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End of the innocence

Honeymoon’s over. The purchase is getting rocky. I’ll tell you about my troubles so you hopefully don’t repeat them.Mistake: We used the mortgage broker our realtor recommended. She got us preapproved quickly enough for us to get our bid in… barely. The rest of the process to get approval went at a sloth’s pace. And then? She slapped us with a 5.625% interest rate and $2,600 in closing costs. She had a vaguely plausible explanation for both, but the closing costs were highway robbery and the interest rate was half a percent higher than it could have been.<p>

Having been lectured by my accountant once about closing costs, I tried to negotiate. Everything’s negotiable, he said. Nothing’s negotiable, she said.

"So I really should just pay cash for this house?" I asked.

She laughed. "If you can." She thought she had me over a barrel and she was going to take advantage of me.

Hopefully she learned a lesson, but I doubt it. Don’t give a Scotsman reason to reconsider parting with money, because once you do, you’ve lost him.

I was out of fight at that point, but my wife called the bank we use most of the time. She told the agent about our 5.625% interest rate and $2,600 closing costs, and asked if she could beat that, and if she could, how we get out of the bad deal.

She talked to us about our goals and our finances and suggested a Home Equity loan. The rate would be low, the payments would be flexible, we could get approved quickly, and there would be no closing costs.

It’s an unconventional answer to the problem. But for a first property, with uncertain expenses, it gives some flexibility. Let things stabilize for a year or two, then get a conventional mortgage if need be. The conventional mortgage gives long-term flexibility, but a HELOC gives short-term flexibility.

So it pays to call around until you find a loan officer with some creativity.

And true to her word, we had approval on the HELOC in three days. That’s how long it took sloth lady to get us just a preapproval.

The house: Now I know why the house was cheap. Superficially, it looked good. But when we started poking around with an inspector, we found out the house was an Uncle Louie Special. Uncle Louie re-did the wiring, the siding, the plumbing, and almost everything else in sight. Uncle Louie did a reasonably good job of laying tile and painting, but when it came to anything else… Well, the inspector said, "He sure didn’t let not knowing what he was doing get in the way of him finishing a project."

He said a few other things too, but it’s probably best not to repeat them.

Unfortunately, it’s going to take professionals to fix most of Uncle Louie’s work. And it won’t be cheap.

The inspector’s advice: Make the decision with the numbers, not with your heart. Which is good advice. The realtor’s job is to make you fall in love with the property. The inspector’s job is to bring you back to reality.

Sometimes the reality isn’t what it first seems. But sometimes you can still make it work anyway.

That’s what we have to learn next.

Net neutrality has little to do with censorship but it\’s a good idea anyway

Pearl Jam came out in favor of net neutrality after AT&T censored a broadcast a performance they did in Chicago last Sunday. I guess AT&T didn’t like Pearl Jam’s anti-Bush message.

I don’t know if Pearl Jam’s sudden embrace of net neutrality is out of ignorance, or if it’s retaliation. It doesn’t really matter because it should help bring some more awareness to the issue.Here’s the issue with net neutrality, in a nutshell. AT&T wants to charge companies like Amazon, eBay, and Google when people like you and me access their web pages. And if the companies don’t pay, AT&T will make the web sites slower. The idea is that if one company doesn’t pay the fees but a competitor does, AT&T customers will probably opt to use the faster services.

Proponents say AT&T built the infrastructure, so they have the right to charge whoever uses it.

There are two problems with that logic.

They’re already paying to use it.

When a company decides to go online, they buy an Internet connection. That connection might be owned by AT&T, or it might be owned by some other provider. It isn’t cheap. While a 1.5-megabit cable modem connection might cost a consumer $30, a commercial-grade 1.5-megabit T1 connection will cost more on the order of $500 a month. A company like Google needs a lot more than one of these connections. Google most likely is spending hundreds of thousands of dollars, if not millions, every month for the privilege of being on the Internet.

Without content, an Internet connection has no value.

AT&T knows nothing about how online services work, because they haven’t been in the business long. Twenty years ago, if you wanted to go online, you didn’t use the Internet unless you were a college student. You subscribed to a service like AOL or Compuserve or Prodigy, who sent you a disk and a local phone number that you called with your modem, and then when you wanted to go online, you connected to their service. It had e-mail and forums and downloads and news, kind of like the Internet does today, but it was smaller. You could interact with other subscribers but that was pretty much it. E-mail was limited, for the most part, to other members of the same service.

Compuserve was the biggest and most expensive service, but it survived because it had the most features. AOL and Prodigy survived because they were easy to use. GEnie, a competing service operated by General Electric, survived primarily because it was cheaper than the others. Each had a niche. In these cases, the company providing access also provided the content. It was a closed system.

The Internet is an open system. AT&T isn’t providing all of the content. AT&T is my Internet provider, and I never touch any of their content, except when my credit card expires and I get a new one and I have to go to att.com to update my account with the new expiration date for my automatic bill-pay.

