself wondering which he dislikes more, tenants or government. (Answer: lawyers!) But he is a straight shooter who admits his mistakes (the only mistake I’ll admit to ever having made was buying that stupid LaCie external hard drive; but I’m happy to tell you it’s now finally formatted for my PC and working brilliantly), and it’s kind of fun to see him rank his competition.

World’s Best Company: PC Connection — 800-243-8088. I ordered a $300 10-gigabyte LaCie external hard drive from them this past Sunday and had it Monday morning.

World’s Worst Company: LaCie. This is seemingly the only company on the planet that makes an external USB hard drive. At least the only one I could find. (It is headquartered in France, I think.) USB is yet another of those funny little connections that allow massive amounts of data to stream unimaginably fast across a wire. How it could possibly work so well and be so small and — well, I’ve just come to accept it as magic.

What I find odd is that the hard part of this job LaCie seems to have done brilliantly. This attractive book-size device can receive 10 billion bytes of information flawlessly in a matter of minutes and store them without forgetting a thing. Even if you turn it upside down. Can you even imagine the mega-brilliance that had to go into the creation of such a thing?

And then you have the one other little chore — trivial, really. The part where the product interfaces not with the computer to which it is hooked up, but with the customer who bought it. This is done through a series of very simple, but critical decisions.

The first decision LaCie made was not to ship two separate versions, one “plug and play” for the Mac, the other for the IBM. LaCie ships all its drives formatted for the Macintosh. This choice was made in order to inconvenience the maximum number of customers.

The next decision was to ship this miracle drive with a faux User’s Manual that does not match the product — e.g., it tells you to “insert floppy disk 2/2” yet comes with no floppy disks. I could go on, but basically the only way to use this drive, if you happen to be one of those rare customers with a PC rather than a Macintosh, is to call customer support in St. Louis (a good French saint).

But I need hardly tell you there is no phone number for customer support in the faux User’s Manual. I found LaCie’s number by finding its web site — which is also not listed in the Manual. (A good place for it might have been page 5, which reads, in its entirety: “This page intentionally left blank for pagination.”) Nor need I tell you that even on the web site there is no section — let alone a prominent one — titled, Click here for help formatting your LaCie hard drive.

No, you have to find the phone number, call on your own dime, wait 20 minutes on hold, and then get a nice person who is almost as frustrated as you that LaCie has done it this way. An hour later, you might succeed in getting the drive formatted for Windows — or you might not. (Once I did, twice I did not.)

Stupidity of this magnitude could perhaps be understood, though not condoned, if it somehow led LaCie to greater short-term profits. But having half their disk drives returned in frustration can’t help the bottom line; and neither can the cost of a tech support operation that spends all day long listening to angry, confused, disappointed customers. Surely I am not the only person with an IBM-compatible. I know Apple is doing well again — bless my little January leaps — but surely they’ve left a little market share for PCs.

What if Ford shipped cars that were all set to go, except they needed you to install the electronic starter, for which it gave you incorrect instructions? Now there’s a marketing plan.

It is for these reasons I am pleased to present to LaCie the award for the World’s Worst Company. Nominations for next year’s award are welcome. But LaCie will be hard to top.

PS – For your laptop-at-the-beach reading, here is Chapter 16 of Fire & Ice. (You already have Chapters 1, 2, 3, 4, 5, 6, 7, 8, 9, 10, 11, 12, 13, 14 and 15.)

But first a word about this endless PlanetRX promotion. Enough already, you are thinking, did you win the free trip to Topeka or not? Well, even though the official rules said the contest ended July 31 — and still said that a couple of days ago — it has apparently been extended to August 31. So if you haven’t yet gotten your three free products ($3.95 shipping), click here. As you know, if enough people click here, I might actually be one of four Grand Prize Winners who get 25,000 frequent flier miles. I’m definitely in the running.

(It used to be that gold was the universal currency, the medium of exchange that drove people to do loopy things. Today, at barely $250 an ounce, no one wants gold. But we will do almost anything for miles.)

