What would you do with a million dollars? How much is a million dollars? If you have a million dollars, can you quit your day job?

Back in 1999 I was working at Microsoft. I had received an offer from Apple. Quite a few people were shocked that I would even consider leaving Microsoft, especially to take a job at Apple. Everyone knew Apple’s days were numbered. What I heard often was, “if you just stay at Microsoft until you’re fully vested, you will be a millionaire. Then you can work wherever you want, you won’t have to worry about money.” I talked to several Microsoft millionaires who had done what everyone was suggesting I do. They gave me pretty much the same advice. In order to live on investment returns you should plan on a 5% return rate. So, you need to have enough invested that you can live on a 5% annual return. Under this theory, one million dollars would yield an annual salary of $50,000. I have no idea whether the particulars are accurate but the general concept is interesting.

Lotto jackpots are a favorite seed for daydreams. What would you do with five hundred million dollars? Most daydreams focus on how to spend that money. Cars, boats, yachts, ships, houses, city blocks, islands. What could you buy with that much money. After my experience in thinking about leaving Microsoft, my thought process changed. I realized that five hundred million dollars invested wisely and conservatively would mean that the next two, maybe three generations of my family would never have to work to make a living. Using the formula the Microsoft millionaires gave me, five hundred million dollars would yield twenty five million dollars a year. That is six and a quarter million per year per immediate family member. If we could manage a modicum of frugality and live on only one million dollars a year, the invested base would continue to grow such that it is reasonable to assume my grandchildren and, quite probably my great grandchildren would never work for a living.

I some times post the question on Facebook; “What would you do with LatestJackpotValue dollars?” Someone proposed a very interesting answer. He would use a relatively small part of it to take care of himself and his family. Then, he would give away $250,000 to a perfect stranger every week until the money ran out. The amount in question, after he had taken care of his own, was one hundred million dollars. Again, using the Microsoft millionaire formula, if my friend restricted himself to giving away $250,000 twenty weeks a year, basically every other week, he would be able to give away money for the rest of his life without ever touching the initial one hundred million.

About a month ago I finally began in earnest on one of my dreams. After a lot of searching, I bought a 1963 Chevrolet C10 truck. I have wanted an old truck to work on and drive for years. For many years, it simply wasn’t practical. I’m finally reaching a point in my life where I can afford to be less practical and realize a few more dreams.

The Chevy C10 is a long bed, still wearing what is left of its original cameo white over turquoise crystal. The paint is tired and has seen better days but it also qualifies as a ‘patina’ that seems to be in vogue of late. The truck has the original wood bed with the wood still in excellent condition. There does not appear to have ever been any significant body damage. There is a repairable dent to the front left fender. The rear suspension is trailing arm with coil springs which makes it ride like a car. Not great for hauling heavy loads or towing things but excellent for a vehicle whose primary purpose is daily driver.

The truck originally had a 230 CID inline 6 engine connected to a column shifted, 3 speed transmission. At some point the 230 was replaced with a 1976 250 CID 6 cylinder. The truck ran well enough to drive it the 125 miles home but there was plenty of work to be done. It leaked a lot of oil. The carburetor badly needed to be rebuilt. The shocks are probably the factory originals from 1963. The truck rides like my first ship. I had the opportunity to buy a very similar Ford F-100 that was pretty much done for about the same price. I am not sure how I will feel in a couple of months but right now I prefer this diamond in the rough that needs work. When it is ‘done’ (we all know project vehicles like this are never done) it will be my work of art. I will have the satisfaction of knowing that I am responsible for how it looks and runs.

The first thing I tackled was the seals and gaskets. Valve cover gasket, push rod cover gaskets and we tried to replace the oil pan gasket but discovered that requires at least lifting the engine off its mounts. We were not quite ready to do that. The drips from the truck when it is parked are less but not gone. No drips ever is important to me so, I need to find the other leaks.

