Scraping my New Years Resolutions

I've decided to scrap my New Year’s Resolutions; I wasn't making much progress anyway. Here is an update –

1. To be a better employee - This one went to the wayside shortly after my company's HR manager attacked my management skills. In the days following, it was all could do to concentrate on my work, let alone try to think like an owner.

2. To become a better blogger, this is something I still strive to do, but I’m not going to participate in the blog improvement project. I still think it’s a great idea and enjoy reading the project assignments. It's just that my blog posts are too infrequent to spend time blogging about my blog.

3. I am going to eat a healthier diet. I have made a small effort to eat better which has resulted in a one pound weight loss. Small effort = small results. Enough said about this one.

If I put my mind to it, I am sure I can come up with a better focus for the rest of 2009 than this.

AIG quote is cheaper: Should he switch?

Jim asks:
I received an insurance quote from AIG for both my homeowners and my auto insurance policies. The savings over my current policy is substantial; 30% for auto and 50% for homeowners. Is there a risk to switching to AIG? How can their rates be so low? What is the catch?

First, it is important to insure with a company that is financially solvent.
There are three companies that perform in depth investigations to determine an insurance company's financial strength—A.M. Best, Fitch, Moody’s and Standard & Poor’s. The most reliable, financially-stable insurance companies are rated AAA or triple-A. Most of the major insurance companies are A-rated. It is recommended that you go with an insurer that has at least a B rating.

To check AIG’s rating I went to the A.M. Best Website. AIG was rated A. This means only 1 in 500 companies in this category can be expected to go out of business and these companies are 3.3 times more likely to fail than those in the most secure ratings.

What are the consequences if AIG were to fail?
The chances of this happening are pretty slim, since AIG just received an influx of cash from the government. But if they were to fail, not only would you lose any premiums you had paid in, but you could liable for claims incurred if AIG was deemed insolvent. This could be substantial in the event of a liability claim. You would also need to shop for a new insurance policy; most likely one that will cost you more in premiums.

The greater problem may be slow processing of claims.
The InsuranceUSA Website is a marketplace where visitors can learn about insurance products and services and compare competitive offerings. AIG received 29 reviews; scoring 2/5 on customer service and 2.12/5 on claims. Saving money on insurance is great, but if customer service is poor and your claims are not processed on a timely basis you could be setting yourself up for frustrations down the road.

Make sure you are comparing apples to apples.
Really delve into both policies to make sure your AIG quote is not providing less coverage. Compare:
Policy Limits
Deductibles
Perils Covered
Valuation Clause: Actual cash (depreciated) value or replacement cost.

What is the Catch?
AIG lost a lot of business when it almost collapsed and is most likely aggressively trying to win back market share. If this is true and they are low-balling you this year, be prepared for a substantial increase in premiums next year.

Get multiple quotes.
The only way to know for sure if AIG is giving you a good deal it to get multiple quotes; maybe your current insurance company has been overcharging you.

Strategy Recommendation
Before switching, I’m recommending a strategy I’ve learned from the insurance agent I use at work: Go back to your current carrier, inform them you received a lower quote from another carrier (or several if you have multiple competitive quotes) and will switch carriers unless they can lower or better yet match your quoted premiums. If they want to keep your business, they may offer to revise your current policy's premiums. If they refuse, you will have to decide, based on your comfort level with the above information, if you want to make the switch.

The Decision
Jim switched to AIG. In performing his due diligence, he found his current carrier, Allstate, scored just as bad if not worse in financial stability, customer service and claims processing. He was comfortable that he received an apples to apples quote. Based on this information, he did not take my advice and go back to Allstate and ask if they would match his quote.

Jane Pauley gives “Practical Inspiration”

I heard Jane Pauley speak last month at Milwaukee's "Smart Talk Event." Along with a group of co-workers, I received a complementary ticket from an event sponsor. Due to the weak economy, ticket sales are down for this year’s "Smart Talk Series" which was evident by the number of seats that remained empty.

Prior to the event, I read Tim Cuprisin’s column in the Milwaukee Journal Sentinel where he introduces what Pauley calls “practical inspiration”:

It centers on a baby boom generation dealing with a longer life than preceding generations. To illustrate her point, she cites her Aunt Martha, who was forced to reinvent herself when she was widowed at 50, and worked 25 more years. Her aunt remained active until she was 90 and died at 94. She personifies what an awful lot of baby boomers are going to look forward to, and that is a long period of good health with frailty in old age and health issues compressed at the end of life. “I’m 58 years old, and the prospect of retiring now when I might have 20 or 30 healthy years ahead of me – one could get really bored.”

A little "practical inspiration" is exactly what I need right now. Even though I’m 15 – 20 years away from retirement, I feel as if I need to begin pursuing a change in my career now, but I have no idea how or where to begin. According to Pauley, "practical inspiration" is where ideas come from. Inspiration is everywhere, but you have to look for it. On change she says, “Going forward isn’t easy. Visualizing it is easy. Actualizing it is hard.” People handle change differently:

-Her friend Meg eagerly looks forward to what’s next.