And don’t forget healthquick.com with its $15 off your first purchase. Sara Wolfson: “My son takes a supplement for treatment of an illness and it is sooo expensive, but much cheaper at this site. Thanks!”

Now a word about the quotes, like the one you see there at left.

In the first place, they display at random, from a large file I’ve collected over the years, so I don’t know which one you are looking at right now. Any that seem particularly apt — a quote about taxes on April 15 — are just coincidence, as are any that seem particularly inappropriate on a given day.

Second, I don’t always agree with them. My quoting Stalin — “It’s not the people who vote that count; only the people who count the votes” — doesn’t mean I buy what he says. You should vote!

Third, I occasionally slip in a factoid, or just something I’ve said. These are not, strictly speaking, quotes. But I don’t care.

I have fun with the quotes, and am struck by the way many things about money haven’t changed in hundreds, even thousands, of years. “Money is a handmaiden, if you know how to use it,” wrote the Roman poet Horace before the birth of Christ, “a mistress, if you do not.” Well, OK — on one level I suppose I know the Romans had money. And I suppose I know that they had maidens and mistresses. But it always amazes me to think that without CNN or sewing machines or photocopiers their lives could have been, in many respects, so much like ours.

“He is richest who is content with the least,” wrote Socrates. But how different is this from Ben Franklin a couple millennia later? “Who is rich?” asked Franklin. “He that rejoices in his portion.” Indeed, how different is it, really, from Ross Perot, talking to a bunch of Harvard Business School students: “Guys, just remember: if you get real lucky, if you make a lot of money, if you go out and buy a lot of stuff, it’s gonna break. You got your biggest, fanciest mansion in the world. It has air conditioning. It has a pool. Just think of all the pumps that are going to go out. Or go to a yacht basin any place in the world. Nobody is smiling and I’ll tell you why: something broke that morning. The generator’s out, the microwave oven doesn’t work, the cook’s gay. Things just don’t mean happiness.”

I actually wrote Perot a letter when this appeared in Forbes — some awfully good cooks are gay — but you get the point. Things don’t buy happiness; there’s peace and happiness in living within one’s means; you can have $50 million and want more or be a pensioner and count each day a blessing.

Still, a little extra free skin cream couldn’t hurt. Click here.

Have you already seen this one? It purports to be a collection of actual warning labels (and other helpful packaging instructions) that have appeared on a variety of products:

On a Sears hair dryer:
Do not use while sleeping.

On a bag of Fritos:
You could be a winner! No purchase necessary. Details inside.

On a bar of Dial soap:
Directions: Use like regular soap.

On some Swanson frozen dinners:
Serving suggestion: Defrost.

On a hotel provided shower cap in a box:
Fits one head.

On Tesco’s Tiramisu dessert (printed on the bottom of the box):
Do not turn upside down.

On Marks & Spencer Bread Pudding:
Product will be hot after heating.

On packaging for a Rowenta iron:
Do not iron clothes on body.

On Nytol sleep aid:
Warning: may cause drowsiness.

On a string of Chinese-made Christmas lights:
For indoor or outdoor use only.

On a Japanese food processor:
Not to be used for the other use.

On Sainsbury’s peanuts:
Warning: contains nuts.

On an American Airlines packet of nuts:
Instructions: open packet, eat nuts.

On a child’s Superman costume:
Wearing of this garment does not enable you to fly.

One reason for all this obsessive labeling is fear of lawsuits. That fear has led to safer products, for which we should all be grateful. But there’s a balance. Fear of lawsuits can have adverse consequences as well. Things cost more; and some worthwhile innovations may never even make it to market. Those interested in this balance, and in the point of view of those who believe we’ve actually gone too far, might want to check out http://www.overlawyered.com/.

(Then again, many of the wild verdicts one reads about are either drastically reduced at a later stage of the process, or involve more than at first meets the eye. That woman scalded by the coffee was just one of hundreds who had previously been injured without corrective steps having been taken — and it was a really, really bad burn. So no one should favor killing all the lawyers. It’s more a matter of fine-tuning.)

