Wednesday, November 14, 2012

A Penny Here, A Penny There...

The State of California just approved a quarter of a cent sales tax increase with Proposition 30 for the next 4 years. This mean on January 1, 2013, the state sales tax for everyone is going up to 7.50%. In addition, it also increases the personal income tax for residents who earn over $250,000 for the next 7 years. And , no, I did not vote to increase my state's taxes.

http://www.boe.ca.gov/news/pdf/l337.pdf

http://vig.cdn.sos.ca.gov/2012/general/pdf/30-title-summ-analysis.pdf

Being lower middle class in OC is looking better all the time... as compared to the city of Los Angeles...

http://www.nbclosangeles.com/news/local/Los-Angeles-City-Council-Gives-Initial-Approval-to-Half-Cent-Sales-Tax-on-March-Ballot-179214271.html

The sales tax there is already 8.75%




Thursday, November 8, 2012

The New Business of Old Music

The New Business of Old Music(c) written by JStutz 11/08/2012

1. An old man's indulgence of recording songs he likes that are not his own and calling it an album.
2. A band leader, usually a singer/songwriter, who re-records beloved hits all on his own playing and singing all parts to re-sell and removing any opportunity for royalties going to the musicians on the originally released songs.
3. When songs from your 30-40 year old music catalog get less airplay, you sell your music to the people who make movies and commercials to keep your songs in circulation. And you allow it to be part of other compilations with various artists.
4. The new trend for old music is to re-release it in collectors, special, anniversary, box sets, or vinyl versions. Sometimes re-engineered, sometimes remixed, sometimes not when you don't have the money to do it.

This is the new business of old music.

Initially, I couldn't figure out why Jeff Lynne's new album wasn't getting any attention, but after listening to previews of each song for the first time this morning on iTunes, I figured it out. He perpetrated #1 from the above list. It was released in March in England and in the US on October 9th. It only came to my attention after the promotion of a BBC documentary showing on 11/14 at the Grammy Museum in Downtown Los Angeles. Tickets went on sale 10/31 and now are sold out. I could kick myself.

He also released Mr. Blue Sky - the very best of ELO. On this recording, he perpetrated #2 and #4 from the above list.

I can't say that I've lost respect for the man, but due to his ongoing aggravation from musicians that used to play with him in ELO and of the music business in general, I really can't blame him for his actions.

After all, they are his songs and he is Mr. Blue Sky.

Later, I found the same BBC documentary on Paladia and recorded it. It started out good and then went astray. I wish it was more like this website (in Danish) to a point, then interspersed with parts of ELO videos and concert footage. http://www.10538overture.dk/Member%20page/JEFF%20LYNNE.htm


Saturday, November 3, 2012

A Retirement Wake-up Call

I woke up really early this morning, my body anticipating the time change this weekend and to the noise of the TV being on to that Ed Slott infomercial about saving your retirement. I've seen it before. I'm sure I'll watch it again. But something struck me. 2012 went by so fast and I probably have about 20 more working years before I retire.

FACT: The three things you cannot live without are food, shelter and clothing. People will give you clothes and share their food with you as these things are relatively cheap but you have to maintain a roof over your head or eventually you'll die of exposure to the elements.

FACT: The single most expensive financial decision one will ever make is to buy a house.

I went to lunch the other day with my cheapskate lunch date (who is in retail loan sales) and somehow the conversation always turns to money. Previously, I discussed with him my need to refinance my home  because I currently have a Hybrid 5 year Fixed/6 month Libor Note that's been adjusting for awhile now. Since LIBOR rates are tied to the European economy and it followed the U.S. economy decline with the credit crunch and the housing market crisis, my Note rate dropped from the initial rate and has stayed low... but the economy is improving. Jobs are coming back to the finance market because even I've had opportunities to interview recently for what I do which is highly specialized and I'm not looking for a new job now. And with an improved economy, interest rates will start to creep up higher. And the interest rate I'm paying today for my home loan is close to market rate and I don't want to put myself into a situation where I have a high interest rate and may not be able to refinance in the future. I also know that my loan is owned by Fannie Mae and HARP Loans, that are easier to qualify for with a high LTV and that require no appraisal, are going away next year.