-Ann, another friend, does not embrace change. She spends all of her time getting her ducks in a row. The point is not to get your ducks in a row. The point is to get your ducks in the water.

- Pauley describes herself as a butterfly, one who flits in an indirect path to a specific goal. All of her ducks are in the water she just doesn't know what to do with them.

I relate the most to Ann, who is afraid to step out of her comfort zone. To combat this fear, Pauley suggests instead of jumping into the water to take baby steps. This is practical advice for someone in my situation. I have a secure job, but everything about my career including my networking group feels stale. With more workers losing their job every day, it’s not exactly a good time to begin a job search or to even think about making a career change, but I can start by getting my ducks in a row. If I take one baby step each week, eventually I will be in the water.

After her speech, Jane was joined by Kathy Mykleby for a question-and-answer session. A follow-up point I found interesting is that Pauley’s 40's were not the best time of her life; her fifties are so much better. She says all over the world the 40's are the worst. Menopause and teenagers both of which appeared in her 40’s were not a good mix.

To date my 40’s (I am 46) have been sort of blah, I really like the idea of my 50’s being better. On the way home, I asked two of my co-workers, who are both in their 50’s, if Pauley’s statement rang true for them. It did not; both felt the quality of their life is worse in their fifties than it was in their 40’s. They based this on job satisfaction, financial well-being and their health. I think enjoying one particular decade over another is more dependent on career satisfaction, the quality of your relationships and your health rather than on your age. I have four more years 'til I’m fifty, I don't want to wait that long to have a more fulfilling life. Perhaps, I need a little "practical inspiration".

I know when its time to leave even if I don’t know where I’m going.
Jane Pauley - Skywriting

Related Posts:
Managing-second-half-of-your-life

Mandatory "Workplace Fun"

Alison Green of Ask a Manager's recent blog post: Should Managers Organize "Fun" at Work? is so relevant to my current work situation, I have to blog about it.

Alison's reader is fairly new to the HR industry and is thinking of organizing at least one fun activity at work every other month to build morale. She asks if Alison thinks this is an effective way to improve morale or if scheduling too many activities could actually take away from productivity.

Alison responds with:
Yes, there's such a thing as too many activities impacting productivity. Fundamentally, employees are there to get things done. So really, every activity you plan that takes them away from that impacts their productivity. Of course, presumably your thinking is that by increasing fun at work, you increase people's morale, which ultimately leads to higher productivity. And it's true that higher morale tends to equal higher productivity. But is "fun" the way to do it.

For most people, morale and quality of life at work isn't about having a series of fun activities, but rather about having coworkers you like, a boss who is fair and effective, the resources you need to do your job, recognition for good work, clear expectations, and so forth. In fact, without these things, planned activities can really backfire; it can be infuriating to work somewhere that doesn't put much effort into these fundamentals but then expects employees to go wild over a fun outing or social event. Also, many, many people will resent having their work time used on non-work activities. Show me an office organizing a cookie-decorating session and I will show you a bunch of people wondering why they can't instead just go home an hour earlier if you don't need them doing work during that time. Lots of people want to have their fun on their own time, in the ways they choose and with the people they choose.

Well said. I couldn't agree with her more:
My Company's HR manager is attempting to increase our company’s morale by arranging a “fun” potluck every month. At first these events were okay, but now employees from every department are beginning to resent them. They are no longer fun and feel like work. Plus, cooking for a group of forty can be expensive and wasteful; there is almost always too much food. When it’s time to clean up the HR manager (who is part-time) is gone for the day; employees who should be working (they are billable) are wiping tables, washing dishes, packing and throwing out uneaten food. Almost everyone has begun to dread these events, but no one wants to be the one to tell her, “Enough Already”. If you don’t participate she singles you out implying you are not a team player.

In these difficult economic times, many of our employees are working harder than ever before; the last thing they need is the additional task of lugging a crock pot to work. The latest consensus around the coffee machine is that everyone does enjoy getting together, but future lunch events need to be catered. The employees who wish to participate will pay their portion. And if you really want to improve morale, turn up the heat. It’s winter in Wisconsin and its cold in here. Haven't you noticed some employees are actually wrapped in blankets?

Enough Said.

Also, be sure to check out the comments on Alison's post. No one was in favor of mandatory "fun" and many included examples of events that went bad. It was also pointed out the potential of eating something prepared in unsanitary conditions. Do you want to eat something prepared by the co-worker who doesn't wash their hands?

What does fiduciary mean?

Due to my mother's birthday celebration and another Saturday spent preparing year-end spreadsheets for my company's upcoming audit, all I have time for is a short question from Jenna:

What does fiduciary mean?
According to the Dictionary of Finance and Investment Terms, a fiduciary is a person, company, or association holding assets in trust for a beneficiary. The fiduciary is charged with the responsibility of investing the money wisely for the beneficiary's benefit. Some examples of fiduciaries are executors of wills and estates, receivers in bankruptcy, trustees, and those who administer the assets of underage or incompetent beneficiaries.

