02016 Year End Review

You can read my 02015 year end review here, which I did in November 2015. Wow. For 02016 I am waited until the actual end of the year to complete it.  

Here is my 02016 year in review. You can check the contents below if you just want to skip to one section
YouTube
Simple Solar

Finances
Charities I Donate To
Microloans
            Kiva
            Zidasha
Books
Personal things I did this year
YouTube:
Earlier in the year as part of my quest to share information that I think will have a positive effect on the world I made a few videos about investing and money. They can be found on my Youtube Channel here. For 2016 I had a total of 680 views coming to 814 minutes or 13 hours and 34 minutes.  While that is not a record for YouTube by any means, it was an interesting experiment for me. I will continue to think about YouTube this year and see if there is any more interest on my part in using it.

02016youtubeviews

Simple Solar:

I believe almost 2 years ago I heard about a potential solar field that would be built by my local electricity provider. They called it Simple Solar. I really liked it for a few reasons.

  1. You could buy as many or as few shares as you wanted.
  2. You didn’t have to do your own maintenance (which most people don’t want to do, simple is better!)
  3. It would move with you if you moved houses, as long as you were in their provider area still. Not possible with a $20,000 home solar system.
  4. You didn’t have to worry about metering back into the grid it’s already part of the grid. This takes away a bit of hassle that you may have with a personal solar setup at your home.

The way it works after we purchased the credits and the field was build was that the shareholders will be credited each month on their bill for 20 years the amount that their shares produced when averaged over the whole solar field. There is no specific panel I own in the solar field.

I started receiving payments on my monthly bill in approximately July 2016. I also started paying for my panels, 4 shares of the whole project at $270/share for a total of $1080 or $90/month paid over 12 months. My monthly pay back rate is  $0.055002/KWH.  (Kilowatt hour). My 4 shares each generated 14.28 KWH in December (a not very sunny month). The normal rate I pay is $0.0579/KWH. While that is only $3.14 this month other months I have seen a payback of $6 or $7. Assuming a monthly payback of $5 = $60/year = $1200 over it’s lifetime. This just covers the $1080 investment. So at first it may not seem to be great money investment. $1,080 returning 7% a year for 20 years would be $3,869.  My calculation doesn’t take into account any raise in the electricity price that will surely happen over 20 years. It also doesn’t include a calculation for how much pollution is being reduced. Because of those reasons I see the money I put in this solar field as investing in the future. I see this as just as important as investing in your retirement accounts or perhaps even more important!

Here is an interesting website that shows the instantaneous and lifetime, and other facts, output of the solar field. Here is a video of the field.

I wrote 17 posts for www.MyWheelLife.com You can find the list of all posts here.

Finances:

Near the end of 02014 I was introduced to Mike Finley AKA “The Crazy Man In The Pink Wig”. He can be found here. He helped me learn a lot about investing and money management. One thing he encouraged was a yearly net worth statement. Here is what I’ve done over the year related to that.  

Start of Year 02016– 1-1-02016
401K – $60,383
HSA – $4,119.76  (none invested)
Vanguard – $14,268.47 ($3,000 to be part of 2016 ROTH $5,500 limit)
Bonds – $853
Total – $79,624.23

End of Year 02016 – 12-31-02016

401K -$85,896.34 (Change +$25,513.34)
HSA -$6,527.75 ($2,799.24 invested)   (Change +$2,407.99)
Vanguard -$17,933.78 (Change +$6,665.31)
Bonds – $882.01 (Change +$29.01)
Total – $111,239.88

My total 401K deferment was $17,399.20 between my own money and my company’s match. My personal ROTH IRA deferment was $5500, the max for someone under 55 years old. My HSA investment was $3350 but some of that was spent for health expenses, that’s why that is not $3,350 higher than the start of the year.

This gives a total of $22,899.20 into retirement accounts (401K + ROTH IRA).

You can see that my 401K balance rose more than the money I put in. This is due to growth of the economy. This is why it’s good to save money in the market, it grows faster than the market. You can see a great graph from Mr. Money Mustache here about how the market is always growing (over the long haul). If you checked the markets everyday, like I did, you will realize that most of the growth in stocks came after November 11th. Previous to this the return was hovering around 2% or 3%. This just goes to show that it is hard to know when to put money in which is why dollar cost averaging is a good strategy. With this strategy you don’t try to time the market. You just buy when you have money. This is how most 401K investments are set up if you have money deferred from a paycheck anyway since that is a regular payment.

On 7-6-02016 I purchased $2600 of FUSEX (a S&P 500 index fund) through my Health Savings Account which is held at Fidelity . The expense ratio is .09% or $0.90/$1,000 invested (Meaning if I have $2,600 total invested in that account I pay $2.34 per year to have that money in that investment. At the end of the year that $2,600 had grown to $2,799.24, which is a growth of $199.24/$2,600 = 7.6% growth. The Mad Fientist has a great post about the benefits of a HSA and investing it.

Digging further into my financial laundry, I will report that I do not own a house nor am I saving up for one. I am enjoying the limited amount of home repair time and cost that an apartment affords me. For most people you could include a house in your net worth calculation but you’d also have to include it in a debt calculation. I have no debt from vehicles, student loans or a house which puts me in a fairly good situation.

As for savings, I have a relatively small amount in cash at any one time. I do have my HSA which can cover any medical bills and the principle of my ROTH IRA can function as emergency cash at any time if I am in a real bind. If I need thousands of dollars in cash for anything besides a car or home loan I am probably in trouble. With my salary and  credit history and showing I have assets in a ROTH and 401K I should be able to secure a loan at any time with little down. This may not be an option for everyone but I believe it works for me.

I have a life insurance policy through work by default (2X my salary) and one extra one through work for $30,000 that costs about $2 a month. I have been meaning to cancel that but I have to physically send in paperwork and haven’t yet. Being a single male with no dependents I don’t see much need for life insurance on my part.