After getting back to work, he sent me this email:

"Your goal this week or next is to contact HR in order to open a 401(k) because retiring poor sucks. I have to turn down seniors all the time (for cash-out refi home loans) and it makes me sad."

I had a 401(k) before I was laid-off from my mortgage job (the company closed) and because it lost half it's value and I didn't know when I was going to get my next job, I liquidated it the moment I could. Almost right after my severance pay ran out, in February 2008, I was hired as a contractor to Fannie Mae for a year and a half driving 150 miles round trip for work each day to manage the default vault at 1800 Tapo Canyon (if your're in the industry, you know that address holds one of the highest number of mortgage loans on the west coast) of loans moving from Countrywide's safekeeping into my custody. I supervised the vault's growth to hold 325,000 files (who knows how large it is today). The stock market tanked in October. HBO produced an excellent movie called "Too Big to Fail" which is a portrayal of what happened in October 2008. I was sitting in the belly of the beast and the beast was required to be bought by B of A and the behest of the U.S. federal government due to B of A exercising a large repurchase of poor performing loans.

FACT: You only have about 45-50 years to save before you retire.

When you're in your 20's and busy establishing your career, home and family, you're probably not thinking a whole hell of a lot about your retirement. My cheapskate lunch date is actually the same age I am, mid-40's, and as he's also a Realtor,  he's put his money to work more than I have in the past so I have to give him some respect for the financial position he's in now as compared to mine own.

My parents, when they retired, didn't really plan for it. Both had to work after retirement because they didn't have homes to sell and live off of the proceeds or even homes that generated a net income from rent. They had no savings accounts, just checking accounts. Both had meager life insurance payouts. I was able to settle my father's estate, but my mothers???

She lived off of credit cards until the day she died. As I cleared out her apartment, I found many newly bought items and at the time, couldn't figure out how she could afford it. That is until I found a brown box in the back of her closet full of unpaid credit card bills which turned into charge offs. She couldn't afford it. She consulted with a family friend, a lawyer, that told her not to pay them after she was 75 and had triple by-pass heart surgery.

I took back to the store those items I could find receipts for and threw the contents of her apartment in storage because it was right before Christmas when she passed. I paid the final utility bills with the cash on hand and that refund money and also ignored those credit card bills. Because of the lack of her financial and retirement planning, I had to pay out of my own pocket for her cremation, her headstone, her funeral and the transfer of her ashes to New York where they were buried with her parents, my grandparent, as she wanted. It took me a year and a half to get rid of that storage unit, finally donating the majority of the contents to Goodwill after giving away some things to friends and I paid for that storage unit, too. I can imagine my story of not being able to settle my mother's estate multiplied by the number new retirees and the debt river that's coming.

So in essence, if the vast majority of people now have the lack of retirement planning, execution and savings like my parents had, you and I will be paying for it all the way through the period the baby boomer generation (born between 1946 and 1964) goes into retirement (2011 to 2029)  and subsequently passes away passing their unpaid debt onto the large financial institutions who will pass it on to the consumer in the form of higher fees and interest rates. That consumer is you and me.

Ed Slott says the biggest retirement killer are:
1. taxes
Tax free safety zone (life insurance and annuity)
Payouts from Life Insurance are tax free.
Roth IRA's conversions. You can get an annuity inside your Roth IRA.

2. risk 
You cannot rely on the stock market for a secure retirement future. Think about an annuity. It guaranties your retirement income for life.

3. saving money
Sometimes you have to spend money now to save money later. Buy life insurance. Seek out qualified financial planners.

4. uncertainty
No one will ever care about your retirement money more than you.

5. inactivity
Doing nothing will be costly because prices rise and taxes increase. Do something now when you can. If you want a secure financial future, you have to do something about it.

I emailed HR about establishing a new 401(k) blind-copying my friend and then I called and was qualified for a HARP loan all in the same day.

Lets see where I am this time, next year...