Innovation

by Louise

I watched this documentary – Silicon Valley. I was struck by the description of the atmosphere of innovation described in Silicon Valley. The many companies that were started as a result. Have you been at places where there was something new being discovered or something old being reinvented ? What do you think of risk taking, not being afraid to fail which accompany innovation ? Have you been innovative at work ? Any other areas ?

Silicon Valley

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188 thoughts on “Innovation

  1. No. I have worked in jobs where creative solutions are wanted, and at times the term “innovation” was a catch phrase. However, it was more creativity within bounds.

  2. Yeah, I’m more in the realm of getting things done that satisfy requirements, and I don’t care for a lot of risk.

  3. No not at all but I’ve been fascinated lately reading the series on Elon Musk on waitbutwhy.com

    The article about Elon’s “secret sauce” was such an interesting glimpse on how he sees the world. So to him (and probably Steve Job’s) risking his personal fortune in starting Tesla isn’t risky, it’s logical.

  4. “Have you been at places where there was something new being discovered or something old being reinvented ?”

    I worked in both exploration and production for oil companies. In the former we tried to discover new oil reservoirs and in the latter we tried to enhance existing reservoirs. If your idea for drilling a new well or enhancing an old one generated sufficient enthusiasm, it might get done. IF your idea was ultimately successful, it was quite exciting. All sorts of obstacles prevented most ideas from going to fruition. Mostly the obstacles were external to the organization, but sometimes not. Some companies were willing to assume more risk than others.

    I also worked in product development for a financial services company. Many of the same principles and dynamics occurred there.

  5. Of course, any “discoveries” I ever became involved in were on a much smaller scale than the SV success stories.

  6. Ha! I remember the series of meetings that my department had when I was a biglaw first year. The “innovation” that occurred was mostly along the lines of having a one-hour argument over whether the word “such” should ever appear in our documents. :) Needless to say, innovation is generally frowned upon in our field.

    In this context, my Twitter feed dealing with newsworthy estate planning topics is REALLY innovative! ;)

  7. Rhett – He’s hemming and hawing trying to figure out how he can buy one and still be MMM.

  8. “What do you think of risk taking, not being afraid to fail which accompany innovation ?”

    One thing that has stuck with me and made me more comfortable with risk was making sure to pay attention to detail. I know others here and certainly some famous innovators may be more the “seat of your pants” type of operators. But I learned that being able to defend actions with well researched fact-based arguments enabled me to keep relatively calm and accept failure. And to keep my job in most cases!

  9. This is what my spouse does. People who are good at it see the world differently. My spouse and I view risk/reward in a very different way. All I see are ways for things to go wrong and destroy everything. Spouse sees ways to de-risk and control things and, most importantly, how to monetize something. But it is a tough and cutthroat business.

  10. Rhett – He’s hemming and hawing trying to figure out how he can buy one and still be MMM.

    That and his April fools post make me think you’re totally right.

  11. “That and his April fools post make me think you’re totally right.”

    What a bind he’s in. He’s got a $400,000 annual revenue stream entirely predicated on him living on less than $30k.

    He’s already found a workaround to that by doing plenty of fun travel/blogger tourism and chalking it up as a business expense.

  12. We watched that documentary a couple of months ago. It was pretty good. I also recommend RevolutionOS, about the birth of the open source movement, as an interesting look at innovation in the CS industry. It focuses on the 90’s

  13. He’s got a $400,000 annual revenue stream entirely predicated on him living on less than $30k.

    He might be able to pivot and start claiming that it was financial freedom that lead to his current success. All along he was into early retirement when what he really wanted was to be self employed.

  14. We have to go meet with one of those fly by night “coding bootcamps” tomorrow. Our adminstration is pressuring us to partner with them. Coding bootcamps are the trendoid-education-innovation-du-jour, now that MOOCs have fallen out of fashion. I want to go bang my head on the trendy glass wall of my innovative fishbowl office.

  15. “He might be able to pivot and start claiming that it was financial freedom that lead to his current success. All along he was into early retirement when what he really wanted was to be self employed.”

    I feel like he’s already testing that out with the Tesla post & things like that. He’s also posting much much less in general.

    I absolutely do not think like an innovator in the SV sense. I am not as risk averse as you might guess, but I don’t have the kind of passion for creating new things that I think is needed to really innovate. I think I am more of a pragmatic problem solver, which is a totally different type.

  16. ” He’s got a $400,000 annual revenue stream”

    really?

    I thought that was from the 4/1 post

  17. “I feel like he’s already testing that out with the Tesla post & things like that. He’s also posting much much less in general.”

    yep. Also, I think a big source of his revenue is from the Betterment endorsement and the clicks that it generates. I’d say that point was the end of the “authentic” MMM. Selling the rental house so that he could have more time to travel to meet-ups and interviews was another nail in the coffin.

  18. “I thought that was from the 4/1 post”

    The New Yorker article gave away that tidbit.

  19. I totally agree on MMM. There is definitely going to be a Why I bought a used Tesla article within the next five years. After reading the Waitbutwhy Tesla article, I sort of want to buy one myself.

  20. Off-topic: Woot Kids has a 144 piece art set today for those of you who stock up on them for kids’ gifts.

  21. Rhett, I have seen the curriculum for the particular bootcamp we are evaluating. They claim that they can take someone with NO programming background, and turn them into an accomplished fullstack Spring/MVC/JavaEE/database developer in a few weeks. I am sorry but I have been in this field for a while, both industry and teaching, and I actually KNOW those technologies, and there is just no way.

  22. Off-topic but of interest. Cousins of ours are about to buy a home above 700k. Out there in mid-america, that is quite a high price for burbs. Together they earn around 200k more or less and have two kids. Neither of them is a doctor or investment banker, so their salary is not going to go up that much. Considering no debts, would you invest so much in a house, especially when similar houses (but bit less luxurious) can be bought for less?

    I think it is waste of money/too much non-liquid investment etc etc. Not that I am going to stop them from buying, but wondering what Totebaggers think.

  23. I think a bootcamp like that might be useful for someone who say has been doing financial software in Python, and who wants to move over into the Java world. But honestly, there are easier ways to do that.

  24. Dell – that actually seems pretty conservative to me for home buying. Probably around 20% of their gross per month if they’re putting 10% down, which should theoretically give them plenty of wiggle room. I just wouldn’t buy the most expensive house in the neighborhood but if that’s the norm and the schools are good I would do it.

    DH and I were probably making a bit more than that when we bought a similarly priced house five years ago and we’ve been able to still save in retirement, taxable accounts and 529 plans.

  25. Dell – at a 200K income that is not that much for a house. I won’t tell you the price of the one we’re buying! ;)

  26. Dell – It depends on their down payment, how much they already have for retirement or other investments, property taxes, and childcare costs. I would not take out a $700k mortgage.