I wanted to share this information because a lot of people do not talk about money or retirement, but a lot of people are anxious about it. The less you talk about something the more anxiety comes from it because the less you know about it. I believe in the free sharing of information. I also believe if you don’t control your money it will control you. I understand that some people measure the value of others by how much money they have or make. This is true for people who don’t make or have a lot assuming that those who do have stolen it from them or others. It is also true for people who make or have a lot thinking that those who don’t are lazy or stupid. Both stereotypes are mostly wrong. Open dialogue between people would help clear up those misunderstandings. I also believe that knowing what you have should help you realize that you probably have more than you need. You can compare yourself to the rest of the world at the website “Global Rich List”. I found that (according to investments) I am in the top 7.6% of people in the world. That certainly makes you think.

global-rich-list

One thing that I am unsure about is how I am supposed to balance saving vs. spending vs investing in myself or others. I think about how selfish it is to consume so much energy, food, entertainment myself when there are many who are unable to get enough to eat. That lead me to read the book “Strangers Drowning: Impossible Idealism, Drastic Choices, and the Urge to Help”. While I am no saint, I wish I was better. One friend I talked to about this this year said that we should all do our best at whatever we are “called” to do. He thinks that if you are “called” to be the best race car driver in the world you should pursue that with passion. I am a bit skeptical if anyone is called to be the best race car driver. I understand that we can’t always be focused on helping others or we’ll get burned out or cynical. But how much more should we be trying to help others who are in a worse spot than us solely based on where they were born?

The tough thing about this line of reasoning is that you eventually end at that you shouldn’t have any fun and you are never doing enough because there is always someone else to help. At least that’s what others have told me. I want to take a bit more hopeful view of it. I hope for a time when we each care about one another more. We provide for those who don’t have enough and we aren’t to wrapped up in our own small lives. The book “Looking Backward” by Edward Bellamy has a pretty interesting outlook on this future.

In light of that, and while I am probably saving more than many people, I am also interested in many charities. Here is some information on those.

Charities I Donate To:

I read the book “The Life You Can Save”. You can read my review of that book here

That goal is possible. Here’s a seven point plan that will make you part of the solution to world poverty.

  1. Tell others what you have done. Spread the word in any way you can: talk, text, email, blog, use whatever online connections you have. Try to avoid being self-righteous or preachy, because you’re probably no saint, either, but let people know that they, too, can be part of the solution. Peter Singer (page 168 The Life You Can Save).

In working with that message, here is my list of charities for 2016 and a bit of justification for each.

Wikipedia – I uses this nearly every day. I appreciate that donating to charities allows you to choose how much you value it yourself and also allows you to pay as much as you can while not limiting access if you can’t pay.

Partners in Health – I read the book In the Company of the Poor: Conversations with Dr. Paul Farmer and Fr. Gustavo Gutierrez at the end of 2015 and into January 2016 at the request of a friend. I appreciate that Dr. Farmer is working to help those in need get basic services that we take for granted in the developed world.

Alternatives Pregnancy – Based in Waterloo, Iowa. This is a Christian based non-profit that helps women who are pregnant. They are a pro-life organization. I appreciate that they are working to help those who can be in a tough position (unplanned pregnancy) instead of just telling them to have a  baby but not supporting them.

St Augie – Platteville, WI – This is the church I went to in college. They asked me to donate to them so I do now since I didn’t have a lot of money in college. (This is a relatively small monthly amount).

Long Now Foundation – This is a non-profit dedicated to long term thinking. They are where I picked up the idea of using 02016 instead of 2016 for a year date. I like them because they are inherently selfless, planning for long after they are gone. ($8/month = minimum membership).

End 7 (sabin vaccine) – Similar to Partners in Health.

“Most people have never have heard of diseases like elephantiasis, river blindness, snail fever, trachoma, roundworm, whipworm or hookworm. But nearly one in six people globally, including more than half a billion children, have these diseases. Without treatment, NTDs can lead to lifelong disabilities and suffering. Just 50¢ can treat and protect a person against all seven of the most common NTDs for up to one year.” – From their site.

Focus – Being Catholic I supported a friend’s girlfriend and future spouse (now spouse) who was doing Focus at the time. Now I support one of her friends.

One Acre Fund – I read their book, The Last Hunger Season, and a few pages into the book I donated to their charity. Here is my review of their book. Their philosophy of giving a man (or woman) the tools and knowledge to take care of themselves vs. handing out charity is a great idea to me. This is supporting both immediate needs (within one growing season people get more food) as well as helping them provide for themselves long term.

Imagine Missions – A woman started an orphanage in Haiti. I went to a friends church one day this year and she was speaking there so I decided to donate to them. $25-$50 a month provides for a child’s education and food. They also make a Facebook post daily so you can keep up with what they are doing.

The Job Foundation – I both mentor kids through this local program and donate to them. I see it as an investment in the future. This is a local and long term program.

NPR – I had grown up listening to NPR and was on a resurgence about a year or 2 ago. Eventually I have transitioned to listening to audiobooks almost all the time when I’m driving but continue to contribute (a little) each month to NPR in the likely event I start listening to them in the future again. I also listen to some public radio content via podcasts so supporting my local NPR station is another way to support those. Similar to Wikipedia, if you can pay for something and you use it you should to help subsidise it for people who may not be able to afford to pay for it. I know I listened to NPR in my life when I couldn’t pay for it and others were.

Children International – This charity allows you to sponsor individual kids who otherwise wouldn’t be getting the schooling and some healthcare. This is an international and long term program.

House of Hope – This is a local charity that is helping women and children who are in a tough place. I like that it gives them 2 years to get back on their feet as well as helping with education. I think this is very similar to the idea of a basic income (in a limited capacity).

Charity:Water – This charity is working to provide clean water to people by providing wells. Clean water can provide so many benefits since it stops a lot of other issues related to dirty water. It also gives more free time since people shouldn’t have to walk as far to get water.

Give Directly – This is a charity interested in seeing what happens when you provide people with a basic income. I read the study, “Household Response to Income Changes: Evidence from an Unconditional Cash Transfer Program in Kenya”  about some people who received help from them. I am interested in what happens when a basic income in provided. Will people work harder at something they enjoy? I am interested in what would happen for a basic income if it was applied to everyone. It’s cheaper to provide that for people who have a lower standard of living to start out with. They are working on a basic income program this year in Kenya.