In addition, administrators of employee benefit plans (especially retirement plans) are considered fiduciaries.

One of the central duties of a fiduciary is to act prudently. Fiduciaries through their actions, or inactions, motivated by, or through ignorance or neglect, may be held personally liable if they breach their duties. Furthermore, fiduciaries should be aware of the actions of co- fiduciaries, since fiduciaries have potential liability for the actions of fellow fiduciaries.

My boss and the chairman of our company are the administrators of our company's 401(k) plan both take their fiduciary responsibility seriously and are well aware of the risk involved. Neither will offer investment advice nor would issue any type of "Stay the course" memo during the most recent stock market decline.

For a more in depth discussion on the definition of a fiduciary please read this article - What is your fiduciary IQ?

Job Market Rambings

“Job loss in U.S. worst since 1945” was the Milwaukee Journal Sentinel's newspaper headline yesterday. It seems as if media reports concerning the job market and unemployment are becoming increasingly dismal each day. Is it really that bad? Here are some examples of what I’ve been witnessing from southeast Wisconsin concerning the job market:

- My niece’s boyfriend graduated in May with a graphic arts degree from a prestigious art school. He interviewed with 27 different advertising agencies before receiving a second interview and ultimately a job offer. This occurred in early December. HR representatives told him companies have slashed their advertising budgets by 40%. This has been a humbling experience and he is grateful to finally have a permanent position.

- My company laid-off our first female salesperson for failing to meet her sales goals last fall. I blogged about her here. This was a real disappointment because she was our first female salesperson and also because it's rumored she didn't really try. Supposedly, she refused to follow up on sales leads. What was she thinking? Now she is unemployed in this economy.

- My company made a job offer to a candidate for the above position. He was looking to make a career change from inside sales to outside. After reviewing our benefit and salary package, he decided to stay where he was. He wasn’t willing to take the risk of working on a commission basis with fewer benefits in today’s economy.

- Our HR department reposted the advertisement for the above job on various internet web-sites; one day’s worth of resumes utilized an entire ream of paper and then some. The applicants come from the banking and mortgage industries, land development and recent college grads.

- While listening to a recent radio talk show, I heard the nursing industry is actively recruiting in the Milwaukee area. Nurses are in such short supply at the Wheaton Franciscan Healthcare in the Milwaukee-area city of Glendale that they gave $50 gas cards to experienced nurses just for showing up for an interview.

Last year, Kiplinger.com ran a feature about recession-proof careers. These fields include healthcare, education, security, environmental science and government. If your area of expertise can be performed in any sector such as IT, HR or accounting be sure to include the above sectors in your job search.

The headline in yesterday's paper is deceiving; our country's population is substantially larger today than it was in 1945. When comparing the percentage of individuals losing their jobs with the countries total population, the actual jobs lost was much worse in 1945 than it is today. In saying that and despite certain sector hiring, it appears that this is a challenging, humbling and scary job market for many individuals searching for new employment.

Working with a FOB (friend of the boss)

Last summer, our President offered a friend of his family a permanent position as our HR Manager. Her original introduction into the company over a year ago was not handled well resulting in all sorts of problems. She was never given a detailed job description and our employees did not have a clear understanding of her role in the company. This allowed her to create her own job description stepping on many toes in the process. Over a year later, employees still do not embrace her or her ideas. They do not trust or respect her as an HR Manager. This is probably for good reason, her main objective since she arrived was to create a permanent job for herself and her loyalties clearly lie with the owners. Others feel she received special treatment, such as an extremely flexible schedule and a higher than normal salary that would not have occurred if she wasn’t a friend of the owner.

I am one of her few confidants, yet I have also had my differences with her. As I look back on 2008, I realize too much time and energy was spent by me and my department resisting her and her ideas. I have come to realize if I were to become her rival everybody loses; her, the company and especially me, since she is the family friend. In 2009, I vow to develop the best possible relationship I can with her.

As a peace offering, I am sending her a note (written on the note cards she gave me as a holiday gift) thanking her for her support and encouragement in 2008 and wishing her a Happy New Year and a successful 2009. Perhaps others will follow my example and as a group we will begin focusing our energy on the real problems at hand such as the lousy economy.

Stephen King writes, "Only 5% of writers can support themselves with their work"

Stephen King's book On Writing didn’t inspire me to quit my day job as it did Trent on The Simple Dollar, but I did enjoy the book.

For me, this paragraph alone made the book a worthwhile read:

"Another argument in favor of writing courses has to do with the men and women who teach them. There are thousands of talented writers at work in America, and only a few of them (I think the number might be as low as five percent) can support their families and themselves with their work. There’s always some grant money available, but it is never enough to go around. As for government subsidies for creative writers, perish the thought. Tobacco subsidies, sure. Research grants to study the motility of unpreserved bull sperm, of course. Creative-writing subsidies, never. Most voters would agree, I think. With the exception of Norman Rockwell and Robert Frost, America has never much revered her creative people; as a whole, we’re more interested in commemorative plates from the Franklin Mint and Internet greeting-cards. And if you don’t like it it’s a case of tough titty said the kitty ‘cause that is just the way things are. Americans are a lot more interested in TV quiz shows than in the short fiction of Raymond Carver."