    Also, DW and I agreed last Friday when we were painting that we never want to own a house bigger than our current one, which is about 3k sf, plus the basement. I also admitted that, when we were buying, if someone could have told me that she would have remained employed this long, I would have pushed for something bigger, but I’m glad that we didn’t. So I probably wouldn’t be buying your cousin’s house, anyway, since it sounds like it’s huge. Now if it’s $700k because it’s on a lake, that’s different.

  27. Property taxes should be around 12k to 15k atleast. That works around to 25% of gross. Otherwise they are very prudent so should have enough savings and atleast 20% down. Kids only need after school care.
    No Lake Milo, but nice house for sure, not top of the line. similar house in same school district can be had for much less than 600k. I guess I am more conservative with my money.

  28. All along he was into early retirement when what he really wanted was to be self employed.

    I hope that italicized. I am a slow learner.

    Rhett – You finally put into words what I have been thinking all along about most people who aspire to “retire” in their 30s. I do know some who retired fully in their 40s after selling a business or coming into a pile somewhat unexpectedly, and who spend time on teen kids and/or do fun things/good works for the rest of their lives, but they didn’t make a crusade out of living very sparsely for the early years.

    MMM has to be careful about changing focus. He has fanatic disciples, some of whom have coerced their spouses into one phase of the MMM journey or even split up over it. Think “Mercy”.

  29. “He’s also posting much much less in general.”

    Perhaps moving toward retirement for blogging?

  30. Dell – No, that’s too much. That’s approaching $4k PITI monthly. That’s too dependent on both incomes, and not enough room for investments, especially when there are suitable alternatives for less.

  31. “What do you think of risk taking, not being afraid to fail which accompany innovation ?”

    Not a big deal in SV, where you innovate or get left behind. IOW, not innovating and not taking risks pretty much guarantees failure.

  32. That’s approaching $4k PITI monthly.

    30% of gross (which is considered conservative) would be an even 5k/month. I think that 30% gross idea must be something the National Association or Realtors dreamed up.

  33. Dell – if they have a bunch of savings and kids college funded then I would say why not on the house. If those areas are lacking then I would probably go for the lower priced options. I think between our mortgage and daycare we were probably at 36% of gross income for a year or two but it sounds like that stage has passed for them.

  34. Yeah, we have been through one too many lay offs to even consider that. Currently we are about 10% gross and very happy with it. Soon we will have to take it to 20% as we need a bigger house, but just the thought makes me sad. I know it will more than makeup for that in other benefits so I am on board to getting a new house.

  35. ” I think that 30% gross idea must be something the National Association or Realtors dreamed up.”

    It’s easier to absorb 30% of gross in a mortgage when:

    1) you’re covered by a defined benefit plan from IBM, Sears Roebuck, or the Navy
    2) you’re buying your house as a 23-year-old newlywed who can expect considerable earnings increases
    3) you can expect that your mortgage will be paid off by 53 at the absolute latest
    4) your wife is a SAHM who:
    a) covers all childcare costs unpaid
    b) could easily pick up some sort of work when the kids are older or if you’re unemployed temporarily

    Change those factors, and 30% becomes a bad idea.

  36. “Off-topic but of interest. Cousins of ours are about to buy a home above 700k. Out there in mid-america, that is quite a high price for burbs. Together they earn around 200k more or less and have two kids. Neither of them is a doctor or investment banker, so their salary is not going to go up that much. Considering no debts, would you invest so much in a house, especially when similar houses (but bit less luxurious) can be bought for less?”

    No. Not even close. Our PITI is around 10% of our gross income, and I like it that way. In the same vein as my earlier post – I am not risk averse so it is not the risk of job loss that drives this, but I like to leave my options open. I also don’t put a ton of personal value into having a big or nice house vs. other things like trying to have enough money to have the choice to retire early or to spend freely on other things that are not fixed (like buying hipster pickles at the farmer’s market or vacations).

    I also agree with Milo on the 30%.

  37. We just went to our friends’ new house for the first time over the past weekend, which they just bought for around $750K. It was beautiful but on one of those streets that has half new houses and half old ranches that builders are just waiting to tear down and it’s not a particularly upscale area but has a great elementary school. Anyway, the wife makes $225K (and will make a lot more this year, she’s an attorney) and her husband is a teacher (so probably $50K or $60K). Husband comes from money so he was able to pay off wife’s student loans with some of his trust fund but they are very frugal people. They lived in a townhouse until the recent purchase and had it paid down to almost nothing and had about $350K in the bank that they had saved up over five years. They put enough down to get a conventional mortgage (why I don’t know because the rates are the same) and put all of the proceeds from their townhouse sale back in the bank (probably around $300K). They are the people that can now afford the nicer house because they’ve taken care of everything else and have family money has a backstop. Plus the wife figures she can downshift at any time and they’d still be fine.

  38. During this period of high demand for programmers in the US, boot camp sounds like a great way to quickly sort the people who can become decent programmers. Most of the senior software engineers I know had high SAT-M in middle school, which is probably another equally effective way to sort. Part of being a good software engineer is being able to identify patterns quickly, especially any exceptions to those patterns. Other aspects of software engineering, like being able to create dialog boxes in Windows, are teachable to a larger portion of the population.

    Computer science and engineering are not credential-based in the way that healthcare professions are and they are easily outsourced, so I would choose nursing over programming bootcamp if I wanted to stay employed indefinitely, even though I have more aptitude for programming. This ties into the government’s decision to pay for healthcare and to pay healthcare providers at high global standards, partly because our medical education pathways are long and expensive. In other countries, physicians earn about 3x the median income, which would mean a full-time physician would earn ~$100k in the US.

  39. Milo,

    I also think there is a tax/interest rate angle as well. At 3.1% $1,000,000 is 4,270.16/month of which the first payment is $1,686 in principle and $2,583 in interest. In a world of 1990s interest rates of 8.5% the same $4,270 payment would result in $336 in principal $3931 in interest. In a higher interest rate environment the mortgage interest deduction makes a much bigger difference in the first years of the mortgage.

  40. First, what you can “qualify for” in terms of a mortgage, should be taken with a grain of salt. Our realtor told us that it assumes your income will grow over time so that the annual outlay as a percentage of your income remains the same as your taxes/insurance etc go up as your home value goes up.

    When we bought our house about 12 years ago, we each were making about the same amount and only looked at houses we could afford on one income. We had small kids (all under 4) and knew that based on our jobs and ages, neither of our incomes were growing fast. We didn’t want to hit retirement and not be able to afford our house.

    I am not sure what I would do without knowing the specific market/neighborhood. I’d be more inclined to take a step down, unless there is some other criteria that makes this the best choice. In general, you don’t want to own the biggest/best in the neighborhood. We broke that rule as we have one of the bigger houses, but it is one of the best floor plans.