Cedar Valley Gearheads – I don’t donate to this charity but I was the Vice President this last year. I see their work as good for effecting a short term immediate need of some local residents. Each charity has it’s own focus, long or short term, local or distant. Ultimately all need support so we should just identify which we can help the most and do that.

Microloans:

Kiva

I had heard about micro-loans and microfinance for a while. I finally took the plunge and put my first $100 into Kiva January 28th, 2016. Since then I have put in a total of $608. Some of that was donated to Kiva for their own expenses. I have made a  total of 37 loans this year of $25 each for a  total of $925 loaned. That is one interesting thing about Kiva is that that money is not donated but only loaned. You can also pull that money back out of Kiva anytime after it’s been repaid to you. The money comes back but you don’t receive interest on it. I had one person die who I’d provided a loan to so that money was lost, but since it’s $25/loan (unless you choose to do more) it’s not a big loss. A much sadder loss for the man’s family that his life was lost.

kiva

I also read the book “Clay Water Brick: Finding Inspiration from Entrepreneurs Who Do the Most with the Least” which was sort of a memoir of one of the founders of Kiva.

Kiva is interesting because it gives you a lot of stats. You can keep track of how many countries you’ve loaned to (28 of 79 available countries to loan to for me this year). This could be a bit of a result of the gamification of everything. Another interesting aspect of their gamification is you can join lending teams. Fittingly the 2 largest teams with their stats are:

(A+) Atheists, Agnostics, Skeptics,… 36,404 members have lent $29,751,725 in 1,024,874 loans

We loan because… We care about human beings and understand that it takes people to help people.

And

Kiva Christians 18,557 members have lent $28,448,925 in 611,093 loans

We loan because… Pure and undefiled religion before God the Father is this: to care for orphans and widows in their misfortune and to keep oneself unstained by the world. (Jam. 1:27)

A little further down the list is Kiva Mormons 1,747 members have lent $3,877,725 in 111,031 loans

To spare you the math, and just for fun, that’s an average of $1533.06 from each Christian and $817.27 for each Atheists, Agnostics, Skeptics….
The Mormons come to $2219.65/person.

Another fun thing that Kiva will do for teams is make various graphs. For example the Kiva Christians seem to fund more loans by men (by some percentage) while the Atheists seem to fund loans to women by approximately 4x!

kiva-athiests-men-women

kiva-christians-men-women

Kiva’s microloan dollars are distributed by local banks and credit union partners in the countries it operates in. The lenders, such as myself, are only the capital. Some of the partners charge interest, others do not. The lenders (like me) do not get any interest though.

I am often quick to make a judgement about something like charging an interest rate to those who are asking for such small loans. To help offset some of those thoughts here is a FAQ page from Kiva. This can be seen as similar to the One Acre Fund policy of lending partners (people they are helping) money to purchase seed, fertilizer and other stuff from One Acre Fund and expecting to have that loan paid back. The borrowers are better off since they are able to produce more food for themselves and to sell. It is good for them to give that money back so someone else like themselves can receive that loan the next year. They are also free to get another loan from One Acre Fund to purchase more feed/fertilizer. Since they are likely to produce excess to be able to pay back the loan and have more for themselves overall the loan is a good thing. I believe the way Kiva’s partners operate with charging interest if they have to to survive may not always be a bad thing.

I am interested if Kiva and microloan is the right thing to do in general. I certainly believe that those people are probably being helped but one question is if the people who don’t receive loans are actually being hurt by the competition they are receiving from someone backed by a loan? Are the people receiving the loan getting an unfair advantage? I am not sure.

Another question I wondered was “Would there be an opportunity for ‘regular’ lenders like banks to make money from lending and gaining interest from a typical microloan user?” Again, perhaps but they may be more likely to lend at even higher rates than if the capital is coming from a relatively “rich” backer from Kiva. (Relatively rich since a typical loan on Kiva is a few hundred dollars compared to thousands or even hundreds of thousands for a typical USA loan for a car, house or education.

Kiva is also interested in other types of loans, such as their 0% loans available in the US here. Perhaps they are also available in other places?

Zidasha

I loaned my first money via Zidasha on August 21st, 2016. It is similar to Kiva (it was started by a former Kiva employee) in that it does micro loans. I can’t tell you exactly what is different. The way I have it set up it auto relends money as low as $1 (although you can go in and set it to relend at a certain date to allow more to get paid back to you for a larger loan to any one person). I sort of like have a little more ($25 vs $1) in each loan, but I suppose the way Zidisha does it, having even more people participate in each loan, donating as low as $1 spreads the risk out even more for the lenders. If you don’t particularly care which projects/businesses/school education gets your money the auto relending seems fine. It is probably more efficient. I mostly signed up for Zidisha just to see a different system from Kiva. My first loan through Zidisha was for $52 and now through repayments $78 total has been lent to 9 loans. I am not actively adding money to this like I have been to Kiva. I haven’t looked into it enough to determine which I really think is better. Kiva is certainly larger. You can find a lot more information about Zidisha here.

zidisha-dashbaord

Books:

26books_02016

I finished reading 33 books in 2016. I started 2 books that I didn’t finish. Antiquities of the Jews (super long book, I got 100 pages in which is longer than most of the books on this list and Getting Things Done the art of stress-free productivity (2015 Edition) – David Allen This book I just found rather boring. A lot of people in the work group I read this with didn’t finish it either.) I also read 1 kindle book (Time and Regret). I had resisted reading Kindle books because I like being able to highlight in my books and find those references again. I found that it is even easier on a Kindle to do that. I also just like having a book in my hand. Maybe I’m old fashioned. I may try more Kindle books in the future.

