Looping the Hen

Shhh...don't tell G

About his new Prius...

Mileage will still vary, but the tests will reduce estimated city mpg by 12%, on average, and highway mpg by 8%, according to the EPA. Hybrids' fuel economy is likely to get a haircut of up to 30% for city driving and 20% for highway.

For Once My Timing is Impecable

Ebay has banned the auction of in-game items. I think this is a little bit ironic, since the sales of my two Eve Online characters elevated me to 'Power Seller' status just a few days ago. I must say for once I have good timing!

Oops...I misplaced $113,000,000...

His life sounds like Hurley, the lottery winner from Lost. I wonder if he played the spooky numbers.

Mortgaging the Castle

I remember more than once having the discussion with folks on paying off a mortgage early (or a student loan or other relatively low interest loan) vs. the benefits of tax deductability or investing that money in a (hopefully) higher earning investment account.

In the past few months I have read several articles in the money portions of various online magazines that advocate similar financial tactics. The latest one is here, and I, as usual, disagree with the theory that paying off your mortgage (or any other low-interest rate, possibly tax-deductible loan) early is a waste of money better used elsewhere.

Much of the article presents good advice in the Dave Ramsey fashion I advocate (maxing out 401k, paying off higher interest credit card debt, building an emergency fund of 3-6 months expenses, etc), but the majority of the article obscures the main premise: there is an opportunity cost for every extra dollar spent on a mortgage that doesn't go toward something else.

While this is true, it also goes for every dollar spent anywhere, from the extra $2 for a meal spent at McDonald's (as compared to eating at home), to the huge money spent on a new car vs. a used one. I contend that once all of ones' other bills and priorities are taken care of (including all the things she advocates, including insurance), paying off a mortgage ranks higher than keeping it around for the tax benefits, or to invest the money elsewhere. It is simple really, and one can turn around the question and ask it this way: if I have a paid off house, should I take out a home equity line (assuming it is at a equivalent to a mortgage rate) and invest that money in the stock market?

I hope the answer to that question for most people is 'heck no'! But why? According to these types of articles, if a home-interest rate is below my hopeful returns, I should invest. Annual stock market returns are almost always higher than home-interest rates, so why shouldn't I always have a maxed out mortgage, second mortgage, and home-equity line all contributing to my mutual funds?

Well, there are several reasons. First, paying off my mortgage provides a guarenteed return of at least the interest rate of the mortgage minus the tax benefits (which can sometimes be 0, as is my case). Currently my mortgage is at 6.75%. However, because the annual interest is not higher than my standard tax deduction of $3750 or so, it does me no good to itemize the interest on my mortgage. So paying down my mortgage will guarantee me at least a 6.75% annual return, far better than the returns in my 401k for the past 6 years (except 1). It's not great, but it's better than today's average bank CD by almost 2%.

Next, the tax deduction advantage is a little misleading. For example, say I have a $1500 mortgage and the average interest over the course of the loan is $1000 monthly. At the end of the year I can claim $12,000 in deductions. However, on income of $75,000 that really only amounts to around $3,000 in additional refund money. Personally, I'd rather have the $12,000 cash in my pocket to invest as I please that I would have with no mortgage. Not having the mortgage gives me a pretty significant boost in cash flow that I can put into the same investments the high-mortgage advocates suggest. If I can pay off my mortgage with additional payments in 15 years instead of 30 (a fairly easy thing to do), I now not only have saved the $50,000 or $100,000 in interest on a $150,000 loan, but I can also invest all of that money (assuming I transfer the mortgage payment to an investment account) to get the 'average market returns' for the next 15 years. Heck, I can now rent my mortgageless house and use that to pay the mortgage for a new home. That's a pretty big dividend.

And I can do so without risk, which is the reason people don't generally take out loans to put the money into the stock market. (Although some do, and those are called margin traders, if I remember my Great Depression lingo.) What good are my hypothetical returns if I lose my job? Get sick? Have to take care of a loved one? My plan is to have my little condo paid off in 4 years. After that, I could support myself pretty comfortably trading little people on Ebay and playing small-stakes poker (or working at the local Best Buy). For every 2 years of working after it's paid off, I can retire about a year early. Or I can rent it and upsize if I feel like it. (which is what I am looking to do)

Having a paid off mortgage gives me financial options I don't have with a $1,500 payment. However, most important in the paid-off mortgage scenario is the qualitative benefit of having no worries. My honey has done a great job keeping afloat in a higher-mortgage home, but I know it has caused her a lot of stress. Personally, I'd rather have someplace to go when times get tough than have to worry about having to drastically alter my circumstances if a catastrophe happens.

Anyhoo, that's just my Financial Peace moment for the day! Anytime someone advocates remaining in debt for some perceived financial benefit, I take it with a grain of salt.

Negative Wealth

Not much new here, but I thought the term 'negative net worth' was interesting. You can be the poorest person in the poorest country in the world, and actually have more worth on a straight-line continuum than someone we would consider 'rich', due to the fact that a rich person's debt can often be more than his assets. Really, it is at this point a person's income that is the true disparity, because the rich person's potential income over a period of time should outweigh his real debt, which at some point should flip to assets. There are some other quality of life considerations as well, obviously, but not this post.

Cometh the Taxman

Uh-oh.

Laptop experiences, anyone?

My newest goal is raising around $3,200 cash for a new high-end gaming laptop. I've never used anything but desktops, but some changes in my life habits are making me think a laptop is finally right for me.

I'm hoping to get around $1,200 for my other Eve Online character and $1,000 from other random Ebay stuff; the rest will come out of my regular savings. With hope I'll have it in time for Christmas.

Anyone with any advice it would be greatly appreciated! I am looking at this Dell XPS Laptop. Looks nice with a 17" monitor and 512 meg video card; I'd upgrade it to 2gb RAM. I am also considering an Alienware (also now owned by Dell I think) laptop; it has an AMD processor, but I'm not really sure which is better, the AMD or Dual Core Intel chips. It's around the same price tricked out as the Dell is. It also looks like it might have a better wireless card, which will be beaucoup importante.

I think my honey is going to get a laptop too, as she is becoming slowly addicted to the box as a device to help with everyday things instead of something mean and scary. And neither of us are good at sharing.

Anyhoo, anyone with any thoughts to share, please drop me an email as I'm flying blind in the laptop department!

Working at Romanian wages...

Okay, so not everything goes as smoothly as I expect. Err...or even close. So much for getting rich on little people. I finally sold some custom figures for Heroscape, and at a decent rate in comparison to what I would have gotten selling them for my game. However, the time expenditure was huge and devalued the project as a whole. I've probably spent 60 hours or so working on this project all told, and the total return so far has been around $40 after auction and Paypal fees. Sounds like $.75/hour. (hey, it was $.33/hour two weeks ago...Tammy asked if that meant she could buy three hours of girlfriend time for a buck!) I could probably do better than that with a metal detector at the beach. And that doesn't count the initial outlay on supplies like photo paper, ink, and the like. So I'm still waaaaaay behind.

Still, it's taught me some good things. The best of which is how to use Gimp,(yes, I think it is a reference to Pulp Fiction) a very powerful photo/image editor, near in functionality to Photoshop. And it’s free, while Photoshop runs around $700. I'm not an expert by any means, but I'm steadily getting better at it. The bulk of the 60 hours was spent creating custom artwork. I'll write it off as a training class or something!

The other main positive takeaway is actually completing a project. Sometimes I am more like some folks in my family than I will admit. I think about doing a lot of things, but rarely follow through. From starting this project to first auction was all of 7 days, and I am a little proud of that.

Still, I probably have another 10 hours worth of work before this project gets to go on auto-pilot. When that happens I will probably make more in the $10/hour range. So to make more than minimum wage over the course of the project, I will need to sell something on the order of 150 auctions. I feel compelled to at least make enough to cover my out-of-pocket costs. Once that happens, I will actually be ahead slightly, as I will have the top-end Dremel I bought paid for by little people, as well as a nice Exacto. If things are humming along smoothly when that is done, I might try to sell enough on top of that to pay for the $400 camera I bought partially to be able to take pictures of stuff to put up for auction. (Though not just little people)

Now I can get back to some other projects that were put on hold due to budget time at work and little people! (Sorry G!)

New Economy II: Ebay, Part 1, the Value Add

I have a couple more New Economy posts to do. This one will focus very narrowly on just one example of how it is possible to make a killing doing what you love. To be honest, just thinking about what this person (actually, there are a few) is doing on Ebay and how much money he is making for a tiny bit of work makes me almost sick to my stomach.

