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Bucks Blog: It’s Time to Occupy Your Checkbook

November 2, 2011 by Leave a Comment

Carl Richards

Carl Richards is a certified financial planner in Park City, Utah. His sketches are archived here on the Bucks blog and on his personal Web site, BehaviorGap.com.

The last few weeks, there’s been plenty written about the Occupy Wall Street protests. As they’ve spread from New York to other cities, it’s been interesting to see people take to the streets to protest everything from bank bailouts to tax policy.

But it’s also made me curious. Does our willingness to protest the bad behavior of the government and corporations distract us from protesting (or even recognizing) our own personal financial behavior?

This question applies to everyone. Regardless of whether you’re marching, or even if you disagree with these groups, I think there’s a lesson to be learned. By focusing on the financial decisions of others — banks, business, government — we risk putting aside our own questionable behavior in the name of trying to make global change.

In some respects, I think it’s easier to focus on what we believe others should do than face our own situations. As W.R. Alger, a Unitarian minister, put it, “We give advice by the bucket, but take it by the grain.”

To be clear, I think there is plenty to be angry about. I think there are things that must change on a national and even international scale. All I am suggesting is that it might help that effort if we ourselves, as the saying goes, try to become the change we want to see in the world. So in addition to marching through cities around the country, I wonder if we can stage a personal version, an “Occupy Your Checkbook” movement.

Last week, I wrote about how difficult it can be for people to figure out where they stand financially. Part of the difficulty comes from an unwillingness to sit down and do the math. Maybe you can outline in detail everything the banks did wrong, but how familiar are you with your own financial situation? Isn’t it time we devoted some attention and passion to our personal finances?

Perhaps it’s time to talk openly about past mistakes we’ve made. Time to take responsibility for our own financial situations and make a plan to improve it. Time to stop buying crap and hoping it makes us happy. Time to stop pretending to be something we aren’t financially. Time to stop trying to keep up with the Joneses, since we all know they’re buried in credit-card debt anyway.

Occupy Wall Street may or may not lead to change. But I know for a fact that if you Occupy Your Checkbook there will be.

Too often I hear people blaming a third party for their financial problems. In some instances (like fraud, theft or medical emergency), we don’t have control. But in many cases, the only person at fault is the one we see in the mirror.

The credit card companies didn’t make you buy that big-screen television. The banks didn’t make you take out a $500,000 mortgage. When it comes to our discretionary financial decisions, we hold full responsibility. How long can we keep pretending that these choices fall on someone else?

So tackle the things that you can control. Figure out exactly how much debt you owe. Work through your budget and understand where your money goes. Ask hard questions about your needs and your wants.

Again, I know these seem like small things in comparison to the other stuff. But be honest with yourself. What’s more likely to have an immediate and direct impact on your life, Occupying Wall Street or Occupying Your Checkbook?

Article source: http://feeds.nytimes.com/click.phdo?i=950b86011b066e796c7738795f72632c

Filed Under: Your Money Tagged With: , ,

Household Net Worth Falls 0.3% in Quarter

September 17, 2011 by Leave a Comment

WASHINGTON (AP) — Americans’ wealth declined this spring for the first time in a year, as stocks and homes fell in value, a Federal Reserve report said Friday. At the same time, corporations increased the size of their cash stockpiles.

The combination could slow an already weak economy because it implies that families have less to spend and businesses are reluctant to expand.

Household net worth dropped 0.3 percent to $58.5 trillion in the April-June quarter from the previous period, according to the Federal Reserve’s Flow of Funds report. The decline followed three straight quarterly increases.

The value of Americans’ stock portfolios fell 0.5 percent in the second quarter. Home values dropped 0.4 percent.

Corporations held a record $2 trillion in cash at the end of June, an increase of 4.5 percent.

Net worth is expected to fall even further in the current quarter because stocks plunged in late July and early August.

“August put a big dent in whatever confidence consumers had left,” said Greg McBride, senior financial analyst at Bankrate.com. That’s largely why retail sales were flat last month, he added.

Over all, household wealth, which mostly consists of home equity, stock portfolios, and other savings, has risen 15 percent since the recession officially ended in June 2009.

The increase is almost entirely the result of one of the fastest bull markets in history. Stocks began to recover in the spring of 2009 and had doubled in value by April of this year, as measured by the S. P. 500 index.

But Americans’ wealth has taken a hit since the second quarter, the period covered by the Fed report. The S. P. index has tumbled 11 percent since its April 29 peak, and 8 percent since the end of the quarter. That likely means an even larger drop in household net worth in the July-September quarter.

Stock portfolios make up about 15 percent of Americans’ wealth. That’s less than housing but ahead of bank deposits, according to the Fed’s report.