I finished 21 audiobooks between audible and CD’s.  I have mainly given up listening to music or news on the radio. Perhaps current news would be good to listen to but I find it usually incomplete. I generally find that I can find more reliable information a few days after some real information is found out. I remember in 2015 listening as the Boston Marathon Bombers were being chased down. It sounded as though I was getting live updates from the officers chasing them. I was getting anxious just listening to it. I don’t really need that up-to-date news. I can hear it in a day or 2. Because of that I am now identifying things that will improve my understanding of how the world came to be as it is and things that will improve me. I read books on history and the future. On technology and religion, about science and pseudoscience and science fiction and a lot of books about space, Mars and astronauts! I listened to books about the governments of China, Russia and North Korea. I read a few books about the work certain nonprofits were doing (Kiva and One Acre Fund). I purchased 33 books from Amazon but only read 20 of them. I didn’t read 13 of the books I purchased (for myself to read). Of the other 12 books I did read some must have been purchased the previous year, some were purchased in person, a few came from a book study at work and at least a few were gifted to me by other people. I listened to 2 books by Walter Isaacson, read 2 by C.S. Lewis, 2 by Oliver Sacks and 3 by Scott Adams, one by Albert Einstein and one about him, 2 by astronauts (1 by Buzz Aldrin and 1 by Chris Hadfield) and one about the experiences of a lot of astronauts (The Overview Effect) and 2 books about Kiva (one by a person who started it and one by a man who loaned a lot of money via Kiva and interviewed some of the people who received that money).  I also read one book for the third time, Operating Manual For Spaceship Earth by Buckminster Fuller.

My complete reading list over the past few years can be found here.

Personal things I did this year:
In January I attended the Detroit Auto Show. One of my favorite vehicles shown there was the 3 wheel, 2 person Elio. It is not in production yet but I hope it eventually is!
In June I attended a wrestling Camp with my younger brother. He is a freshman this year.
Later in June I visited a friend in Texas. We went to the Johnson Space Center, 2 Lamborghini dealers and a Hindu Mandir (temple) in Houston.
In July I attended a family reunion where we celebrated the 100th birthday of one of my father’s aunts.
In July I also became a Godfather for the 2nd time.
In November I visited a friend in Chicago and went to the Museum of Industry and Science. The German U-boat there was incredible!
I visited the Performance Racing Industry Trade show in December 2016.

elio_detroit_jan2016

mandir_houston

u-boat-chicago

US Government Debt

A new idea I had the other day (which I’m sure many other people have had before me), was “Remove Fear With Knowledge”. With that idea in mind I am going to start by thinking about removing the fear of the “US Foreign Debt Crisis” by sharing some information about it.

The USA has so much debt!
Our debt has increased to $X trillion dollars.
China owns to much of our debt!

The headlines cry. The topic of debt of a country is no small matter, especially when it’s your own country. We start to talk in trillions of dollars. At that level most people just breeze over the numbers. They just can’t fathom them. Most people probably don’t believe that these numbers have any effect on their lives and that “the system will sort itself out” so they don’t worry abou it too much. But some people do get to thinking about these numbers, usually with incorrect facts. I wanted to read a bit into who exactly owns the US debt. How much debt do we own of other countries? And other thoughts related to debt.


To find the most up to date numbers here is the US DEBT CLOCK. From now on I will be referencing various article for general snapshot from recent points in history but for the latest rough numbers use the debt clock.

Here are the debt clocks for many different countries.

You might ask what exactly is a debt? An debt is a liability that a government owes to another government or person. I personally own about $1,000 in individual EE bonds from the US government. Each bond returns a different interest rate depending on when it was purchased. The reason I own the bonds are because they are helping my money grow. Making my money work for me. This is good because if money is not growing by being in bonds or in some other investment like a stock or if I am not investing it in some other company that money is effectively losing value because of inflation. Inflation is a good thing. It encourages people to spend money and look for ways to make money grow. If you have deflation it leads to people not spending money because it will be worth more the next day. This can lead to an economic death if no one is willing to spend money!

Question:
Why does the USA issue debt?

Answer:
The USA issues debt so it can balance its budget. The US government has a yearly budget (sometimes) that they (usually) exceed. To make up the difference they need to get more money from somewhere. People and other governments actually give their money to the US government to meet this deficit.

Question:
What does the US government do with this money?

Answer:
They pay for roads, schools, military and other services for the US people.  The US government has a budget that is part mandatory and part discretionary. This is an important distinction to understand

“71 percent of our 2015 budget is Mandatory.  Discretionary spending is only 29 percent our total budget.Of our Discretionary spending, half goes to defense.” “ – agenerationempowered

Question:
Why would people give their money to a government that is overspending?

Answer:
People give their money to the government in exchange for a promise of more money in the future. A bond is really a type of loan from you (or another government) to our government.

Question:
Is the USA the only country in debt?

Answer:
NO! There are only 5 (tiny) countries in the world with no debt. The list of all countries by their total debt can be found here.

Question:
Doesn’t China hold all our debt? What will happen if they decide to collect on it?

Answer:
Only ⅓ of our total debt is held by foreign governments or individuals and China only own a fraction of that. In order for “all debt to be collected tomorrow” that would require that the people who hold that debt would have thought of a better way to make money on their investments other than the US debt. It’s unlikely that’d happen all at once so there is little likelihood of all the debt being simultaneously collected at once. Also if something as massive and disruptive as that was proposed we could always just say no. Being the most powerful country in the world it would take a war to get your money back. Luckily the US government is, mostly, trustworthy, and usually pays their bonds back. But not all governments do.

You can read more about Argentina’s debt crisis here.

“He buys debt from countries, such as Peru and Congo-Brazzaville, that have defaulted. He gets this “distressed debt” for pennies on the dollar. Then he tries to force those countries to pay up through international courts. It’s a take-no-prisoners approach to debt negotiations. It’s time-consuming, it’s costly and it can get ugly. But the profits can be huge. In Peru’s case, for example, Singer paid a reported $11 million but won court judgments for $58 million, which the South American republic eventually paid because it had no choice. These tactics have won Singer and other such firms the nickname “Vulture Funds.”’ – Buzzfeed

The US has not hit a point where it is not paying its debts back.

Question:
Who owns US debt?

Answer:
Many individual people and parts of the US government (Social Security) own US debt (of other parts of the US government) (65.6%) ($11.71 trillion dollars) while some foreign governments also hold US debt (34.4%) (totaling $6.147 billion dollars) when the US debt was $17.86 trillion. While these numbers all change slowly over time they more or less remain steady percent wise while overall debt is rising. So any debt we tried to reduce payments on would actually end up hurting our own citizens more than foreign holders of debt.

You can find the link to the table below here for US debt held by foreign countries.

foreign-holdings-of-us-debt

Question:
What debt of other countries does the US hold?