Aron Roberts: “One of the better ways to avoid situations where credit card issuers impose late fees is to obtain a credit card from your bank or credit union, *if* it can automatically pay your full balance (or minimum payment, if you prefer) directly from your checking or savings account. My modest-sized community credit union, for instance, automatically deducts my full balance each month shortly before the payment due date. (Better yet, their Visa Gold card – with a $20 annual fee – pays a cash rebate of 1% on all purchases.) It’s worth checking with one’s bank or CU to see if they offer such an automatic payment option, as well as to check on the features of any credit cards they may offer. Sometimes the best credit card could be right under one’s nose!”

John Carr: “Since I get ballistic when I get late charges, I arranged to have my balance paid in full automatically. Citibank offers 3 options: pay in full, pay the minimum, pay a set amount each month. I have every utility and monthly charge paid automatically from my Citibank credit card where possible — for the frequent flier miles — or else from my checking account. So the only balance I have to watch is the checking [to be sure there’s enough to pay off the card balance in full each month]. Just call your credit card, utilities, newspaper deliverer, cable, etc and tell them you want automatic payment.”

Are we really going to keep asking the same questions over and over? Can’t we settle some of these age-old questions?

Q. If a tree falls in the forest, does it make a sound if no one’s there to hear it?

A. Of course it does.

Q. Which came first, the chicken or the egg?

A. The egg. Because at whatever stage you decide to define a chicken as being a chicken — mutated and evolved from whatever near-chicken precursor laid the egg that hatched it — there was an egg with a forthcoming chicken inside before there was a chicken to lay it. The egg was laid by the precursor to the chicken, which had perhaps spent too much time around a poorly-shielded nuclear power plant. The egg cracks, and to the surprise of the near-chicken, out pops . . . a chicken!

Anything else on your mind?

(For questions like “Why is the sky blue,” where it’s not in dispute, just hard to remember, try http://www.ask.com/ and type, “Why is the sky blue?” For questions having to with your refrigerator’s ice-maker, or any other GE appliance, call 800-626-2000 twenty-four hours a day, press 4, and you get great human service.)

Ed Tolson: “It used to be that if you missed a payment, you were assessed finance charges at the high interest rate you understood when you got the card. Now, when a payment is missed or late, they tack on this exorbitant ‘late fee.’ Is there some consumer advocate we can look to for a remedy to this mess? The fees go beyond the realm of usury. I recently was a couple days late on one card (my fault for being on vacation) and was assessed a $29 fee on my outstanding balance of $9.95. It’s just incredible to me. We would seem to need some government intervention (shudder!) or a major grass roots campaign to shock these money-grubbing morons back to their senses. Any thoughts?”

Well, Ed, the simplest thing might be to send $100 extra, say, and run a perpetual $100 credit. The lost interest, after tax, on $100 is — what? Three bucks? A lot less than even a single $29 charge. And if you are someone who, like me, never pays interest on a credit card, then letting them enjoy that foregone three bucks a year isn’t much to pay for the convenience of the card and the float we get from the time we make a purchase to the time our check to the credit card company clears.

I’m actually not sure how various cards would treat you if you had a $100 credit and then they sent you a bill for $110 — for a net of $10 — and you didn’t pay the $10 on time. They might still try to charge you $29. But it seems to me even they might agree this makes no sense.

Still, two other ways to do this would be (a) to run a credit of even more than $100, especially if you know that a vacation looms; (b) set up an automatic $100 a month (say) payment to this card, if you use CheckFree or one of the other services that allow for automatic bill payment. Separately, you’d pay the bills as received (generally, for $100 less than the total, because your $100 payment would be reflected as a credit) . . . but if you ever failed to do it on time, at least they’d have gotten the $100 on time, and you’d have avoided the late fee.

All that said: Yes, it’s highway robbery, and abusive, and an easy target, I should think, for regulators and class action lawyers. Then again, no one forced you to take the credit card or agree to its terms — or to pay late. The best solution may be the free market: People who don’t like the charge should switch to a card that doesn’t have it. What was particularly galling about the GM Card, if Deep Plastic is to be believed, is that late fees were routinely charged to people who paid on time. That really is unconscionable.