If it weren’t for the companies like eBay and Amazon and Google, nobody would want an Internet connection in the first place, because without those providers, an Internet connection is pretty much useless. The only reason the Internet took off in the first place was because companies like AOL and CompuServe couldn’t offer services that were as good as what Google and Amazon and eBay.

That’s why AOL went from a blue-chip stock to a drag on Time-Warner’s share price in less than a decade.

People buy Internet connections so they can use Google and Amazon and eBay. Very few people care about the mostly sterile content AT&T puts on the Internet. I’m sure some people enjoy watching concerts in the AT&T blue room, but I’ve never heard of anyone watching anything there. But I hear every day about what someone bought or sold on eBay, or a story that showed up on Google News or CNN.com, or a book someone bought on Amazon.

And when they use e-mail, people increasingly are using e-mail from Google or Yahoo or Microsoft instead of the one from their Internet provider. That way they can read their mail anywhere, and they can keep their e-mail address even if they move or change Internet providers. So Internet providers aren’t even the primary source of the most basic services anymore.

If anything, AT&T should be paying the companies that produce the content. Not the other way around.

AT&T isn’t selling content. It’s selling a pipe that content travels to. Lest AT&T get a big head, all AT&T has to offer is plumbing.

So what does this have to do with censorship?

Net neutrality has very little to do with censorship. I suppose someone with contrarian views operating a blog on a shoestring who can’t afford to pay for both an Internet connection and the privilege of running in AT&T’s fast lane is a victim of a form of censorship. Or if Google doesn’t pay to be in the fast lane but Yahoo does, then in a way Google is being censored in favor of Yahoo.

But if AT&T chooses to drop the audio out of a Pearl Jam concert, net neutrality isn’t going to stop that. In that case, AT&T is the provider, not just the company providing the plumbing.

But net neutrality is a good thing because without it, what’s going to happen is higher prices for the things you buy on Amazon and eBay, and less content on news sites because the news providers can’t afford as many writers because now they’re having to pay AT&T and every other company that sells digital plumbing. You get less, so that Randall Stephenson gets a higher salary and a more attractive stock options.

Stephenson made $14.6 million last year, before he got promoted to CEO.

I don’t think you and I need to make any more sacrifices in order to give this fat cat a bigger raise.

A reminder about the most obvious money saver

I haven’t written about being a tightwad in a while. Not to worry, I’m still a big cheapskate–every dollar I save has a cascading effect. Remember, paying just an extra $10 a month on your mortgage is enough to shave a full month off the back end. So let’s talk about coupons.

The first thing about coupons is to resist the temptation to have to use them. Sometimes a generic still costs less than a name brand with a coupon. If that’s the case, put the coupon away and buy the generic. And if the coupon is for something you’d never buy anyway, resist the temptation to buy it just because you can get it for a quarter less.

Read More »A reminder about the most obvious money saver

A super-cool Mozilla extension

I’m about to get you to dump Internet Explorer for good.

And no, this has nothing to do with the latest security exploits (there were only four revealed this week, right?). This has to do with functionality.

Super Drag & Go is what I call a disruptive technology. It’s like multitasking. You won’t understand what the big deal is when I explain it to you, but once you try it out, you’ll find it impossible to use a computer that doesn’t have it.It’s dead simple. You’re using the Web for research. You’re tooling along, finding lots of information you didn’t know about ancestors, obscure toy train manufacturers, or whatever it is you like to use the Web to research. You hit upon a name or phrase or topic or book title that’s useful, so you highlight it with your mouse, copy the text, then open a new browser window, go to Google or Amazon or Dictionary.com or Wikipedia or whatever the appropriate research tool is, paste it in, and keep on going, right?

Wrong. That’s what you used to do.

What you do is you install Mozilla Firefox, then you click on that Google icon and install the interfaces for whatever search engines besides Google you like (there’s plumbing that hooks you up with Wikipedia, Amazon.com, Dictionary.com, and everything else you can possibly think of). Then you install Super Drag & Go. Then you instantly become about 40 times as productive as you were 20 minutes ago.

How? I tool along the same way I always did. Then, when I find reference to, oh, say, Voltamp, I highlight it like I was going to copy and paste it, but instead of hitting copy, I just drag it with my mouse over to some blank area on my browser window.

Boom-shakalaka, a browser window opens with that phrase punched into Google for me with my results. So then I can read the three–wait, now it’s four!–webpages that make mention of the first company that made an electric toy train that used a transformer plugged into a household AC wall socket.

(You can thank me later for putting that song in your head. Change browsers and I promise I won’t do it again.)

Of course, if you’ve changed your default search engine to something else, then it’ll go to that other page. Now you know why it might be useful to set your default search engine to Wikipedia or Amazon.com. It changes back easily–it’s just a matter of clicking the icon in the browser’s search bar.