Answer:
As you can see from the table below the US holds debt of other countries equal to $9.4 trillion dollars. This is compared to our own total debt of $19 trillion dollars. The debt we hold of foreign countries should be compared to the debt other countries hold of ours.

We owe $6.147 billion dollars to foreign governments.

Foreign governments owe us $9.455 trillion dollars.

You can see in this comparison we actually come out ahead $3.308 trillion dollars. That sounds like a good position to be in!

You can find the link to the “Report On U.S. Portfolio Holdings Of Foreign Securities” here. Table shown below.

us-holdings-of-foreign-debt

Question:
Why does the US debt keep going up? Is that ok? When will we have to pay back our debt?

Answer:
To understand why the US debt can keep going up you need to rethink your idea of the US government. The government is not like a family. Ideally, the government will not end. Therefore there is never a time when all the debt will come due. Old debt comes due every day and it is paid. New debt is issued everyday also.

It’s ok for the debt to keep going up as long as the people of the country keep making more. Debt is a count of ability to repay in the future. If the government continues to collect taxes it will continue to pay back its debts. If we are always projecting making more in the future we can borrow more. There is no projected end date for government operation so there is not a need to pay off debt.

Question:
How should we quantify debt?

Answer:
Debt is obviously counted in dollars. But how do we know if it’s a lot of debt or not? Debt is often compared to Gross Domestic Product. This is how much money a country makes in goods each year. I don’t see this as a very useful measure since the government doesn’t get all the money of it’s GDP. Debt would more usefully be compared to the taxes a government takes in since that is the money it is able to use to pay the debt.

“The federal government took in a record of approximately $3.2 trillion in taxes in fiscal 2015 (which ended on Sept. 30), according to the Monthly Treasury Statement released today. That equaled approximately $21,833 for every person in the country who had either a full-time or part-time job in September.” – CSN news

This is compared to the US debt of $19.5 trillion.

You should also realize that each state in the USA has it’s own budget. All states are also in debt.  You can ready more about that here.

It is not useful to be scared of debt. The best reaction is to understand it and what it really means.

Dak and the President

Below is an excerpt from a story I started writing a while ago. I am hoping to finish this story and share the whole thing, perhaps even publish it. A book is a lot of work and dedication and I wanted to share a small part now in case I never finish the book. Let me know what you think of it.

After taking with the stranger in the park Dak felt like he’d gotten somewhere. The man just might know something about the man who’d robbed him. Then again, the stranger could be bluffing. There was no way to tell. Dak didn’t have a lot of experience making deals with people. He’d always had food and shelter provided for him on Mars by the government.

Luckily for Dak, being the only man ever born on Mars as well as the oldest human alive and this being his first time on Earth, he had some special privileges. He was going to see the President of the United States.

“Mr. President. Thanks for taking the time to see me.” Dak said.

“The pleasure is all mine” said the President of the United States. “I’ve heard a lot about you and am excited to learn about you. The first and only man ever born on Mars and the oldest man ever to live. So what have you spent all those years doing there Dak?”

“Well sir, I’m quite well read on history of the world. I have a lot of knowledge of historical conflicts, although I must admit that the more I have read the more most conflicts seem frivolous to me. I am also a first rate technician in the footsteps of my mother. Keeping your habitat functioning when you’re on Mars is a pretty high priority! For the last 20 years I’ve been learning more about the human body, specifically my own, preparing to come to Earth. As you may or may not know, being born on Mars I grew up in one third the gravity of Earth. That lead my body to develop much weaker muscles, as well as allowed me to grow so tall.”

“So what brought you to request a presence with me?”

“I was mugged the other day. I was wondering why we have such abundance while other parts of the world people are still hungry?”

“That’s a great question Dak. It all goes back to when we figured out how to create energy through fusion in 2100, before I was born. This allowed us to produce literally unlimited electricity. Naturally we weren’t willing to give that formula to other countries. Up until that time, we relied on other countries for a lot of our energy production. That lead to us maintaining a huge military presence in many foreign countries, acting as a de facto world police at times. That was both expensive and as you can imagine created some friction between ourselves and the countries we were in, both peacefully and not so peacefully. Since we didn’t need those resources anymore we were free to leave. Opening up that much more money to spend on national defense and securing our own borders. Now we have some of the most secure borders in the world. Not many illegals get in each year. Also since we have the greatest society in the world not many people leave either. The world is a dangerous place. Much of the rest of the world was actually happy to see us go. The man who mugged you was one of the few illegals who was able to sneak in over our very secure borders.”

“So why don’t we just help the others?”  Dak continued.

“They don’t necessarily want our help. Many places are afraid of outside influence, our own country included. Many people are afraid of a one world government. They expect that if we started providing favors we’d expect some influence over their government. It’s not a completely unfounded fear.”

“Is it right to continue in this way of thinking?” asked Dak.

“It is for us for now.” said the President wearily. “I like how you’re thinking Dak, but being the President my obligation is to my country, not the world.”

“Well that’s a huge discussion for another day, Mr. President. I wonder if you could help me with a smaller matter?” asked Dak.

 

(All characters were created by myself, Axel Hoogland. Feedback is welcome to axel-jerome@hotmail.com)

Questions 2

I wrote something I called “The Most Important Thing” almost exactly 1 year ago. It was mostly a long list of questions. I have come upon more questions. I am not sure if any of them is the most important question or not (probably not in this list).
Maybe the most important question is:

How do you determine what the most important thing to think about is?

So here is my list of questions. Have you thought about any of them?

Why are people gay? Is it a natural (coming from some brain chemistry) behavior or is it induced by something that happened to them during their life (trauma)?
What is a natural behavior?
What other actions are induced by some action?
Are most neurosis brought on by some action that happens to people?
What is the most important thing for the future?
Do we want to reduce deaths?
Do we want to push death off later?
Is longer life the goal?
Is avoiding an unplanned death good?
What is a planned death? No one plans to die.
What is a quality life?

Why don’t women go bald?
What is the carrying capacity of the Earth? (How many people can the earth support).