The likely drop in wealth comes at the same time that incomes are stagnating, particularly for middle-income households. Average household income, adjust for inflation, fell 6.4 percent last year from 2007, the year before the recession, the Census Bureau said earlier this week.

Americans also have less equity in their homes. The average homeowner has just 38.6 percent equity, down from 61 percent a decade ago.

The report found household debt declined at an annual rate of 0.6 percent from the previous quarter, helped by a big decline in mortgage debt, which has fallen for nine straight quarters.

But the decline is deceiving. Mortgage debt is coming down because so many Americans are defaulting and losing their homes to foreclosure, not just because people are paying off loans.

Article source: http://feeds.nytimes.com/click.phdo?i=2bb20526f23ff28711accb85ca2e4128

Filed Under: Economy News Tagged With: , ,

Preoccupations: Into the Bustle of China’s Boom

June 26, 2011 by Leave a Comment

I was excited about the idea. I’ve been with the company for more than 20 years. From 2005 to 2007, I worked on a project in Russia and made a number of trips there, but they never lasted more than 30 days. I have a feeling that NBBJ felt I could adapt easily in China because I’ve worked with some demanding clients. They probably also figured that if I could work in Russia, even for short periods, I could work anywhere.

I would rather have been offered the China project when my children were young and could have gone with me, because it would have been a great experience for them. On the other hand, I probably had more flexibility when the offer did come up, because they were already grown and on their own.

The biggest drawback was that my wife, Beverly, couldn’t join me. She’s a lawyer with the Washington State attorney general’s office, and her job can’t be done from afar. We decided that I’d go and that she’d visit when she could.

My predecessor in China tried to tell me about the job, but it’s hard to teach or learn everything by phone. And NBBJ didn’t have classes or training that larger corporations with hundreds of overseas employees might have.

Before I agreed to the assignment, however, the company sent my wife and me to Shanghai to give us a feel for what life might be like. We saw some housing options and met the people in the Shanghai office. NBBJ also paid for some economy-class airline tickets for family visits.

That amount of help was O.K. with me. I’ve traveled a fair amount, and am usually pretty good about preparing for a new region. I’m not necessarily looking for a lot of information; sometimes I enjoy being surprised and would rather find things out for myself.

I had three months to prepare. I picked up software for learning Chinese, but work was so busy that I didn’t have time to get to it before I left or after I arrived. Luckily, our Chinese employees spoke English.

Of everything I encountered, the biggest surprise was the street signs — they were in both English and Chinese, so it was easy to get around. The buses broadcast the stops in both languages as well. I was pleased to find that I could go wherever I wanted; I saw no restricted areas.

Since NBBJ is a United States company, Chinese law requires that we work with a local design institute in China. It could be stressful at times. The Chinese clients expected significantly more design options than a typical American client, and they wanted faster responses. Occasionally, they seemed intent on sticking with a design that had already been done, but on the other hand, they could be willing to take risks.

My work schedule was intense, so I didn’t have much free time, but I did become lonely for my family. It took a while, but I made friends in the compound where my apartment was. I also got to know some expats in our office, and my Chinese landlord and his wife were wonderful.

I enjoyed Shanghai more than I thought I would. Life moves onto the street in that city, especially when it’s warm. There’s always something happening, from card games to street-vendor sales to impromptu ballroom dancing. I was there for the 2008 Olympics in Beijing and Expo 2010 in Shanghai. The Chinese literally rebuilt both cities for these events, which, as an architect, I found fascinating. There is probably no better place for an architect to practice currently than China.

LIKE many other people who return from work in another country, I wish that I had traveled more while I was there. I also wish that I had learned the language before my arrival: then I could have enjoyed arguing with the taxi drivers about directions. But I did learn how to get around and knew the most direct routes. I also regret not being able to just talk with the drivers. Something told me they are like taxi drivers everywhere — they want to talk about the city and what’s happening.

I’d advise people who work overseas to try living outside the expat community. There were expats everywhere in Shanghai, but they seemed to congregate in certain areas. People with children might want to be close to the expat schools, but it pays to live with the locals if you can. You learn so much more about the culture.

I’ve been home a year now. I live on a houseboat on a lake in the middle of Seattle. In Shanghai, I rode a bike to work; here I walk to the office. I’m amazed by how quiet Seattle streets are. I miss the noise of Shanghai.

As told to Patricia R. Olsen. E-mail: preoccupations@nytimes.com.

Article source: http://feeds.nytimes.com/click.phdo?i=d2a9a3a5d8b7676e27fa9bc1d775e44d

Filed Under: Business News Tagged With: , ,