FYI, King feels critiques given by fellow participants at writing workshops are useless and may even be detrimental to your writing process. He recommends writing the first draft quickly for yourself and the second draft for your readers. Questions and comments from others while writing the first draft breaks your concentration and could change the course of your book.

I haven’t read a lot of King’s fiction, but I am familiar with most of his work through movies. I enjoyed his autobiographical section, learned a little bit about writing and was touched by the moving account of his near death accident and the challenges he encountered in recovery.

I rate this book 4.5/5.

Scaling Back This Holiday Season

December is typically a busy month for me both at home and at work. In addition to holiday activities, I am closing my company’s books and finalizing next year’s budget. This year has been exceptionally busy; it’s my turn to host my extended family’s holiday meal. Last week, in the midst of shopping, decorating, and cleaning I realized I had three parties to attend over a two day period all of which required I bring a dish to pass. To save my sanity, I decided I had to scale back. This is what I came up with:

The neighborhood cookie exchange:
I am not going to participate this year. I don’t have time to make 5 dozen cookies, nor do I need to eat them. Plus, my husband doesn't particularly like the exchange. He can’t understand why I give away his favorite cookies only to receive ones he doesn't like.

Holiday cards:
I am not sending cards this year. This isn’t a new practice; I didn’t mail cards last year either. My thinking is if I don’t take the time to write a note, send something creative or purchase cards from a charitable organization what is the point. Hopefully, my friends and family don’t feel slighted by not receiving the token Hallmark card with just my signature on it. I love receiving their cards especially the ones that are handmade and include family photos.

Volunteer work:
I am not attending my professional organization’s mid-year board meeting. I am no longer on the board and am not sure why I feel obligated to travel across town during rush hour traffic to attend a meeting in which I most likely will be persuaded to chair another committee.

The work pot-luck:
I am bringing Frito snack mix as my dish to pass. A bag of Fritos is mixed with plain M&M’s, peanut M&M’s, peanuts, chocolate stars and chocolate peanuts. No cooking. No cleanup. No hauling of crock pots and no searching for room in the work refrigerator. This is my kind of dish.

Buying gifts for family:
Instead of spending hours searching for the perfect gift, I have asked for gift ideas from my recipient's spouses and their children. I have been surprised by their practical suggestions; slow cooker, gloves and socks. (Also, as a group my family decided to lower the spending limit for our gift exchange this year.)

Giving gifts to co-workers:
I am not going to rush out to buy a gift for my HR manager just because she gave me one. It's kind of weird; she gave only me and one other person in my department a gift. To reciprocate I wouldn’t feel comfortable giving a gift just to her; what about the other people in my department or the employees I work closely with in other departments. I've already participated in my company's gift-exchange. I am going to leave it at that.

Holiday Dinner menu:
After a failed trial run making slow-cooked wild rice, I've decided to serve Uncle Ben’s wild rice out of a box as one of my holiday meal side dishes.

Scaling back doesn’t always have to be about money, sometimes we need to step back, evaluate our situation and be realistic about what we can and can’t easily accomplish in a tight time frame.

"I hate my supervisor"

Alyssa asks:
Two years ago I was promoted to a different department within my company. I love what I do and have been performing very well. The problem is my supervisor; I hate her and she hates me. She inherited me as a subordinate when my department merged with hers last January. Things got pretty bad earlier this year, forcing me to file a harassment suit against her. HR performed an investigation and determined no harassment had occurred. They did, however, send her to an all day training seminar. Since then, we both go out of our way to avoid each other, but I am constantly on edge thinking she is plotting to get rid of me. My old department has sought me out and offered me my old job back. I hate the idea of giving up my current position, and salary, yet the thought of working for this woman another minute literally makes me ill. What should I do?

I think your best bet is to seek employment outside of your organization. Your company does not have your interests in mind. They have already demonstrated this by neglecting to help you work through the problems you are having with your supervisor. Keep in mind with the economy in the doldrums; it could take several months to find a new position outside of your company. Worst case scenario it may take a year to find a new position. Do you think you could work for your supervisor another year?

“2008 was the worst year of my working life. Working for her another whole year! No, I really don’t think I can.”

You have just answered your own question. Working for a boss who dislikes and harasses you affects your work performance and mental health. Go back to your old job where you are wanted and appreciated. Start networking with family and friends letting them know you are looking for position similar to the one you have right now. Enlist your former boss (the one that originally hired you for your new position) to give you a reference. Good luck. Hopefully, with your renewed confidence and the 2nd-quarter projected economic turnaround, you will have a new job before you know it.

