Tuesday, February 28, 2006

Forget April–February Is the Cruelest Month

Author: Nick
Category: Money
Topics: ,

I think February is the shortest month on purpose–it’s simply not as likeable as the other months. April is nice because spring is in full bloom. July and August are warm, sunny, and a great time to take a vacation. Even December outranks February on the awesomeness scale because it throws in Christmas to help keep away the winter blues. But February, it’s cold and miserable and the only holidays in it put the spotlight on groundhogs and greeting card companies. You’d think I would be thrilled that February usually ends after 28 days, but its abbreviated length just serves to make February the least favorite month not just for me but for my wallet as well.

To see why February earns the ire of my finances, consider how many monthly bills you pay. Things like gas, water, telephone, and electricity might come to mind. Of those four I just mentioned, which is most different from the others? You’ll probably choose telephone if you participate in a fixed-price plan where usage doesn’t impact the monthly charge. For all the others, your bill each month depends on how much gas, water, or electricity you crank into your home. These kinds of bills don’t really care how long the billing period is; you’ll pay the same amount per diem if you’re billed once a month that you’d pay if you were billed weekly, yearly, or even hourly!

Those fixed monthly charges, however, usually don’t take into account the length of a month. If your rent is due every month on the 1st, you’ll pay the same regardless of whether the month is 30 or 31 days long. You’ll obviously get the most benefit out of services that charge a flat monthly rate during months with 31 days. But February, geez! Not only do you miss out on the benefit of 31-day months, you lose another two days!

Let’s consider a semi-hypothetical situation based loosely on my own finances. Say we have a person whose basic living expenses look like this during the month of April (a 30-day month):


There are plenty of other expenses this person will incur, but these will do for our purposes. For expenses, I included the equivalent per-diem charges calculated simply by dividing the monthly cost by 30. For income, since this person only works Monday through Friday, I calculated his income per diem based on a 22-day work month. You can see that, after basic expenses, this person has about $81 left for other purposes each of those 30 days.

Now let’s consider a 28-day February with only 20 work days:


Assuming daily usage remains the same in February and April, this person will have slightly smaller gas, electric, water, and grocery bills. Since rent and telecommunication bills remain the same, their per-diem equivalent charge goes up almost four bucks over April’s. When you take into account the slight hit to monthly income from those two missing work days, this person’s discretionary income goes down $7.60 a day in February!

To keep this from becoming just another personal finance rant, I’ll throw in some advice for dealing with the cruelty of February. Instead of counting your pennies monthly like I’m doing here, consider your income and expenses on an annualized basis. That way, lengths of months don’t really matter to your income or expenses… unless you’ve got one of those crazy leap years. In that case, just take a cue from the groundhog and go back in your hole for six weeks.

Monday, February 27, 2006

Super-Sizing My Commute: Only If I Can Use the Corporate Jet

Author: Nick
Category: Money
Topics: ,

While I was walking from the parking lot into my building at work this morning, I was thinking about how I really love my commute. Just six minutes is enough to get me and my MINI Cooper from our apartment to my workplace, and in the summer I might start walking or biking instead. Five months ago we lived a 90-minute car ride from where I work. Since a commute is a two-way deal, this meant I was on the road for three hours a day, four days a week (I work from home on Fridays, even now). To put it lightly, the commute took quite a toll on me. While my car is quite comfortable and the drive was mostly through country roads, three hours of my day were going to waste. So in October, I said “enough!” and we packed our bags–a lot of bags. The move was grueling, but I can say it was totally worth it. And even the higher rent that we pay now isn’t enough to cancel out the bliss of having an extra eleven hours each week.

This morning, I get a call from my manager. He wants to see me. I never like these unscheduled calls, but they’ve never been about anything bad so far (just raises and promotions). Today’s wasn’t necessarily bad as it was simply my manager trying to find out who might be interested in working on another project at a location about 45 minutes away. My current manager just took over for my previous manager who is away on maternity leave, but he knows that I just moved to the area a few months ago primarily because I wanted an ultra-short commute. Our meeting was short, and rather than reject the offer outright, I hinted that I maybe possibly could be sort of interested a little I guess.

Even if I accepted an offer at the new location, it wouldn’t start for a little while. My current project is beginning to wind down, and our team will soon transition to the next-generation version of the product. And as important as our team’s role is on the current project, I have no doubt that they’d want all of us to continue working on the next. My manager suggested that some people may be transitioned to other projects anyway despite the fact that the next-generation project is ten times bigger than the current one, though I can’t imagine anyone would forcibly reassign anyone on our team because we’re already putting in tons of overtime on the older project while it’s ramping down. I also know that if I went to my team leader and mentioned that forces above us are looking to relocate me, he would not be happy since we’re going to need even more experienced man-power after transitioning to the next project.

But I have an icky taste in my mouth about this. Will I soon be facing a “relocate or re-employ somewhere else” scenario? Should I have flatly refused my manager’s offer? Or should I have jumped at the opportunity … without even knowing what the opportunity really is yet?