Next time I see him, I’ll have to thank Todd, the coworker who showed me how this works. I’d read about it and dismissed it, until he showed it to me. And now?

It’s not a habit, it’s cool. I feel alive. If you don’t have it you’re on the other side. I’m not an addict…. Maybe that’s a lie? –K’s Choice, Not an Addict

01/12/2001

Let’s talk about wealth. When I was 15 or 16, I was sitting in English class and the teacher stood up and told everyone that the American Dream is dead. We would be the first generation that would have it worse than our parents did, she said.

I didn’t argue, though I should have. I figured I’d at least be the one to buck the trend, if what she said turned out to be right. A couple of years before, my dad had actually bothered to sit down with me at the kitchen table, candidly tell me the mistakes he’d made in life, and then he told me it didn’t look like I’d make those same mistakes. I trusted my dad’s judgment.

But when I look around today, I wonder if my English teacher might have been right. Wealth isn’t  about money or possessions, after all. In that regard, she’s very wrong. There’s a high school next  to one of the buildings I work in. Most of the cars in that parking lot are nicer than the cars in the parking lot for the building I work in. And there are plenty of highly paid IT professionals like me in my building.

Am I better off than my dad? Well, let’s see. In 1981 my dad decided he’d made it, so he splurged. He  bought a luxury car: a Chrysler LeBaron. It wasn’t the swankiest of cars, but it was far and away the  most loaded car he’d ever owned. The only features it was missing were a tape deck (not sure if  Chrysler was offering that in 1981), the famous Corinthian leather, and speech synthesis (which I think they  were offering that year). I thought it was a nice car.

Today, nearly 20 years later, I drive a Dodge Neon. That car has everything that 1981 LeBaron had, plus some things it didn’t. By today’s standards, it’s not a luxury car.

Ten years later, my dad bought a 1980 Chrysler Cordoba, which he let me drive most of the time. That was the swankiest car Chrysler made in 1980. Leather seats, everything adjustable… It was still  awfully nice in 1991. The car my sister drives puts that Cordoba to shame. Leather seats, but these are heated. And my sister’s car isn’t a luxury car either. It’s mid-range.

I can’t quite afford the last house my dad bought. Give me a couple of years. I could afford the  next-to-last house my dad bought pretty easily. I don’t see the point–I’d just fill the place with computers and books, and I’d have to drive longer to get to work. I like where I’m living now.

Compared to my dad, I’ve got it good. Real good. And my dad was no pauper. He was a successful doctor. Not a high-priced doctor like a brain surgeon, but he did fine.

This weekend, I was talking to my good friend Tom Gatermann. He was talking about a friend who’s  about to marry a girl from the former Soviet Union. Her hometown is just south of Siberia. His friend was talking about living conditions there. Indoor plumbing is a luxury.

I spent a couple of weeks on a Navajo reservation in 1998 and 1999. Out there, a telephone is a luxury. Sometimes electricity is a luxury. Usually, those who go without budget so they have  electricity during the hottest parts of the year, then shut it off during the mild months.

For me, budgeting involves raising or lowering the thermostat by about 5 degrees if I’m going to be  gone for a few days. Or if a month looks like it might be particularly tight for some reason, I’ll  move my thermostat and turn off all but one of my computers. I did that last year, around tax time. Comparatively, that’s not a big deal.

No, wealth isn’t about possessions. I learned that in New Mexico. Wealth is about gratefulness. My  friends down there are much wealthier than I am. They’re grateful for just about everything they  have. I take my car, my computers, my phone, my indoor plumbing, my lights… I take all of that for granted pretty much. I complain when my DSL connection isn’t working right. Meanwhile, miles away, there’s someone walking half a mile to use a neighbor’s telephone, or someone walking outside in the dead of winter to an outhouse.

My generation’s spoiled. The generation after mine is even worse. We take everything for granted. Those younger than me take everything for granted and many of them want it handed to them. And if we  don’t have something we want, it’s always someone else’s fault. Eight years ago it was George Bush’s fault. Now it’s Bill Clinton’s fault, or those mean-spirited Republicans in Congress. Or maybe it’s Bill Gates’ and Larry Ellison’s and Warren Buffett’s fault, because they’ve accumulated all that  money and won’t share.

My cubicle neighbor agrees. We talked about that the other day, and he asked me the same question my  mom asked me last week: How do we fix it?

I remember my grandmother was grateful for everything she had, which by today’s standards, was zilch. But she never thought of herself as poor. Never. She lived through the Great Depression. People who  lived through the Depression looked at things very differently.

So I told my cube neighbor and my mom the same thing: We need a good, long, hard depression.  Capitalism gave us everything we ever wanted. But we changed the rules and said it wasn’t what we  wanted. We don’t know what we have, and we won’t all make a pilgrimage en masse to see how great life  is in Siberia. The only way for us to find out what we have is to struggle for a while.

So, was my English teacher right? Are we better off than our parents? NO.

I’m very sad to say I couldn’t prove her wrong.