The Negatives of Social Networking Media

All the world is a Buzz about Facebook & Twitter these days. It’s almost like MySpace circa 2007, Google circa 2003 or Microsoft circa 1998. I don’t doubt the success, innovation or long-term viability of these social networking sites but I have seen that there are flaws in the system that mean that things won’t be perfect with the business along the way and we’re in for a bumpy road. Basically my point is that for all these sites give us in entertainment, social connections and opportunity they also have some negatives that are almost the equal and opposite pendulum action.

1. Time Suck – all social networking sites are using your time that you used to devote to other things. Maybe in some cases this is actually a better use of your time (instead of TV) but in most cases its time spent that you used to use for researching new information for work projects,  time actually spent talking with people in person (family/friends) or time spent doing things that really need to be done at work or home. Once the brain gets trained that you can go socialize instead of work at those times of day it’s a habit extremely hard to break. For all of us procrastinators looking for instant gratification its a real problem keeping up with work and affects the overall productivity of companies and the country as a whole. Internet access is much more prevalent and has far more users during the business day than it does at night, so there’s the proof. Unless your job is trolling these sites for sales prospects by “connecting” and making “relationships” with your customers, its a waste of time to spend more than 15 min a day.

2. Privacy – Of all the details analyzed about consumer privacy online (on Facebook) in the last few weeks the most suprising thing I’ve seen is that people really don’t care about their information online. Sure, nobody is going to post a ss number or cc number on their profile (duh) but they don’t really seem to realize the power of logging all their social interactions in one database and selling access to retailers and cpg companies who have even larger databases of information to analyze and strategize with. Is it really as fun when most of your friends are companies selling you things all the time? Twitter already has morphed into the largest opt in direct marketing platform I’ve ever seen. If people keep using it at this rate it will surpass email. The other obvious issues come with the work life balance thing and when people friend work makes and think nobody will see them rant about work or post drunk pictures on a sick day, but then again I’ve heard that its just people naturally selecting themselves out of the working pool.

3. Logic – the other issues I’ve seen coming for a while have to do with how everything that is built from large databases online with lots of consumer data seems to not work properly. There is always some algorithm developed by a science tech guy based on some theoretical calculus and it doesn’t provide relevant results. Which brings me to a repeating theme of data right now: we don’t really know what to do with it yet. Nobody knows enough real info about their customers to target them. (who has a budget for that?) And the database people just like to say they improved things a statistically insignificant amount with an algorithm tweak. The marketing strategy/process should always start with offline real life information about people and products and then develop an algorithm to show you information in that way. I don’t know why it’s always done backwards but it will keep our results irrelevant and marketing dollars wasted for a long time to come.

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

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.

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?

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.

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?

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.

HyperMilling How to Save Money on Gas, fuel economy and Drive Cheaper

I was surprised to read this article about driving, gas mileage and hypermilling which is basically the art of conservative driving to save gas in general by getting about 30% better gas mileage. Of course the results differ depending on which car you drive (or truck) but I think this article brings up a lot of good points and strategies. Here are some of the tips they suggest for saving gas (and money) and improving fuel economy for your car when driving around town:

1. Accelerate slowly from stoplights and stop signs. This is a huge gas saver for those of us who live in the suburbs and city. We do a lot of stop and go driving every day and this acceleration from the light sucks down fuel like nothing else. They recommend never pressing the pedal more than 1 inch down. Never floor the car or race away from the light. Just accelerate slowly and you will not waste gas.

2. Use your cruise control on the highway and tollway. I never do this but I will start now. If you want to avoid costly fuel surges in your engine, just set your cruise control for 55 mph or 65 mph depending on the speed limit, set your car in the right lane or middle one if there are super slow cars or trucks in the right lane, and get there at a normal consistent pace. The car is better at managing acceleration with just enough gas at a consistent rate than we are. Humans generally pump the pedal when they drive and constantly throw too much fuel into the engine and are highly inconsistent. Anyway, I like this because it isn’t that different from what we do now and it is more cost efficient.