  41. Off topic, but thinking of innovation versus old school, retirement freedom versus working forever, and the thread on the 30 day challenge about sentimentality and savoring the past. The Mets (we have MLB package for DH) are in LA for three games. We stayed up late (retirement freedom) to watch the whole game because Vin Scully (88 and not retired until October) was announcing. Vin Scully was the young new announcer in Brooklyn when 12 year old DH’s Brooklyn Dodgers defeated the hated Yankees in the World Series. (Priceless memories). He works alone. His voice is not quite as mellifluous as it was ten years ago, but still strong.

  42. We are carrying two big mortgages right now. It makes me feel a little crazy to think about it. We got an offer on house in the suburbs, so maybe just one or two more payments until we are free of that. It boggles my mind that the banks think that it is appropriate we have that much debt. We are living paycheck to paycheck right now – in the sense that our paychecks get deposited, the mortgages get withdrawn and there is just enough left to cover basic expenses. Thank goodness this is a temporary solution – we’ve got things riding on the credit cards while we anticipate a work bonus. If we had the great big house the bank thinks we can afford (PITI 35% of gross, which is about 55% of net) – we would be in such trouble if we suddenly the furnace needed replacing, or DH was out of work for 3 mos.

  43. They claim that they can take someone with NO programming background, and turn them into an accomplished fullstack Spring/MVC/JavaEE/database developer in a few weeks.

    That seems unlikely. What about being able to strip the leading zeros out of field X and convert the date in field 28 from DD/MM/YY to MM/DD/YY? More of the low level grunt work. Would that be possible in 10 weeks?

  44. WCE, if the bootcamps are effectively sorting people who can become good software engineers, they would have a high failure rate. These things are expensive – why would someone take that financial risk?

  45. One of the lessons of the 00’s was that software engineering wasn’t that easy to outsource. It turns out that for many companies, their business intelligence and a lot of their advantages are buried in that code, and it made sense to handle critical code in-house. The company I worked at were all moving their outsourced projects back in house by 2006 or so. Where my DH works, they no longer outsource anything – the software is too critical.

  46. Most of the big banks are more careful now about mortgages vs. 10 years ago. I know several neighbors that are working through new home, or refis right now. It is taking a while because they need A LOT of documentation and I doubt it was just a slam dunk to allow you to carry two mortgages.

    This post is timely because I got involved with a startup in a field that I am passionate about. One of the founders had to relocate to the west coast, and I didn’t love one of the new leaders that joined last year. I stuck it out for an additional six months and then I just decided to give them my notice at the beginning of this year. I wasn’t really getting paid, and I found the whole start up experience to be very frustrating for my MBTI type of personality.

  47. Did anyone else have a kid taking the new SAT in March? The scores are in. My daughter took it as an 8th grader, for practice / special program qualification so who cares if it’s the first administration of a new test. She ended up with a 660 V / 640 M, which seems pretty good for someone who hasn’t yet had geometry, but I wonder if there’s some score inflation like there seems to have been on the new PSAT.

  48. @Dell — I wouldn’t do it. I didn’t do it — we made close to that when we moved back east, and we bought a house for less than that.

    But I am also too anchored to the old expectations. When I first bought, 2.5x was the recommendation, maybe 3x if you have no other debt or big expenses. But then again, that was also based on interest rates around 8-9%, and current rates are half that (or less). And if you end up with a @$4K monthly payment, including taxes, on a $200K income that’s still within even the 28% figure I grew up with, much less the 35-40% some people will lend now. Heck, a web calculator even says a $200K salary will qualify you for a $1MM house!

    So objectively, it’s probably reasonable. But I personally wouldn’t do it unless I absolutely had to because there were no other good options in the area I wanted to be in. I remember being in Ada’s position for over a year when DH lost his job; I also remember the shock of moving back east and buying a house that was 50% more expensive than our NM house, and then adding two daycare bills that together exceeded even that ridiculous mortgage. I am SO thankful not to be there any more — 12 years later and we are on the downhill slope, with the mortgage more like 10% of income, and with maybe 10 years left and sufficient cash reserves to pay it off any time we want. So it would take a LOT to persuade me to climb back up the mortgage hill again.

  49. Mooshi, without knowing the type of people who are admitted to the bootcamps, it’s hard for me to know whether the bootcamps are effective or whether the admission standards (either unofficial or official or both)are effective. I suspect that as the bootcamps become more common/less selective, they will become ineffective.

    Boot camps are/were effective early on because of the quality of the inputs, not because of the boot camps themselves. You already know I think that college is mostly a hoop-jumping exercise and that was especially true for me in com sci, which was in the liberal arts college when I was an undergrad. I thought only one of my com sci professors was as competent as my engineering professors, and she was an adjunct with a joint appointment at NASA JPL.

  50. We don’t fit Milo’s example, but when we bought our house, PITI was between 35-40% of our gross income, and we were terrified that first year of anything breaking. We freely accepted that we were young, no kids, growing careers, and we had time to take a gamble. Over the years we’ve paid down the mortgaged, refinanced into a better rate, and earned more money, and our PITI is now about 15% of our gross income. My DH occasionally talks about upsizing to a bigger house, but I like how reasonably we afford the one we have right now, and I feel “too old” (in the terms of years of a mortgage) to take on the kind of gamble that made a lot more sense at 26. We can likely pay this one off early if we want– why would we want to tie ourselves to a bigger mortgage that might truly take us 30 more years to pay off?

  51. Regarding entrepreneurship. It’s terribly risky–you go without income for months and years. You invest your own money and time. You ask others to invest their money. Most start up companies do not make it. That said, I think it’s an addiction for a certain sub-set of people.

    My partner is an entrepreneur and I consider him un-employable by most companies. He doesn’t take direction from others well. He loves being in charge. He loves building products. He doesn’t care about the money. He just wants to be left alone to create things.

  52. Regarding a house, I think it’s foolish to buy a more expensive that what you need. I’m totally with Milo on this. That said, most Americans and 99% of House Hunters people disagree with us.

  53. From the Great Recession, I learnt that many people who should have had a cushion just didn’t. These were people at the point where you would expect mortgage at least half done, retirement, college funds etc. Hardly any of that was in place and it wasn’t as if they needed the money for a start up either.
    Most people did land new jobs but are still very behind.

  54. Re: 2:48, my DH recently turned down a job offer that was >200K because it would have required him to go to an office every day. I don’t think he would ever take an office job unless things were really dire. Instead, he has worked his entrepreneurship into having a bunch of hands in different pots, so we have income streams from multiple places and the risk is more spread out.

  55. PITI was between 35-40% of our gross income

    I just ran the number for us at 37.5% of gross. I assume after closing costs, down payment, being young etc. you didn’t have a 9 month emergency fund after you closed?

  56. “I learnt that many people who should have had a cushion just didn’t. These were people at the point where you would expect mortgage at least half done, retirement, college funds etc. Hardly any of that was in place.”

    But life goes on, somehow. Just being more introspective and self-critical about it, instead of the Totebag knee-jerk tut-tutting, I wonder if they’re having more fun. And if you’re foreclosed on, so what?