You won’t need to know anything about gaming other than what I mention here; this is more about how ‘value-adding’ can mean the difference between making pennies or dollars. As an example of value-adding, I will use my brother Todd. For example, say he has a copy of Windows he can sell for $99. That is his cost, and is what he will charge his customer, if his customer will pay him $50 to install it on a PC. The $50 is what I call a ‘value-add’ the customer gets because he doesn’t want to deal with installing the software himself. It is good solid money, and breaks down to a good hourly wage.

On Ebay, I often see people in my hobby selling D&D figures for a tiny markup. They make a very low hourly wage, if one counts the additional time spent packaging, making labels, listing the item, etc. I would bet many of them see only the ‘I bought it for $1.00 and sold it for $2.00, I have made $1.00 profit .’ They don’t take into account that it took them 15 minutes of their time, between listing and getting it out the door. If they can only do only 4 of them per hour, they are making a grand total of $4.00/hour. Woopteedoo! As I showed in my last post in this series, time can be a hugely valuable commodity.

While searching through various game listings, I came across a bunch that left me, well, dumbfounded and awestruck. For example, take a look at this one. These are being sold for a game called Heroscape; however, they are actually DDM figures (the game I play). When sold as figures for my game, they run around $2.00 for the three shown. He made $26.00. Not bad, considering he bought them for $.66 each (and in bulk they cost even less). (Really, go take a look at the links, I'll wait for you to get back.)

So what was the value-add and how much time did it take him to achieve? Just guessing, he had to rebase the 3 figures. He does a ton of these, so he probably has a system to it, either through painting the original base or rebasing with actual Heroscape bases (comparing to my own bases, I would guess he is rebasing). I would say that runs 10 minutes. Printing a glossy stat card to go with it as shown probably costs another $.50 and 2 minutes. Then the packaging and shipping costs the same as any the figure in the other example, or 15 minutes.

So let’s add it up. For a total investment of $2.50 and 27 minutes, he is making $26.00. That is over $55.00/hour. Seems like a better way to spend one’s time than shlucking it out for pennies, oui?

I didn’t take into account a couple of things, but that is because I think they wash. It took him time to design the stat card for the new game. However, it is obvious this seller is a gamer himself, so I will assume he uses these types of figures in his own games, and would have done it regardless of being able to sell it. Even if he didn’t and it cost him 2 or 3 hours to design it, if he makes 2 or 3 of these sales at these prices, he is still making around $45 or $50/hour. At home. By playing games.

Sure, there are some variables and risk at work here, but one has that in any business. The game could stop selling. Other people could start competing. Heck, I’ve thought of lifting his entire ad, printing out the stat cards, rebasing some of my own figures, and doing this myself. However, no need to make enemies needlessly when I might be able to enlist his aid in doing the same thing he is, but the other way around. In any case, he'd never need be out more than $75 in materials, which is pocket change to people who hang around Ebay. Where else can you literally run a business making $80,000 a year with an exacto knife, some glue and a big pile of little people? (Yes, I know realistically there might not be a market for that many custom figurines, but you get the idea)

So I am going to try taking common Heroscape (or any other game in that genre) figures and making them into custom creatures in my game. No one is doing it as far as I know, so there’s no competition to start. If I can get 15 or 20 unique models going like he did before I even start to try to sell them, I can get a good jump on the competition that will definitely spring up, as based on the number of listings there are far more people playing my game than are playing Heroscape. There are a ton of places on the web where I can download the stat card; a little work in a photo-editing tool and I should be able to create decent replicas pretty easily.

The question is, does the market exist on my side like it does on his? I don’t rightly know, but I would guess there is a portion of the market that likes having something no one else does. Collecting is a huge part of this hobby. And for me, so is playing with them. So if nothing else, if my gaming group accepts the figures as playable, I can use them regardless.

(Rodney, if you’re interesting in helping me design some cool figs for this, let me know! I have a Mage Knight figure set on the way, I am going to see if I can find some common ones to try this on.)

New Economy I: Virtual Worlds

For those who have not recognized it, in the past 5 years or so gaming in general, and video-gaming in particular, has gone mainstream. Revenues for the video-gaming industry rival those of the motion picture industry. The average age of video game players continues to increase as those who spent time in the 80’s on their Atari 2600’s and Colecovisions come into their income-earning prime and drop significant dollars on what used to be a childhood hobby. They play with their friends, and pass the hobby along to their children. A single game, World of Warcraft, has become a phenomenon, with over 6.6 million players, more than 2% of the population of the US, generating revenues for Blizzard (one of a handful of premiere video game companies) of over $1 billion annually.

Video games are not just for kids anymore. As huge as the World of Warcraft number is, many times that number of US adults regularly plays online games such as Tetris, Bedazzled, Scrabble, Solitaire and Backgammon online at sites like MSN and Yahoo. Add in another couple of million who play poker online, and it is easy to see that gaming is in our blood, and we’ve proven our dedication with huge tithes to our digital deities.

In 1972, playing pong with one other player was the dizzying peak of technology. Now, that peak is more like Richard Dreyfus’ pile of mashed potatoes compared to the mountain Spielberg’s (a side note on pop culture: Word’s spellchecker recognized that I spelled ‘Spielberg’ wrong) alien ship actually landed on. The average online game (MMOG) has 2000 people playing on a single server in one ‘instance’ of a game, and gaming companies have dozens, hundreds or sometimes thousands of servers running; Eve Online has gone one step further and has single shards, or unique universes, with peak concurrent records of over 30,000 players.

Those types of numbers are easy to read and say ‘neat’, but visualize what that really means. I grew up in a town of 5,000. My high school graduating class was a paltry 189. It is hard to imagine, but more people than the population of both Tennessee and Connecticut combined plays World of Warcraft daily. The equivalent population of the entire county where I lived most of my life plays Eve simultaneously.

Is it surprising then that these digital worlds that draw such huge populations, should witness the development of vibrant and sophisticated social conventions, such as language and economics? Each of these may be limited by the constraints of each game, but they are by no means simple. That they do develop as fully functioning economic microcosms is beyond question, but let’s take a look at why. From there, we can go into how in-game stuff comes to involve real-world bucks.

Remember Monopoly? If you do, then you have the basic formula for every Massively Multiplayer Online Game (From now on abbreviated MMOG). In Monopoly, each person starts with basically nothing, and through time and effort, begins to acquire. St. James Place, Marvin Gardens, Waterworks, Boardwalk. Those were a great start and generated income if another player landed on them. However, the real magic began when you owned a ‘set.’ Boardwalk and Park Place. Illinois, St. Charles and that other purple one. And my favorites, Mediterranean and Baltic Avenues. Once you have a set you receive a bonus, and get to charge double rent when someone lands on it! Great! However, it gets even better. When you have a set, you get to put up houses, and then hotels, which generate the most income.

Online games work almost exactly the same way, even if the window-dressing is more intricate. Let’s presume you start as a lowly knight. Your goal is to acquire the best imaginable armor and weapons (like individual properties in Monopoly; like Baltic vs. Boardwalk, some are better than others) and the prettiest horse (sets of properties) and a castle (houses and hotels). That is greatly simplified and I am stretching with the metaphor, but there it is.

Just as in Monopoly, the overriding motivations for each player are all in MMOG’s as well. While little Johnny might play to win and stomp on his little sister Sara; Sara’s motivation might be to neatly line up her houses on the colored lines, not really worried whether she wins or loses. Mom and Dad play to socialize and spend time with their kids.

The equivalents in World of Warcraft and Eve Online would then be power gamers (Johnny), paper-doll players (Sara), and social players (Mom and Dad). They all play the same game, but each has an overall motivational component that it indivisible from the game; once that motivation (or motivations) dissipates, they will eventually lose interest in whatever game they are playing. The best MMOG’s are very good at pushing these buttons and maintaining or shifting these emotional drivers, in a suspiciously Pavlovian fashion.

So how does our new knight begin to acquire these things? Well, he generally starts small, killing rats (for fun, easy reading about a number MMOG’s, including Eve, check out the appropriately named KillTenRats), or goblins, or other not-very-challenging or interesting critters. Each kill grants the player a few Experience Points as well as a tiny bit of treasure, like cash, fur or bones. I’m not exactly sure where these rats get silver, but it’s best we not worry too much about suspension of disbelief at this point.