In the end, it all comes down to the commute. Is there anything that could convince me to trade this lovely hop-skip-and-a-jump drive to work for a butt-clenchingly painful one? Maybe…

Things I Might Take In Trade For A Much Longer Commute

  1. Interesting, enjoyable work. I like my current project, and the next-generation one will be even more challenging and exciting. But a new opportunity could be even more interesting, and I might find that I enjoy it even more than what I do now. A job I like is a pre-requisite that cannot be ignored, so this comes above all else.
  2. A hefty pay hike. A new assignment means the opportunity for a new salary. If I’m going to lose 90 extra minutes a day to driving, I expect bags with dollar signs on them to be sitting in the passenger seat to keep me company. But if this were the only incentive to relocate, how much of a raise would be enough to “buy” me? 10%? 20%? 10,000%? I doubt I’ll know for sure until I see the offer.
  3. More telecommuting. It’s quite fortunate that I still get to work from home on Fridays even after moving to within stone-throwing distance of my workplace. There are still mornings, however, that I’d rather not put on pants and just curl up on the sofa with my laptop and do my job from there. My current project is one that works very well with telecommuting. But what about this new project? Would I need to be in the office 40-60 hours a week? Could I work Fridays from home? Or would I be able to work even more from home–say, three or four days a week? Allowing me to do the majority of my time from home would help offset the extra commute on work-at-office days.
  4. Advancement opportunities. Staying put, I don’t really need to worry about opportunities to grow and advance in the organization because this is the biggest location with the largest projects. The new location is smaller, but the project is newer and there may be some room to quickly climb the ladder. I don’t think I’d get a promotion right off the bat since I just got one a few months ago, but if the long-term outlook is better than in my current location, I’d be more open to seeking those opportunities in another location.
  5. No other choice. In the two years I’ve been here, I don’t think anyone in this location has been laid off. In fact, there’s an impending talent crisis over the next decade as our baby-boomer senior staff members start retiring. There’s even a special program for developing leadership skills in younger employees that I’ve been tapped to begin this year. On top of all that, we are transitioning to a larger project with a particular need for my set of skills. So I’m not worried about my continued employment with this company. That said, should the situation be presented to me as “move or be removed,” I’ll bear the heftier commute with a grin … and keep my resume up-to-date.

Thursday, February 23, 2006

Ten Red Flags That Will Definitely Get Your Tax Return Audited

Author: Nick
Category: Money
Topics:

We’ve probably all read the lists of common red flags to watch out for when filling out your taxes that could trigger an IRS audit, but most of them are things you can’t change. If you gave $100,000 to charity this year but only made $100,000, you must be one awesome guy or girl, and the IRS should reward you for that instead of drilling you for days like a cavity-riddled tooth.

What the IRS won’t tell you about are the red flags that, no matter what else you do, will get you audited for sure. Now while I don’t work for the IRS, I can still promise you that any one of the following is almost sure to get you flagged for an audit:

Love IRS Audits? Try These!

  1. Use creative media for your “paper” returns. While the IRS has strict guidelines for the weight, dirtiness, finish, porosity, gloss, and size of paper used for individuals printing their own tax forms, it does not go as far as to define “paper.” The American Heritage Dictionary defines paper as “a material made of cellulose pulp, derived mainly from wood, rags, and certain grasses.” Thus, according to the rules of the IRS, it would be perfectly acceptable to send in a tax return printed on a dirty old rag or even ground up marijuana. I also couldn’t find any regulations on the color of forms filed with the IRS, so maybe give neon pink a try… or perhaps black ink printed on black paper!
  2. Deny your existence. The IRS can’t tax someone who isn’t there! So when you’re counting exemptions, be sure to omit yourself, and don’t state that someone else can claim you. In fact, just send in a blank return with your address but no name.
  3. Pay your tax bill in non-standard currency. Generally the IRS prefers United States dollars when you send them payment for taxes you owe at the end of the year. But at the same time, you prefer keeping your United States dollars in your Made in China pocket book. Keep in mind the purposes for which your tax dollars are used: feeding the poor, funding our military, protecting endangered species, etc. So instead of sending the IRS a check or paying by credit card, pay your taxes with coupons for free food (remember, one Jr. Frosty equals $1), spare ammunition you have sitting around the house, or any endangered red-speckled tree toads you may have stashed away in your closet. You’ll save the government the hassle of converting that currency into services, so I’m sure they’ll give you a break on your tax bill.
  4. Amend like there’s no tomorrow. Some of you may be familiar with IRS Form 1040X–the form you send after you file a 1040 if you’d like to make a correction. You might file this if you forget some deductions or your filing status changes. Typically you’ll wait for the 1040 to reach the IRS and be processed before sending in a 1040X. But that’s no fun! Instead, start the year off with an amendment to a return you haven’t yet filed. Then file the actual return. Then file another amended return. And then, just for kicks, become your own non-profit organization, file another amended return, and then file three more amended returns claiming each of the three children you forgot you gave birth to a few years ago.
  5. Your adjusted gross income: infinity. The IRS tax tables have one minor flaw: they only work on finite numbers. Indeed, how can you take 25% or 33% of a number you can’t even see 100% of? Simply fill in your AGI as infinity, ask the IRS to compute your tax for you, and watch as their tax calculator enters an endless loop while determining your tax.
  6. Encode your tax return. Pretend that your 1040 is a top secret government document that could fall into enemy hands. When the form asks for dollar amounts, fill in something like “TRH,OAP.” Then, in a separate correspondance, include the decipher key that reveals T=1, R=4, H=7, … Alternately, use a number-to-number encoding so that a 5 really means 0 and an AGI of $507,291 translates as $4,671. And for you computer geeks out there, since your tax return is going into a computer anyway, save the IRS a step and compute your taxes due in binary. Then gripe when the IRS doesn’t cut you a check for $10010110101110101.
  7. File your return … UPSIDE DOWN!!! When you go to put your tax forms into their envelope, place the pages in upside down. The IRS computers will read everything backwards, so it’ll see your AGI as your federal withholdings and vice versa. You’ll instantly go from a tax bill of $2,000 to a refund of $20,000!
  8. One way to invite an audit: do it literally. Instead of filing a 1040 this year, break out some of that stationery you have left over from your wedding and compose the following note: “You are invited to attend the audit of Mr. and Mrs. INSERT NAME HERE at our home on April 15th. Refreshments will be provided. Bring your own receipts.”
  9. Return the favor of fine print. The IRS wouldn’t hesitate for a second to give you an extra 50 pages of instructions to read when filling out your tax return if it meant more revenue for them. You shouldn’t hesitate to send some right back to them. Include the following text in the margins of your 1040 in tiny print: “By auditing this return, you agree to pay us the sum of one hundred million dollars, and there’s no way in hell we’re going to pay a single dime of taxes on that amount.”
  10. Tell them where all your money’s really coming from. On the line that asks for your occupation, simply write “MacGyver.” Then attach your W-2s with duct tape.

