Government Income Taxes in History

income tax brackets rates through history united states USA

(click graph to see full size version) I was just looking at this really interesting infographic of the income tax rates for the United States over the last century or so. It is an interesting graph because it makes it very clear that the wealthiest people are paying the lowest taxes by percentage of any time in our country’s history. By contrast the low and middle class are paying the most they’re paid or close to the most. 

I’m not sure how the government got away with a 90% tax rate in any time period, but it sure looks like they did. As much as I think the wealthiest people need to pay more again, nobody deserves that.  It makes the 5-10% increase in taxes we need on the wealthy people making over 1 million a year now seem paltry and insignificant. 

According to the graph the yellow areas say that in the 50′s and 60′s if you made more than $10 million you gave 90% of it to the Government. Wow. (9 million?) That doesn’t really seem plausible although they tell a story about boxing matches being held only yearly for this reason. There has to be something between 90% and 35% though because these people are the cash cows of our country/economy and are the only ones that can actually pay for the fancy jet security and government health care. 

Also I found it interesting that in the early 90′s people making less than 10K had to go from 0% tax to 15%? That is a big loss for the part-time workers of the country and it happened just in time for me to start working at my first job. Someone making 9K would lose $1350 to taxes, a huge sum for someone who may be just scraping by. Previously in history this tax bracket was taxes between 10-20%, so it has been higher, but the logic seems difficult that the people who make the least are losing the least also. Maybe if more government programs like healthcare actually give back to this income bracket this will be a more justified expense.  

I am also surprised looking at the top income bracket at 50% through the 1980′s and it re-frames how to think about Ronald Regan’s presidency (known for cutting taxes), but seeing that he got a larger percentage of paychecks to finance things with during a time of de-regulation and government cuts, no-wonder he was able to make things work. I doubt he would have believed that the tax rates should go as low as they are today though seeing how much government is expected to provide. 

Seeing over time how high these income tax rates have been in order for the country to survive and knowing what people expect from government right now (more services), I think we will have to return to the previous income tax rates and raise business tax rates at the same time to make up the difference even in a good economy. We have a huge budget deficit, increasing costs and government loans that are ballooning (bonds that are declining in value). Things aren’t looking good. It’s all our civic duty to pay taxes and the country can’t survive without it.

Ways Google Has Changed Media Consumption Behaviors

I was glancing at Google Fast Flip today and it struck me that they have been successful not only in providing what people want but in some ways changing human media consumption behavior.

We all know that Google has turned the media world upside down with the humble text ad because of it’s ad matching relevance and pay-per-click business model.

They have up-ended the rest of the media world because they have influenced people to stop using it. This may be completely un-intentional, but I think it has happened.

The obvious way is that Google has  gained brand preference as a reference tool and a information source on limitless topics. But there is another behavior that they have changed is not usually talked about.

This change in how people consume information is that they can scan headlines now and glean what has happened in the world without actually viewing the ads around the content. (or visiting the content site, via rss, email, search engine, aggregator or google news) This has been bad for online ad inventory (although some may say we need less inventory to drive up prices, not more) and worse for recouping the cost of producing the content.

I don’t think that Google is stealing anything like copyrighted material by linking headlines from Google News, the search engine or screen shots Google Fast Flip. That would be like saying you are stealing copyrighted material by cutting out an article about a local festival coming up and posting it on the break room bulletin board for your coworkers to see.

I do think there does need to be revenue sharing for content sharing on some level though. How this should come about, I haven’t the slightest clue yet. And it can’t happen in the search engine because it seems to vast to fully comprehend let alone orchestrate.

I do think Google wants to be in the media business without actually producing any content, and they don’t usually ask for exclusivity with that content. Google wants to provide more products for consumer use and consumption of information branded offline. If they offer basic content for free on these product/services and upgraded content for a fee they should share the fee with the content providers. The rates may depend on usage and of course demand, and they will probably always be in flux. (no more rate card anything)

Yet I think it’s important that these shared fees (content payments) should be as low as Adsense revenue share since Adsense revenue is largely regarded as welfare for website owners. It needs to be enough to incentivize content providers to really feel like Google is a partner in their business and devoted to a positive business relationship.

The alternative may be that someday you have to pay a large content creator to crawl its site and republish parts of the content. Yes sharing is good, but if the content borrower doesn’t bring in enough revenue (analytics can tell you if your google news readers view, click or buy things) then is it profitable to be hosting the traffic from that source? (yes, hosting costs a ton of money for large content sites) I guess everyone thought they could replace millions of dollars in branding with a simple search engine relevance project and all their traffic generation problems would be solved. It’s never that easy. You have to own the relationship with your customer, you can’t outsource that to Google or anyone else.

Trust is also one of the BIG hurdles Google has to overcome to really being a star in the B2B space. Google has always believed that any process can be automated by a computer and nobody needs to talk to a human because humans are either too expensive or busy engineering things. This seems to enrage some humans, mostly the ones that run large companies. Also, No customer service and No sales people that can actually answer your questions along with ridiculous inflated PPC rates have actually eroded their text ad client base in the last 2-3 years. (and that whole display thing isn’t really looking great for ROI either when you consider people under 30 don’t respond to them at all)

So, in order for Google to really keep that growth going, they need to compensate content creators when re-publishing their content on/in their branded products in the future or the content creators with the greatest authority won’t be there for very long. Yes, some laid-off journalists are blogging but in 20 years how many will be left doing any journalism at all if it doesn’t pay and very few newspapers exist?

I also think all businesses need to stop every few months and think about the future. We’re too busy overloaded with tasks from laid off coworkers to really do this, but in a profitable world we would make time to consider where things are going in 3,6,12 and 24 months out (not a swat analysis, those take too long and are somewhat cumbersome) and really think about what they think the business should be doing to compete and win and innovate.

Why I dislike Large Blogs

I love blogs. I have been blogging since 2002 when my friend Mugsy emailed me and told me to sign up for LiveJournal. A lot has changed about blogging since then, but the revolutionary idea that if you can type, you can publish easily in a word-processing-like interface on the internet has not. The method of blogging to share knowledge by and for non-programming type people is still spreading to the corners of the globe and helping people’s voices be heard in ways we never thought possible.

At the same time I am growing more frustrated with the technorati and the overload of emails, posts, rss feeds and spam arriving on my accounts daily. I am trying my best to stay on top of the active topics in  the  user generated content world as it has forked into many roads that include blogging, social networking, social ads, microblogging and a whole host of a million little startups with other concepts they want to share with the world. (more than can be kept up with or can survive even if they do all innovate)

I have had to scale back my online content consumption several times over the years when it was in danger of taking over my life and all my time. But lately this getting married thing has taken a large chunk of time out of my life too, (even after the wedding) and as a result I am trying to glean all my updates and news knowledge into smaller and smaller bits of time. (apparently being married means I have to do work around the house and spend a lot of time trying to motivate my husband to stop watching hours of TV and do things around the house. Life just got more complicated and we have to learn how to cook, fix things, do laundry and empty the cat-poop-box with much larger quantities now). My work is also very busy (analytics and metrics seem to go nuts in recessions) and no spare time is to be had anywhere in the schedule.