When the knight finally gets enough Experience Points by slaying the many rodents terrorizing innocent civilians, he ‘levels up’, or ‘dings’. This means the character becomes a little stronger, gets a few more hit points (how much damage he can take before he dies), and often means he can carry a bigger weapon. With all the fur and money he collects, he can go to the local merchant, or another player, and trade for or buy a stronger weapon.

This acquisition of better weapons and armor is one of the focal points of the game for many players. Of course, for those who want to nitpick, this is a much-simplified version. There are other things players can do to get Exp (Experience Points) and cash, such as going on quests, crafting items (creating in-game items such as clothing) and trading. However, the over-arching goals all typically involve increasing a player’s power (either physical or social) in the game.

Based on the conventions of one of the original Granddaddies of all MMOG’s, Everquest, most fantasy-based MMOG’s allow players to gain between 50 and 70 levels, or ‘dings’. Sound time-consuming? It is, and this leads me to the point this very long post. In the beginning of a characters life, it might take only 30 minutes to Ding, but the higher one goes, the longer it takes. Going from level 39 to 40 might take 2 weeks of playing 2 hours a day. (No ‘get a life’ comments please!)

Due to the way these games are structured, that often means much of the content (read: fun) is specific for higher-level characters. There is even a term for the often tedious, repetitive leveling of a low-level character: Grinding. Yes, it’s often as boring and obnoxious as it sounds.

Now, let’s imagine two scenarios: the first, a father who likes to play this game with his son when he can. However, while the father is at work, the son is Grinding away, and after 3 weeks the son is level 25 while the father is stuck at level 10. Although sometimes this isn’t a problem, often a large level difference makes it hard on one or both players. The father will not be able to participate in more challenging quests, while the son, if he adventures with his father, will find things too easy.

In the 2nd scenario, instead of Grinding and leveling his character, the son decides to become a merchant and spends the extra time in 3 weeks making a ton of gold and buys the very best armor and weapons in the game. Although he is still technically level 10, due to the great equipment, he can take on challenges like average level 20 characters.

In either case, there is inequity between the father’s character and the son’s, but they still want to play together. So what is the solution? There are several. However, one that becomes more popular by the day is the father pulls out his credit card, spends $50 on Ebay, and buys a full suit of Zeutronium armor and weapons, which are as good as his son’s. The father meets the person he is buying from in-game, where the weapons and armor are transferred to his character.

Now, before any gamer purists have a puppy, I am not here to discuss the ethics of purchasing in-game items for cash. If there is any interest, I could do another similarly long post on that topic alone, but it is too much of a knee-jerk subject to work in here.

Anyhow, problem solved, and the father and son set off happily again, mowing down Orcs and Trolls like Orlando Bloom and Viggo Mortenson.

So what makes Zeutronium armor worth $50? I am probably on the verge of losing some of you who still can’t fathom anything virtual having that much value. To simplify, let's convert the Zeutronium armor to what it really is: time.

The father is really paying $50 for time. Time to socialize and adventure and laugh with his kid. If the father wants to be at the same level and power of his son, he really only has a couple choices. He can play for 25 hours to get his character up to an appropriate level, or be a trader for 25 hours to make enough money in the actual game to match his son’s equipment. So, for $50, he has purchased 25 hours of someone else’s time.

At $2/hour, does this purchase seem so crazy? Let’s assume the father is an investment banker and makes $300,000 a year working 60 hours a week. He gets paid the equivalent of $100/hour. His time is then worth just that, $100/hour. He doesn’t have 25 hours just to get to his son’s level in-game, let alone the desire, so he pays someone else $2/hour for theirs.

Still doesn’t make sense? How about this then. He pays a maid $12/hour for 2 hours a day to clean his house so he doesn’t have to. He pays his CPA $125/hour so he doesn’t have to keep his own books. He pays the lawn guys $10/hour each. He pays the daycare people $75/day to take care of his infant daughter. He pays his auto detailer $35/hour. Many people regularly pay for other people’s time.

Could the father do all of those things? Sure he could, if he wanted to spend all his free time doing so. However, he places an inherent value on free time, and he would rather spend it socializing and slaying dragons with his son, and to him that time is worth much more than $2/hour.

For those who have never considered their free time as having monetary value, think about it a little. You are here reading this blog post instead of working a minimum wage job (well, some of you may be reading from work, but you know what I mean). So I would make the argument that your free time is worth at least $5.15 an hour. More likely more. I know that after my regular job, I could work part time doing various things for at least $10.00. As I choose not to, I have to assume I value my free time at more than that.

So it’s possible Zeutronium armor is actually a bargain!

Let’s look at another example. A 35-year old Purchasing Supervisor decides he wants to play with his friends an hour a night in one of these games. However, his friends are all 40th level. Gadzooks, it would take him 300 or more hours to get to 40th level, almost a year of his available play time. In this example, the value of the game is $0 if he can’t play with his friends, and he really wants to play with them. He takes out his credit card and buys a $400 41st level character. Again, many people are thinking this is pure craziness. Really? He just paid $1.33 an hour for someone else’s time. In my book, that’s a steal.

Now, we get to one of the more interesting aspects of all of this. The dad in the first example, being an investment banker, doesn’t throw money away easily. Due to his schedule, he soon finds himself behind the power curve again in a few weeks. Also, an in-game event during those weeks has made Zeutronium even more rare than it used to be, and thus more valuable. He manages to sell the original set of armor he bought for $60, making a profit of $10, and buys a new set of more powerful armor for $100.

In the best games, in-game items are consistently valuable. They are assets, just like a diamond ring or grandfather clock. It is true that often these items lose some of their value over time as a game becomes less popular or the population of the game becomes more powerful overall or when the designers of the game introduce new and even more powerful items. However, say the father only manages to get back $40 on his purchase of the Zeutronium armor. On the other hand, he got 10 hours of good time with his son before it lost its value. His total cost for that? $1/hour (($50-$40)/10 hours). Movies nowadays set us back $4/hour. Playing pool can cost $5/hour. An amusement park can be up to $10/hour.

Who wouldn’t (or doesn’t!) pay $1/hour for quality time with their children?

I haven’t even taken into account the actual entertainment value of the game itself. We have already determined that our free time has value. Does that not mean that the things we do during our free time have inherent value as well? Let’s say I purchase a new videogame for $40, and I play it for 20 hours before I complete it and put it on a shelf. That means the game provided me $2/hour entertainment. Again, in comparison to your average movie, not too bad.

Now let’s look at World of Warcraft. Not only do I have to pay $40 for the game, I also pay a $15.00 per month subscription fee. This is another one of those things that some people may scratch their heads over. Who on earth would pay a monthly fee for a game they’ve already bought? (Never mind those 6.6 million folks who do exactly that) Assuming someone plays the game 2 hours a day, the first month they bought the game they are paying around $.91 an hour for their entertainment. However, during the 2nd month they also play for 60 hours but only pay the $15 monthly fee. Their entertainment cost has suddenly dropped to a mere $.25/hour. Anyone else know someplace other than the local park you can go to for $.25/hour? Heck, at $3.00 per gallon gasoline, even that might cost more than a quarter per hour.

I don’t know about the rest of y’all, but next to my family and my honey, my free time is the most important thing in my life. $500 or $1000 is a lot of money in terms of pure dollars; however, when you equate it to how much time you are buying, the numbers don’t seem so out of line. Not counting food or other tangible purchases, my trip to Vancouver cost me $6.00/hour, even the time I was sleeping.

And my most brutal example? My skydiving experience cost me the equivalent of $3,600 an hour, and it was worth every penny. Many, and I would venture to say even most, already spend more money on a per hour basis for your entertainment than the person who paid me nearly $1700 for a character I put 3 years of my time into. (Try to figure out the per hour cost of this one!)

Personally, I think they got a steal.

The New Economy: Prologue

More than 100,000 people worldwide make their living off of Ebay. Many are ‘game merchants’, peddlers of magic swords, virtual real estate and bags full of gold coin. More than 30,000 people (in the US) make a comfortable living playing online games full-time and selling their in-game loot, gold, or credits for the real-world variety. In Eastern Europe and Asia, ‘game farms’ employ thousands of people who instead of sweating it out stitching clothes or sweeping streets, work 12-hour days swinging cartoon axes, collecting treasure, and turning it over to their boss at the end of their shift. Most work on a quota; occasionally, the best (or the lucky) find a way to ‘embezzle’ some of it and convert it into valuable American currency.

