Wednesday, June 18, 2008

Do You Like Running Water? Enjoy It While It Lasts!

Author: Nick
Category: Money
Topics: ,

comic 37 - water wizard

It seems that even one of the richest counties on the U.S. East Coast isn’t immune to massive water main breaks. Thanks to some shoddy pipeline materials, Montgomery County, Maryland (home of yours truly) is now under mandatory water restrictions and boil water advisories for the third straight day. What has this meant for area residents?

  • No tap drinking water. Because of the break, water pressure is low. For some residents and businesses, this means a higher risk of contamination; thus the water restrictions and boil advisory. For others, it means no running water at all.
  • A run on bottled water. In less than 24 hours, most area grocery stores ran out of bottled water due to expectations that the water advisory will last until the end of the week. That means those who got to the stores first have been hoarding whatever they could grab, leaving others high and dry.
  • Water use restrictions. Prohibitions you normally only see during severe droughts were immediately enacted, including bans on outdoor watering, car washing, and even flushing your toilet.
  • Restaurants ordered closed. Nearly every restaurant in the county was ordered closed for two straight days. There are also rumors that grocery stores are removing some produce stock they normally use water misters to help keep fresh.
  • Everyone smells bad. Today is the first day I’ve been grateful that most of the people I work with come from the counties north and west of this one. I bet there are lots of smelly places in Montgomery County today!

Fortunately I live in the one city in Montgomery County with its own water system, and it isn’t affected by the break. Unfortunately, while my workplace is in the same city, it gets its water from the Washington Suburban Sanitary Commission (WSSC) which is impacted by the break. That means we’re stuck with bottled water, hand sanitizers, and a closed cafeteria. But at least I can go home and suck on the kitchen faucet like I normally do.

We’ve had plenty of similar water main breaks in Maryland over the last decade. Most have been small and only affected a few blocks at a time. Others have been as large as this one, but they typically struck poorer towns where residents drink beer instead of water and only shower for major holidays. The fact that a break of such magnitude has hit the wealthiest county in the state may finally push Maryland to confront the need for serious utility infrastructure reform.

For half a century, utility operators in Maryland and most other states have generally taken a “wait and see” approach to maintenance. If it isn’t broke, they ain’t fixin’ it. This has been especially true for water and sewer lines which, being buried underground, have been out of the sights and minds of utilities, residents, businesses, and politicians. As a result, a good portion of water and sewer lines running throughout the U.S. is approaching triple-digit years in age.

So whose fault is this watery mess? Well, I’d share the blame equally between three parties: local and regional utilities, local and state politicians, and you. Why is this partly your fault? It’s because we whine and complain whenever our utility rates go up. Water, the cheapest of all public utilities, has been dirt cheap for far too long. As a result, most utilities don’t have the money necessary to perform regular maintenance and reconstruction of major water and sewer lines.

With utilities’ wallets empty and the suddenly realized need for massive water main replacements, that can only mean one of two things: either our water utility infrastructure will experience even worse breakdowns, or your super-cheap water utility bills are going to skyrocket in ways that’ll make rising gas prices look like normal inflation. And if you’re a fan of regular running water, you better not complain one bit when your $50 a month water bill becomes $500 a month.

Whatever happens with your bills and utility lines, any solutions are going to take a while to implement. In the meantime, we’ll all experience more utility breakdowns—possibly even worse than this one. So stock up on bottled water (larger containers are cheaper), keep some hand sanitizer nearby, and figure out the best places to install a waterless outhouse on your property.

Oh, and if you’re in Montgomery County and can’t find any water, feel free to stop by my house. I’ll sell you some for 50 cents a gallon—a steal compared to those 16-ounce bottle prices.