    Lately, I’ve also been feeling a lot more like death could be right around the corner.

  57. Most people did land new jobs but are still very behind.

    That’s what I was thinking. If you’re at 40% of gross and you’re out of work for 6 months then even when you start working again you’re not really going to have any extra with which to catch back up. And, that assumes your new jobs pays as much as the old one.

  58. But life goes on, somehow.

    We’ve come to find out that friends have taken out yet another $25k limit credit card to pay for day care. The wife makes $120k and the husband makes $45k and she doesn’t think he has the patience to stay home. So, there you are. Most folks are just doing the best they can to make it through the day.

  59. “yet another $25k limit credit card to pay for day care”

    Discharged in bankruptcy?

    Although I agree that the day-to-day management of that system is no fun and definitely stressful. It’s not like I’m endorsing this whole way of thinking, I’m just trying to look at it from a different angle. I’m sick of the MMM cult’s horror at every bit of spending.

    I was reading this article (fascinating ending, btw):

    http://www.politico.com/magazine/story/2016/04/donald-trump-marvin-roffman-casino-lawsuit-213855

    and thought that Trump has certainly had some fun and left his mark with the resources he inherited.

  60. I agree with “making it through the day”. I’ve heard – got my teacher’s certificate a whole bunch of times. Former stay at home spouses did take up jobs to help the family stay afloat.

  61. “Did anyone else have a kid taking the new SAT in March?”
    My youngest took it. I don’t really know how to compare the scores – they were higher than his 8th grade scores, but I would expect that now that he has had more math. His older brothers, however, definitely believe they have dumbed down the test, because DS3 broke 1400 and they didn’t!

  62. Discharged in bankruptcy?

    I don’t think that’s the plan. It’s what they are doing to get over the hump before the oldest hits kindergarten. I assume the plan is to pay it off once the youngest hits kindergarten?

  63. LOL, HfN. Yeah, she’s not all that far behind her big brother’s PSAT — too bad his competitive instincts are more likely to lead him to explain it away than to study for next year!

  64. This couple has been working 10 plus years, so must have a decent amount of money saved. They are frugal otherwise. The part that I don’t understand is that they are never going to make physician/finance douche type of money, so to me, a similar house for 500k would have been perfect. I guess, their threshold of comfort with percentage of PITI going to mortgage must be higher than mine.

    To support Milo’s point, several of our neighbors just walked away from their homes during 2008-2010 period. I guess they never had enough equity in first place and the house prices crashed. So after a short sale, many of them are gearing up to buy a new home. Granted this is not totebag demographic, they don’t seem any worse for wear living a few years in a rental.

  65. We’ve always been at around 20% of gross but I would be fine increasing that if I had enough in the bank. DH and I are renovating our house in the next few months and increasing our mortgage to do so. Some of the reasoning behind it is certainly we’re almost 40 and so let’s get it done and enjoy our house (while still being Totebag responsible and able to save).

  66. Dell,

    Reading between the lines I get the sense they aren’t putting $37k a year in their 401ks?

  67. Dell,

    If they are making $200k in a modest home and are “frugal” and they aren’t putting $38k a year into retirement then the numbers don’t add up. I bet it’s more like $150k. $700k at 3.9% is $2989/month plus $1000 in property taxes has them at $3989 a month which is almost exactly 30% of gross on $150k/year. I bet they’ve always been a lot more overextended than you would have thought.

  68. Around here, 700k is below average for a house.

    Dell, your cousins sound a bit like DW and me. I’m going to guess they’ve been living in much more modest accommodations for a while, facilitating a lot of saving, that they’re fulling funding their 401ks and IRAs every year. They’ve probably even funded 529s and other college funds, which we haven’t.

    I don’t see a big problem with them spending that much on a house, especially if it puts them in a good school district that obviates the need for private school.

    If they are, as I am guessing, similar to DW and me, this is probably their one big splurge, fulfilling a dream, with a house to grow into as their kids grow up without every having to move up again.

    BTW, to exactly quote you: “Cousins of ours are about to buy a home. ” You also referred to them as a couple, and mentioned kids. In addition to being your cousins, are they each others’ cousins too?

  69. “Reading between the lines I get the sense they aren’t putting $37k a year in their 401ks?”

    My reading between the lines was that they are maxing out their 401ks. My reading is also that they have equity in their current home as well.

  70. they’re fulling funding their 401ks and IRAs

    Dell said that for sure they aren’t doing that.

  71. HM, I guess I’ve fallen behind on CC, and hadn’t heard the results were out (which pretty much guarantees that I will fall hopelessly behind).

    I’ll ask DS about it. I was talking to the mom of one of his classmates who took that test, and they were waiting for the results to help them plan a trip this summer that would include some campus visits, and it sure seemed to be taking a loooong time to get the results.

    I think the CB also extended the registration deadline for next month’s test because they were taking so long with the March results.

  72. “Dell said that for sure they aren’t doing that.”

    If they’re frugal, and living in a modest home in an area where a $700k home is pricey, I’m wondering where that money is going. Well, if it’s not going into their 401ks then I guess a lot of it is going to taxes.

  73. Finn,

    The most likely explanation is that they aren’t all that frugal and they make significantly less than $200k.

  74. HM, did your DD take the test enthusiastically, or at least willingly?

    I wanted DD to take the March test as well, but she demurred.

    BTW, I have a theory that the March test could be one of the truer tests of aptitude for a while, since its newness precluded the type of prep that had become so prevalent for the old SAT.

    WRT the dumbing down of the PSAT, I’m guessing you already know about the commended cutoff being 209.

  75. Rhett, I guess that shows that without really knowing their situation, it’s hard to say whether or not buying that $700k house makes sense.

  76. Willingly, but not enthusiastically. She did make it through a practice test, but declined any further studying as it would have interfered with her busy schedule of instagramming and YouTube. She said there weren’t any other 8th graders there that she saw (MidPac site), and the room she was in had just her and a senior.

    I saw about the 209 for commended just today, and that definitely suggests that there was score inflation across most of the range for the PSAT, despite the lower ceiling. And it looks like there officially is some inflation in the new SAT. They have a score converter here https://collegereadiness.collegeboard.org/sat/scores/understanding-scores/sat-score-converter , and running it suggested that each section score would have been 20 points lower on the old version. Anyway, by the time she’s thinking about it again the new test will be the standard that everyone’s used to.

  77. This definitely is another step that makes the SAT less of a differentiator among strong students. I predict a Finn lament that Stanford is rejecting even more students with perfect SAT scores.