Therefore, I have gone through many iterations of un-subscribe weeks in my email boxes and cut back drastically on email newsletters, of which once I found very enlightening. Most marketing/advertising/analytics/metrics/SEO/SEM email newsletters  these days aren’t as willing to share any real actionable info without you spending a lot of $ so out they go.

I tried to update myself by trying an RSS reader again (3rd try) and I think its been a few months but I am overwhelmed by that too. Its way to easy to get more than 1,000 unread items in the reader and when it doesn’t tell me the exact number anymore I am less motivated to tackle it because it seems impossible.

I have found Google Reader to be good for sunday afternoon fun feed reading and more personal fun  topics/blogs though. Home design is a great topic in the reader since you really have to see it all to learn.

On the other hand I am re-subscribing to some email newsletters and just un-subscribing altogether to others who insist on posting 30-50 items per day! (assholes!) How is one person supposed to read that many posts per blog per day? It’s impossible and on some level, rude.

I know why they do this. It is partially a play to keep new items being published every few hours to keep the Internet addicts coming back for more traffic and it is also a play for search engine dominance by having more content in the engine for every possible term than anyone else. These teams of writers churn out mostly regurgitated posts about content repurposed from other blogs without much new insight. Some do deliver genuine news and content you can use but scanning through 50 posts is way slower than scanning 5 emails. The content and pics seem to load soooo sloooowly and an email you read, scan and go to what you want quickly. Big offenders of this are ReadWriteWeb (on volume and not separating feeds), Silicon Valley Insider (regurgitating and trying to predict the future even though they’re usually wrong), SEO Roundtable, Apartment Therapy (OMG, holy re-post everyone elses content and fill up with summary posts daily to waste everyones time, generate page views and sell ads), Jalopnik (jebus stop showing us every detail of the 24 hours of Lemons in every city across the country and asking us what our favorite imaginary dream car in a movie with Bruce Willis: waste of space, use summary feeds please! On a cable bandwidth line it takes forever to load all these damn images!) and Media Post (phhbbtt). ALL THESE BLOGS have been banned from my RSS Reader. Some have been demoted to email updates but others are just gone.

Also, I’m not programmed to think to go see my rss feeds yet either so I often forget about them for several days after a good several hour scanning session finally getting the numbers down to below 200 new items. then I return the next time to see 1,000+ again and feel defeated. In contrast I have OCD about keeping a clean email box, and completely forget about facebook until I am completely bored. I guess that is a sign of my age bracket. (34)

I wish that this spammy fluf put out there to fill space could be eliminated. I also wish that these blogs would split their feeds into sections so you would be able to just get the posts you were interested in. Like if new original content and re-purposed other people’s content were separated in 2 feeds, it would be a big help.

I would also recommend that they stop doing summary posts. They piss me off. I wait a minute or 2 for something to load in the darn reader only to see its the same posts from the local editions of the same blog.  Poo, if that happens 15 times in a day I could have spent that time sleeping and then I’m annoyed. 

These blogs also do this because they are in some get-rich-quick rush to make money as a profitable business before Google figures it out and bans them or something. Yes, blogs have an elitism to them that says, duh, if I can make a slice of the money publishing from what the Tribune used to, I am going to do this as fast and as hard as I can. And it over saturates the web with watered down content that is just filler mostly, even if it does increase ad impressions and some adsense revenue if you’re into web-welfare payments.

I also would like to recommend that if you want to start a blog you keep the posts to no more than 2-3 a day and resist the urge to just regurgitate other people’s posts and link to them saying how great they are. Research things you are really interested in and share your own unique experiences. Any web-bot can be an aggregator, what we need more of is real people sharing experiences and knowledge to make social media stick and not die out because of spam/splogs and info-overload. It is these people who become trusted advisors and get the visitors who come back again and again.

And this is also better for the rest of us who have to go clean the cat-poop-box and have a life offline now that they are married.

Update 10/29/09

http://scobleizer.posterous.com/why-i-dont-use-google-reader-anymore

I guess Robert Scoble agrees with me to a point, though he blames Google Reader for a bad format and experience and not the blog owners for copious amounts of useless content hiding the good stuff. I guess there is always room for improvement and certain people discover it before others depending on how they use the info/product.

Update 11/5/09

How much content is too much content? Read Write Web chronicles these mega content sites and their race to populate the web all by themselves by posting 200+ posts per day. We should call it the Answers.com business model.

http://www.readwriteweb.com/archives/the_age_of_mega_content_sites.php

The Apple iPhone wasn’t a miracle just a repurposed design from arrogant salespeople

 

It really needs a glove with the case built in for the left hand.

I just got an iPhone.

 Since all the hype has died down about these iPhones 2 years later, and people have accepted this device as the most amazing thing ever I thought I would post my reactions to this nice but not miraculous device.

The first thing that I realized when I got this iPhone was that its a video iPod. (of which I also own) It is a repurposed design of a former product. That isn’t revolutionary at all.

It’s like someone at Apple said, wow I like my iPod so much I’d like to make calls from it and ditch my phone. And they did it. All the technology was already developed for a former device. Some new things did have to be added and re-engineered. But there is so much re-purposed from 5-7 years ago, the development costs were probably not that high because they knew pretty close how to use the materials to do this from past experience.

Now I see this Apple tablet image in the news and think they are re-purposing it again on a larger scale. I get the if it’s not broke don’t fix it idea, but their marketing and PR hype is a bit off.

I think these functions work really well:

• The touch screen is better than the old Palm Treo one and more intuitive. I am impressed at how they solved the QUERTY problem with a touch screen.
• I think the apps are also very good and its nice that they share the love with the app companies that develop them. I don’t think $5 an app is a bad price for what they deliver and plus you should think before you download a ton of apps and a cost helps you do that. The alternative is that your HD gets full and crashes quickly.
• It syncs with Yahoo email very well, which is what I use for one of my accounts. It turns out that email is very doable on a small screen.
• I like the pull the corners effect to read web pages and increase the size of the fonts so you can click a link. This is very intuitive.
• The GPS is pretty good. I watched my phone show a blip of my location on a map that was about 2 seconds behind where we really were as we drove home. That is pretty good bouncing off a sattelite that fast. I think the directions from where we are to an address will be very helpful in the future.
• Doing the convergence thing and having the phone, music player, GPS, camera and email all together works great.

