Posted by Tim Stobbs on March 31, 2009
Well it’s another week gone by and here’s what I thought was interesting reading.
It’s interesting that the US rejected the auto-maker’s plans to restructure and Canada followed, but still gave them $4 billion. Aren’t we tired of bailouts yet?
The US House is set to release a draft version of their cap and trade bill. It should be interesting to see if there is any real details in the draft, since the impact is usually mostly based on weather you allocate or auction the credits.
Brip Blap talks about giving up on your career.
Tim Ferris has some tips on automating your money.
Preet has an interesting lead on financial advisor suicide.
FT asks is your home an investment?
Posted by Tim Stobbs on March 30, 2009
Savings is a difficult art form. I say an art form because how you do it is all rather personal. You might shop for clothes second hand, I may eat less meat or someone else might skip their summer vacation. The methods of getting to your goals are all very different.
I would say in my savings progress I went from spending a bit more than I should to spending almost nothing I didn’t need for a while. Then more recently I’ve been moving a bit away from savings and beefing up spending again. Why? I realized I don’t need another dollar for the pile. Saving more at some point becomes a bit meaningless.
I had a raise from work in January and most of it did go to savings, yet at the same time I did increase our spending. Now with my wife sent to go back to work she might make more than I’ve forecast in my retirement plan. If that is the case I’ve decided I don’t want to increase our savings again. I ran the model to find out how much early we could retire if I put that money in savings. The result we could retire a year earlier at best. That seems like such a minor amount of time for the lose of potential in the present.
I’m happy with our savings rate right now and the plan requires a certain amount of compounding to work. So to cut that time down any further requires significant more savings. How much? Well I ran the numbers with putting even extra dime at savings and assuming decent raises for myself until I quit. The result was retirement at age 42.
Three years earlier for being a miser for the next decade or so. That just doesn’t seem worth it to me. I want to enjoy my life now and in retirement. So I don’t feel the need to push it much further with my savings plan. Yet at the same time I don’t want to fall into the trap of lifestyle inflation where my lifestyle spending expands every time I get a raise.
So I’m likely going to cut the difference. Half of each unexpected income increase will go towards long term savings. The other half will go towards spending in the near term. Perhaps I’ll take a nicer vacation next year or we may do a renovation to the kitchen a bit earlier than I planned. I’m not sure where the extra money will go but I imagine I’ll come up with something that will make me happy.
So have you ever ran into this? At what point was saving that next dollar a bit of a waste for you? How have you dealt with it?
Posted by Tim Stobbs on March 27, 2009
So another Earth Hour is fast approaching tomorrow night people will turn off their lights from 8:30pm to 9:30pm in their local time zone. Some people may recall I did an extended period of this last year. So is this going to change the world? Ah, no.
Let’s do the math shall we: there is approximately 400,000 residential users of power in SK. So let’s say for practical purposes we get 80% of the people trying it (I know, not likely) and they on average turn off two regular bulbs each. 60 W x 2 x 400,000 x 0.8 = 38.4 MW. The grid average yesterday when I was at work was about 2500 MW. So the total savings would be 1.5% for one hour. So almost nothing.
So what’s the point? If nothing else it is an excellent PR campaign that people can easily get involved with thinking about their energy usage. Yet to really get people to be serious about their energy usage you need to put in some price influences. Some common ideas include: have threshold billing, so if you are a higher user of power in a month you pay more on that power. Another idea is to use time of day billing to get people to shift power loads from the noon and supper time peaks.
The overall point is people won’t change their usage now, since the payback is so low. Yet under more expensive power it becomes more attractive to change habits. Education will only go so far to get really change you need to hit people in the pocket book. This will even apply to business as well. Now this can be started either now as a demand management exercise or it can start later after there is no chose to raise rates to cover new pollution control technologies like an FGD for SOx or carbon injection for mercury control and eventually something to deal with CO2. Cheap power is coming to an end shortly regardless. Even in those places with large amounts of hydro eclectic generation, the market demand from other regions will edge rates up everywhere.
Yet for now, enjoy the party. Get out some candles, perhaps something to drink and sit down and visit with some friends. Make the evening something fun. Just don’t get fooled into thinking your saving the world by doing it.