  78. My brother and SIL are slowly shopping for houses around the $1M/6,000 sf (8k with basement) range. We’ve had years of conversations about why I think it’s silly, and he doesn’t disagree, but they like working, and they don’t spend money anywhere else. They have cheap cars, they don’t care about clothes, they don’t travel unless DW and I set something up, their kids don’t go to private school. And they’re not looking to impress people. They don’t want a big boat, they don’t want a vacation home, and they don’t want to retire early. They owned their last house outright, in a cheaper area, at around half the cost. His argument is simply “we might as well spend some money on something.”

  79. His argument is simply “we might as well spend some money on something.”

    I bet that thought gets louder and louder in MMMs head each day as well.

  80. Atlanta, my guess is that if you have a $1M mortgage and the kind of income to qualify for it, you will run into AMT and not be able to deduct the full amount of your interest payments.

  81. I don’t have close to a $1.0 million mortgage and living in CA I am subject to AMT

  82. Let’s say you are buying a house and you find out on inspection the furnace is quite old (20+ years). As part of the negotiation, you require the owner to have the furnace serviced, in order to reveal if it really is at the end of its useful life. They do that, provide receipts that show that and a little bit of work has been done. The furnace appears to work fine while you live there.

    Some not so long time later, you are selling the house. The inspector for the new buyers finds code on the side of the furnace from the previous inspection. They call the company to have it decoded. They state that they found a cracked heat exchanger and the owners’ declined service.

    The furnace still works, it is still 20+ years old.

    Things I found out about cracked heat exchangers:
    1. usually best to replace the furnace
    2. can lead to lethal CO leak
    3. sometimes a scam by furnace inspectors to get you to replace the furnace

    Doesn’t the original owner (and the original agent) have an obligation to tell you about the cracked exchanger? It wasn’t on the property disclosure form, because it ostensibly came up after the inspection. It seems you should be obligated to tell about relevant defects in the house, especially if they could be life-threatening to the occupants, even if they come to light late in the process.

  83. The mortgage interest deduction does start to phase out but it wouldn’t be by a large amount…

    “Thankfully in 2015, the phaseout begins with incomes of $254,200 or more and $305,050 for married couples filing jointly.”

  84. Milo and Rhett – y’all are intent on taking down MMM !
    There is one couple I know who are Dave Ramsey fans and seem to be very responsible. They use the envelope system for budgeting. When they moved to a bigger home, they rented out their townhouse. I would say their combined income is around $170k with two kids in childcare. I am quite impressed with their financial discipline.

  85. Anon, to my knowledge, the owner who declined the repair but did not notify the buyers could be found liable had there been a lethal CO leak. The sellers are legally obligated to disclose any known defects.

    I’m also wondering whether the seller’s agent knew about it. That seems like the sort of thing that could result in loss of license.

  86. My income is south of $254,200 and I am subject to AMT – google tells me the phase out begins with single incomes of $119,200 and is fully phased out at $333,600

  87. @ Anon, since the buyer was on notice about possible problems with the furnace, the buyer should have ordered a further inspection of the furnace and had the report sent directly to the buyer. Since buyers have inspections done for their benefits, I don’t think sellers have an obligation to go beyond what inspections the buyers do.

  88. Louise – I’m highly amused by his predicament.

    If you want to read a more realistic MMM, you’ll find it in RootofGood. It’s a horrible name, and he’s kind of boring, and he has almost none of MMM’s entertaining obnoxiousness, but he and his DW retired with about $1.5M and three kids in NC. He’s not carbon-preachy, or bicycle-preachy. He retired ahead of schedule only when his job with the state was eliminated. He’s overweight, and a lot of his posts are focused on topics like the most cost-effective ways to take the family on cheap cruises.

  89. Lark,

    The sellers knew about the potentially fatal defect and kept quite. The issue is they were told and didn’t disclose and in most states they are obligated to disclose.

    I’ve mentioned before friends who sold there beautiful home to someone rich and litigious and their having to pay several thousand a month for years at a time fighting lawsuits, With that in mind, if you forgot about the furnace inspection and the husband and three kids died of CO poisoning would your umbella coverage cover the judgement?

  90. Is there an actual legal obligation here to disclose? I have no idea. And even if there is, are we sure that’s information the seller had? What if the company verbally told the seller, “Yeah, we see a cracked heat exchange, do you want us to fix it for $2500?” Of course the seller is going to say hell no and decline the service. If you told me I had a cracked heat exchange, I would have no idea a CO2 leak could be a downstream potential issue unless I were explicitly told.

  91. Milo – I read Root of Good occasionally but he is a little boring (but seems nice). The 1500 days guy is more interesting but he hasn’t retired yet. I like Financial Samurai because he wants to live on $200K per year and not $30K. If nothing else, MMM has spawned an entire blog category, there are too many early retirement blogs to keep track of.

  92. Lark, I agree that the sellers probably met their obligation as far as having the furnace serviced. I also agree that it makes more sense for the buyer to order all inspections. But that does not relieve the sellers of their obligation to disclose the cracked heat exchanger.

  93. Also – each time we have our units serviced we receive a written report from our HVAC company detailing what was done and whether any further work is recommended. If I had been the buyer requesting such a service, I would have required the written report, not just receipts showing something was paid for.

  94. Lark, my understanding (which probably is limited to the states in which I’ve lived) is that sellers are legally responsible for disclosing all known defects. So if the furnace service company asked the seller if they wanted to pay to fix the cracked heat exchanger, whether or not they decide to pay, they were responsible for notifying the buyer of that defect. It doesn’t matter whether or not they had knowledge of the potential downstream issues.

  95. Lark,

    Based on my friend’s circumstances, I get he impression that selling a piece of property opens one up to vastly more potential liability than is commonly understood.

  96. Rhett– 9 months worth of expenses? Nope. As young buyers in the Bay Area with student loans, we got into our house by our fingernails. That said, we currently max out retirement savings, have a substantial emergency fund, etc. It’s worked out well over the last 10 years, but we had to gamble to get into this house. (If we’d waited, given how much home prices in our area have gone up, I’m not sure we would have been in the market for this house.)

  97. Grammar drift:

    I read this today: “X said Y is grieving the recent death of his mother and his best friend.”

    I read that to mean Y’s mother was his best friend, due to the singular “death.”

    Anyone else read it like that?

  98. Fortunately the damages we’re talking about here are the replacement cost of a furnace, not the death of a family. How much does replacing a furnace cost? I’d guess less than the cost of suing. And with suing, there’s also the emotional / psychic cost of spending a couple of years continually going over your past grievances. May I suggest talking shit about the previous owners for a week and then moving on?

  99. In my state, you would have a hard time going after the original sellers. It is a buyer-beware state and difficult to prove knowledge/intent.

  100. Finn– I’d read it that way because of the singular.

    Honolulu– I love that solution. I also regularly suggest setting aside some of the money you would have spent on litigation on something a lot more fun (read: almost anything).

  101. HM,

    I totally agree. But, what is the actualy liability if you’ve sold to a former big law associate now stay at home mom who wants to entertain herself? Easily 6 figures, assuming you are in the right.