I think these things need work:

• The rss feeds don’t always work on the iPhone. Not that it doesn’t literally work, but these are items I’d like to read in more depth, and on a tiny screen its hard. Also all the links go out to the web and I am finding that I can’t get that data very easily in Chicago.
• The web issue is still an issue with web enabled phones. I hated that things took so long to download on my old Treo 650 and 4.5 years later its still an issue with the iPhone. (heck its an issue on my computer sometimes with Google reader)
• I think people who have iPhones use them on the go a lot and the backup for the wireless network are free wireless networks. Which means you’re in trouble if you want to download an rss feed in google reader online. (meaning the bandwidth exceeds the ATT mobile network and that is sometimes spotty with its coverage)
•  The Metra commuter train and Chicago CTA don’t have free WiFi on their trains and busses and you can’t always find one when you are on the street either. (neither do our cars) So, there are a lot of times/places I look down at my phone and can’t connect to anything (phone or internet network). fail.
• I feel like we’ve developed content and a device for reading things in real time that wants to be downloading info/updates 24/7/365 and the networks still look like swiss cheese or a spider web, with gaping holes in them. We need more ubiquitous universal access before these devices can really be life changing.
• The touch screen is great but then switching to a physical button for on/off seems counter intuitive. Why not make all the functions be a part of the touch screen? I keep looking for an off button in the screen itself. 
• The battery life is horrendus. If I read email and rss feeds on the train and bus between home and work I use 50% of my battery life. Holy Monkeys, this needs a better battery or a plug that pops out the side that you can stick in any outlet you find.
• I also like that Steve Jobs has the kind of what I say goes power and involvement in the details to make his products good on many levels and keep the design level very high. It’s impressive he has been able to hang on to that power in a large company, it is rare to see and keeping one person in charge makes decision making faster, easier and true to the original purpose. Its how things get done if that person is well rounded in knowledge and willing to enforce what they preach.
• There is also the annoying problem that on any field you need to enter text you can’t click to put the cursor anywhere on the field to start typing except the end. If you want to change one letter you have to backspace the entire field until its blank and start over. We need to have a click to cursor ability/function, do apples just not do that?
• The me.com thing they sell as an add-on is cool but way way overpriced. I cited that 1 yr of Flickr unlimited access is $25 and 1 yr of full LiveJournal access is $25. Why is syncing my phone to the web $100 for the year? Assholes. I did get a small discount and got it for $65.
• The Apple sales guy was over the top. I really hope I never have to go back to that Naperville Apple Store again. He was about 18 and very arrogant. He made me (age 34) feel stupid for not knowing everything about the iPhone or web phones and his Apple Brand Arrogance and demeaning tone was disgusting. Why ask us about our computers at home? Why rip on them in front of us? When you don’t even own one? Admit most people have windows machines and then say why you might consider the Apple, don’t just say everything else sucks. OMG, and don’t explain everything for 2 hours when I just want to buy the damn phone. Dragging things out forever and then asking 7 times if we want to buy the apple care program that I didn’t want. And when someone says they will look it up online and then decide later, don’t say look it up now on this Apple, that is a high pressure sales technique and if I didn’t need a phone that day I would have walked out of the store at that moment. Totally unethical and wrong to do to a customer while you are looking over their shoulder. So, at all costs avoid Apple sales assholes that admit they don’t even own any of the Apple products they sell.  Just buy stuff online if needed. 

The basic thing is that the phone was worth the $288 that I paid (for the 16 gig). I paid like $300 for the Treo 650 in 2005. I think if this works for a few years it will be ok, and worth the purchase. But it really doesn’t need the hype or the arrogance.

Why the Microsoft & Yahoo Search Deal Sucks

I blogged about why I thought that the Microsoft and Yahootalks were not going to yield anything useful last year and was satisfied that they stopped wasting time trying to buy each other out of financial trouble. Now it has been widely reported that Microsoft has gained access to Yahoo in a search partnership deal. This is somewhat better but again, the executives have not listened to the public.

1. This Yahoo-Microsoft deal still sucks for several reasons. One being that Microsoft Ad Center is the ad display engine being used in the partnership and not Yahoo’s Panama. Neither have the depth or ease of use of AdWords. Anyone who has ever placed any pay per click search ads in their life would choose Panama over Microsoft Ad Center as the system to use. Maybe MAC makes more money but there are too many limits on bids, keyword availability and restrictions on running your ads to make it widely accepted.

2. The recent Netflix prize showed how much collaboration benefits organizations rather than competition. The revenue share partnership deal usually shares no information about technology or business strategy at all between companies. Its a you win, I loose, I’ll just pay you for handling this for me-approach to solving a problem, that doesn’t work in the long term.

The Netflix prize was recently awarded when a group of individual competitors and small teams banded together to use all their ideas in combination to finally get above the 10% improvement mark in matching/suggestion technology and submit their top result. In the last day before the time was up, another group of researchers banded together and topped the previous best submission also by combining all their ideas together at once.

Then in the last 12 hours the first team did come back with another submission just slightly better,  to win,  but the overall idea/lesson is still the same. If you really want to improve on consumer products and experience with really complex technical problems like search and suggestions, you have to collaborate rather than compete.

Yahoo and Microsoft would do a whole lot better against Google if they got the Bing folks together with the Yahoo search folks and started collaborating on this daily via videocam rather than doing an affiliate marketing type deal. This deal is evidence that Microsoft is being run by the lowest common denominator these days (and loosing a lot of money that way) and Yahoo’s CEO won’t be around long. She has made a decision that helps her contain and cut costs of running her company in the short term and that decision has sacrificed the long term marketability of her product.

In fact Yahoo was a search company primarily. People only used email, Yahoo news and other functions like Yahoo Answers because of the search engine they knew. If you take that away you don’t have an identity as a company. And they will lose a lot more search market share and preference by outsourcing to Bing even if they get paid a little bit more profitably in the next 2 quarters. This is pretty much the death of Yahoo. It is really sad.

New Media and New Information Paradigms

I have been hearing about the demise of the newspapers, the rise of search/social networking/new media and the internet fragmentation concept for years now. (almost a decade?) And I just read about it again today with the newspapers secretly meeting to try and sort out monetization methods to save their business. At the same time I am a Guinea pig living through this time of change/shift in how people find information, use information and consume things. Here are some of my observations although not in a concise dissertation format yet. 