Next on the list we tackled the carburetor. The truck has a Rochester B manual choke carburetor. I purchased a carburetor rebuild kit from Mike’s Carburetor Parts. We bought a can of Berryman Chem-Dip carburetor cleaner. We removed the carb from the truck and began to tear it down. There are a lot of little parts in a carburetor. The Rochester B is a pretty simple carb, definitely one of the easier ones to rebuild. We were pretty happy for that. It will be a while before I am really to take on the challenge of rebuilding a Holley four barrel.

The truck now gets 12 and half miles to the gallon. The filler neck on the gas tank leaks so about a half gallon to a gallon of gas goes on the floor every time I fill up. The gas tank is currently out so that I can replace the filler neck. While the gas tank is out I am also dealing with the rust on the floorboard. Nothing cancerous but some pretty severe pitting. I wirebrushed in all out. I will treat the areas that were rusty and then put a couple of coats of paint down. Over that I plan to put sound deadening material over the painted surfaces. My goal is to make the truck quieter than my wife’s new Nissan. I have a cool stereo system designed for it but first I have to make sure I will be able to hear it.

 

By the end of the week I will no longer be a homeowner. We finally sold our townhouse and will be soon be moving into a house that we will be renting. The house is larger than the townhouse we are leaving. It has a yard, a two car garage and parking that we do not need a permit for. It is the first step toward a new chapter.

I bought the house in 2002 when money was easy, no down payments necessary. It was supposed to be a stepping stone to some thing bigger, a little nicer. In 2005 I refinanced, got a little better interest rate. Got rid of the second mortgage that served as the down payment. Put the house up for sale in 2007, looking to make that step to bigger and a little nicer. Two weeks later, the mortgage crisis began to break in earnest. In February 2008, we took the house off the market. That bigger, nicer place was not going to happen. Eventually, homeownership felt more like a stone tied round my neck than the American Dream. The perpetual equity machine turned out to be about as good as any other perpetual machine.

A neighbor in the complex put her house put for sale. I went to talk to the realtor who was handling sale, asked him if he thought my place might sell too. He asked the particulars. After a brief discussion it was determined that I could sell the house. I would break even if only just. As it turned out, I did a little better than that. I will remove the stone from round my neck, get moved into a house with a little more room, pay off some bills, and have a chance to start working on my making my next dream come true.

In the end, I did better than a lot of people who bought homes during the same period. Several of my neighbors faced foreclosures, short sales, or are still underwater on their mortgage. I managed to always make my payments until I could finally sell the house and be free of it. I have an excellent credit score. The experience reinforced the value of conventional fiscal practices. 20% down, keep the monthly payment to about one-third of you income, stick to fixed mortgages and understand the difference between buying a home to live in and real estate as an investment.

And so ends one chapter, another chapter begins.

Here we are, 2013. The Mayans are embarrassed or, western European/American anthropologists do not really understand the Mayans.

A year ago I published my New Year’s resolutions here. I managed to keep one of the three. Sort of. Posting a blog entry once a week was the first resolution to go by the way side. I managed to keep it for two weeks. Reading through the Bible in a year lasted a little longer. I got to about the middle of Numbers before I finally gave up altogether. Getting that far happened in fits and starts. I would still like to get through the entire Bible but I suspect I will not manage to do it in a year.

Which brings us to the the partial success. In the blog entry I said I would run 350 miles but when I made the Runkeeper goal entry, it became 300 miles. Which became the goal that I began striving toward. I totaled 330.6 miles last year. Funny story. Once I decided to run in 2012, I ran 5 miles a day for five days straight. My knees hurt, my feet hurt, my legs hurt so bad I could not sleep. I was sure that I would need knee surgery and never be able to run again. Went and talked to a running coach, replaced my old, broken down running shoes and adopted a more sensible training plan. By the summer I was running 10 miles at 9 minute pace with no problems. Goals for 2013. I want to run 500 miles this year. I am hoping to get to running 5 miles a day, five days a week by midsummer.

And, we will see how blog postings go this year.

–Smittie

In 2001 I bought a townhouse. The plan was, based on conventional wisdom of the time, to be a ‘stepping stone’ to a single family dwelling more consistent with what I imagined I would raise my kids in. Given that I never honestly expected to own a house, I was pretty excited about all this. Given the trajectory of real estate values at that time, it seemed reasonable I might be able to afford a modest home somewhere in the area. The operative word being modest.