As to giving up your position and salary, a few years ago I took a pay-cut and gave up a title to escape a bad boss and have never looked back. With-in one year I was making the same salary as what I had given up. As to the title, a title is just that a title, I was working on more interesting projects in my new position working for a "great boss" than when I had the fancy title.

Greenatopia

Greenatopia is the fictional start-up company Sara Walker works for on ABC's “Brothers & Sisters”. In last week’s episode, Sara and her partners describe their company as follows:

“We're talking about an eco-friendly company with an exciting revenue model. You input your zip code, the product you want, and voila! We give you all your local options. The customer base is there. Everybody's dying to buy local. The starting demographics of a site like Greenatopia are users with an income average of between $150,000 and $200,000 a year. This is a low-cost company with global growth potential. Not to mention, we might actually do some good for the planet.”

I think most people have good intentions and like the idea of buying local, green, and organic, but most do not go out of their way to seek out these options. Other than buying a few tomatoes at the local farmer's market, few people I know make an effort to buy local.

Why don't consumers seek out eco-friendly products?

First, the demographics listed above for Greenatopia users, family incomes between $150,000 and $200,000 a year, are probably realistic. A couple of months ago, I asked a group of women who were discussing healthy food options, whether they bought organic products. Not a one of them did. All of them were concerned with chemicals and food additives being in the food they fed their children, but felt their budgets were stretched just purchasing regular produce, let alone organic.

The second drawback is the time needed to sift through all the purchasing options available. Today's consumer is overwhelmed with choices. It's more convenient to shop at the local Wal-Mart or Costco where most of the items needed can be found and purchased at a low cost. Extra effort is needed to seek out green products.

I think as a society we need to start making more conscious decisions about what and where we buy. We can’t afford to buy the best of everything, so we need to make trade-offs. How many $7.00 shirts from Wal-Mart do we really need? By buying less and making decisions based on need rather than want, we might be able to fit more eco-friendly items into our buying mix. Greenatopia is a clever idea; if the information was easily assessable more people from all incomes would be able to make better choices.

What I've been reading.

I am the type of reader who usually has two or three different books going at the same time. Right now I’m reading John Bowe's Nobodies and Reg Theriault's How to Tell When You're Tired in preparation for Citizen Reader’s Book Ménage which begins December 8th. The book ménage is an on-line book club where everyone reads a pair of related books (selected by vote on her site) and then discusses them in the comments section. The above choices are bound to generate a thought provoking discussion. I encourage you to participate or at least check it out.

Also, on my night stand is Stephen King’s, On Writing. This book has been on my reading list, since I read Trent's review on the Simple Dollar. He attributes this book as giving him the inspiration to quit his day job and become a full-time writer. I have never aspired to be a writer nor do I now, but I love reading books that inspired other people to pursue there dreams. Who knows I just might pick up a couple of writing tips.

Books recently completed:
To Love What Is by Alix Kates Shulman - I have been an Alix Kates Shulman fan ever since reading her memoir, "Drinking the Rain", so when I came across this post on Gretchen's blog "The Happiness Project" I knew I had to read, "To Love What Is", her latest book. Per Gretchen, the catastrophe began when:

Shulman's 75-year-old husband fell from a nine-foot sleeping loft in July 2004; he suffered a brain injury that keeps him from having a short-term memory. Her memoir covers the accident and the aftermath, and in flashbacks, the period during which they met, went separate ways, and years later, married.

I can't help but admire Shulman's spirit and patience; I can only hope if I ever faced a similar situation I would be able to handle it with the same strength and grace. The book is also a haunting reminder of how we need to be cognizant of our own physical limitations as well as those of our love ones. Perhaps, a 75 year-old man with signs of dementia should not have been sleeping on a nine-foot loft that didn't have a railing in a cottage without electricity on an isolated island without a road to get to it. The book also makes a strong case for purchasing long-term care insurance.

Kindred by Octavia E Butler - Dana, an African-American woman living in the late 1970s, is suddenly transported back in time to a Maryland slave plantation in 1819. It turns out that she’s been called back in time to save the son of the white plantation owner–a boy who, she soon learns, is one of her ancestors.

This book is considered a fantasy thriller, but is really so much more than that. Its depiction of slavery is one of the best historical fiction accounts on the subject I have ever read. I assure you, this book will stay with you for days.

Never Let Me Go by Kazuo Ishiguro – This book was a recommendation by my friend Dana who described it as a thought provoking worth while read she felt to be much better than, “Remains of the Day.” As children Kathy, Ruth, and Tommy were students at Hailsham, an exclusive boarding school secluded in the English countryside. It was a place of mercurial cliques and mysterious rules where teachers were constantly reminding their charges of how special they were. Now, years later, Kathy is a young woman. Ruth and Tommy have reentered her life. And for the first time she is beginning to look back at their shared past and understand just what it is that makes them special–and how that gift will shape the rest of their time together.

I can't say I liked this book, but I did feel it was worth my time.