• We are at an odd time in internet evolution, on pause between big developments. We got email, IM, web sites, RSS feeds, Blogs, social networking and now Twitter. We don’t need more services or ways to interact on the web. We need better all inclusive ways to connect and consume all in one. Ways to make the experience more relevant and more inclusive of many kinds of content at the same time. Not wasting our time.
• I can’t help but notice that at 33 I have never really “read” a newspaper. This indicates to me that newspapers were not that important back in the 1980′s to my generation when their profits were healthy and the internet was but a dream for most of us. (Except being something to line litter boxes and bird cages with.) I hate the size format, I hate the ink and I always have. I actually like the ads though, especially the Sunday fliers. 
• Weeks go by without my watching any TV. This started about 3 years ago when I got high speed internet. It’s not that I don’t like TV, I just don’t have time to sit for 2 hours plus and I know if i sit down I won’t get up and get anything accomplished in the evening/weekend. And I don’t like overly repetitive things. I was watching the sell that house shows on HGTV to get ideas about how to sell mine and after about 3 I got it and didn’t need to watch any more. Reruns aren’t nostalgic to me really, more just boring. And reruns is all Cable TV is about.
• The only TV I will drop everything for is Top Gear UK. When it is in Season we trek over to my parent’s house and watch wwith extended family weekly. Everybody drops everything to watch that show. It makes you laugh, it makes you dream of fancy cars and it inspires you to take grand adventures regardless of what the outcome is.
• This leads me to a general cluelessness about a lot of local and newsworthy (?) events. Things like buses that are Hijacked and what the weather will be tomorrow. I also find that these things weren’t essential to me in the first place. I carry an umbrella, what’s the big deal?
• I find myself focusing on things I’m interested in. Maybe this is the political polarization people speak of? I read my marketing emails/newsletters/blogs as well as home design blogs and write my own blog as well. I check status on Facebook/Twitter/Flickr and maybe update if I have something interesting to say. And I work a lot. I also am always investigating 2-3 new directions for my work/career. Not all of them pan out, but they help me figure out what is evolving that I need to know about.
• I do still use the phone (yes the land line). It is the best way to reach my parents and Steve’s parents. Steve’s parents email but mine are not really into it. And we try and go visit once a week in person. In person time still matters.
• I am a book reader because I am a train commuter. I have been for years now and it has created a small library of business/marketing/analysis books. I order from amazon when I see something I like and then go consult the pile of books for something new.
• And that is all I have time for. Now with a husband (fiancee really for one more month), 3 cats, 4 litter boxes, a yard, wedding planning, condo selling, house hunting, family organizing, laundry, food shopping & cooking I am overbooked. I don’t even get to skype/call my friends very often. A party invite seems really daunting these days with the schedule we keep.
• I wonder about new media uses and if we will really care about anything not personally relevant to us in the future? Will a police chase matter to everyone in Chicago or just the people who live by the highway where it happens? Will we be less distract-able by sensational news and distracting entertainment? Will we be able to channel the news, information and analysis we really need into our lives and ignore the products/content we really don’t care about?
• On the other side of the coin, how will we ever discover new things? I find myself looking to find out what is happening on the internet a few times a week and look to Google News and the Yahoo home page. Not the Trib. Yet somehow the list at these sites is always limited and not really anything relevant either.
• There has to be something in-between a completely open fire hose of information and one select rss feed with just content from one niche area. There has to be some middle ground between being hijacked by ads for 20 minutes of a 60 minute program on TV and not knowing at all where to find a dress for my rehearsal dinner when my usual 5 clothing websites didn’t pan out. (who has time to go to a mall?) ((and why does Google shopping suck when the main search is generally good??))
• People won’t pay for news. Period. They will pay for some kind of extra relevant cool service though. They will pay for innovation, new products that are noticeably better for some reason. Things that simplify your life.
• Ads should not be integrated more with content as if they were the content. It blurs the line in what is really true and what is marketing speak. And although they may pay the bills for a while, people will eventually figure it out and abandon that medium that does this.
• We need another search player. Google is not enough and although they do some things well, I am not a fan of everything they create. I would like more companies to work on real time indexing of information as well as historical archiving to keep information accessible if anything happens to Google’s accessibility. At some point people will be so hooked they will be able to charge for a (low cost) subscription to the search engine itself. 
• More people need web enabled phones with internet use active. I just read yesterday that out of 57 million people in the US with internet capable mobile phones only 18 million have internet enabled! (netpop stat comparing us to China) 31.5% of the people with internet use phones don’t even pay for internet access? (only 13% of all the cell phones total) This is a huge hurdle to making info more relevant and accessible because people carry their phones everywhere. Things like bigger screens, flatter profiles and easier software app use on these phones will help the adoption rates improve. 
• Identity management and security is also a problem. We might like something like OpenID but only if sites still allow anonymous comments too. Privacy and being able to say something important without being hunted down in person for your opinion necessary for getting people to adopt this identity management software and make our lives easier between all the hundreds of web sites and e-commerce activities we do in a day and consolidating that information for our own personal use.   
• Data mining is going to have to improve. If statistics are wrong 25% of the time like stated in the Numerati book, we really need to combine automated data crunching with human decisions about data more often. Numbers are meaningless without someones explanation. This completely changes what and how data is configured, crunched and reported and can determine/undermine your results even if you manage to collect it perfectly.
• All this plus the only way out of a recession is through innovation. We’re waiting.

TopGear Weddings and Marketing

Those are three things I seem to be talking about this morning.

1. I am slightly jealous that the TopGear crew already incorporated themselves into someone’s wedding and therefore probably won’t be able to find a way into mine at Cantigny in the suburbs of Chicago. Bummer. Maybe we should rent the corvettes then? As an homage to TopGear and our love of cars? Read the full story here at the Daily Mail from the UK. And the Sun UK. Maybe we can do some kind of challenge in getting from the wedding ceremony to the reception? If any of the TG crew reads this blog thanks for including my ideas if and when that ever has possibly happened.

2. Wedding Planning is arduous and totally consuming of every second of free time you have when you are this close to the final date. I haven’t been updating this blog because there are so many things to manage. Oh and did I mention the I have to move out of my condo in 3 weeks also? It finally sold after 6 months of marketing and price lowering. Maybe moving would be a good TopGear challenge? Just don’t let them plan a wedding, that would be disasterous. No amount of compensation for mucking up would help fix that after the fact.

Between figuring out who will be attending, seating charts, making things like name cards and menu cards, making tiny bows on wedding favors, picking the set lists for the music, meeting with the church minster, and the soloist, seeing a test run of the flowers, getting the gown hemmed, insisting that the groomsmen and fathers to finally go rent their damn tuxes already, and matching the table runners and who knows what the f else, I have no time. It is a bit frustrating already. Now that I think about it, I am about ready to offer to turn it over to the TG folks out of frustration and a lack of sleep. I almost don’t care how it turns out, I just want my life back.

3. It hasn’t helped that I have been swamped with work either during this time, so I haven’t been able to blog about new online marketing trends either which is what I do for a living and should be easy and quick to write about. But I am working 12 hour days for difficult clients right now, so this isn’t happening either.  Anyway, it will be a while until this blog is updated regularly again, but I do plan to be back starting July 12th.

Update; the only TG tie in at my wedding was that we had a TopGear Table and a Nurbergring Nordschlefe Table. We also had a Star Wars table a Les Chats Table and a bunch of others named after our hobbies and interests.

Can ordinary people manage the risk in the stock market for their retirement?

I am beginning to think there is no way an average American can invest in the market and make any money for their retirement in a 401K. I was reading this morning that 5 and 10 year returns in the portfolios of most mutual funds are negative now when they calculated in the huge losses from recessions in 2001 and 2008 and the beginning of 2009. (Q1 hasn’t been kind) 

As an investor (for my 401K) I look at that and say: yuck! Why would I put my money in something that has no long term value?

My fiance sent me this article saying that now 20 and 30 years are the benchmarks for best overall performance in mutual funds and stocks in the market. Yikes! 20-30 years? Who has that much time before retirement? Who can invest for that long anyway?

When you consider that most people’s salary starts dropping when they reach their 50′s (because employers don’t value old employees and can’t spend time/money updating their skills) you really have 25 years max to work with as far as investments for retirement.

You start your first real paying job with a 401K at age 25 and you may not be fully employable by age 50 although you will likely live to the age of 80 or 90.  There’s your 25 years to save and invest for 30-50 years of retirement.

I also think there is something else going on here affecting the 20-30 year market profit numbers. The US Markets benefited from a long term technology/innovation and growth curve from WWII to the 1980s. Personally, I think that was a one time deal and we will never see that kind of long term prosperity again.

Why? 1. Because we don’t understand enough about technology to innovate on that level again to create that much growth. 2. Because the US has higher paid workers than anywhere else in the world and everything gets manufactured and produced (and serviced) somewhere else. 3. Because we’re too complacent and have too much entitlement as a country of workers. Work creates wealth, not shell games with securities.