  102. Also – you might have a statute of limitations issue. Maybe it has been tolled. But maybe not. I don’t know. Lawsuits kind of are awful.

  103. Oh hell, no, Rhett. I best be getting paid if I am undertaking something awful like litigation.

  104. I best be getting paid if I am undertaking something awful like litigation.

    From what my friends’ experienced, some people love it. And, can you get legal fees if you’re suing over a $2,500 furnace and win?

  105. “May I suggest talking shit about the previous owners for a week and then moving on?”

    Perhaps the seller’s realtor might be willing to eat the cost of repairing the cracked heat exchanger in lieu of a complaint to the agency responsible for real estate licenses.

    Or would that be considered blackmail?

  106. The Venn diagram of people who love litigation and people who want to stay home with their small children is probably two adjacent circles with no overlap.

    And no, you’re not getting six figures in legal fees for a lawsuit with damages placing it in small claims court. (Nor is inflating your damage claim by adding emotional distress going to do the trick either — courts have seen it before.)

  107. Finn– Agreed. We were terrified at the time, but we figured out the worst case scenario and assumed the risk. If we’d said “We’ll never pay over 20% of gross in PITI” we still would not own a home here, but we are also well aware that didn’t exactly work out for everyone.

    Rhett— Sounds like so much of that is state specific, so I don’t know. I’m guessing that you can go after the sellers a TON here in CA, because we saw all sorts of disclosures for things like the neighbors having an annual loud party on a particular holiday weekend. I know in some of the hot markets the buyers are waiving all contingencies and all inspections, and I still can’t fathom it.

  108. Finn – I wouldn’t do that. And if someone threatened to report me to the bar unless I paid X, I would tell them to go pound salt. But real estate agents can be weird, so maybe it would work?

  109. The Venn diagram of people who love litigation and people who want to stay home with their small children is probably two adjacent circles with no overlap.

    When their precious little munchkins had to spend a night in the emergency room after the CO leak?

  110. Our furnace really did die, somewhere near closing and we replaced it. If it didn’t die but we became aware of a CO2 risk, we would have disclosed it. Our buyers were very nit picky types and we were fed up of them. In the end we just wanted to be gone. That was sad because that was our first house, kids were born there…

  111. I think disclosures are very state-specific. I know in some states you can choose either to disclose or to disclaim and basically sell as-is. But I think there would be an issue here if the sellers chose the disclosure option but then didn’t disclose what the inspector said. That said, I also agree with Lark: I’d want to see the HVAC report myself instead of just taking the seller’s word that it’s ok and no repairs are necessary.

  112. Milo — Honest question here re. your brother’s house search: What does one do with 6,000-8,000 square feet of living space? Does he have lots of kids? Does he plan to have your parents or his wife’s parents move in down the road?

    I’ve never wanted a big, expensive house, because the mortgage is just the beginning of what you have to pay for the home. A bigger house means more to pay in property tax, more space to have to furnish, more area to have to heat and cool, more cleaning, more maintenance, etc. No thanks.

    Re. the hypo of the kid who dies or is injured due to a CO leak from the furnace: Couldn’t the seller claim contributory negligence if the buyers didn’t have the proper CO alarms to alert them early to the leak? Especially if they live in a state where building codes require CO alarms in a home?

  113. “that was our first house, kids were born there…”

    You sound like a lot of local politicians.

    On this island, there aren’t many hospitals. Most towns do not have hospitals. But a lot of politicians (e.g., our mayor and governor) claim to have been born in towns that do not hospitals.

    I am skeptical that they all were not born in hospitals.

  114. Have you considered seeking third-party mediation through Judge Judy?

    She’s a tough-talking, no-nonsense sort of woman, but she renders sound and dispassionate judgment.

  115. Honest question here re. your brother’s house search: What does one do with 6,000-8,000 square feet of living space? Does he have lots of kids? Does he plan to have your parents or his wife’s parents move in down the road?

    He was raised to believe it was one of the few acceptable forms of conspicuous consumption?

  116. NoB – two kids, and they’re getting older at this point. Middle school.

    Definitely not on either parents or in-laws moving in.

    Believe me, I’ve made all the same arguments and asked the same questions. And they fully understand and agree. They just don’t care. Which, in a way is fine.

    Joking aside about Judge Judy, this is a good PSA for CO detectors. I’m someone who childproofed nothing, but I have CO detectors on every level of the house.

  117. Rhett – he’s never cared as much as I do about parental approval, so I don’t think that’s it. And my parents couldn’t care less about what kind of houses we buy, but if they did, they’re not really impressed by McMansions of any size.

  118. “Have you considered seeking third-party mediation through Judge Judy?”

    Or Judge Sarah Palin?

  119. Carbon monoxide freaks me out. I have monitors in every bedroom and throughout our house and always pack a one when we travel. My husband makes fun of me, but a family who lived near us when I was growing up all died from carbon monoxide poisoning. Parents, kids (including a baby), grandparents. It was terrible.

  120. Rhett – he’s never cared as much as I do about parental approval, so I don’t think that’s it.

    I don’t think it’s so much about approval. It’s more about the unquestioned assumptions one grows up with.

    It’s like someone who was raised to believe that new cars are foolish waste of money finding out that the new Accord is $280 more than the two year old one with 24k miles. They might accept the math, but they won’t be quite comfortable with the idea.

  121. In Massachusetts, the current plumbing codes require signage on your home to indicate where gas vents are located:

    “3. SIGNAGE. A metal or plastic identification plate shall be permanently mounted to the
    exterior of the building at a minimum height of eight (8) feet above grade directly in line with
    the exhaust vent terminal for the horizontally vented gas fueled heating appliance or
    equipment. The sign shall read, in print size no less than one-half (1/2) inch in size, ‘GAS VENT
    DIRECTLY BELOW, KEEP CLEAR OF ALL OBSTRUCTIONS’.”

    We have two of these signs on our house. It’s sort of sad to see beautiful old historic homes with these bright red or yellow signs stuck to them, but I definitely understand the reasoning behind the requirement. Our neighbors have an old (but still used) dryer vent that isn’t even a foot off the ground. It’s on the side of their house that faces ours (so it’s more visible to us than it is to them); I always keep an eye on it when it snows to make sure it’s clear.

  122. HM, I guess I’ve fallen behind on CC, and hadn’t heard the results were out

    I’m shocked that Finn wasn’t aware of something going on related to college admissions.

  123. Thanks for the feedback. I looked back at our records – we required the furnace to be “serviced” prior to close – neither party “inspected” it (except as part of the bigger home inspection, who recommended that the furnace be “serviced”.) Since the cracks in the heat exchanger would have been disclosed long after the inspection and other contingencies had expired, we would have not had recourse. We could not have asked the seller to fix it, replace it, etc. as far as I can tell – we had no leverage. We would have gotten it fixed after we purchased it, because we like our kids, hate carbon monoxide and all.