"Bringing Home the Birkin"

In Bringing Home the Birkin: My Life in Hot Pursuit of the World's Most Coveted Handbag, author Michael Tonello impulsively moves to Barcelona, after becoming enthralled with the city while working there on assignment. His new motto is, “Work to live, not live to work.” Unfortunately, soon after he signs a five year apartment lease, he finds himself without a job. To make ends meet he begins selling his possessions on eBay. Noting the popularity of a Hermes scarf he begins scouring European boutiques for Hermes items. This leads to a customer request for a Birkin (a pricey status bag that starts at $7,500 and is sold in limited numbers) and his discovery of the magic Birkin purchasing formula.

This is a must read if you ever dreamed of working from home in your pajamas as a full-time eBay re-seller. Michael quickly learns there isn’t much you need to know about eBay in order to use it successfully. He would set an opening bid for an item, and also a reserve (the lowest price he was willing to sell for). He was partial to either a 7- or 10- day action, timed to end on Sunday evening when most people would be at home. (I based these calculations on “eBay time” aka Pacific Standard Time, since the greatest number of eBay users are in the USA).

The job isn’t as easy as it looks. Michael discovers the more you work the more you make. He made a lot of money, which meant he worked a lot. In 2005, he says he spent 1.6 million purchasing Birkins for resale. His life became a series of shopping excursions, emails and trips to the post office. In the end, after losing his mother, he comes to the conclusion that traipsing all over Europe buying overpriced purses for spoiled Americans is a shallow way to make a living and gives it up.

The book is a delightful tale/travelogue. While recounting his experiences, he gives the reader a glimpse into his exotic lifestyle; the gourmet food, wine, expensive hotels and luxurious shopping venues he visits and of course insight into all things Hermes. He does all this in an engaging style and dry down-to-earth wit.

Here are a couple of unrelated items I’ve procured from the book:
~ Barcelona and the island of Capri are now on my list of places I’d like to visit.
~ The following items have been added to my reading list:
- Lillian Hellman's novel Pentimento”
- Truman Capote's novel “In Cold Blood”
- Somerset Maugham’s short story, “The Lotus Eater”

Consequences of Roth IRA Early Withdrawal

Dan asks:
My daughter, Lynn invested $2,000 (a gift from me) into a Roth IRA account in 2003. She now wants to use this money to purchase a car. What are the consequences of an early withdrawal?

Lynn was able to use your gift to open a Roth IRA because she also had $2,000 of her own earned income during 2003. Roth IRA contributions are made with after- tax dollars; once these monies are invested, earnings accumulate tax-free. If she keeps the money in her account until age 59½, she will then be able to withdraw money without incurring taxes or paying a penalty. If she withdraws money now, she can only withdraw money up to her original contribution tax and penalty free. She will owe income tax plus a 10% penalty on any withdrawal of account earnings. These earnings will be taxed at her marginal tax rate. The good news is with the recent market downturn she probably his little if any earnings in her account at this time.

Are there any possible scenarios in which Lynn could withdraw all her money, including earnings, without incurring a penalty?

Yes, Qualified Distributions are made both tax and penalty free. To be considered a qualified distribution, a Roth IRA distribution cannot be made before the end of the five-tax-year period beginning with the first tax year for which the individual (or the individual's spouse) made a contribution to the Roth IRA. This means even if you are age 59½ you must have held the money in the IRA at least five years for the withdrawal to be considered qualified.

In addition to the five-year holding period, there are several exceptions to the 10% federal early withdrawal penalty that generally applies to taxable IRA distributions taken prior to age 59½. These penalty exceptions generally apply to distributions taken for one of the following reasons:

· death of the IRA holder
· qualifying disability of the IRA holder
· certain medical expenses exceeding 7.5 percent of adjusted gross income
· health insurance if an individual has been receiving unemployment compensation for more than 12 weeks
· qualified higher education expenses
· qualified first-time homebuyer expenses
· conversion of Traditional IRA assets to a Roth IRA

Thus, if Lynn were to withdraw money to purchase her first home, her distribution could be considered a qualified distribution.

Also note Roth IRAs are different than Traditional IRAs in that they do not require minimum distributions. That is because Traditional IRA contributions are made with before-tax dollars. The IRS wants its money at some point, so they require you to start taking distributions by age 70 ½. There are no such requirements for Roth IRAs. You can keep the money in there until you die if you wish.

Saving Money on Window Treatments

One of the first things Karyn Bosnak did upon moving into her NYC apartment was to purchase (charge) expensive window treatments. Since I moved nine times between college and my current home, I feel somewhat qualified in telling you not to spend a lot of money on window treatments for an apartment, especially if you don’t plan on staying more than a couple of years. The curtains I purchased for one apartment were seldom compatible with the next apartment because the windows were never the same size.

How can you do to save money on window treatments?
1. Window treatments should not be the first purchase you make upon moving. Get your bearings in your new place before spending money on furnishings. Plus, if you’re just starting out, you probably don’t have a lot of discretionary cash left after paying for the move.

2. If the lack of window treatments really bothers you; the morning sunlight is blinding or you need privacy, hang a sheet or blanket over the window during the interim.