That brings up another point: We’ve been playing a shell game with our economy since the 1980′s. De-regulate, re-regulate, stimulus, fix, fund, trade, outsource, sell, leverage, whatever… It’s all a shell game to us worker bees and the internet has been the only significant improvement in technology to create new industries and jobs in the last 20 years. We need more than that to survive and prosper as a nation and a world.

I don’t know about you but I can’t stand to take that much risk with my money. I have some in a 401K but mostly my retirement is locked in a 5 year CD IRA at 5.25% that was a promotion this fall when banks wanted more cash reserves. I changed companies in 2006 and rolled over the old 401K to a bank in 2007 because I knew the 10 year recession was coming soon and I didn’t want to risk timing it.

There will always be people who game the market and come out ahead, but those of us without finance degrees, huge money to invest in undervalued markets or inside scoops will never really profit on the whole. Many of us will get out exactly what we put in and maybe less considering our lack of  investment prowess. So, in that level of risky why not just put it in the bank? Positive 3-5% sounds a lot better than negative 40%.

I hate the inflation argument that says that 3-5% isn’t enough to make money after inflation. Guess what? Inflation has been very low and inflation doesn’t stop when you have negative returns either. I’d rather have some money dependably than none at all when prices are higher. 

You may be asking why I want more innovation and less investment in the market? Doesn’t investment in the market lead to more innovation?

NO. Most of the mutual finds and stocks you can buy that are highly rated are in huge old (one trick pony) risk averse companies that have already peaked and can’t figure out how to do anything new. They sell shares to raise cash and then have old people make decisions like the old days. Venture Capital,  new small businesses and Universities are the place where innovation happens. If I could invest in those, I would. But then again I don’t have millions of dollars and apparently I won’t any time soon.

What are the best proven ways to fund your retirement and create wealth then?

1. Have a side job for extra income you can save (part-time weekends or evenings a few nights a week)

2. Own rental property for extra income (you need to live near it for this to work)

3. Have fewer kids if you’re contemplating having a family (ok we don’t always control this, and we love kids, but nobody is going to debate that they are expensive) 

4. Own a smaller home (smaller mortgage = smaller amount in interest paid (lost) to the bank)

5. Don’t go into debt on credit cards or car loans (hello! 25% interest, MONTHLY! on some cards)

6. Live frugally generally, keep your cars 10 years, don’t buy new clothes every month and don’t buy big ticket items like TVs and Computers every few years. Spread out the expenses over the long term.

7. Share what you have with others. Seriously, knowledge, help with projects, donating time and donating items you no longer need, as well as hand me downs between families help kids and neighbors live better within their means and help the community live better too.

8. Take care of your health. Eat less junk, lower fat, lower salt, lower carbs. Exercise daily. Take vitamins. Don’t work in an industry that has a side effect of cancer. Visit the doctor regularly and if something comes up treat it early, it will cost so much less in the long run. Heath issues start in your 30′s and get more frequent in the 40′s, 50′s and 60′s. Expect to pay more every decade for health costs in your life/budget.

These are all real tactical changes we can make to save more money monthy and yearly that will get better returns than the stock market and help prepare for inflation. What else do you think can help?

Chicago CTA Rant – Where are the Busses? Commuting Problems

I have been a commuter in Chicago for about 3 years now. I was initially excited to abandon my car in it’s parking space during the week and walk to the EL train and then to work every day. I have saved a bucket-load of cash not paying for gas or parking downtown since I have worked in that area. I was able to get to work in 1 hour from door to door, and it would be faster if I caught the CTA Train right when I got to the station. It was never more than a 10 minute wait for a green line though.

All these things changed recently when I moved in with my Fiance in Warrenville. (I had been living in Oak Park for the last 7 years) Now I am only tied to downtown Chicago by the METRA trains. Which is very frustrating since the BNSF only comes in to Union Station which is all the F way over west of the loop and not walkable to Michigan Avenue. 

This means you have to fill that gap with more public transport since cabs are too expensive to take every day. Your choices are the CTA elevated Trains which aren’t really by Union Station or Michigan Avenue either or the CTA Buses. Everyone said the Buses were the way to go. And for all the ranting about Metra, the CTA Buses have ended up being far more problematic than the Train. (although the train has been so packed the last 2 days that people have been standing in the isles in all the cars)

This morning for example it was a 1/2 hour wait for a 121 bus by Union Station. WTF? They are supposed to run every 12-15 minutes per the CTA Site. Last night was no better. I caught the 151 bus to Union Station for a change (most days I wait a 1/2 hour for that at 6 pm also) and then there was no Train until 6:50 pm. I spent a 1/2 hour sitting in the train station doing nothing. Where was the 6:20 BNSF?

That is the first time a METRA train has been missing but the CTA buses are there at about a 50% rate . I can walk to the train station in a 1/2 hour, but if I can get a bus it only takes 15 minutes (even stopping on every block). But if I knew there would not be a bus for a 1/2 hour I would just F-ing walk.

I get to start working from home on Fridays this week. I won’t miss the 1.5-2 hour commute each way.

How have your experiences been with Chicago CTA & METRA commuting?

How GM should restructure for a Government Bailout and streamline Brands and Cars

How can GM save itself from Implosion? Which GM brands and cars should bekept and which should be cut?How many jobs can be saved in Detroit? Should GM, Ford and Chrysler be saved at all? Will the consumer demand for vehicles (cars) ever pick back up again? These are all good questions.

Everyone is all a buzz about the American Car companies and their pitch to the Government saying that “bankruptcy isn’t and option” so give us billions in free money that has no strings attached and we can spend on anything we want. Ouch! I think congress was right to send them packing the last time they showed up in private jets and asked for money, and we have learned that in the other bailouts, the banks aren’t spending their money on what it was “proposed” for so more oversight is needed for any government bailouts of companies.

Back to my thoughts on GM specifically, since I am not an expert on Ford or Chrysler.

GM has some opportunities to be successful in the future but much of that opportunity comes at the cost of getting rid of the past, completely and starting over from scratch.

Almost every GM car or truck sold in the last 10 years has been either: inferior in quality, reputation or design. They also tend to make cars for segments that people don’t need and then wonder why people won’t buy them even when pushed. (Hello: SUVs) I read yesterday that the 4 brands that GM intends to keep are Buick (yay!), Cadillac (ok), Chevy (a necessity) and GMC (WTF?). 

I think they should throw all the brands out and come out with 5 new ones with distinctive market segments and niche products. Here are the segments in automobiles that I think will be big in 10 years that GM or any car company needs to invest in, and cut everything else:

1. The new shiny reliable car below $8,999. Developing countries and low income people in developed nations will need this kind of transportation as the cost of transportation increases consistently. (think college kids and retail hourly wage workers) It isn’t sexy or cool or updated every year. It is a 5 year design of an extremely reliable and simple car and only available in 1 color and maybe with 2 seats. If people want variety they can customize on their own. These cars are cheap super basic transportation and low cost is what sells them and fuel efficiency is also important. They have to be more reliable than a used car or this won’t work. Think old VW Beetle, Geo Metro, India’s Tata, China’s Cherry Motors or simpler version of a Honda Civic/fit.