What makes someone smart?
Connections in their brain?
Why can’t we all be savants, photographic memory, pick all dates from history, do large math equations in our heads?
Why are not all successful people “smart”?
Why are all “smart” people not “successful?
Why are some people who are successful “not as smart”?
How is smartness measured? Street smart vs. Book smart
How is success measured?

How do 2 particles get entangled?
Do they get un-entangled sometime?
Can more than 2 particles be entangled?
Wouldn’t all particles eventually get entangled together?

Why do people worry about “using” water? It can’t be destroyed. It can only be contaminated, and contamination can be cleaned.
There are very few things on the earth that “consume” water. It is always returned, sometimes just not in the same place.
How many people will the earth sustainably support?
We will be better able to ration food as we get more technical since fewer people will be making the food. This is a good argument to be the people making the food! At the same time, this should allow us to take care of everyone’s hunger needs. There should be abundance. In fact there already is!
Why do some people die of hunger each day? (21,000 according to this site) That’s ridiculous

Why did the 1918 flu epidemic end so quickly? Why didn’t it just spiral out of control and kill everyone?
How do they get genes in a GMO?
Gene Gun
Bacteria
Does a trans-gene have to go on a specific chromosome?
Does a trans-gene have to go in a specific part of a chromosome?
If so how do they get it in the right place?
Why do we have 23 pairs of chromosomes instead of 1?
How many examples of fusion genes are there in different animals?
Why is our GULO (vitamin C gene) apparently broken?
Is it broken?
Do we want to fix it?
What other animals have a mutated GULO gene? (fruit bats)
Why don’t we make all 20 essential amino acids we need?
Would we want to turn that ability back on if we could?

How are there always fresh fruits at grocery stores? Who is harvesting tomatoes all year?
How old is the apple you are buying from the store?
Yet according to this study, antioxidant activity in apples gradually drops off after three months of storage in the cold. An apple stored for nearly a year? It will have almost no antioxidants remaining in it whatsoever.
What exactly happens to the antioxidants? They break down? Into what?

What is someone paid if a gas pipeline is forced onto their land?

Why are there homeless people?
Why don’t they get social security money?
How would we provide them a safe place to live?
Do they want a place to live? (you’d sure think so)

Below is a line of questions I worked down after a friend asked the first one. I have included links to some of the answers I found.
Q. Why don’t Jewish people do sacrifices today if they don’t think the Messiah has come yet?
A. We stopped offering sacrifices because we do not have a proper place to offer them. – Link
Q. So that brings up the question – Why don’t the Jews rebuild the temple?
A. “Truthfully, we don’t even know how to construct it.” – Link
Q. How are you supposed to build something that they don’t know how to build?
Comment: “It is forbidden to enter the Temple area in a state of ritual impurity. The only way to become ritually pure is with the ashes of a red heifer, which presents its own set of challenges.”
Q. Where is the red heifer?
A. “The cattle rancher is utilizing the technique of implanting the frozen embryos of the Red Angus cattle, which originally come from North America in Israeli domestic cattle.” – Link
Q. Should not God provide the Red Heifer?(from a commenter on this article, not my question)

What are some of the most burning questions you have? Why haven’t you sought the answers yet!

The Life You Can Save: Acting Now To End World Poverty – A Book Review (of Sorts)

Here is a link to Peter Singer’s TED talk about effective altruism, which makes a lot of the same points as the book “The Life You Can Save: Acting now to End World Poverty”.

The target we should be setting for ourselves is not halving the proportion of people living in extreme poverty, and without enough to eat, but ensuring that no one needs to live permanently in such degrading conditions.

That goal is possible. Here’s a seven point plan that will make you part of the solution to world poverty.

1.Visit www.TheLifeYouCanSave.com and pledge to meet the standard.

(read 2 and 3 in the book yourself)

4. Tell others what you have done. Spread the word in any way you can: talk, text, email, blog, use whatever online connections you have. Try to avoid being self-righteous or preachy, because you’re probably no saint, either, but let people know that they, too, can be part of the solution.

 Peter Singer (page 168 The Life You Can Save)

In writing this post I am trying to do exactly what Peter Singer asks above. The basic premise of the book, if you can’t tell from above, is that “wealthy people” (nearly anyone reading this qualifies as wealthy) only need to give a small percentage of each of their individual incomes to help eliminate world poverty and save the lives of “the extreme poor”. These are people who are dying from diseases that have long been defeated in the “1st world” countries.

Throughout the books he shares examples of how in certain situations if there is a person in trouble right in front of us we are willing to go to extreme lengths to help that person. He then shares how with the prevalence of the internet and the plethora of NGO’s and charities operating in the world we are only a click away from helping thousands of people, even if we don’t make 6 figures a year.

In the chapter “How Much Does It Cost to Save a Life?” he tries to address the often heard excuse that “I don’t know if that charity is actually doing any good or not with my money so I won’t give any.” He discusses both Charity Navigator and also GiveWell. Both groups that try to help individuals understand the effectivity and transparency of various charities in the world. He also shares some calculated numbers of how much it costs to help people through various situations.

“Interplast corrects deformities like cleft palate, and helps burn victims so that they can walk or use their hands again.” “GiveWell calculates that Interplast spends about $500 to $1500 per corrective surgery” (p89)

“We can reasonably believe that the cost of saving a live through one of these charities is somewhere between $200 and $2,000.” (p103)

I believe, as Peter Singer states that “as people become more confident of the cost-effectiveness of charities, they will become more willing to give.” (p93)

After sharing how easy it is to give and how effective charities are these days, Singer discusses how much he thinks each person should give. He shares the story of Zell Kravinsky. Here is a link to an article about the man. He is truly amazing. He has anonymously donated a kidney to a stranger. Some of his charity has caused some internal conflict with his family. His efforts to help others are truly heroic.   The whole point of this book though, is that if we all pulled our own weight in helping others, Zell’s heroic efforts wouldn’t be necessary.

Which is the point of the next chapter, “Asking Too Much?” I can’t say it any better than Singer, “focus instead on the fact that if everyone were doing their fair share, the total amount each of us would need to give in order to wipe out, or at least drastically reduce, large-scale extreme poverty would be in the hundreds, rather than thousands, of dollars per year.” (p144)

In the final chapter Singer finally shares a real number, he proposed 5% of income per person who is “financially comfortable” should be given to charitable causes. He even shares some data about the reverse bell curve of actual giving in the USA currently. You can find that curve here. At least as measured in dollars, the less money you make the more likely you are to give a higher percentage, at least until people are making many hundreds of thousands or millions in income.  