3. If you have the opportunity, ask the previous tenants if you can buy their window treatments or if you are lucky they may just leave them behind. If they aren’t totally hideous make due.

4. Look for bargains. Try the JC Penny Outlet Store, or the clearance section of JC Penney’s store. If you hurry you might be able to snag a deal at Linens N’ Things which is going out of business.

5. Use a neutral colored sheet as a curtain. If you can sew use sheets as cheap material and make your own.

6. Be creative. The curtains in the photo were purchased from JC Penney’s and are held in place with tacks and rubber bands.

Save your money. Pay down your debts. Secure your job.

Save your money, pay down your debts and secure your job is the advice financial gurus are giving lately to help us weather the storm in these turbulent economic times. I can't help but think this advice is timeless. I thought of it often while reading Karyn Bosnak's quirky book Save Karyn.

Karyn moves to NYC in May 2000. Over the next couple of years, she racks up $20,000 of debt and loses her job. Ultimately, she becomes a cult figure after soliciting donations from her website Save Karyn, where she asks people to help pay off her debt. Her plea: if 20,000 people each give her $1 she'd have enough money to pay off her entire debt. She also sells most of the stuff she bought incurring the debt on eBay.

How did "Not saving her money, paying down her debts and securing her job,” impact her situation?

Save your money:
Kayrn moved to NYC with virtually no savings. She didn’t even have enough money to make it to her first paycheck, forcing her to take an advance on her American Express card to pay for apartment necessities. Once she started receiving a paycheck, she began a downward spiral of excessive spending and charging; buying furniture for her apartment, designer clothes, expensive makeup, beauty treatments, a health club membership and a weekend summer vacation package she used only once. She didn’t save $1.

Pay down your debts:
She moved to NYC with unpaid balances on her credit cards. When she received her first paycheck she was surprised to see how much money was withheld for taxes. She hadn't budgeted accordingly. Instead of realigning her budget to her actual paycheck, she kept spending and charging. It wasn’t long before she couldn’t keep up with her monthly credit card payments and still pay her rent. She began missing minimum payments, incurring late fees, interest and over limit charges. Eventually, she finds a new job and begins earning over $100,000 a year. Even then, instead of paying down debt she continues her spendthrift ways thinking why shouldn't she, she makes over 100,000 a year.

Secure your job:
She remained in denial that her job was in jeopardy. After September 11th, the job market for TV production in NYC virtually dried up. Ratings for her show were low. New management was brought in; they asked everyone in her department to sign a new, less favorable employee agreement. Refusing, along with her fellow contending co-workers, she was let go. She hadn’t thought this through completely, she now firmly believes if she would have asked for her job back her boss would have given it to her. At the time, however, she didn't like her job and thought she’d be able to find another one within a month. She ended up being out of work for four months, when she finally did find a job it was at a substantially lower salary than what she had been making before.

The results:
She was no longer able to pay her rent and her credit card payments without overdrawing her checking account. She took steps to get control of her finances; consolidating her debt, finding a roommate, canceling her health club membership and even making her own coffee. Not making much progress and feeling overwhelmed she dreamed up the Save Kayrn website and the rest is history.

Overall, based on the subject matter (financial irresponsibility) I was surprised how much I enjoyed this book. It was filled with financial lessons. My professional organization is planning a workshop to teach financial literacy targeting college sororities. After reading this book, I can’t help but think perhaps they are right; young adult women do need financial literacy training. I know where they should start: Save your money, pay down your debts and secure your job.

Read "A Broom of One’s Own" for realistic insight into life as a writer.

A Broom of One's Own: Words on Writing, Housecleaning, and Life is a sublime little book of essays by Nancy Peacock.

In A Broom of One's Own, Nancy Peacock, whose first novel was selected by the New York Times as a Notable Book of the Year, explores with warmth, wit, and candor what it means to be a writer. An encouragement to all hard-working artists, no matter how they make a living, Peacock's book provides valuable insights and advice on motivation, craft, and criticism while offering hilarious anecdotes about the houses she cleans.

While reading the book, I couldn’t help but think maybe there is some truth to Penelope Trunk’s post five reasons why your should not write a book.

According to Penelope:
People who have a lot of ideas need a blog, not a book. A blog is more immediate, so you’ll get better feedback~
Nancy’s life as an aspiring writer was difficult. In her early years, a blog may have served her well. She struggled to get her stories published; writing and submitting 100’s of short stories to various publications in hopes one would sell. At one point, she even succumbed to writing fake true stories for True Confessions Magazine. A blog may have given her the immediate feedback she needed.

You'll make more money per hour flipping burgers than writing a book~
Nancy’s first book, Life without Water, did not bring her riches, immediate fame or prestige. After publication she still needed to clean houses to pay her bills. It wasn’t always easy, but she continued writing because she loved her craft. She says it best on page 53 where she writes:
"I think that in the beginning of my writing life I believed that writing, publication in particular, could, besides making me rich, also make me invulnerable. It might have been the stupidest thought I ever had, because there is nothing, with the exception of love, that has ever made me feel more vulnerable than writing and publishing."
Beautiful. I cannot give this book justice. If you have ever had any interest in writing or in an artistic career I highly recommend this book. Even if you don't have an interest in writing, I recommend this book. Her essays on housecleaning are thoroughly enjoyable; some of her cleaning clients remind me of people I know. This was both hilarious and scary.