It boggles the mind of many folks I talk to that can’t comprehend paying real money for virtual goods, or even that virtual items can have value. I hope this series of articles may give them a little more understanding of those of us who find real worth in things that are ‘unreal.’ This will be the first of a two or three-part series breaking down and explaining a cultural phenomenon that has the potential to allow many of us who have nothing more than an idea, a little faith, and a dollop of luck to live well above our means, either by fully embracing the New Economy, or using it to increase our standard of living.

The first installment will focus on the development of virtual economies: what they are, how they develop, why they work and are important, and both the opportunity and dangers they represent. The 2nd will discuss the rise of Ebay and the auction economy, and its potential to create a new middle class. We will touch on what Glenn Reynolds calls the ‘Army of Davids’, empowered individuals who ‘punch above their weight’ by leveraging technology. Everyday folks now have the ability to do many things that not so many years ago were limited to the commercial or governmental sphere.

I hope that I can get people as excited as I am by the prospect of having a huge portion of the economy run by us, by entrepreneurs, many of who are our friends and neighbors. Nowadays, no one has to accept living an ‘average life.’ This means you (and me!): Tammybaby, Lilly, Mom, Dad and Anne, Tom and Dagi, AKBar and WCB, Todd, Gribblet and DarkElf, Gibb and Saint, Tarpy and MamaB. And everyone else who may stop by! People are not limited now by high costs of owning and starting a business, by blindingly obtuse regulations, by taxes, or by ‘the Man.’ People are limited or not only by their own willingness to take a risk. And in some cases there is almost no risk involved, as we can now easily convert our entertainment to extra cash.

So let’s start with the area of the New Economy that has done so well by me: virtual worlds and their associated economies. Be warned, some of these articles will be long. However, I hope most of you will engage with me if you don’t understand something, or would like to add your insights, either in the comments, by email, or even by (gasp) phone. I hope to have the first installment up tomorrow!

Rob from the poor and give to the...

Happy 200th post! Go me!

This must be my bad year for customer service. I think I find it more frustrating to have a bad experience(s) now because most of my job is working with folks of various levels, from clerks to VPs to vendors, and helping each of them the best I can. My department often gets compliments for their genuine desire to do their jobs well and serve their customers. So when I reach clueless customer service folks, people who could care less about whether they've actually helped me, let alone done the right thing, or just downright refuse to respond (like my condo management company), it perturbs, annoys, or in Sprint PCS's case, makes me downright angry.

I'll get to Sprint in a minute, because I'm actually going to file a BBB complaint against them for a dangerous security policy, and need to work myself up into an appropriate lather.

Having listened to G and read about many condo associations, property associations, and condo management companies, it is obvious a good deal, maybe even most, are horrible. It seems mine is no different. I am sure some of you will think 'what's the big deal?' but my condo management company compounded their initial, and probably minor, screwup by refusing to respond to any request of mine for information.

So when I bought my condo, I picked what I thought was a great unit. It is always 10 degrees cooler in the summer than most of my neighbors due to great shading (a big deal in TN), it's a corner unit so I only have two neighbors (the weird Karaoke neighbors for those who have heard me babble on about them; the other unit behind me is currently vacant). It has a good view of the pool, has a nice little stream (when there is actually water running through it, which only happens about 1/4 of the year), and the trash dumpster was very close, about 20 yards from my front door.

Well, about 5 months ago I was going to take my trash out and noticed my dumpster was gone. Huh. That's odd. I thought maybe the trash company was replacing it or something. I ended up walking almost 200 yards to the next closest dumpster. In the middle of summer, it's quite a hike in 95 degree heat carrying two 40-lb trash bags. I have a feeling it won't be any better in the middle of winter.

So when I sent my next association payment (two actually, as I double up so I only write them a check every 2 months), I dropped them this note:

Robin Hood Condominiums
Jim Curley Properties
177 Belle Forest Circle
Nashville, TN 37221

May 30, 2006

Ma’am/Sir,

Could you please send me a key for the laundry room? Neither of the two sets I have works for the new lock.

Also, could you drop me a note to explain the movement of the dumpster from near my building? I (and all the units around me) have to walk nearly a quarter mile there and back to the next closest dumpster.

Thank you!
Toby Truman

A week passed, then two, and by the time it hit a month I figured I wouldn't get a response. Even if they didn't want to send me a note, they definitely should have sent me a key, which they didn't. Initially I thought it may have been possible they didn't receive my note, but they cashed my check, so that isn't what happened.

Two months later I was writing out another check for this company which now provides me less service than I had when I moved in. I included a more detailed note:

Robin Hood Condominiums
Jim Curley Properties
177 Belle Forest Circle
Nashville, TN 37221
07/28/06

2nd Request for Reply

Ma’am/Sir,

Attached is a copy of a note I sent two months ago; I have not yet received a reply. If there is a different address I should send correspondence, please let me know so I can re-route if necessary.

If this is the correct address, I hope someone will reply to my concerns.

I have a severe case of tendonitis/arthritis that makes it difficult for me to carry bags of trash long distances. The two trash dumpsters where I am required to walk to now are more than twice the distance away from where my original dumpster was for over a year. Would it be possible to move one of those back to the position of my original dumpster? That would make it much more convenient to anyone who lives in my building. (Building 2)

If this is not possible, I would appreciate an explanation letting me know why our original dumpster was moved and why no correspondence was sent out letting owners know it was occurring.

Thank you!
Toby L. Truman
Robin Hood Condominiums

Well, it's been almost a month since they cashed that check, and again no response to my concerns. It's not even like I expect them to move the dumpster back (even though the building deepest into our complex now has two dumpsters and two, maybe three buildings now have no dumpster at all.) I do, however, expect a response from someone I pay every month. We even pay more than most condos in our town do, ($139 monthly; my friend AKBar, who lives in an infinitely nicer neighborhood with more amenities one town over pays $99.) so the least I would expect is to maintain the standard of living I had when I moved in.

I did a quick web search of the condo management company, Jim Curley Properties, and they only have 6 Google hits for an exact match when I last checked, so this post will be very visible if anyone decides to research them. I'm not sure if I can file a BBB complain (or if one is applicable), but if I can, I will. It seems JCP handles one of the swankier condo neighborhoods in Nashville also, so maybe that's why we get so little service.

In any case, my next step will be to email them a note at the one email address I could find and see if they will reply to me from there.

It's funny, I used to get irritated at my previous condo management group for their little newsletters, which was downright degrading to some of the folks living on the property (usually the non-payer's of fees). The one thing I can say though, is I at least knew what was going on, what the balance sheet looked like, and any news. This new company appears to be getting the same amount of my money for far less service.

Holy Lap Dances Batman!

I may not be able to get one G, but how I about I buy you two. I had hoped for $1300!

;) Go me! On top of that I sold a set of Little People also for another $170 or so.

Gonna be a good vacation!

And Tammy, we're getting you some shoes!

I'm alive...barely

Sorry posting has been light, I've been having some blogging ennui. Hopefully I shall overcome!

Here is what I am doing tonight...it would be nice to pay for my trip to Vancouver next month with this auction!

Not bad for something so 'non-real world', right honeybuns?

More Ebay goodness, let's say a prayer for the Little People! Tammy would miss them!

Pennies for your posts?

Neat. More here.

It's Real in Its Own Way Honey

Waking up two weekends ago, I did my morning Saturday ritual: put on the coffee, check Ebay, walk around like a zombie, and feed Gruffleen. Gruff-who? That's what my lovely girlfriend (two months today!) asked me, right before she hit me with another WDYGU moment. Gruffleen is of course my Neopet, and this time the question was more 'Don't you want to spend time in the real world?'

Which of course to the tens of millions of us whose lives are spent on cellphones, working on laptops, listening to their Ipods, or watching 24 and Survivor, is beside the point. The two worlds are fused to a great extent, and inseparable. However, I thought it especially interesting as I regularly work out, run, spend time with friends, among other 'live' activities which will soon include skydiving and travelling. She felt that feeding a computerized pet was crazy, or something. I guess she has never had a Nintendog or even a pet rock.

I also thought this ironic coming from a woman who spends more time watching 24 and reading fantasy novels in a month than I do playing Neopets in a year. Escapism is escapism, no matter which poison, be it hemlock, arsenic or poisonous lollypops, one chooses. Heck, it is even big business, which several of my posts here about selling online currency supports.