2. Super eco friendly green cars. This segment has a product range from cheap eco friendly basic cars to luxury eco friendly status comfort cars. Performance isn’t really a priority but style and design is. Comfort comes at a price but miles per gallon is always in the 50-75 mpg range for all vehicles. Leather heated seats is an option on the lux ones. Think Toyota Prius and GM Volt. A 5-door option is nice here too. Eco people are practical people. Plug in charging in your garage and solar panels in roof are also great pluses if the cost can still be comparable to a non-eco car. People need to have one of the eco cars start at $15,000.00. Then fancier ones can be higher priced. Pricing people out of the market is bad for business, you loose sales and customers to people who do have the affordable eco cars.

3. Business/Industrial/Delivery Trucks & Vans. No consumer needs a truck unless they live in the mountains of Colorado or live on a ranch, but telling people they needed huge over-sized utility vehicles for their family use has been a strategy used in the past 15 years to re-purpose existing designs to new markets. This era is over and the SUV needs to die except for people who have 5 kids. (relatively few) There is a continued opportunity to sell trucks to businesses that deliver, transport and create large products in the US but it is a far smaller division of the company and of sales. And living in the US and seeing firsthand how people use these vehicles for business should give GM an insight that the Japanese, Chinese and German car companies don’t have and lead to building and innovating better vehicles.

4. And most importantly: The everybody car. I think GM has no way of recapturing a significant part of the 4 door family sedan but there is an opportunity to innovate it. There have been a few cars that are appealing to everybody because they contain multiple category characteristics. (um, crossovers without the truck part plus luxury) The everybody car I am talking about is the 5 door hatchback sedan. Don’t think 1970′s! Think of the Prius and Saab 9-3 when it was a 5 door, think Subaru WRX. More needs to be done in developing practical sexy cars like this because they take over where SUVs left off. You can haul things in them and get good fuel economy at the same time. You can even structure them for performance and luxury and fuel economy at the same time. So, the 5-door sport/luxury/green/family sedan is the everybody car of the future. Will GM make it and market it properly? (it could be the volt if they lux it up a bit)

5. The Luxury Performance car. Lastly, GM needs a super-car or luxury flagship vehicle that basically walks on water and inspires a generation. (more than the Pontiac solstice) These cars aren’t always profitable themselves, but they make the other brands you own more profitable and can make your brand one that people believe in. How Toyota and Honda don’t have one I don’t know, but maybe that is why they do so much racing now?  The Corvette makes Chevy feel cool, the R8 made Audi sought after. Vipers dying off made Chrysler seem even less cool and less reliable. Plus so few people will be able to afford a luxury performance car in the future that this will need to be a niche business with limited production.

And for fun here is what I think of the brands GM currently has:

Keeping Buick: Buick makes an extremely reliable car (yes like Honda/Toyota reliable) so this is a good place to start and they get 25-30 MPG. What Buick needs is a few smaller car options and even better fuel economy without sacrificing the comfort, luxury and quality that people need and love. They do need a new logo though, that doesn’t look like the 3 old 80′s shields.

Keeping Cadillac: Caddy is all about Flagship dream cars and it may share a few parts with Buick so there are manufacturing cost efficiencies there.  Caddy needs to keep innovating on performance, style and (surprise) eco materials and fuel economy.

Keeping Chevrolet: Chevy has been the all American fleet of everything (soup-to-nuts) vehicles for a long time. Many of the other brands aren’t needed because Chevy offers most everything. They cover work trucks, family sedans, performance cars with the Vette and with the Volt an eco car of the future. They should make them less fugly though, because they aren’t selling against other lux GM brands anymore, they are selling against Toyota and Honda’s flagship cars. 

Keeping GMC: Wouldn’t it have better to just sell trucks under one brand as Chevrolet since we need so few trucks? I am at a loss on this one. GMC offers nothing new, interesting or innovative at all. (yuck)

Cutting Saturn: Apparently this is just Opel cars from Europe now.  The Saturn brand name needs to die since it means cheap, flimsy, crappy, cars that break down a lot and are ugly. Re-release Opels under the Opel name? How about Vauxhall in the US? We like them.

Cutting Pontiac: Well Pontiac has been loosing it’s battle to streamline its designs and be a sleeker performance division of GM because of it’s cheap finishes and lack of quality. Plus the dealers don’t really help here either when they don’t look like a performance dealership. I think the concept of performance only exists at the same time with luxury because who will pay all that money and not want to be comfortable in their car? And quality in finishes and reliability is ultra important. As Pontiac is now, it should be cut and their logo scrapped.

Cutting Hummer; Duh! Sell it to the Norwegians or Russians or UAE or something. Wherever it is cold and has mountains or endless oil. The military division of Hummer should be retained and put into Chevy for developing military/industrial products.

Cutting: SAAB Well we saw this coming. They made an over engineered car un-reliable so GM deserves this one. From personal experience I will never buy another Saab again because of the reliability problems and obviously no one else is either. This is typical GM strategy, cut quality, save money, increase profits in the short term, piss off customers, loose customers, wonder why they can’t win customers back after costing them 5K in repair bills. Basically if you screw someone over financially once, they never forget it. This should not have happened because Saab had a lot of potential, but it’s pretty impossible to fix now.

 

We Can Save Washington Mutual and other Banks by Overpaying our Mortgages

Washington Mutual Home Loans Logo - My Mortgage Company

I think we, the mortgage holders and general citizens might be able to help in the credit crunch going on right now in the news. I am hearing so much about the Lehman bankruptcy and the AIG de-valuing today. Certain sectors of the economy are in shambles due to over leveraging and greed on the part of the top level executives in these banks and financial institutions and we really don’t know how deep this will go.

As much as I hate their greedy asses for getting us into this mess, (just to get another bonus to buy another yacht) I think you and I may be able to help so things don’t get worse. I think that if everyone that has a Washington Mutual (WAMU) Mortgage (like me) pays extra principle over the minimum ammount every month the cash on hand will rise above expectations and help keep the company running. I am currently paying $150.00 over my minimum now and my brother pays $250.00 over his minimum payment also.

The thing is it benefits you too! If you pay extra on your mortgage now it cuts payments off at the end of the mortgage and that saves you the interest that you would be paying on those payments. So, in my book this is a win-win situation. And don’t give me that line about mortgage interest tax deductions, that is only 25% back in credits on your money. It’s not like you get all of it back from tax deductions. Its still better to not pay the interest all together and save 100%. Duh.

You may be “saving” that money for when “financial armageddon” happens but really… those of us savers have been saving for years and have plenty of “cash on hand” now. We should pony up and get these mortgages paid down. It seems like the responsible and needed thing to do. Plus it gets a better return than a new handbag.

If 1,000 people pay $100.00 extra on their mortgage that is an extra $100,000.00 a month and an extra $1.2 Million a year for WAMU to keep afloat. If 5,000 people pay $150.00 extra on their WAMU mortgage that is $750,000.00 extra cash per month and $9 Million more per year. And 10,000 people paying an extra $200 a month is $24 Million a year. (which should do some good)  This may be small potatoes for a banking snob but it all adds up and is scalable since WAMU must have thousands upon thousands of mortgages out there.

Anyway, take it for what its worth and see if you feel like making a contribution to the capital that banks and mortgage institutions have on hand in this economy.