Please Note, I am an Amazon Affiliate

401(k) Fees Rant

In addition to my recent angst regarding stock market volatility, I have just discovered one of the reasons why my 401(k) fund returns were always lower than I anticipated. My company has our plan pay for expenses such as our plan audit, which can run as high as $8,000 annually, plus the cost to transfer employee payroll files to the plan each pay period. Our payroll service provider tells me it is common for companies to have their 401(k) plans pay for these types of expenses.

What is included in 401(k) plan administration fees:
According to the U.S. Department of Labor, the day-to-day operation of a 401(k) plan involves expenses for basic administrative services -- such as plan record keeping, accounting, legal and trustee services -- that are necessary for administering the plan as a whole.

As an employee whose benefit package includes fewer benefits each year, I was upset that my company would require our 401(k) plan to pay for expenses such as the ones I mentioned above. Aren’t these expenses a tax-deductible cost of doing business? Can’t companies pay for anything anymore? My lousy benefit package and measly company match, 50% of the first 2% of salary deferment, suddenly seems even worse.

High 401(k) plan fees is not news to me:
I have read in the past, over time 401(k) plans may earn a lower rate of return than other types of investments due to high fees. A good fund should have a total expense ratio of 1% or less. My 401(k)'s funds typically earned lower rates of return than the funds in my IRA. I did try to determine the expense ratio for each fund, but was unable to find any mention of expense ratios in the fund literature provided by our 401(k) provider. I now realize these fees are usually hidden.

In the Kiplinger article, “The High Cost of 401(k) Fees: How Much Are You Paying,” Mary Beth Franklin writes:
Mutual fund returns in 401(k) plans are normally reported as net returns, meaning that fees for managing your investments are subtracted from your gains or added to your losses before calculating the annual return. Other costs, such as administrative and record-keeping fees, are often divvied up among plan participants but are not explicitly listed on individual investment statements.

You can read Mary Beth Franklin’s informative article in its entirety here.

Top Salesman maxes out his 401(k) Plan

Our company’s top salesman, also known for his financially savvy, has requested our payroll department max out his 401(k) plan when issuing his commission check on Monday. He is under age 49, so he can contribute up to $15,500 for 2008. This check will include the majority of commissions he has earned this year; allowing him to take advantage of the plan's tax deferral in addition to the down market.

I cannot help but be comforted by his actions. This request comes at a time when I have been trying hard not to panic or do anything rash with my own 401(k). Over the past two weeks, many of my co-workers have stopped contributing to the plan altogether. In a year when this salesman is struggling to maintain his #1 position for the first time in 22 years, he has enough confidence and risk tolerance to pump a large chunk of his paycheck into the market. As he made his request, he said, “With twenty years remaining until retirement I would be crazy to stop contributing now; if the market were to completely collapse, which it won’t, the economy would be in such disarray stopping now wouldn’t make a difference in the long run anyway.”

"Enough Said"

The Digital Camera Saga

For the second time in four years we have experienced problems with our Canon POWERSHOT S1 IS digital camera. Most recently, the image displayed in the view finder was completely black preventing any attempts at capturing a picture. This was a huge disappointment, since I first noticed the problem during a family outing where I very much wanted to take pictures.

Afterwards, I inquired with the camera store where we had purchased the Canon about the possibility of repair. I was told it would cost $140 for Canon to even look at the camera. Since this was the second time we had experienced problems with this camera, we decided to forego the repair and put the $140 towards a new camera.

We decided on the Nikon Coolpix P80. Unfortunately, you can no longer buy just a camera. The $350 purchase quickly turned into $450 with the addition of accessories. None of our Canon accessories: batteries, memory card or camera bag were compatible with our new Nikon.

After relaying my Canon digital camera saga to a co-worker who happens to be a photography buff, I decided to talk directly with the manufacturer about my camera. My co-worker’s experience with Canon has been that they always stand behind their products. Sure enough, Canon had recently issued a service advisory addressing my camera's problem. They volunteered to fix the camera for free. They emailed me a pre-paid UPS label and within a couple of days my Canon was back in our possession working like new.

This saga has worked out well in the long run; we now have a new camera we love plus a backup that works like new. That is, if we don’t think about the $450 were hadn’t planned on spending.

Lessons learned:
-Always contact the manufacturer directly if you are not satisfied with the distributor’s response to a service query. The camera store’s interest was in making a new sale not repairing our old camera.

-With technology constantly improving; items such as digital cameras, printers, mp-3 players and cell phones quickly can become obsolete. When replacing these items be prepared to spend money not only on the replacement item, but also on its accessories.