    So, it seems to me there was likely no lasting harm, financial or otherwise. I’m just mad that we have to buy a new furnace to sell the place. And annoyed that the seller’s didn’t tell us what they knew. HM is right – should just bad mouth them for a week and move on. Maybe an angry letter to the seller’s agent/broker, just to shame them all a bit.

  124. Tulip,

    What’s the issue? They are paying all his tuition, fees and health insurance and half his rent. As a result he’s borrowing 4K a year to cover living expenses. Wouldn’t the most obvious solution to him being distracted by hunger be to borrow $6k a year to close the gap? Or is $4k the max he can borrow?

  125. “I’m shocked that Finn wasn’t aware of something going on related to college admissions.”

    I am ready for the school year to be done already. There are the usual end of school events that pack May. I hate to think of the May when each of my kid’s graduates from high school. It always seem easier with the second kid, so there’s that at least.

  126. Tulip,
    The most depressing thing about the article was that the kid was missing meals to pay for a class called The History of Punishment. What a waste.

  127. The line that jumped out at me was “Last year, half of the [UC] system’s incoming freshmen were the first in their families to earn a college degree.” Half? Wow!

  128. From the cases that come through my firm, I can tell you that buyers will frequently sue the seller AND the real estate agent AND the real estate agency if something comes up after closing that the sellers should have disclosed. We have a provision in our P&S saying the inspection constitutes full disclosure, and will preclude all complaints that the buyers might have after closing.

  129. Hijack question: My office has a landline, which we can’t get rid of because I need a clear line for talking to clients – cell coverage isn’t perfect. I have voice mail through AT & T, but it’s like death from paper cuts listening to the instructions (which can’t be bypassed) every time I have to access it. To access your voice mail, enter your pin. You have 3 new messages. To listen to your messages, press 7. Enter your passcode. First new message. Etc. Etc. I am seriously considering going back to an old fashioned answering machine and dropping the voice mail option. All I want to do is press play and hear the message, like I can on my iPhone.

    Does anyone else have an actual answering machine? Are these still even sold? (Does anyone else even still have a landline?)

  130. The most depressing thing about the article was that the kid was missing meals to pay for a class called The History of Punishment. What a waste.

    Everything is free and they are even paying half his rent and all of his health insurance.

  131. Yeah…I have google voice, and it has its limitations. It doesn’t always ring through to the phones that it’s supposed to.

  132. Lark – we have a pseudo landline bundled from FiOS. Most Cable/ISP providers have phone service on one of the bundles. I don’t have to use the phone to access messages – I just listen via the website or on the mobile app. I have it for tradesmen, charities, town and political robocalls – anything that requires a phone number but that I don’t want to be bothered with on my mobile.

  133. Trump has named Bernie “Crazy Bernie” and us that Feel the Bern are embracing it! it is trending on twitter this morning

  134. I still have a Verizon land line because my ATT cell service on my house is the pits. The voice mail on Verizon is just as annoying. Same as your home phone.

    We rarely get messages at home because most of our friends and family know that we barely check that voice mail.

    They definitely sell answering machines.

  135. wine – It’s fascinating that you’re a Bernie supporter and your parents are enthusiastic Trump supporters because, in a way, you’re really not that far apart.

    It’s a fun election.

  136. Electionwise, we have gone back to 1968. Sadly, I have dim memories of it. I thought we would never come back to that place in history

  137. It’s a fun election.

    Nightmare election yes, fun election, not how I would characterize it.

  138. Calling this election fun sanitizes it. I don’t want to see it sanitized. We need to confront all of the ugliness.

  139. This is what stuck out to me in that article.

    “Carrasco, for example, pays $750 a month out-of-pocket for his room in a shared apartment in Albany, even after his grant.”

    I know the Bay Area is expensive, but this seems like the big reason why he can’t make it. Why doesn’t he live on campus? Is that subsidized more? Is there a shortage of campus housing at Berkeley too? One more thing to consider when looking at colleges. An advantage of going to college in a cheaper place.

  140. Ivy,

    He’s only borrowing $4k a year. He could crank it up to $6k if he wants to stay it Berkeley and eat too.

  141. Rhett– Back in my day (TM), the university computed an expected annual cost for all expenses, and that was the max amount of any aid plus borrowing. That budget was WAY unrealistic then, and I imagine more so now. I remember breaking down the amount that was budgeted for ten months into a monthly amount. I had $40 a week for food, for example. The budget was around $500 per semester for books, but I regularly had over $750 per semester in books. (There are likely cheaper options available now, etc.) Plane tickets home were not part of the budget. Medical expenses, outside of the cost of the university health insurance premiums, were not part of the budget, etc. I found housing that was under the estimated housing cost by moving into a one-bedroom apartment with two other people– they shared the “living area” and I had a bedroom. The university run housing was all more expensive than the budgeted amount. I saved enough on that cheap (cramped) housing so that I could afford the other expenses that were outside of my budget. I got several part time jobs over the years to cover going out with friends or clothing purchases, because doing just about anything fun was also not contemplated as part of the budget. My dad didn’t have much, but he alleviated a lot of that by helping pay for books, buying plane tickets home, and helping me stock up on shampoo, contact lens solution, etc. when he was in town so my weekly budget didn’t get eaten up with that stuff.

    So I can definitely see how a kid who is not paying tuition, and who is borrowing his living expenses, could suddenly find that he was running short on funds. Time is finite, too. If he’s spending a lot of time on the bus to commute to school to save on housing costs, that’s less time to study, or less time for a part time job to cover extra expenses, less time to get any rest, etc.

  142. @Rhett – he just may not want to borrow that difference. It probably will be hard enough once he graduates. He will need to find a good enough job to cover his rent, transportation and living costs in the Bay Area.

  143. @Rhett – he just may not want to borrow that difference.

    Then go hungry.

  144. Tulip,

    Certainly the school would allow him to borrow enough to live on campus plus a full meal plan? If he’s living off campus without a meal plan to save money that’s fine, but there are other options.

  145. So he’d be more responsible for putting extra food costs on a credit card? Because once you’ve hit the expected budget, you can’t borrow more than that as a student loan. For most kids that leaves credit cards. I don’t buy it.

  146. Doubt it, Rhett. I don’t have time right now to pull up the current budget v. the current dorm costs, but I remember they didn’t work. Not to mention that that particular university always had a housing shortage that mostly took care of some freshman and a few outliers. I significant % of students did not get (or want, because it was overpriced) the student housing and lived out in the community.

  147. Ivy, yes, there’s a huge housing shortage in Berkeley. At one point they weren’t even guaranteeing housing to freshman. I think they do guarantee that now (not certain though) and after your freshman year, you really scramble. In 1982 I think I paid $250 for a ratty room in an incredibly ratty house (originally four bedrooms, repartitioned to eight) with no heat. Seriously. So $750 34 years later doesn’t surprise me at all.