In 2007 I put the townhouse on the market. If I managed to get something close to what units in the complex were going for I would have been in pretty good shape. Able to buy a fairly decent single family house in an area we liked better. About two weeks after the house got listed, the mortgage crisis started to break. That was August of ’07. The realtor convinced me to keep the house on the market until February of 08. When we finally took it off the market, I wondered if we would even be able to get enough to cover the mortgage. From there, the prices of units in the complex went into free fall. Now, units purchased for $400,000 with $100,000 in upgrades are selling for half that in short sales. Most of the buyers are investors who rent the units out which further depresses the property values in the complex.

Compared to many people, I am fortunate. I have a good paying, stable job so I can make my payments. The house is big enough that my family can all live there. It is a good thing we are a close knit family, 1100 square feet is not a lot of space for four adults. No garage.

I made certain that I bought only what I could afford. When I refinanced in 2004, the mortgage brokers were flogging Adjustable Rate Mortgages (ARM). I had a hard time finding someone who would put me in a 30 year fixed rate mortgage. However, at the time consumers were being told that interest rates were the lowest they had been in 40 years. It made no sense to me to get an ARM which would put me in the position of having to refinance again, presumably when interest rates were no longer at their lowest. Little did I know that the rules were being manipulated.

My frustration is this. I played by the rules and with integrity. I sought wise advice and followed it. Now, I am stuck with a property I no longer want, making rather huge payments for a property that, at least for the foreseeable future, will never be worth what it is costing me. My integrity will not let me miss payments when I have the money to make them but the majority of government programs to assist homeowners require that the homeowner be at risk of foreclosure. The sum of the mortgage, taxes, insurance and home owner association fees exceeds potential rental value. Thus, I am shackled in one of the most expensive areas in the country.

So, I’ve owned a house for 10 years and I regret almost every year of it. Had I rented for the same period I would have either been able to live in a significantly better dwelling or had a much larger expendable budget. After 10 years of making payments that were almost double what I would have paid to rent the same place, I really have nothing to show for it except a mortgage balance that is greater than the value of the collateral. I am really ready to move on with my life. I would like to relocate and do other things. Mind you, I am not looking to move up in life. Most people would consider what I want to do a move down. But home ownership, the very thing that everyone told me would help me achieve my dreams, is the very thing that has me locked into a place, a situation that I find depressing and stressful.

The unemployment rate among college graduates is 4.1% (source: U.S. Bureau of Labor Statistics). We might choose to believe that this provides a case for getting a college degree. However, this overlooks some very important truths. Some people are not good at or happy in the types of jobs that a college degree affords. College is not necessarily the best format for preparing people for all occupations. Society needs the services of many occupations that are not well served by college education.

The thought being that if we give everyone a college education, they will rise to the socio-economic advantage that people with a college education normally have. However, what if it is not the college education that is the key to success? Is it not more likely that success comes out of pursuing that which you are good at, that which you find fulfilling? Is the only difference between an auto mechanic and an economist, the college education of the latter? Is it reasonable to suppose that had the auto mechanic instead gone to college, majored in economics, she would be happy working in economics? The most rudimentary survey of high school students shows that this is clearly not the case. Some people are made to more academic pursuits. Some people are wired to be outside. Some people are only happy when their hands are covered in grease and oil and they are up to their waist in a motor.

As a society we have made it second rate to pursue a career that does not involve going to college. Kitchen tables all across America are the battle ground of kids who are being told that they must go to college even though their passion is to build homes, fix cars, or be a cowboy. Where would today’s unemployment rate be if being blue collar were not equated with being second class? If students who sought to pursue vocational careers paths were given equal time and resources as their college bound peers?

Mike Rowe hits the nail on the head his testimony before the Senate.

The ball has fallen in Times Square. 2012 has begun. If the Mayans are to be believed, we should all make the year a good one, it will be the last. Which is probably good advice in any case. Live each year as if it were your last.

I am not one for resolutions, usually. This year, I thought maybe I would try something new. So, here we go.