So who here thinks the real world is better? Even us nerds and geeks would probably attest the real world is pretty cool, and no one I know is addicted to virtual anything. However, I would contend that our fusion of reality and 'unreality' is better than a limited existence in the corporeal world. Online I can entertain myself, learn, read, write, earn money, buy groceries, sell real world commodities, buy virtual world commodities, fight orcs, cast spells, fly enormous starships, and literally limitless other things. I would suggest access to extraordinary things is more readily available in the ether of the Internet.

Jumping out of a plane will be great, but for a 5-minute experience I will spend 8 hours driving and 2 hours training. Yes, I think it's worth it, but those type of events certaintly don't fall into place all the time, or even much of the time. And yes, I also value the 'everyday' experiences of walks in the parks, supper at the dinner table, and kissing my Honey. However, at this point, I would have a hard time giving up either aspect of my life, and I suspect much of America, Japan, and Europe feels the same.

Generally a Dollar, 1

I don't blog much about my job. I enjoy it a great deal, and never want to risk saying anything that might breach confidentiality or even suggest a hint of an ethics issue.

Today, however, a prospective vendor had me frustrated beyond comprehension, and I just have to share a little of it. For those who don't know, I supervise the Purchasing Department for a Fortune 250 company with over $8b in revenues. Basically, my department's job is to buy stuff, cheap. And we do it pretty well, reducing our annual budget by over 25% in the last 36 months, while increasing the overall amount of stuff we buy. And those are 'real' numbers, not fudged. Meaning, if I spent 10 bucks last year on something, I bought the same stuff this year for $7.50. Yes, we're cool like that!

Anyhow, since last week I have been trying to acquire an item (cheaply!) we were in short supply of at some of our facilities. We'll just call them widgets. So, our prior widget provider decided to move their plant from one location to another this month, but didn't let us know. When folks started complaining they weren't getting their widgets, I investigated and found out what happened, and that our widgets would be a month late. Not even so much as an apology. Needless to say, I was not amused.

So I started a search for an emergency provider, and almost immediately found one through Google. It is a company that has a strong rep, and has actually quoted for me before a couple years back. Big, over $300mm, reputable. Their quote came back at a great price and we issued a PO, indicating the three locations I wanted our order shipped to. And there started a migraine-inducing argument with people who apparently have no clue about their business. (Or any business, for that matter)

So say I have 1000 Little People that Tammy wants to buy from me because she loves them so much and wants to play with them. I offer her a deal at $1.00 per Little Person, and $10 for shipping and handling. Ok, so far so good. Now, Tammy, being the particular shopper that she is, decides she needs the Little People to go to 3 different locations (Bethany and Tarpy both need Little People also, apparently). Well, being that I want her business, and she told me she was going to buy 10,000 Little People from me later in the year, I want to cultivate the relationship. So I say, ok, I'll charge the same $1.00 per Little Person, and 3 x shipping and handling for $30 to cover my additional costs. Make sense so far?

To you and me, yes (I hope!), but not to this vendor. Here's how the vendor wants to play that situation. I want to buy 1000 Widgets from them at $1.00 each and $10 shipping, for a total of $1010. Then I tell them I want those widgets shipped to 3 locations. I expect to be charged a little extra for additional packaging, freight, etc., or in these terms anywhere from $1030 to $1100.

Their response? Ok, because you are shipping to 3 different places, we're going to charge you $3.00 per widget, and $10 shipping each to 3 locations for a total of $3030. Umm, huh? Iniitially I figured someone just got their wires crossed and I wrote an email asking for them to review my order. No mistake, they said. Hmm, maybe I didn't word my question very well.

Umm, Mr. Customer Service Guy...I'd like to buy 1000 of your widgets, please tell me why you are going to charge me $2000 extra dollars to put them into 3 boxes and have the UPS guy ship it to 3 places? I even wrote up some detailed examples of how this was crazy, and the Customer Service rep writes me back and says. I'm sorry, I don't understand your question. You want to ship to multiple locations, so we're increasing your unit cost.

Now, I guess I don't expect everyone in the world to get exactly why this is wrong (though I bet most do). Unit cost is based on volume; shipping and handling is the amount of effort it takes to get the order out the door. My unit quantity was the same, just being shipped to multiple locations. Not only were they going to charge me additional shipping and handling, but they were also going to charge me a higher (double actually) unit cost.

Does this make sense to anyone? If I am missing something, someone please let me know. I know Saint works in an industry with lots of freight movement...does this make any sense to you?

Cash over Glory...

Well, was a good day of pokering!

I played in both the big Pokerstars Blogging tourney mentioned below, plus a $20,000 tourney I qualified for playing on Poker.com.

The Blog tourney ended up with their prizes being a lot of slots for other big tourneys, so when it came time to focus my attention, I ended up picking the $20,000 tourney (plus the Pokerstars GUI was confusing me; it's cool, but I just wasn't used to it). I ended up going all in in the Blogger tourney with Qd/10d with a queen on the board, flop was rainbow Q52. I shouldn't have even been in the hand, and the guy flipping AcQc showed me why. Ended up 909 of 2500 players.

In the cash tourney, I swore I wasn't going to play stupid like I had been, and cranked down on my game, only playing pockets or other premium hands. A couple of early good hands (including AA my 2nd hand, and a 55 where I hit my set a little later) put me in the top 5-10% of the 761 field for at least the first half of the tourney. Of course as the blinds start going up, even a good size holding can get eaten away fast. At the 2nd break I was sitting in at 49 of 49 remaining (well into the money at this point, which I was very happy about, but not so much about being in last place with 1940 chips, average was over 10000). Talked to my honey for about 3 mintues, and came back to a string of breaks.

On my Big Blind (800/1600 by this point) I called my last 340 in showing 6c4d offsuit versus a pair of black jacks and I figured I was out. 4 diamonds later my 4d won the day and more than doubled me up. I won 3 or 4 more all in's and ended up 10 out of 41 at one point in chip stack.

My luck ran out as I put my last 10k in on my AK offsuit and my opponent shows QQ. Still, I lost on a break point and picked up $200, ending up 20th out of 761! Not a huge amount, but it puts faith back that I really can play this game, which I wasn't so sure of when I got wrecked rapidly twice in a row last weekend by the Mafioaza crew. That puts me at +$56 lifetime online poker winnings, go me!

Tammy baby, let's get you some shoes!

Updates of old topics

I said I'd let you know if I got anything from the state of CT! After around 10 weeks or so I finally received the check from the Unclaimed Property division for CT. Not as much as I had hoped, but hey, 45 bucks is 45 bucks. Was a fairly painless process other than the waiting. Just filled out one form and poof, old money reappears! (It was actually an overpayment to the University of CT, which I attended briefly many years ago)

In another money area, my hoped for Ebay business which hadn't been doing so well (selling collectible game stuff), finally generated some bucks. Or, as my friend Allison would say, the Little Peeps finally made some Bank! I managed to sell off 2 sets of little people for around $600 bucks, or just enough to cover the infamous suit I met the Arabian Prince in. Yay!

Only problem is, after doing the math out, even if I sell all the sets or near-sets and the 2 cases I have, I will just break even with my outlay. (A little over 2k, dear Lord) Still, that will leave me with a couple hundred dollars worth of figures to play DDM and D&D with...it's what I am calling my Zero-Sum Hobby. Still, the effort required for those few hundred dollars worth of figures is probably less than I would have made flipping burgers and just earning cash. C'est la vie, live and learn; I'd much rather open little people for a living than flip burgers!

We All Need Hobbies!

It sounds like someone was bored. (Hat tip to G-Max)

In the Cards?

I have always wondered whether I could make a living at gaming. Once upon a time I used to think it would be by playing Magic the Gathering. Lately I wonder whether I could play poker. Usually I drop my $50 a month into my online poker account and rapidly lose it. This time it lasted the whole month (if I can go 3 more days!) and then some. I'm sitting at $227 due to my first good finish in a money (cheap money, but still money) tourney (2nd out of 188). As of this moment, counting all the times I have put in and cashed out, I am +$77 (yesterday I was around -$50).

Believe me, I understand that luck has much to do with poker, but I think being able to last long enough in a big tourney for it to work for you can make all the difference. I had 2 hands that made the tourney (well, it was over 300 hands long or more, but 2 that put me into a position to play and not get blinded out.) It was about 6 blind levels in (200/400) and my stack was sitting at around 2300 chips (everyone starts at 800), and I was about 5th stack and starting to get worried that the bigger stacks were going to start pushing me. A pair of kings let me push all in, and everyone folded but one (Ac Qs) and let me double up (to around 5600, as I got some blind money and early callers also). Unbelievably the next hand I was dealt Bullets (AA) and I got another all-in caller and ended up at over 13,000.