3. Properly inflating the tires impacts the gas mileage very little and turning off the air conditioning on highway trips doesn’t do much either. (turning off the air conditioning in stop n go traffic can help though)

So take 20 seconds to accelerate away from traffic lights, turn off the air conditioning in stop and go traffic and use the cruise control as much as possible when driving on the highway and your gas mileage should go up and your fuel consumption should go down and you should save some more money.

And then there are always the old fashioned ways to save money on Gas like carpooling and using public transit. Don’t forget those either!

 

Ack Recession!

I have lived through 2 recessions that I can remember already and I really don’t need a third. The thing is that our economy used to run in 30 year cycles according to our history books. Now we seemed to be on a 10 year cycle early 90′s recession and 2001 recession pointed to this. And this time we were only growing the economy for about 5 years! (2002-2007) So, the Fed didn’t improve the economy by lowering interest rates back in 2001-2003 they just sped up the cycle.  And what they are doing now may be speeding up the cycle even faster. What will life be like if we have alternating boom bust years every other year? This is getting a little crazy.

How do you plan for your retirement or family or future with a yo-yo economy?

How can you buy property not knowing if you will have a job in a year? Or be able to get a job in the US reliably in 10 years when they have all gone overseas to lower rent districts? Sure some people will, but what about the average masses? Even those with college degrees keep having to change direction into the flavor of the month job wise with these companies and not everything is a living wage.

I just don’t know where our economy is going considering we have opened the door ourselves on developing nations and are being hit hard by how it has stolen the majority of our growth and industry. We are left as a nation of 300 million luxury consumers that on average owe $128,000.00 each to the bank (per economist’s state of 2008) and will take everything out on credit to have the latest new stuff. When we can’t borrow anymore or pay the bills (like now) the economy will crash and people don’t have any savings to stay afloat. I call that false growth in the first place, but the markets don’t seem to distinguish between what they can falsley get you to buy into for a while before it crashes and real growth, nor do they seem to care.

Doesn’t it feel like 1929 to you sometimes?

Of course these are generalizations and you may not fit the bill at all here but it’s the generalizations that run the economy right now. And I think it’s sad. Our nation’s executives and business leaders have sold out to the lowest bidder and given our jobs away with no loyalty to the country which made all their wealth possible. All the while expecting us to mortgage ourselves to the hilt to keep buying their goods. Something has to change with corporate accountability in order for this to settle without a complete melt down disaster.  And stop blaming the American consumer. It’s not their fault. If they weren’t set up to fail by huge greedy businesses none of this would have happened.

MicroPlace.com Can you invest money to end poverty?

Ebay’s MicroPlace.com is a new site where you can invest small amounts of money (starting at $50.00 and $100.00 in some funds) in a 3rd world country and help individuals start their own businesses and help reduce the rate of poverty there. It’s free market profitable charity? If that makes sense. It is piggybacking on the consumer idea that started with a site called Prosper where individuals loan to other individuals at different levels of risk and get bigger returns than a bank would pay in interest on your money. This is profitable for Prosper because they take a cut of the profit first and then the loan gets its interest.  Even with the lender and Prosper’s cut, its still a lot less interest for someone to pay back than payday loans or other super high interest loans.

The idea that small loans (which make interest and are repaid on a regular schedule) to individuals in impoverished countries that allow them to start small businesses has been a popular idea of the past few years. The University of Chicago economist and author Jeffrey Sachs wrote about it in his book The End of Poverty: Economic Possibilities for Our Timein 2005. It was a best seller and landed him on Time Magazine’s 100 most influential people list. Muhammad Yunus also got critical acclaim for his micro lending company Grameen Bank and the Nobel Peace Prize in 2006.

On MicroPlace.com anyone can try to end poverty. You can choose a region of the world and a country and research some statistics about the population there. Then look through an read up on the programs available to invest in. There are risks involved in these investments, like in all investments. These MicroPlace invetsments specifically have these risks you should be aware of before investing:

1. They are not FDIC insured

2. The interest rate is lower than you would get in a bank or an average index fund rate over time. (I saw 2% listed)
3. You can’t purchase these funds in Pennsylvania (it says so on the prospectus)
4. In the investment world the ones who loan the least get the smallest rewards, so $100.00 may do some good, but you won’t get rich from it.