  • Read the bible, all the way through.
  • A blog post every week.
  • Run 350 miles (not brave enough to commit to 500).

Hopefully, next week’s blog post will not be about how I have abandon these resolutions already. Worse would be no blog post at all which would essentially be the same statement.

To read through the bible in one year I plan to use an iPhone app, Bible. The app offers access to a variety of reading plans. I am going to pick one of the one year plans. I am leaning toward an historical approach, reading events in the order they occurred. But, I have not decided yet.

I already use a Garmin Forerunner 405cx on my runs. Garmin Connect provides the ability to set goals. I have already set an annual goal for 2012 of 350 miles.

To track my blog posts… Watch this space for further developments.

Happy New Year. Welcome 2012.

I spent 6 years working at Apple. Those were the best years of my career.

When the .com bubble burst in late 2000, early 2001, Apple was one of the harbingers of the ensuing stock crash. In one or two days Apple’s stock went from $78 a share to less than $20 a share. I believe it was in November. Apple called a meeting of employees. As everyone gathered in Cafe Macs, security personnel started moving through the crowd asking to see badges. Anyone who was not a full time employee of Apple was asked to leave and escorted out. The doors were locked, the shades were pulled.

Finally, Steve came into the cafeteria. He stepped up onto one of the low walls and began to address the crowd. Steve talked about what the senior execs believed was coming. Hard times in the tech industry. Then, he laid out the plan for how Apple would deal with it. No one will get any raises. No one will get any bonuses. And there will be no stock options. And there will also be no lay offs. Focus on your work and let us worry about the business. Do that and we will come through this, together.

Apple laid off a few people that year but nowhere near what the other tech companies were laying off. For the next two years everyone I knew in the tech industry was either looking for a job or worried about losing their job. I wasn’t. There were no raises for about two years but there were no lay offs that I knew of either. Apple, under the direction of Steve Jobs, kept us all employed and working on interesting and exciting projects.

Thanks, Steve. It was one hell of a ride.

As I stood in the parking lot changing out of my wet suit after a morning of surfing, I heard someone say, “hey, the world trade center blew up.” What? What are you talking about? As I got home and put the surfing gear away, I mentioned to my wife that something must be happening on the East Coast.

I drove to work. As I walked into the office it was my first sense that something was really wrong. Everyone was quiet, staring at video playing on their computers. I sat down at my desk and started looking at email. One of the first ones that caught my attention was a link to a newsfeed. The newsfeed everyone was watching. For the next six hours, not much got done. We all sat silently watching in horror at the death and destruction and then the acts of heroism.

I was watching the names of the dead scroll by on the screen as they replayed over and over the video of the airplanes flying intentionally into the World Trade Center and the Pentagon. Up to then I had just been filled with sadness. But then I saw three names scroll by, all with the same last name. Because the ages of the individuals were included I could see that it was a family with a small child. Christine Lee Hanson, two and a half years old. My own son was only six, my daughter 11. The thought went through my head. What do you say to your small child when you realize that death is eminent? For the first time that day, I cried.

I do not remember much of the rest of the day. Around 1500 I decided to go home to my family. Nothing was getting done at work and I really needed to let my family know that I loved them. Driving home I listened to the radio. In an interview with a man on the street he told about watching firefighters joking with each other as they wrote their social security numbers on their limbs and torsos. That was to make identification of their bodies easier. I had to pull over.

In the weeks that followed, security was heightened everywhere. Parking in front of the building at work was no longer permitted. Car that were parked in from the building were towed almost immediately. For at least a day or so there were no aircraft in the sky. None. I saw flags everywhere. On my drive home that day there were flags on almost every overpass on the freeway. And they stayed up for weeks to come.

Congress stood as one for at least a moment. For a while, we were a nation united.

Two years in a row now we have vacationed in Montana. Last year it was an RV road trip through Yellowstone National Park, on up to Missoula, Montana and then over to Spokane, Washington to see Sam Mazzola and the Rockin’ B Ranch. Sad news, The Rockin’ B is doing its last season. I highly recommend you get up there and see it.