From there it was one of the more interesting experiences I've had playing poker. I've never been big stack in a large tourney, and I found that I could sit and wait for my hands or if I sensed weakness could buy the blinds (though I did that rarely, need to work on that part of my game). During one hand I called 3 or 4 all in callers one before the little blind with AQ offsuit. My archnemesis of the tourney (who I ended up losing to) triples the bet, and thinking he is just trying to push me out, I call. The flop comes AQ7 rainbow and when he pushes again I try to put him all in and he backs off. My two pair sticks and I am the overall chip leader for the next 20 minutes with over twice the chips as the next player (35,000).

At the intermission (play for 55 mins then 5 off), I found I had actually got into the money of my first big tourney. (19 players remained, money goes to top 20) I could have lost then and still been thrilled! I tightened up my game and grew my stack slowly by re-raising people trying to steal my blind. When we got to the final table I was alternating between 1st and 2nd stack against more than a few folks still holding on for dear life. We let them blind out and at 5 players left the table stabilized with me in 2nd. A few good plays later by the chip lead (the only player at the table playing tighter than me) and there were 3.

We played almost 100 hands between the 3 of us, trading blinds and pushing all in to steal them on occasion. To be honest, this is the weakest part of my game and always has been. I don't know what to do when there's just a couple players left; I kept hoping the big stack would take out the 3rd stack so I can make more money, but that is not to be. Luckily, we both hit a hand (finally!). It was pretty anti-climactic as I called his all-in queens with my pocket aces, and that put me back in the lead (temporarily).

I duked it out with the other guy for a good while, but he was just better than I was. When it became clear I was losing ground I called all in for $45000 with my 82 offsuit (trying to steal his blind). He calls with pocket 3's. An 8 fell on the flop and I thought I might actually take it, but he whacked me with a 3 on the river.

In the scheme of the universe $94 is not a lot to win, but it only cost me $2.50 to play, and after more than a few tourney losses gave me some hope I may have the instinct in me. I became comfortable enough with odds and playing fast that I started playing two tables last night also: one tourney table and one limit .50/1.00 table. Over 4 hours today I took $12 to 51 and yesterday went $12 to $43. (Those had been covering the bigger tourneys I was losing)

It may end up just being another one of my hobbies, but I've decided to put some effort into learning as best I can to play the game. I've bought a couple of books (Brusnon's Super System and Phil Gordon's Little Green Book) and Gordon's book so far has helped me be a little more aggressive, with some more unusual pot selection (easier in the limit game because you can't go 'all-in')

At worst I end up playing poker and making $20/day (Which is my 2006 goal for 'non-work' income) online. I am fairly certain I can do now if I just played Limit .50/1.00, and if I place in a tourney once in a while like tonight, more power to me!

Update: Not too bad, did another tourney, 220 peeps, and ended up in the money again (lol, that means I made 50c more than I paid in) at 22nd. Whee!

Put the white nails down.

If you can't quit smoking because it is the right thing to do for your health, it is the right thing to do for your family, and generally just the right thing to do...then quit for greed. Greenbacks. Kayle. Moolah.

I missed a milestone in my life earlier this week; they happen so often now, I didn't even notice (JK, I just forgot!). I quit smoking January 14, 2003. I was smoking a little over 3 packs a day, and averaging $10/day spent. If my calculations are right (and even if they're not right, they are close), I have been smoke-free for 1194 days.

That is $11,940. My mom told me that if I quit smoking, I should treat myself big time.

So I did.

I paid $11,900 for Luna Grace, and she's given me more in 6 months than 3582 packs of cigarettes over 3 years ever could. Even if you are only a 1 pack a day smoker, that sounds like a weeklong cruise to the Carribean after a year. After 1194 days you could have nearly the best PC money could buy and every worthwhile video game on the market to go with it. You could pay cash for a 53" flat panel LCD TV. You could buy your fiance over a 1 caret diamond ring.

And I for one think you should do it. Don't just put the money in the bank. Put the money in your pocket and buy something you really want. Because if you can put those white nails down permanently, you deserve it.

Ebay...

Raised their prices again this year, as well as two or three times last year if I remember correctly. Between Paypal and Ebay, total fees for low to mid-priced auctions (under $50) end up being 10-15% of the sale price. Considering Ebay owns both services, that almost feels like they get me coming and going. Google is setting themselves up to compete with Ebay late this year or early next (I hope, but it looks like); if they offer more competetive pricing, they will easily pull folks from Ebay, as many are upset with the constant string of rising fees.

One of Ebay's redeeming values is the 10 cent listing sales they run every 8-10 weeks or so. Around the first of the year I started gathering a crate of stuff together in anticipation of their next listing sale; they only give a few hours notice, but I was prepared when the email came last night, and I've just finished putting up near $600 worth of stuff, mainly Magic the Gathering cards this time, and a couple of games. Once I get through these I will start filling up the crate again.

This should put enough in my Paypal account to buy a new PC with no money out of pocket. I've been looking at returned/refurbished Dell XPS 400's; a good one with a dual core 3.2mhz processor, 1-2gb memory and 256mb vid card is around $850-$950, depending on the promotion of the day. It's not as scary as it sounds; I bought the PC I am using now the same way in April of 2003. It is almost 3 years old and I have never had problem 1 with it. I know people who spend $2000 on every new PC; I buy one about as often for around 60% less, and they last me 99% as long.

Whee, just had my first sale come through from a listing, a Pernicious Deed for Magic the Gathering.

Sprint PCS me off too...

I must have a big sign on my back that says 'that's Tobias, he'll pay for anything.' After my conversation with Capital One, I looked online and saw my cell bill had been charged to my bank account at $95 and change. Hmm, that's odd, considering my cell plan runs about $72.

So I call Sprint and they tell me 'We only charged you $72, the other must be for 'premium services' that you would have ordered through text messaging.' About a month back I started to recieve horoscopes by email on my phone every day; I didn't think anything of it and thought it was spam, especially since they were sending me Pisces horoscopes, and I am a Capricorn. (And the fact that I would never spend good money on something idiotic like 20 words words of wisdom sent to my phone every day)

Apparently they had been charging me a buck a day for something I knew nothing about. The first call to Sprint, they said, 'Oh, you just have to text message them back and they will stop.' Me: 'It's not the cancelling I am worried about, its getting my $23 back. Well, yes, and the fact that I have no idea how to text message them back, and have never text messaged anyone on this phone, so they need to not be charging people who don't sign up for their crappy spam' I spent another 10 minutes on the phone with Joe Clueless before I got fed up. 10 minutes later I called back and found someone avec clue who said he would get my money refunded and walked me through getting the 'premium service' cancelled. I find it hard to believe, but there is no person I could actually call to get the horoscopes cancelled, and I had to do it through a text message (actually, 2 text messages). Talk about making 'opting out' of something cumbersome.

Oh, one note to everyone: if you have a montly plan for anything, like premium websites, phone service, annual fees, whatever...just tell them you will cancel and they will lower your rate, nearly guaranteed. While I was on the phone with the first Sprint guy I told them I wanted to cancel my $15/month PCS vision plan, and he immediately offered to cut the rate by 50%. I'm so glad they offered that to me before I wanted to cancel it! The same has happened with anything I've had a monthly or annual fee for.

Caveat emptor redux.

Capital Done...

Oy vei...sometimes I feel like I am gaining some ground in my finances, on others I realize I can still easily do some very stupid things. So I have (should be 'had', but more on that in a bit) a Capital One card. It was a no-annual fee card, good interest rate, the whole nine. Well, I haven't had a balance on it in over a year, and somewhere in the fine print it says that if I don't use it for a year, they can charge me an annual fee. Well, every time a bill from them comes in, it goes straight into the shredder without being opened, because its got a 0 balance right?

Duh. So in November I get hit with an annual fee, of course followed up with a late fee in December, January and February. Finally I get a note from the little credit-guy about a week or so ago (one of those services that tell you when there is a change to your credit report...it's expensive, but in this case very worth it) saying I had a bad mark hit my credit report. Ugg, I haven't had a bad mark on my credit report since my bankruptcy in 2000, so I'm a little miffed. So I immediately paid off the balance, and called Capital One later that morning after several cups of not-Dunkin-Donuts coffee.