The above statement should drive you to ask “How can I become financially comfortable?”  This should be the first step in helping others. Much like the mantra on a plane “put on your own mask before helping others” if you aren’t stable yourself, or at least feel stable, you shouldn’t be to worried about others. If you eventually figure out the few tricks

  1. The is no true security.
  2. The market always goes up.

You will be feeling quite secure in your future once you have built some assets and understand what they actually are. You can learn more about investing and saving and creating your own security here. You can learn a bit more about investing from a few videos I have created here and here.

You can also learn about security from “The Crazy Man in The Pink Wig” a personal mentor of mine. (I will buy you his book on investing if you won’t buy it yourself, just email me hooglandaxel@gmail.com)

Finally, you can learn from Mr. Money Mustache’s posts, here or here, or just about any post of his.

Once you are stable yourself you can then start focusing on others. You will be in good company as these guys Warren Buffett (Berkshire Hathaway), Bill Gates (Windows), Pierre and Pam Omidyar (Ebay) and Manoj Bhargava (5 Hour Energy) are already leading the charge to change the world for the better.

If you need a few suggestions on charities you can check my page of preferred charities or this post for more information about my 2nd favorite book “The Last Hunger Season” about what I think is a particularly effective charity.

Once you are in a comfortable place yourself, I would encourage you to at least “do your part” by checking in at Singer’s site, https://www.givingwhatwecan.org/ and “becoming a member”. To do that you will just have to tell the site your income and it will recommend how much you should give to charity to “do your part”. I believe that if we do this we will see the end of poverty in our life times. I have calculated the year 02041 as when we will have no more hungry people but I believe it will be much sooner than that based on an exponential rate of reduction of poverty.

The Last Hunger Season (A book review)

You can buy “The Last Hunger Season” using this link.

How we will be able to explain to children why there used to be hungry people in the world?

People sometimes wonder why God would allow so much suffering in our world. Maybe instead we should be wondering why we do. – Jim Palmer

I started reading this book 8-17-02016 and finished it 8-22-02016. I had found out about it after listening to the TED talk by the founder of One Acre Fund, Andrew Youn.

You can learn more about the organization (and any other charities) via Charity Navigator. Charity Navigator is great for helping you feel at ease donating to various organizations. You can know so much about a group. You can see the salaries of the top paid people. The tax returns of the charities for the past years. Tons of information. Back to the book.

One Acre Fund is a NGO (Non-Government Organization, charity, non-profit) that works with farmers in rural Africa to provide them productive seeds and planting techniques. Most of these farmers plant .5 acres or 1 acre. The “super farmers’ plant 2 acres. The planting is all done by hand. Sometimes they are able to have their fields plowed by an animal but some just work it by hand also.

The book follows the story of several farmers in Kenya through their year of 2011 working with the new techniques and hybrid seeds provided to them by One Acre Fund. It chronicles their lives, planting season, struggles with money to feed their families, keep their kids in school, deal with illnesses and deaths and skipping celebrations because they didn’t have the money for food.

As an engineer I really appreciated how thorough the book was regarding the inputs, costs of seed and fertilizer, and outputs, what the farmers are paid for their harvest. It also chronicles how the cost of food varies by over 100% over the year and how farmers often have to sell early when the price is low and then buy later when it is high, a double whammy to the net worth (or lack of) of the individuals.

Another thing that was astonishing to me was concept of a hunger season, the “wanjala”. Many times they talked about how they would have tea for breakfast and perhaps nothing to eat during the day.

Money was talked about a lot. Always in Kenya Shillings. I found it easiest to approximate 100 shillings = $1. For example, one of the men’s salaries was 1500 shillings a month, or $15 (Page 34). To be fair, it didn’t say how much he worked, but I suspect it was more than 1 hour. They also shared the price of one man’s bean and fertilizer purchase to plant a quarter acre of beans. 1800 schillings, $18. It also records his returns, 158.8 kg x 80 shillings a kg = 12,704 shillings or $127 on an investment of $18, that’s a 700% return! If we could all get that kind of return wouldn’t we be happy? (Page 65).

The tough decisions these people face each day was eye opening. I could feel a little bit of the weight they felt as they were making decisions to sell a bag of rice to buy some medicine to treat a family member. Or the choice to sell a cow to pay for schooling for a child. While I could try to feel the weight, I really couldn’t even fathom it. How does a person in the USA even consider living on a few hundred dollars a year?

Later it discussed the various companies trying to address the challenge of storing the maize and other grains. Since sitting in air it can spoil easily if it gets wet. There are various companies working on plastic storage bins, about 6 ft tall for some of them. That doesn’t seem like a lot of storage but when you are farming an acre it can be huge! Between those companies and One Acre Fund trying to educate on farming techniques and share new seeds, there is really a lot of improvement coming about in a small time in Kenya and other parts of the world.

After I read this book I decided to read one or two reviews of it. One quote I got from this review was “Africa’s future is not as a continent of happy peasants” pointing to the successful Brazilian model – highly mechanized production and greater urbanization is the answer, enabling the children of smallholder farmers to move off the land.”

While I can understand his sentiment I would have to ask him where he thinks these small time farmers will get the money to buy small enough tractors to till 1 acre of land and make it profitable? Where will be the infrastructure to fix the vehicles when they break? I believe that Andrew Youn and One Acre Fund are doing exactly what is right for the right time in history. He is rolling out something that can be implemented immediately to allow the farmers to literally fight off days that would require them to not eat! The farmers are even doing as the writer of the article suggests and investing in their children’s futures. The children already have a brighter (less manual labor and less likelihood of hunger) than their parents and the parents futures look bright because of the kids. It should be unnecessary to mention but I will anyway, most of these people don’t have much put away in terms of money savings. The do talk a lot about diversifying their businesses as far as getting different animals and planting different crops. They are sharp people doing the best with what they have. One Acre Fund is just trying to get them the tools to do even better.