This year three fourths of the family (the daughter didn’t think a dude ranch was for her) went to the Lazy E-L Guest Ranch in Roscoe, Montana. I have had a life long love of horses, ranches and cowboy culture. I decided I wanted to try the cowboy life on for size. My own personal City Slickers experience. What an awesome experience it was. First off, I totally missed my calling. I definitely should have been a cattle rancher, or at least a cowboy.

Before we got to Lazy E-L, we spent a day in Cody, Wyoming, supposed capital of the cowboy world. While there were some cool shops, it was mostly tourist central. We had lunch in the Irma Hotel, named after William F Cody’s daughter. It was a fun experience but now that I have done it, I probably would not go back for the food. The hotel has gotten a number of good reviews so I might try spending a night there, again largely for the experience of it. There is a rodeo in Cody every night during the summer months. It was fun but a little expensive for the calibre of cowboy that competed. All in all, I am glad we went to see Cody but now that I have seen it, I probably will not make any special effort to go back. I do recommend The Proud Cut steak house. Good food and service, reasonable price. Next year, we will be stopping at Sheridan, Wyoming, the next on my list of American West locations.

Lazy EL - 63

We arrived at Lazy E-L at 1400 on Sunday as instructed. We were shown to our cabin and told to be in the cookhouse at 1500 for orientation dressed to ride horses. After about a half hour briefing on food service, basic rules and facilities on the ranch, we were led out to meet our horses. The Lazy E-L wrangler staff starts out with instruction on how they would like horses brushed and saddled. Once the horse is saddled and bridled, you mount up and move off to the arena. Walk around the arena, trot around the arena, the wranglers are looking to see who is comfortable on a horse and gauging the riding ability of the guests. Once they have a basic idea and are sure everyone is going to be able to stay in the saddle outside the arena, the wranglers lead off on a trail ride. That first day at Lazy E-L is the first and only trail ride we did during our stay. The next five days we rode on cattle every day.

Russell Cabin, Lazy EL Guest Ranch

We stayed in the Russell cabin. I love rustic, cozy feel of the cabin. The cabin is a single room with a bathroom. A queen bed and one twin. It is filled with lots of items from the era when the ranch was founded which creates the ambiance that I really appreciated. The Russell cabin really feels like you are on a ranch, even transporting you back a few decades. The cabin is very comfortable, the shower is large, modern and really a pleasure. The drawbacks of the Russell cabin are its size and amenities. No kitchen, no frig, no laundry. The cookhouse is right next door where all three are available. Russell cabin is perfect for a couple.

Our week at Lazy EL was exactly what we were looking for. Most days we were up at 0600 in order to have horses saddles before breakfast. When things worked right we were on horses and riding out to the day’s work before 0800. Most days cattle work kept us out until lunch time. Three days we had lunch brought out to us because the cattle work was scheduled to take a little longer. The latest we came back to the ranch was 1530. There was cattle work every day. Participation in moving cattle depended on your ability in the saddle. I got to ride a lot of the more difficult terrain, going after cattle that had gotten into the woods. The biggest challenge for me was keeping up with the wranglers on the longer transits. Trotting is the favored gait of the cowboy because it is easy on the horse, hard on the cowboy. Monday I got ridden into the dirt. By midweek, I was able to keep up in most cases.

Lazy EL - 65 copy

The remuda at Lazy EL is excellent. These are some of the best trained and well behaved horses I ridden in a very long time. All of the horses I rode did test me to see if I was really willing to be in control. Once that aspect of the relationship was established the horses responded wonderfully. I did have one horse that had an injury the previous season. He was still behaving like he expected some things to hurt him. It was a challenge to push him through things so that he began to see that he was OK, which was a good way to expand my own riding skills. All the riding is under the watchful eye of the wranglers. While they are a young crew, they are very talented horseman. They provided the guidance and oversight to make sure horse and rider did not get into more than they could handle while at the same time pushing riders to improve.

I guess the best review of Lazy El Guest Ranch is this. We have already booked our vacation for next year. We did look at some other options but in the end, we really has such a good time at the Lazy EL that we decided to go back again.