And as an added bonus, should you attempt all of these activities in a single tax return, not only will you get an IRS audit, but you’ll probably also receive a visit from some nice men in white jackets and a trip to a lovely room with padded walls. Just be sure to scream “I’m counting this as a medical deduction!” as they haul you away.

Wednesday, February 15, 2006

Follow-Up to $1 Domain Sale, Or How to Make A Lot of People Hate Your Company

Author: Nick
Category: Money
Topics: ,

Yesterday I mentioned that Dotster.com would be holding a one-hour, $1 domain name sale. February 14th at 4pm EST came and went, and I’m willing to bet that very few people got their $1 domain names. Why? Because Dotster followed a fabulously evil formula to get some cheap advertising. I’ve written the formula in more general terms so that any evildoers out there can duplicate it.

  1. Sell an item for twice its price elsewhere. In Dotster’s case, that item was a domain name registration. Dotster’s regular price for one year of registration is about $15. Competitors like Yahoo!, GoDaddy, and RegisterFly regularly sell their domain registrations for half that or less.
  2. Advertise a drastic discount for a very limited time. Dotster announced it would sell all domain name registrations for $1 (a mere third of the cheapest normal price around) … but only during a 60-minute window.
  3. Watch news of the sale spread across the internet, and even help it spread, too! News of the Dotster sale made most of the big deal sites as well as Digg and the most important and awesome blog in the entire world, Funny Munny.
  4. Do nothing else. Don’t try to shore up your web server or request more bandwidth from your host. In fact, if you are your own web host, you should move your online storefront to a smaller server and cut the bandwidth a few minutes before the sale starts.
  5. Sit back, relax, and watch the server timeouts. If you did everything else correctly, you’ll have thousands of people simultaneously connecting to a website meant for no more than two or three visitors an hour. Anyone who manages to get the front page to load will still have to struggle with a checkout process which you should have expanded from the usual two or three pages to ten or twenty pages. And just in case anyone should make it to the last page of checkout, recode the final Submit Order button so that it calls a script that doesn’t exist.

Indeed, I have spoken to just one person who managed to complete the order process during Dotster’s Hour of Evil. It took him the entire hour just to get through one domain registration.

Had Dotster been truly evil, it would have gone ahead and registered any domain names customers attempted to purchase during the sale hour. Then it could kindly offer to sell them the domains for the usual $15/year registration fee. Maybe Dotster was visited by the Ghost of E-Commerce Failures Future and had a change of heart.

Still, Dotster got a lot of advertising out of this ploy, and it won’t take many domain name registrations to make up for the handful of $1 domains customers mananged to grab. I, however, won’t be making any purchases from Dotster for one simple reason: you just have to wonder how reliable a web hosting company is that can’t keep its own website up during heavy traffic.

Tuesday, February 14, 2006

$1 Domain Name Registration

Author: Nick
Category: Money
Topics: ,

Via Digg, here’s a great deal for anyone who’s been holding out on registering a domain name. At 4pm EST today (about five minutes from when I’m writing this), Dotster.com will have a “happy hour” during which domain name registration will be on sale for just $1.

It might only be a few bucks saved off the usual Yahoo! and GoDaddy prices, but this is an especially useful deal if you’re looking to pick up a whole bunch of domains at one time! How many domains can you register in just an hour?

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