A Vote FOR the GM Card . . .

Steve Strunk: “I wanted to let you know that we have had a GM card for several years and have had no problems with them or their servicing agency. They were quite helpful in a billing dispute I had with a merchant and I have twice redeemed points toward purchases. We keep our cars for many years (my GM truck is almost 10 years old and never had a major problem) and therefore feel that buying new (and getting a full 3 year warranty) is best for us. We buy everything — even groceries — on the card and then pay it off each month. Once we accumulate the maximum $500 in credits each year we switch to an airline miles card for the remainder of the year. The only problem I have with credit cards in general is that all of them keep cutting the grace period. It’s to the point where you have to mail payment the day you receive the bill in order to get it there on time. However, I am not going to let that stop me in taking the free money or miles that they give away. Just wanted to let you know that someone has had good experiences with the GM and other ‘free’ stuff cards.”

. . . And Another Vote Against

Shane Millburn: “After receiving my GM Card bill with an unexpected late fee and entering an item in my dayplanner to call The GM Card first thing Tuesday morning I was pleasantly surprised to find more GM Card bashing on your web site. Forgive me for beating a dead horse, but I need to tell my story.

“I have been a loyal GM card user for six years. My charge volume for the first four years was $20K/year and $10K/year for the last two years (they changed the rules after the first four years reducing the maximum credit towards a GM vehicle). In six years I missed one payment (I wrote the check but it was lost somewhere and I had to pay to cancel it – no late fee was charged by The GM Card). Other than that one lost payment, not a flaw in my payment record with them. Two years ago I used my GM Card earnings to help buy a very nice Chevy. I was a happy customer (and still am happy with the car). I thought The GM Card and I were quite good friends.

“Imagine my dismay when my latest statement had a $29 late fee. After checking into my records I found that I mailed the check on 7/14/99, it was due 7/16/99, and was posted 7/20/99. The check was posted prior to the next statement closing date. Guilty as charged I called The GM Card people to apologize and ask for the charge to be reversed. After calling their “customer service” line, and entering my account number, I was promptly told that they had high call volume and no one could talk with me. I was then disconnected. I was amazed! I expected a long wait, but they just hung up on me! I tried it again just to make sure I didn’t do anything wrong — same result.

“I called again and this time I entered the lost or stolen card option and was connected to a nice customer service agent. She asked why I couldn’t pay my bill on time and then explained the late fee sequence. Here is the math on The GM Card: 11 days from the closing date until arrival of the statement at my house, seven days for the post office to get the payment back to them and be posted in their operation. That leaves only eight days for me to pay it or be hit with the late fee. And NO she didn’t offer to reverse the $29 fee even after I indicated that I wanted to close my account because of it. The nice customer service agent forwarded me to the account closer who very efficiently closed my account (I got the impression that this was a common thing).

“The bottom line on The GM Card is that they don’t want to keep their customers. I am willingly forfeiting $1K in GM Card earnings to close this account and deal with a customer oriented card operator that doesn’t gouge their customers.”

Oh, no! You let them get away with $1,000? You see? That’s their strategy! They try to make you so crazy over $29 you give them $1,000! The rep probably got a bonus! Try to get it back!

Don’t read this column if you disapprove of my straying from money topics. Just go straight to Chapter 15 of Fire and Ice. (You already have Chapters 1, 2, 3, 4, 5, 6, 7, 8, 9, 10, 11, 12, 13 and 14.) Most of us have a great deal to be thankful for — I certainly do. But near the top of the list is not having to work for a guy like Charles Revson.

Now.

You may have heard about the proposed Hate Crimes Prevention Act. Clinton/Gore and most Democrats support it. George Dubya and many Republicans do not. It would extend existing hate crimes legislation to cover serious violent crimes committed on the basis of sexual orientation, gender and disability (not just race, religion, and national origin, as now).