I think these programs have succeeded in their limited trials so far because of a few reasons. They are starting small in areas where this has never been available before. The newness of the opportunity seems huge and people are so excited about repaying because they have never had an opportunity for a loan before. Over time this will wear off if they are available to everyone everywhere and the payback rates will drop. (look at home loan defaults right now in the U.S.) They also don’t have competition in a lot of the new businesses they start, so the success rate is high when no one else has a loan yet or a new business. I also think that Americans are very into the popularity of  charity and giving to help poverty right now, and are eager to donate and invest. (sometimes instead of investing in their own 401K plans, paying off credit card debt or donating to communities at home) Over time if rates of return don’t stay high, and change doesn’t happen the popularity will decline also. And lastly the idea that “free market capitalist economies can save the world” is very popular right now. As this expands and shows the pluses and minuses long term (America has a lot of poverty too you know, and no one seems interested in ending it here) may change our thinking. But for now it’s Laissez Faire for everyone.

I applaud Ebay for their efforts, because they are trying to do good while doing business. But, over the long term I think these programs should stay small and primarily offline with more involvement in the venture by the investors to help supply the knowledge needed to make these new businesses succeed. (because money alone can’t create a successful business) Commoditizing this process as an investment opportunity for all is probably going too big too soon and at an unmanageable level and will not return gains on investments or really help end poverty in the long term. (in my opinion)

Wake Up WalMart – Chinese food product recall update

I just got this information in an email from Wake Up WalMart and wanted to pass it along because more people should know about what lengths WalMart will go to in order to make more profit. Nothing is sacred, so don’t spend your money there if you want to have any control over our U.S. Economy at all:

Wal-Mart is the #1 importer of Chinese goods. So, after the spree of high-profile recalls and outright bans on dangerous Chinese products, wouldn’t it be logical for Wal-Mart to take the offensive against unsafe imported goods? Shouldn’t Wal-Mart stand up for the safety of American consumers?

Wouldn’t you?

The truth is that Wal-Mart is putting profits over people – again – by blocking laws requiring disclosure of where food comes from. Instead of looking out for consumer safety, Wal-Mart is watching its own bottom line.

That’s why we put together a new ad to expose the truth about Wal-Mart and China.

Click here to watch our new ad and send it to five friends:

http://www.wakeupwalmart.com/feature/foodsafety

Even among nations, Wal-Mart is China’s sixth largest trading partner: it buys more Chinese goods than industrial giants like Germany and Britain. This gives Wal-Mart the power to demand safer products from its Chinese suppliers. Unfortunately, it has demanded nothing more than lower prices, and has tried to cover up the consequences of its race to the bottom.

As consumers, we have the right to know that the products we buy are safe. Don’t let irresponsible corporations like Wal-Mart cut us out of the loop. Please watch our new ad today, and send it to five friends:

http://www.wakeupwalmart.com/feature/foodsafety

The more people learn the truth about Wal-Mart, the more public pressure grows for Wal-Mart to change.

You – together with more than 402,000 fellow supporters of WakeUpWalMart.com – have the power to make Wal-Mart put people first.

Amidst seemingly endless recalls of dangerous products, Wal-Mart has tried to keep American consumers in the dark.

Let’s shine a light.

http://www.wakeupwalmart.com/feature/foodsafety

Thanks for all that you do,

The Team
WakeUpWalMart.com

Kodak drops Olympic Sponsorship After Beijing 2008

The 2008 Beijing Olympics are less than a year away. NBC is shaking in their boots though because so many advertisers are baling out right after and have probably reduced their advertising and commercial media spend on this upcoming 2008 Olympic Games. A few things seem to have changed with the Olympics over the past 10-15 years. They used to be the talk of the town and what everyone was watching each night on television for 2 weeks. Now we are not so sure where the Olympics fall in popularity in the U.S. Today they announced that Kodak along with GM and probably a few more United States companies that aren’t as popular, won’t be advertising in the Olympics after the Bejing 2008 Games. Here are several reasons why I think this evolutionary media and company changeover is happening:

1. The Olympic Mystique is waning. In a world of video games, social networking and texting these big deal once every 4 year Games that an athlete works their entire life for somehow seem disconnected. To work for that long on something and not get paid is somehow against our current consumer culture’s ideals. If you work that long you should surely get a Million dollar contract and a promotional deal with Nike right? The “for the love of the sport and glory of winning to bring peace to the world” idea isn’t really that popular with today’s youth or yuppies. They believe in sell to your neighbor, network with your friends and only work towards one goal: Money. So the Olympics are just not relevant anymore and somehow boring.

2. The evening entertainment options for people now are fragmented and overwhelming. Before you could watch TV (5 channels) or go out to dinner and a movie, listen to the radio, read a book or talk on the phone. An example of a simple 1980′s night. Now in 2007 you could do all those things plus, go online, email, text, IM, blog, twitter, MySpace/Facebook, watch dvds, DVR, Tivo, download something to watch illegally, listen to satellite radio, NPR, Google, read and comment on online news, watch cable’s any number of billions of channels, talk on the cell phone, listen to CDs, your iPod, choose new music on Itunes, go to a virtual world like second life or WoW, play video games on your TV or online, or possibly several of these combined. You can see why kids have such trouble sitting down and studying with a book these days. You can also see why the 1980′s seemed quaint and the 1950′s seemed unthinkable. People have so much selection to choose from, they just switch entertainment as soon as they get bored and which ever gets the excitement going wins. The Olympics haven’t really been able to capture the excitement for a while now.

3. The face of American Business is changing. Companies that manufacture and produce actual products in America are dying. That is just the way it is. Our Japanese competitors were formidable in the 1980′s and Our Chinese competitors in the 90′s and 00′s are killing us softly. Notice that Bank of America will be Advertising in the Olympics and GM and Kodak won’t. No American company can afford to manufacture anything in America anymore and be a world power. We’ve gotten too rich and demanding as employees (especially executives), and it’s too expensive to manufacture here. If a company transfers production to Chinese factories (for cheaper labor to be competitive) by default they teach the Chinese companies how to do their work and run the business. And then they Chinese have been known to start their own company and take over. There is a conscious effort by the Chinese to take US knowledge to build businesses in China and bring greatness and world economic power back to China like it used to have centuries ago. (from the book One Billion Customers) Hosting the Beijing Olympics is part of that Grand Plan to showcase how modern and westernized they are now while they win all the medals. The U.S. on the other hand seems to not really plan for the future, and doesn’t see that we are being put out of business. So, companies like Kodak and GM can’t advertise in the Olympics because they can’t afford to anymore, they are shrinking companies that are being beat out of the market at every turn. It is sad that we will all be driving Japanese and Chinese cars and using Chinese and Japanese cameras made in Singapore, Nepal and Malaysia soon and we won’t have any jobs here because we don’t produce anything. Manufacturing is power and we have given that up for big profits short term manufacturing in China and long term business loss and job loss here in America. The executives and board members that have decided that for this country should be put in Jail. The damage they have done to the U.S. Economy for their own personal gain is disgusting.

Fight WalMart Killing America

I am pretty anti-walmart. I never shop there, and the few times I have been there I have been pretty dissapointed in the store. But what is more dissapointing is how they hurt the American Economy by putting small businesses out of business, killing the economy in small towns, underpaying and underinsuring their workers while over working them, and buying the vast majority of their goods from China. I realize now that this is not just a WalMart phenomenon. Even the well liked Target buys a lot from China. So does every store you can think of. If I tried to not buy anything from china, I wouldn’t have anything to buy. I have been looking at labels more and putting stuff back that has the made in China mark on it, but it is hard. Its cheap and affordable and WalMart knows that this is the drug that americans are addicted to; Cheap Stuff. So in favor of our own economy and job in the USA, we should try and buy less form China and reduce the urge to buy lots of stuff. And here is a good site about the walmart fight: http://www.wakeupwalmart.com/ Check it out and sign up on their email list for updates.