This was my 2nd favorite book I have read in the last 2 years after “Operating Manual for Spaceship Earth” and I would recommend anyone and everyone reads it.
Bringing this back to my opening quote, I wonder how we will be able to explain to children why there used to be hungry people in the world? I say “used to” because “I really hope I am able to look out my window in 02041 and say “There are no hungry people today.” (based on my post “The Last Hungry Person”)

Here is an article with some information about how farmers partnering with One Acre Fund are doing.

I Bought A Prius (8 months ago)

I find it curious the different reactions I get while driving a “cool” car vs. driving a Prius. Am I not the same person regardless of what I’m driving? – Axel Hoogland

One thing that has bothered me about sports cars is that for most of it’s life you are unable to use the performance of your vehicle. It is not accomplishing the task it was created for. – Axel Hoogland

Most times when I tell someone I have bought a Prius it is met with a disgusted sound and some complaining about how stupid a Prius is. That is understandable as at one time I probably would have done the same thing. Because of that I feel obligated to finally go through what drove me to this decision.

Those of you who know me probably know me as a guy who likes fast and cool cars. That was the persona I embraced and curated from a young age. I enjoyed many hours reading Hot Rod, Car Craft, Popular Hot Rodding, Truckin’ and many other car modification magazines. In college I worked on the FSAE race car. Since I graduated college I bought both a 2008 GSXR 600, a 1981 Honda CM400C, a 2007 Mustang GT/CS and have continued to maintain my 1987 Monte Carlo SS.

So how, with that background, did I come to purchase a Prius?

I read some books which started me on a path to think about what is really important to both the world in general and myself in particular. I began to ask myself probing questions to try to understand the real nature of things. I started to appreciate efficiency more.

Here are a few of those books.
Deep Economy – Bill McKibben
Operating Manual For Spaceship Earth – Buckminster Fuller
Financial Happine$$ – Finley

Blogs – Mr. Money Mustache
Top 10 Cars for Smart People
Curing your Clown-Like Car Habit
What Does Your Work Truck Say About You?

What is the purpose of a daily driver? To get you from point A to point B as efficiently as possible (at least that’s my purpose for it now). You will see that many race car drivers drive rather boring vehicles (of course many also have many fast cars). The reason many  race car drivers drive rather boring vehicles is because they recognize they can’t reach anywhere near the limits of the performance of the vehicle on the street. When your race car is purpose built to go fast, would you enjoy a vehicle that is compromised for street driving? Looking at it objectively, the Prius does exactly what a vehicle is intended to do. I am working on getting over seeing vehicles as some symbol of status. The facts are, a fancy vehicle is just a way of showing off how much you can afford (or borrow). If we want people to know we make a lot of money or have a lot wouldn’t it be easier to just walk around with our net worth statement floating above our heads (perhaps our salary also). That’d sure be a lot more efficient than burning an extra $1,000 a year driving a vehicle that is doing it’s job (transporting you efficiently) inefficiently. For more on that you can listen to my YouTube videos about saving for retirement (freedom), posts about it,  or about one of my New Year’s Resolutions to have $100,000 in my retirement by the end of the year (on track with the good returns the market has had in the last month).

I’ve had my 1987 Monte Carlo SS, which is admittedly not the pinnacle of performance vehicles, since I was 15 years old. I was always thinking about upgrading it to go faster. Why, because that’s what I was influenced to think was good by people around me as well as magazines (Hot Rod, Car Craft). Once I had the funds to make it an option to spend thousands of dollars to make it a lot faster I did a little more thinking about the time and money that it’d cost to upgrade the Monte and I figured it was cheaper and more efficient to buy a newer sports car if my goal was to go fast. This lead to the purchase of a 02007 Mustang GT. It was a faster vehicle, and due to 20 years of technology it also got better gas mileage up to 25 mpg’s, going 55mph. I realized that although it was faster, I couldn’t really utilize that extra performance most of the time. Now I was continually thinking about buying an even faster vehicle or modifying the Mustang. What stopped me was the realization that the money I would invest would really only lead to reduced general performance, mileage, while not really gaining me any actual useful performance. Perhaps a few seconds faster in an autocross that I participate in once a year or a second faster drag racing, also 1x a year. So my car would basically be good at nothing. It’d get a bit worse mileage and go a tiny bit faster, which I’d never get to utilize.

So to the Prius. The beauty of the Prius is it accomplishes its task with highest efficiency. It’s goal is to move people efficiently (less gas) and it accomplishes that in spades! I have driven it through an Iowa winter and over 10,000 miles.

A side effect of the increased mileage is saving you money and depending on what you are transferring from, a significant amount! You can see that if you drive a Prius (45mpg) instead of a truck (20mpg), even at $2.00 gas is a could be a savings of over $1000 a year (if you drive 20,000 miles a year).  This is in addition to having lower insurance since it’s a cheaper vehicle.

prius mileage

One of the main questions I get is “What about the battery?” It is a fair question. People are generally afraid of things they don’t understand. Being as huge batteries is still (sort of) new technology (we’ve had Prius’ for 18 years now, people still haven’t had a ton of exposure to them. The short story I can tell them is, look on the internet for the history people have had with the Prius and other hybrids. If there were massive problems, people wouldn’t keep buying the car for over 18 years. A battery replacement is about as common as an engine replacement and costs about the same, probably a bit less. A battery sure has less moving parts than an engine or transmission!
From having the opportunity to drive various “cool” vehicles (1987 Monte Carlo SS, 2008 GSXR 600, 1981 Honda Bobber, 1957 Chevy (dad’s) and various “average” vehicles, minivans, 2001 Silverado, 2007 Prius, Ford Focus, I have had the opportunity to see people’s reactions to various different vehicles. It is always cool to drive a neat car and have people interested in it. I can’t tell you how many people asked about or commented on the 1957 Chevy when I drove it for a week. It was a lot. I also get rather regular comments on the 1987 Monte Carlo SS. I find it funny that driving the Prius family and friends go out of their way to make negative comments about it. Am I not the same person driving the Prius as I was driving the “cool” car? Maybe I’m not, but I like the new me. It’s just an improved version of the old me. I can continue to drive the “cool” vehicles occasionally while driving the Prius most of the time for its efficiency.