Opponents say that all crime is hateful, that all criminals should be punished, and that it’s not fair to single out certain groups for special protection or to punish crimes against those people more severely — let alone to call in the Feds to do it. Local law should apply, and the punishment for a crime should have nothing to do with whether or not it was motivated by hatred against a particular kind of people (e.g., blacks or Jews or gays).

I just want to say two things. First, it’s not true that our system of justice ignores motivation. Dead is dead, but there’s first degree murder, second degree murder, third degree murder, and manslaughter. We already make distinctions based on motivation — as I think we should. What the Hate Crimes legislation aims to do is send a message that pure hate, as a motivation, is one this society particularly detests. In a society as diverse as ours, it’s an especially important message to send. Be a good citizen, pay your taxes, contribute to the common good — and you’re welcome here.

Second, this involves real people. Maybe even, one day, someone you care about. The Human Rights Campaign held a press conference yesterday prior to House hearings, at which two of the participants were Tony Orr and his partner Tim Beaucamp. Two years ago, they were standing at an ATM in Tulsa when three men approached them, called them “faggots,” and beat them. Orr suffered a concussion and received stitches for the many gashes on his head. Beaucamp suffered permanent nerve damage after the orbital bone around his eye was broken. The attackers were sentenced to 40 hours of community service.

“People like us in communities all across this country need some place to turn when justice is not served,” Orr said at the press conference. “We need to be able to appeal to a higher authority when localities and states do not — for whatever reason — fully investigate and prosecute a hate crime. ”

The Hate Crimes Prevention Act was passed by the Senate this month. It is supported by, among others, 22 state attorneys general, the National Sheriff’s Association, President Bush’s former Attorney General Dick Thornburgh, the Police Foundation and the U.S. Conference of Mayors. The President has promised to sign it if passed by Congress. It’s up to the House.

“We were targeted because of who we are, not for any other reason,” says Orr. “They were trying to send a message that ‘our kind’ are not welcome in Tulsa and deserve to be beaten or die. It is time to send a message that what is not welcome are hate crimes.”

Forty hours of community service may not adequately send that message.

Spread the word . . .

Tristan Ashby: “Re: Biweekly Mortgages. Perfect timing. I, too, almost enrolled, as an easy way to pay down my mortgage. But the kicker was even worse. They wanted to charge me $335 to start off AND $36 a year (or something very close, I can’t remember exactly). Since my mortgage is only $750 a month, I figured I would be better off just to pre-pay the extra $360 today and be done with it. Besides, my mortgage company already makes it easy to pre-pay by offering an extra line with the payment coupon.”

Stephen Gilbert: “There’s a great website that shows the effect of changes in your mortgage payments. Want to add nine dollars a month? You can instantly see the change in your loan term — graphically and with numbers. See: drcalculator.com/mortgage/ .”

Bill Kistler: “Ok, I got the idea on biweekly loans and prepayment. But how about a new purchase of a home? Is it better to pay cash or take a mortgage assuming a 15% or 28% marginal tax rate? And at what point (interest rates/time) might one decision change the other?”

☞ The higher the tax rate, the lower the effective interest rate. And the lower the interest rate, the better to borrow for a long time — if you think you’ll own the house a long time. It’s nice to have the bank on the hook for you for 30 years at a low rate while you are on the hook to it only until you decide to pay off the loan. But there’s no magic number at which it’s suddenly smart or stupid to borrow against your house.

Theoretically, you would do so the instant you can earn more, after tax and all expenses, than it costs to borrow. But you can never do that risk-free. (Mortgage rates will always be higher than short-term Treasury rates.) And you really can’t assume 10% a year in the stock market is “a given” even though the last 17 years have been so extraordinary. In the 16 prior years, the Dow went from a 1966 intra-day peak of 1000 to a 1982 low of 777. It fell.

But whatever the stock market or interest rates may do (and note the big news earlier this week that mortgage rates have bumped back up above 8% on average), one homespun is always true: It’s wonderful to own your home outright. This is not an archaic notion, and you are not a fool if you aspire to it.