    I do think that maybe as part of the financial aid package the university could consider some food plan at the cafeterias.

  148. Tulip,

    I don’t have time right now to pull up the current budget v. the current dorm costs, but I remember they didn’t work

    Then that seems like Berkeley’s fault not calculating the total cost of attendance correctly.

    So he’d be more responsible for putting extra food costs on a credit card?

    No, he should take out a student loan at a much lower interest rate.

  149. Rocky– Maybe the press will get them to do that?

    Rhett– I suspect there’s some pressure to keep those numbers down so that the published cost of attending doesn’t appear so much higher than others. It sounds good to get a student loan, but they don’t just make those available beyond the budget. For the students currently attending, they don’t have that choice. Not to mention, the girl in the article who had a health crisis and then had no money for food for the rest of the month? She wouldn’t be helped by that. If it’s affecting the number of students they’re talking about, this is more than one kid making dumb choices.

  150. I do feel bad for the guy. But I must confess to this niggling thought of froofy food priorities. Soy milk? Yes, eggs are a cheap source of protein, but beans are cheaper; add a ham hock or some other soup bones, and they won’t even taste horrible. Yes, you have to cook them, but you make up a giant pot while you’re home studying and then just reheat all week.

    I do agree that it’s rough — I had a tight budget myself, and that was with my dad helping set me up in my apartment with necessities like paper towels and canned goods. And I really, really hate feeling like a reactionary grinch, because I don’t want to imply there’s no problem here. I just have trouble wrapping my brain around prioritizing soy milk, when you could buy a week’s worth of rice and beans for the price of one box.

  151. Not to mention, the girl in the article who had a health crisis and then had no money for food for the rest of the month?

    So they won’t even let you borrow enough to be on the meal plan? If that’s true, they really needs to change.

  152. L,

    It’s also interesting the degree to which there is apparently a bait and switch going on. They are publishing a cost of attendance that’s far below the actually cost of attendance.

  153. He’s already borrowed $8000, so considering maximum loans amounts he’s likely up to his limit.  (He probably qualifies for a Perkins loan in addition to the other standard types.)

    The school’s published cost of attendance could very well be different from this student’s actual costs.

  154. I went to a SLAC and financial aid definitely took into account on campus housing and a meal plan. We weren’t even allowed to live off campus until senior year and I think my rent was $200 per month. It sometimes pays to go to school in a rural area.:) Dh went to law school in a small southern city and I think his rent was $250 per month. That was definitely a factor in his reasonably low borrowing for law school (I think it was $40K total).

  155. He notices that he has started overeating when he encounters free food at campus events.

    It was common practice at my kid’s college for students to monitor campus events that featured free food and attend just for the food.

  156. “It was common practice at my kid’s college for students to monitor campus events that featured free food and attend just for the food.”

    Ditto. Not to mention business practice — IIRC, 6th Street had a specific “free appetizers with drink” night (Tuesday?), which made it very easy to have dinner out for $5 (tip included).

  157. “It’s also interesting the degree to which there is apparently a bait and switch going on. They are publishing a cost of attendance that’s far below the actually cost of attendance.”

    Hasn’t this always been the case? I remember this being an issue when I went to school, and just assumed that the cost of attendance was calculated low for my daughter as well. Not to mention, Berkeley is crazy expensive and it clearly wasn’t accounted for in the cost of attendance this past year when we looked at costs.

  158. “I’m just mad that we have to buy a new furnace to sell the place.”

    Not necessarily. Another option would be to disclose, and discount the price by the amount you would pay for the new furnace. That would give your buyer an option to buy a different furnace if desired, e.g., pay extra for an upgraded furnace.

  159. “Does anyone else have an actual answering machine? Are these still even sold? (Does anyone else even still have a landline?)”

    We have a landline with answering machine at home, and I have one at my desk. There are multiple options at Costco for combo phone/answering machines, many with multiple handset/charger units. We bought one for our home that has a base unit with the answering machine, and three other handset/charger sets that we’ve located throughout the house.

    My office, as a cost saving measure, ditched the centralized phone system with voicemail and replaced that with individual lines to each desk and a combo phone/answering machine.

    Our office also had bad cell coverage before, but a cell repeater was installed in our office. I’m not sure how that was arranged, but now cell coverage at my desk is excellent.

    Another way to get good cell coverage at a fixed location, e.g., your home or your office, is to get a phone/plan that uses wifi when available. Republic wireless, for example, is cheap because it first tries to connect via wifi, and only uses cell towers when wifi isn’t an option. I’ve heard that makes it a cell option worth considering for people who live somewhere with no cell coverage from any company, but still want to cut the cord.

  160. “I had $40 a week for food, for example.”

    I’ve noticed our family grocery expenditure have gone up recently, to somewhere between $140 and $200 most weeks.

  161. Thanks Finn. Our cell coverage is actually decent here, but you can always tell when someone is on a cell phone vs. landline. Generally not as clear, and not what I want for talking to clients.

  162. I know we’ve all moved on, but that link LfB, is emblematic.

    They say the budget for dorm living is just under $15K. Dorm housing, given by lottery and so not entirely up to your choice, is only under $15 for a triple (one room shared by 3 students). Anything larger is over the budget. This works for those with extra funding to fill the gap, and not for others. http://housing2.berkeley.edu/rates

  163. Here’s a lower-cost option at UCB that includes a meal plan:

    http://www.bowleshallresidentialcollege.org/

    But it only holds 186, so that’s just a small dent in the housing needs of UCB students.

    OTOH, there are UCs throughout the state, facilitating many students living at home. Many of the UCB grads I know lived at home while students there.

  164. No mention in the article of SNAP, aka food stamps. I wonder if the students are eligible. Apparently some adjunct faculty are.

  165. Bowles is listed as $9600 per student, per semester. That’s a lot more than $15K for the school year.

    I believe SNAP is available if you aren’t claimed by a parent on their taxes.

  166. It was common practice at my kid’s college for students to monitor campus events that featured free food and attend just for the food.

    We definitely did this when I was in college even though the undergraduates were pretty much all required to live on-campus with a full meal plan. Event food was better than cafeteria food. My senior year I started tagging along with a friend in a neighboring residential house to her house master’s weekly teas (so many little cookies and pastries — they were awesome!) and my sister, then a sophomore, came along with us for many of them. When my friend and I graduated, my sister continued attending weekly for the next two years. At graduation time she thanked the master and admitted that she was actually not a resident of that house, to his surprise.

  167. “It was common practice at my kid’s college for students to monitor campus events that featured free food and attend just for the food.”

    It was also common practice for recruiters to take advantage of this, offering free food to draw lots of students to their presentations.

  168. Free food – We had an event center on campus that was rented out to the public for events like conferences and weddings, almost all the receptions and dinners for international students was held there, so I got to eat some very good food. The dessert buffet was famous, with small portions of different cheesecakes. Haven’t eat as much cheesecake since.

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