Me: Hi there, I'd like to close my credit card account. I got whacked by the invisible annual fee, and although I do realize I should probably open my mail every month, I got used to 0 balances blahblahblah.
Them: You are such a fantabulous customer, if you'll stay with us we'll waive your annual fee.
Me: Umm, but I didn't have an annual fee, and after not using my card for a year, you charged me an annual fee and dinged my credit.
Them: Well, we can even credit your account the annual fee you paid this year.
Me: Umm, that doesn't help me with the $100 in late fees you've charged me. I still want to close my account, thanks anyway though.
Them: Ok, I will process your cancellation.

So all seems well and good, and I have a little bit more money wisdom under my belt (Yes, Mom, I am horribly embarrassed!). A week later (yesterday I think), I get a note in the mail from Capital One. I figured it was my cancellation confirmation or a beg me to stay letter or somesuch. But no.

'Sir, thank you for deciding to keep your account open with Capital One. Per our conversation, you will no longer be charged an annual fee.'

I know I am dense sometimes, but holy senile misrepresentation Batman!

Anyhoo, I am expecting to have another useful conversation with them tomorrow.

Whee, caveat emptor and all that.

Financial Plan for 2006

I don't know about anyone else, but my budget never seems to jive with reality! It shows I should have around $1,000 or more spare income per month after all my bills are paid, retirement accounts funded, etc. I even included standard additional expenses such as movies and online games into the numbers. Maybe Christmas did me in this year; I didn't expect to go as all-out as I did. The $60 Jager-bomb nights don't help either I guess. Getting back into running also whacked me with new shoes, 5 or 6 outfits, cold-weather gear, and $25 entry fees.

I think I'll do a Dave Ramsey month and write down absolutely every expense, from gas and hot pockets to individual junk out of the vending machines. My new health plan kicks in this next paycheck also, blech, and I have to take that into account. I've got some sort of wrist/tendon problem that's caused me nothing but grief and expense this year, and I am willing to do darn near anything to fix it, so I moved to the maximum plan where I work.

Anyhoo, I was looking at what is on my wish-list (anything over $200) for 2006, and it's around $11,900, with $6200 in household expenses: an entertainment center, washer/dryer, LCD TV, and new hardwood floor for my dining room and kitchen. The other are a vacation, Xbox, and pistol, among other toys. The total is what I am setting as my goal for home-based revenue. Maybe a bit of a stretch, but I had an initial goal of $2500 for 2005, and did quite a bit better; I'll be looking hard at revenue stream opportunities in gaming collectibles. Anyone with any ideas for making money with under $1,000 capital let me know, and I'll keep y'all updated on what I am doing.

Arbitrage, original construct

I know I went off on arbitrage in the dating realm a while back, and although the theory was sound, it was not very practical for me. I've been surprised that after learning what it was (generally speaking), how often I have heard it used. On the news, in print, online; I've just never noticed it before.

So I have been wandering around Ebay the last several days, and it struck me that it is probably possible to use Ebay similar to a stock market. Buy something low, and turn around and figure out how to sell it for more. I have been looking at getting into D&D Miniatures, and the ranges, or spread, on some of Wizards collectibles is large enough that if one could consistently get a specific price selling something, they would know what they needed to buy it at to make a profit.

For example, I bought this item at $175 total, which is at the low end of what it is currently selling for. I think I can reasonably sell this for about $210 30 days from now, +/- a little. After fees and shipping, that's probably a $20-25 profit, for probably 40 minutes worth of work. Not bad, but is it repeatable? There are a number of additional considerations.

Does one have a high enough feedback rating to have people pay premium prices? Can one cover the spread of fees between Ebay and Paypal, which can easily be 5-10% of the selling price? (at least on the small items I normally sell; the % decreases the higher the price of the item) Can one live with the vagaries of the market and the fact that at any time, an item might sell at less than what it was bought for? And for me, most importantly, can one make enough to make it worth the time to do it?

How about those folks who sell sets of cards or miniatures? They actually open all the packages, put together sets, sell the ultra-rares singly. Selling sets has to be profitible (considering the number of people who do it for a living), but I have yet to actually put together the numbers about how much investment one would have to put in to count on having sets. When I was playing Magic, we were talking about 10 or more boxes of boosters to guarantee a set, an investment that could be in the $600-700 range. If I bought miniatures cases, there are 12 rares per case; there are 20-30 rares in a set, so counting the vagaries of sorting, I am guessing 3-4 cases to guarantee a set, somewhere in the $300 range. The nice thing about miniatures sets is even the new ones are selling for $160-$180, so even if I had to purchase a couple of figures to make a 2nd set, I've covered the input cost fairly easily. All the figures left over are the 'profits' and just like in Magic, the good rares will run $5-$10. 4 cases of figures is 384 total figures; 2 sets leaves 250. Even at an average of 50 cents each, that looks like $120 profit per run, more if there are some good chase uncommons.

The question then becomes, how much time is it to sort, sell and ship 2 sets and 250 figures? Say several folks buy a few each, so I am shipping out to 150 people. At 3 minutes each (assuming a good labelling system), I've just invested nearly 8 hours to make $120. I could almost do better delivering pizza. Of course, if my numbers are off low and I average $1.00 per spare figure, it becomes a much more lucrative operation. If I am low due to packaging (though if one ships standard USPS at $3.85 the packaging is free), then one might be working for minimum wage.

The third option and one I am looking at is purchasing a case of 12 boxes of miniatures like I did, then selling them off singly at $20-$25 each. On one side, I get a discount for purchasing in bulk, and then a premium for selling singly.

Saint was always better at trading/selling Magic cards than I was, so maybe he has some input or data that would help see if my numbers are off!

Anyhow, my goal for this year is to make more off of Ebay than I did this year (around $6,000). Its going to be a challenge, as my 'easy money' is going away, so I am going to have to put some research into figuring out how to invent opportunities. Anyone who has any expertise in collectibles could probably do very well in their field never venturing outside Ebay, even with their ridiculous fees.

Update:

Looking at the set checklist for the newest set, there are now 24 rares and 9 ultra-rares in a set; that probably means 5-6 cases, or a $600 investment, and probably a $200-$300 return. Not bad, I may go ahead and try it and see what happens. More later!

I think its an income tax check I never cashed...cool!

I don't know why, but I went to Connecticut's unclaimed property website, and not only do I have something to claim, so do one of my brothers (Tom, if you read this, go check!), my father, and 3 things for a cousin!

Neat! Honestly, I think it is an income tax check that missed me because I was changing addresses, and it was a ton of work trying to find out where it was at. Woohoo, it's all of $92 if I remember correctly, but hey, I'll let ya know if I actually get something!

Did a quick search for Saint/Gibb and Jess, but didn't find anything in y'alls name, sorry!

Why I don't work for John Hancock

Let's just say it's not my best investment ever!

Their stock shot up yesterday afternoon and I thought I was clear; it was risk-takers betting the pharma-trials went well. We found out early this morning they didn't; as a matter of fact they were total failures, and the stock reflected it. From my understanding, not much left in the pipeline in the way of research either. Ugg.

Which is why I am glad I take my Mom's advice (and you should too): don't bet what you don't have! It could have been worse, but it was the smallest part of my portfolio. Those shares will hang in the back for about 10 years and maybe I'll break even; actually, the best bet now would probably be some major pharmacom buying it up for their R+D department.

Holy Flushes!

A few of my otherwise Texas Holdem-inclined friends refuse to play online due to fears of cheating, either by players or by the sites running real-dollar play. Although I know there are folks colluding on Teamspeak or the like, I tend to play $.50/1.00 tables, where any decent cheater's take per hour would likely be extremely low. I find the question of whether or not the House (the poker sites running the games) cheats more interesting.

I have read some forums where players insist the house on some sites will give good hands to multiple players to create more action to generate more rake. (Rake is the house's cut of each hand) I find it a stretch to think many sites regularly rig the game, due to a plethora of tracking tools that would let computer-literate players detect any foul play. However, even I must admit based on the real life games I have played, it seems online play has more big hands. Skeptics may claim this is because online play is faster, and one sees more hands than in real table play.

This past Wednesday I came in 2nd on a real-life tourney table. In the course of the evening we probably played 100-120 hands, which online ranges between 1.5 hours worth of play on a fast table to perhaps 2.5 on a slower table. It took about 3 hours and change and included 2 10 minute breaks. Based on that I guesstimate real life play with a good dealer is maybe 1 to 1.5-2.0 online.