Now I do need to add a few disclaimers to this idea:

1. If you are having trouble making ends meet, this post or idea is not for you. Keep paying the minimum each month and move on to cash saving strategies pronto.

2. It is no one’s individual responsibility to do this especially if the job market is not good and they say to have a year in cash living costs on hand if you loose your job. Make sure you have that reserve first to protect yourself. 

3. We don’t owe those rich asses anything extra beyond minimum payments, but it might help the general economy and us all in the long run. And if you know one of those greedy financial execs, egg their car or something. Make it personal.

 

Update; um, this didn’t work. WAMU got bought, eaten and taken over by Chase bank. Poo.

New Year’s Resolutions 2008 Check in

Well, it is at about the 1/2 year point in 2008 (ok a little late) and I thought I would check in and blog about my new year’s resolutions that I posted about back in January. I know everyone makes resolutions (well most of us do) and then forget about them when we can’t hold on past the 2 week mark. Yet it is a marketing boom for companies that want to capitalize on people’s need to feel like they have solved a problem by buying something. Millions of Gym memberships are sold and then forgotten in January. I hope I didn’t fall into a buy something trap this year, and I hope you didn’t either.

My goals were no different than anyone else’s this year. This was my actual list:

1. Loose 20 lbs. It’s a necessity. (result: well I lost 5 lbs. Not much really and I am struggling with getting it to go any further but Kashi go lean products seem to help keep me feeling full longer and therefore less likely to snack)

2. Save 5K more in savings again. (Result: surprisingly I completed this already despite having a 2K car repair bill earlier this year. I did have referral a bonus from referring a friend that got hired at work which helped a lot, but the rest has been in cutting back. The things I have cut costs on are: Car insurance, driving, clothes, eating out for lunch and dinner, vacations and random household stuff that I probably didn;t need anyway. Crate and Barrel has been filling my house with stuff for years) My new goal here is to make it a total of 7K saved for the year now that I have reached 5.

3. To keep things going along well with Steve. (Result: This is going well. No problems at all except that we both work a lot and it is difficult to find time together some weeks, but otherwise all ok)

4. To keep up the HPV  Cervical Pre-Cancer Dysplasia health related follow ups. (Result: I have been back for more followups but no change. Still CIN-1 cells they are very determined to do harm no matter what. No talk of more surgery but I suppose it is still a possibility again)

5. To take some kind of web or HTML class. (Result: I did this early in the year, using my company education credit but I have to say that as much as it felt like I learned a lot at the time, I really don’t remember much because it was so fast)

6. To be better at time management. (Result: I have been better with this too. Getting up earlier and being more on task. Hence less blogging. I also use an app called rescue time that helps me see where my time is being spent. The thing is when I am more involved in creating what happens at work I am happier. When I have no say in anything it becomes boring and without much motivation. I think everyone enjoys being more of a stakeholder in their company and work situation than not.)

7. To learn to cook some things. (Result: I haven’t really learned to cook anything specifically but Steve and I try and cook together once in a while)

8. To get back into being more career goal oriented again. (Result: I guess but there aren’t any new positions to move to in the company and the economy sux so I will be here for a while appreciating my current job and taking more classes. No climbing the ladder this year)

TIME Magazine Article – The Social Contract in America

I was reading my parent’s TIME Magazine this week (that I usually swipe to read on the train) and they had polled Americans on the state of the economy and their take on how they plan to personally ”get by” in the coming years. You can read the survey results and the article about this concept of a social contract online at TIME.com.

I had never heard of this concept of a “social contract” that business and government have with America. I work in a recruitment related field so if it existed, I thought I would know about it. As a human being I was aware of it as a colloquial dream we have perpetuated by the stories told by our parents and grandparents.

My family history doesn’t go back that far here in America. My great grandparents arrived from Poland and the Ukraine pre-WW1 and went to work in the gritty factories of Chicago because it was a better living and opportunity than they had back in Europe. (poor peasant potato farmers I usually say) and the economic opportunity has kept us here in Chicago ever since.

My grandparents generation went on to slightly boring but consistent blue collar jobs with pensions and my parent’s generation went on to white collar jobs after getting college educations. Some of them got a pension and health insurance and others did not. My generation doesn’t even get a shot at a pension. Companies have found that they can hire good people without it and they tell us that a 401K is really the same thing. (for reference I am 33)

So, we have these 401Ks that seem to never make money fast enough to accrue enough funds to equal what a pension would. They plummet in value every 10 years or so in recessions, and someone changes the funds available without asking or telling us. Most of us have health insurance through our jobs. We pay handsomely for it, between $100 and $300 per month per person.  And then when something happens that requires medical care, the insurance only covers 1/2 the costs. It is totally possible to go bankrupt with health insurance coverage these days because most coverage is crap compared to what my family had back in the 1980′s.

TIME says that there is an “implied” social contract in America where you give a company (or number of companies) your time and energy and they give you “a basic level of economic security provided you work hard and took responsibility for your family”. (direct quote from TIME July 28, 2008 p 42) And I think things have changed. This contract implied or not doesn’t really exist anymore. I see businesses every day making decisions to give workers less and people have to get more creative trying to survive.

I think the social contract is more like this now.

1. A company promises to pay you as little as they can for your time. This sounds pessimistic but I have seen the proof on paper that you are paid what they can get you for with your experience rather than what you are worth or how much “the job” pays. You have to wait years to work your way up the ladder to make a good wage and then marketers and your neighbors taunt you daily to buy everything in sight to keep up with the Joneses. 56% of the people who made over 100K a year said even they can’t expect to afford health care, college or a secure retirement anymore.  And 100K a year is a lot of clams. (I don’t make anywhere near that. ) I do realize that these businesses have to keep costs low in order to compete with India and China, but somehow I’d rather see the cuts come from other areas that don’t erode the culture in America and impede our ability to raise families. 

2. Marketers will prey on you from every direction. A lot more people could make it through hard times if they had savings but the national savings rate is negative now. All the “stuff” and services you “must” have seems to replace the financial security your grandparents achieved. Just say no didn’t work for reducing drug use in the 80′s and I think that the disposable consumer culture will probably continue here too.

3. Health Issues will cost you. Most young people don’t need much care because you haven’t gotten to the age where things start falling apart yet and we don’t have any concept of how much it costs to survive a serious health issue like cancer or bypass surgery. Both my parents had heart surgery in the late 1990′s and they were 50 & 60K each. We paid about 10K each of those costs and the insurance paid the rest. I just heard someone at my dad’s workplace had bypass surgery last month and it cost $100K. I know they have really poor health insurance there, and I can guess that the guy might have had to pay 50K out of pocket. Even dental issues are expensive. I need have needed a crown for about 5 years and because there is no pain or damage being done since the root canal and filling, I am holding off on the $1,000.00 price tag since dental insurance is only going to pay 1/2 and I would rather save the $ for a real emergency like fixing the 7 year old car I have or paying for the radiator heat to be fixed in my condo.

4. Retirement is going to be difficult. Very difficult. Some people wonder if social security will be around in 2040 when I turn 65. I personally, think it will be. It may not be nearly enough though. Most of us will have some 401K savings but as the Frontline Retirement special found, most people make crucial mistakes with managing their 401K and end up loosing a lot of money and getting little out at the end. (and then have to go back to work) Some tips include, never take a lump sum benefit, due to the tax penalty, never just let it ride and not watch the performance and watch for trading and management fees eating up your money. It also helps not to own a McMansion when you retire and live within your means before retirement. Saving money (like 10% of after tax income) on the side and investing it in some low risk but higher than inflation yields is also a smart way to prepare. And well let’s hope medicare still exists in 2040 also, and that doctors and hospitals still accept it as payment.

5. Creativity & Leverage are the new working hard. Money makes more money, it’s all who you know and being clever with side jobs or side businesses usually helps. Yes, saving a large percentage of your income by living simple and investing it can help you have the “power of compounding interest” as they say. Keeping in touch with people and maintaining your network helps with job opportunities and side opportunities to make some income. Starting weekend jobs or part time businesses online or otherwise helps too. I find people living simply and leveraging clever ways to work in more than one place are the ones that will have what they need later on. Getting into an industry that is doing well in the economy also helps but that may take pro-active skill re-training. Paying off your mortgage early and not moving also helps. You loose thousands of dollars on the services and fees associated with that transaction every time you move, and  we all know you pay 3x the value of your loan in interest if you really pay your mortgage over 30 years. After that you are seriously in the hole.

The only contract I think we really have now is that everything will change by the time the 30 somethings reach retirement age. The only thing we have to rely on is ourselves. In general business is struggling because the US has passed it’s peak and we will be in a pack of “also rans” soon. Companies in the US will not see the skyrocketing growth that they saw post-war in the last 60 years with China, India and Eastern Europe emerging as super-economic powers. This coupled with dwindling natural, energy and food resources will make the next 50 years a post US dominant era that will be much harder and more global.

I actually believe if the US was more competitive with skills and education we would do well in a world economy but I haven’t yet seen the expertise or drive to innovate. All I see every day is the drive to reduce expenses and cut resources in business and make short term gains with little or no thought about long term survival. I feel like the country is being run by the lowest common denominator MBAs right now and the next 10 years for us commoners are going to be difficult as a result, as we all lack the jobs/growth that they sucked/poached out in the short term and ran off with the profits.

So, enough about all that negativity.

How do you plan on coping with the changing game living and working in the US in the next 50 years?

Engagement Marketing Metrics, ROI & Open ID

I have been reading a lot about how conversion tracking isn’t enough data to make the best decisions and engagement is the new black. It is frustrating because no one defines engagement in the same way and no one can really tell you what it is.

I do agree though that engagement is the next evolutionary step in tracking onlinemedia for ROI purposes. I think the trouble people will have will be in customizing it rather than standardizing it. I think the meaningful parts of the process will be totally different depending on the company, the media, the process and the product.

What I consider the next thing for my own tracking purposes is prior ad exposures. This is an engagement metric for the ads leading up to conversion rather than site visitors for our own site. I don’t work with analytics usually or determine how to get someone to engage with a process over and over again. I do try and figure out ways to advertise affordably and get people to complete the conversion process. This prior exposures report should provide more insight into how many, where, when and how people come to the conversion site. I am thinking it should provide us information we won’t anticipate as well as show some information we knew would be there.

I am also a bit pissed off with this stupid marketing sherpa execuitive summary report. Pretty much everything written in it is complete bunk since there are a ton of caveats to each graph and I would bet more is according to how people track and assess results than how the media actually performs. If people would track media post impression they would see the value of banners rather than just for clicks. This is so frustrating until you see the data. Then it just makes sense.

People are influenced by banners (branding) and that whole banner blindness thing had to do with the crap companies that were allowed to buy ads with spammy business practices and scams.  They are still out there and as long as they are allowed because of corporate greed, people will keep ignoring some of the good ads for things they really do want and need. Targeting is part of the equation, but as far as targeting goes, we are still in the dark ages.

This brings me to another beef I have with the online ad industry right now. Everyone LOVES behavioral targeting, even if they don’t know what that means. (It has nothing to do with your behavior most of the time by the way.) It is a tracking of people who have been selected as a target by their profile info (Yahoo) or by visiting your site before and the ads follow you around on the web. The latter is the better way to do this (indicating actual interest rather than categorical inclusion) although we don’t know nearly enough about our target customers to really be able to target them online.

I am always asked why someone targeted for one category converts in an opposite one. Why? I have no F-ing clue dude! People are multi-faceted. They can belong to more than one interest or category even if marketers feel it shouldn’t be allowed. People have many aspects to their life and interests and they will always be that way. We won’t know all that data about them or how to process it for a long long long time.

That is what this stupid open ID thing will eventually lead to. A one stop shop for all your profiles and data so marketers can target you on hundreds of variables like what you do for fun, what you do for work and where you shop and live. (they have to sell out sometime) It would take literally hundreds of actual customer profiles to understand the marketability of each of these demographics, and then targeted messages to serve specifically to each profile type. It will take a few years to get there but I think it will get there sooner than I am personally ready for. I don’t know how to collect, assess or value those metrics about customers nor do I really want them targeting me like that.

Oy! Anyway, I am most interested in the overlapping cloud of ads that all influence someone to buy or sign up for something rather than I am in trying to figure out how to track a million personal profiles and target them with individual ads. Also, contrary to that stupid exec summary, pop-ups and unders still suck ass and you know it.

What did you spend your economic stimulus rebate check on?

I have not yet received my rebate check from the US government for economic stimulus purposes. I have read though that people are planning on saving it, paying down debts or using it for necessities like food and gas. All very good things. I think the people who will loose out will be the ones that think it is good for another fancy handbag or 100th pair of red shoes.  I think some Americans are coming to the conclusion that you are not what you own and that a simpler lifestyle has less financial risk in these uncertain times.

I have lived on both sides of the fence, a child of a uber-frugal dad and a spendy mom. I currently feel the urge to get a pair of dark jeans trouser pants even though I have plenty of pants. I feel the urge to pay extra principle on my mortgage every month even though I probably won’t be living there in 20 or 30 years. I feel the need to buy a car that gets 35 mpg or better AND has leather heated seats AND an automatic transmission AND costs less than $20K (used). Why do none exist? I guess I am a paradox that car makers don’t accommodate.

I am not suprised at the high cost of gasoline right now and fully expect it to get higher. (it’s not that they don’t want to increase oil production, it’s that they can’t because there isn’t more to be tapped) That said, it is scary that I spent $120.00 in May on Gas and I only drive on Weekends since I take the train and walk to work. If I was still driving every day to and from work that would be about double at $240.00. A full tank just cost me $65.oo and I have a 16 gallon tank.

What I didn’t see coming is the rising cost of food. Everything is not only going up in price at the grocery store, there is a difference in the regular prices of food depending on where you buy it in Chicagoland. I have started shopping at the super target in far west suburbia where Steve lives rather than pay about 10% more in Oak Park. And that doesn’t even include the difference in sales taxes by county.

I think people’s budgets will be pushed even further to the edge and breaking point in the rest of 2008 and that it will be a lean Christmas because the high cost of basic necessities will make it hard to afford non-necessity gifts. I would say that a good place for the rebate check would be an ING savings account and hopefully it will generate some interest before it becomes a Christmas gift fund.