In the tourney, there was one flush and 3 straights (2 of them mine) for high hands in the entire event. The rest of the winning hands either didn't show or were high pair, two pair or three of a kind. In my last 100 hands online, I have won 13 hands with these:

1 flush, Jack high
1 flush, 8 high (4 suited on table)
1 flush Ace high (4 suited on table)
1 flush Queen high
3 x straights
1 3 of a kind Aces
1 3 of a kind Kings
1 3 of a kind Fives
1 2-pair Aces and Eights
1 pair Queen high (Only went to flop)
1 pair 4's

I don't know much about statistics, but that seems like a lot of really good hands. Even with that many high hands, I tend to only break even online (for the year I am up around $100). Just for grins, I broke down the number of hands that ended with 3 or more suited cards on the river (last card on the table):

3 x 3 spades
6 x 3 clubs
8 x 3 hearts
10 x 3 diamonds
1 x 4 clubs
3 x 4 diamonds
1 x 5 diamond
1 x 5 heart

(I didn't win either of the 5 suited)

That is 33 hands that had possible flush draws. Anyone know the odds in general of 3 or more suited cards coming up?

Again, I find it hard to believe that the site I play at regularly rigs games, but perhaps I will break out some poker manuals and figure out whether or not the above is a statistically probable set of hands.

The Borrower is slave to the Lender

(Ugg, this post is long and not polished, be warned and you might just want to move along. I'm too tired to stare at it any more.)

I don't know why it is, but I am like a squirrel with money. To me, segregated money is more money. I have a cool Target Chrome Piggy Bank that is slowly filling (actually, fairly rapidly as I transfer change from multiple Sobe Green Tea bottles) Copper into the pencil holder for kids on Halloween. Silver into the attractive porsine knick-knack.

I have a sock with 300 Susan B. Anthony dollars in it in my closet. Even if a bladed object is not close at hand, I can brain burglers with the Suffrage Momma. I have $800 in cash hiding in a suit jacket in the spare bedroom closet (Usually more, but I had to spend $1000 to register my car and just gave some to my brother). Anywhere from 0-$200 on Paypal. 2 IRA's, savings, checking, money market account, fully funded 401(k), new funded account at some online brokerage for when I bought NABI (now tanking, joy). And so on.

None of that is bragging, as I know I am not rich by any means rich (And rich people don't hoard like that anyway;), I am just my Mother's son.

As I am my Father's son also, I love to spend money. A lot. Amazon ships me stuff at least weekly (if it is at least half off retail). Hollywood video every other week to buy 6 used $8 DVD's. Kohl's once a month. Walmart (Ugg, hate walking in there) every 8 weeks. Car, house, going to Belize toward the end of the year, blahblahblah, just like any other typical American.

However, I'm kind of kooky. First, I listen to Dave Ramsey, so I don't believe in debt, and have very little. (House will be paid in 70 more months and a 12-month out on my car) Second, a few months back, I felt that for what I made, my cash flow was not quite what it should be. It didn't feel like my check went far enough or that I was saving enough. (even though I think my aggregate savings is about 30% of my income) So I decided to try an experiment.

I made a pact with myself. All my regular discretionary spending (DVD's, movies, Amazon, Website and hosting fees, most eating out), I was going to only fund from Paypal. And the only way I was going to fund Paypal was through Ebay sales or Consulting fees (i.e. Work income separate from my main job) In other words, if I don't have any cash on my Paypal debit card, I don't buy any junk. I started off selling my old Magic Cards on Ebay. Most of the Magic cards weren't even good, for those wondering at home.

I would put 60 random Dark commons, a few uncommons and a rare into a box and sell it for $2.49. Ice Age got me $3.50. Mirage $1.99. These are the big binder cards, the rares no one used and commons we all had 1000's of. I did sell one Morphling for $35, but that was the biggest. The problem was, the whole thing actually felt like work, and I was always paranoid they wouldn't get the cards or felt gipped somehow and they'd whack my feedback. (Same with the BMG CD's, though I still do those like clockwork.)

Then I found out that people willingly pay ridiculous amounts of cash for electronic objects that exist only in online games (MTGO, Eve, Everquest, all of the online games). That's no news to most of y'all, but it was like Moses on Sinai for me. The reason is, I had found a hugely undervalued trade good on Eve Online, and had made billions of ISK (Eve currency...currently 1 billion eve ISK is worth around $250-$300) buying and selling it. I am sad that the item in question doesn't drop much anymore, and the only reason it was undervalued is that it is large and hard to move (thus it only worked well when I was buying huge quantities, recycling it and then selling the components), so my market is mostly gone and my ISK drying up.

Still, between February of this year and now, I have made around $4,000 selling electronic money, simply by playing a game I was already playing. To be honest, in the past 3 months due to my wrist problems, I haven't even done much playing other than going online and transfering cash to whoever bought it. I also made another $300 in Magic Online cards, though I spent a little more than that. (And yes, I know that is small change to many of the professional game cash sellers) Still, that's a lot of junk in the real world.

And more importantly, it did wonders for my cash flow. I never feel stretched anymore, and always have plenty of paycheck in the bank when the next one arrives. And if Eve doesn't cancel my accounts for Eula violations, I should be able to get another $2,000 out of my two accounts after I sell off most of my liquid assets in-game, almost enough to pay for my Belize trip.

I guess the point of all this is that I hear complaints all the time from certain folks at work and in my family about how there is never enough money. One guy I know who makes around $10k more than me does nothing but complain about how he never has any and is in debt up to his ears.

Personal finance is about 10% income and 90% behavior (I think Dave told me that). We all know tons of people who make plenty of money but are still in debt to the gills. After my bankruptcy, I was only making 9 bucks an hour for almost a year. However, I made the choice to never, ever, be in over my head again. If I spent a dollar, any change went directly into a bucket at home (and still does). If I spent a 5-dollar bill and got a 1 back, that did too. (not doing this one though anymore) If someone offered to buy something they saw in my house or car (old books, posters, more Magic cards and other junk), I'd sell it. If I was out of cash, there was no way I was putting food on a credit card. I would eat whatever leftoevers were at home or my ex-fiances. Even today, when my Eve money ends, I will find something else to do to keep cash on the Paypal account or I will do without my movies.

We live in a society that is in for the quick fix. Credit card offers are NOT your friend. They do not make people adults, or show that we've done something right. These are businesses, designed to make money. They will sign you up whether you have any way to pay them or not. They will charge you $30 for paying late one time and jack your rate up after two. The new bankruptcy laws go into effect in the next several weeks, and that is no longer the easy out it once was.

I am not as bad of a credit demonizer as Dave Ramsey is, but I do understand that they are dangerous, no matter how much we think we have them 'under control.' Often, people buy as much house, or car, or stuff, as they can get away with. They don't leave themselves any escape routes if they lose their job or something like a bad illness or blown engine happens.

I am not a poster child for anything, but I have put myself into a position where if I lose my job tomorrow, I can actually pay all my bills, including my mortgage and car stuff, by playing video games or working at a McJob for $7/hour, without touching my 401(k) or IRA's. It wouldn't be much fun, but I could do it. Heck, the cost of my car was exactly equal to what I will have saved by quitting smoking for three years (It was a present to myself for doing right by my health and life). I do understand that there are extenuating circumstances for some people's difficulties, but putting balance into one's financial life can have a tremendous impact and actually allows you to buy more stuff over the long term.

However, unlike many, I do not see putting $5,000 worth of furniture on a credit card to furnish a new apartment as an extenuating circumstance. I do not see spending 1/3 of one's income on a new car as extenuating circumstances. For Heaven's sake, Christmas is not an emergency, and yet more debt is added during that time of the year than any other.

It's funny, I sold $45 worth of of stuff on Ebay since I started this post (too long ago!), and that's enough adding to what was there already to let me go get my new Ipod tomorrow.

Go me.

Staph Sucks, buy Nabi!

T's first stock pick: (I'm in for 503.24 shares at $12.34 (I'm holding the 3.24 for a friend ))

Nabi Biopharmaceuticals
Risk: High
Reward Potential: High
Turn Estimate: 3-6 months

Nabi has been working on a staph vaccine with a potential revenue stream of 5x (or more) greater than the current revenue of the company.

Don't bet big on anything I suggest, I'm not a broker and I don't play one on TV; but if you have some unallocated funds and like to gamble, the potential for a real hit is there.