Monday, June 16, 2008

Don’t Let High Fuel Prices Stop You From Volunteering

Author: Nick
Category: Money
Topics: , , ,

comic 36 - volunteering

If it seems like every article here is related to gas prices lately, that’s because the price of gas influences so much of what we do with our puny American lives. Want a vacation? Need gas. Want to work? Need gas. Want to drive downtown and pick up a few hookers? Need gas. Well, here’s another one: want to volunteer to help others in your community? Need gas. And unfortunately for a lot of those on the receiving end of volunteer work, high gas prices are pushing some people to reduce their hours spent volunteering or to stop altogether.

While every type of volunteer—from scout leaders to soup kitchen operators—are feeling the pinch at the pump, there are many less fortunate folks out there who need the help of unpaid, unreimbursed volunteers just to get by. And when volunteering includes lots of driving—perhaps taking patients to required medical treatments, or delivering food to shelters—the price of fuel can greatly impact a person’s ability to be generous. Worse yet, with the price of everything going up, more and more people who have never needed a helping hand are finding themselves in positions of need. Put together, that translates to more needy, but fewer volunteers to serve them.

Having driven over 1,000 miles this year alone to perform volunteer work (including 450 miles this past weekend), I have a great appreciation for the hardships volunteers are enduring due to high gas prices. What I don’t have is a lot of sympathy for their excuses if they choose to cut down or quit their volunteering. That’s because Uncle Sam is more than happy to help you pay for your gas that you use in the course of your volunteer work.

In case you don’t already know, mileage incurred that is directly related to volunteering for qualified charitable organizations is tax deductible. For 2008, you are allowed to deduct 14 cents from your taxable income for every mile you drive for charity. So if you drive, say, 2,000 miles a year for charity in a vehicle that gets about 30 miles per gallon, you’ll pay $280 for gas priced at $4.20 a gallon. But if you take the time to carefully log your mileage each time you take a trip for volunteering, you could deduct 14 cents for each of those 2,000 miles, or $280. Isn’t that nice how that math worked out!

While I’ve tried to convince others I volunteer with to log their mileage for the tax deduction, many of them choose not to—even if they itemize their deductions anyway—because it’s “too much trouble.” On the contrary, logging volunteer mileage is incredibly simple:

  1. Create a mileage log book. Take a small notebook, and throw it in your glove compartment along with a pen.
  2. Log your miles for each trip. Record your starting and ending mileage for each trip you make to volunteer for qualified charities.
  3. Add ’em up. Whip out the old calculator (or use a spreadsheet like me) at tax time and take a deduction for your charitable miles driven.

Of course, you’ll want to be careful whenever you try to tell the IRS you don’t owe them tax on every dime you make. You may wish to consult a tax accountant or attorney before deducting your charitable driving, and you’ll want to confirm that your volunteer work is being performed for a qualified charitable organization. But as long as you document your volunteer driving well, you should have nothing to worry about.

On a side note, I will mention that the Federal government has not seen fit to increase the deduction rate for charitable work mileage in over a decade. While deductions for business, medical, and moving mileage have all risen steadily (and are all at rates higher than volunteer work), volunteers have been stuck at the same deduction rate since 1998 despite rising gas prices. I think news of waning volunteerism will finally help to spur a rate bump for volunteers soon.

Wednesday, June 4, 2008

Oops! It Looks Like I Broke the Gas Stations

Author: Nick
Category: Money
Topics:

comic 32 - house on a hill

Remember that article you read here a few weeks ago about the shortage of #4 letters for gas station price signs? The vast majority of people picked up on its satirical nature right away. And if you’re not one of the ones who did, I’ll spell it out for you in plain English: it’s 100% made up, as I’ve done in the past numerous times.

At least three people, unfortunately, took the news that there could possibly be a critical shortage of plastic lettering as the truth. After all, it’s on the internet, so it must be true. Two people sent me e-mails like this one:

haha, they can’t raise there prices above 4 bucks? that’ll teach them for trying to overcharge us for gas!!!!1111oneoneonetwotwo

The third e-mail was the best one. It was from one of the top national nightly news agencies asking if I’d pass along contact information for my person at Industrial Signs, Inc., the fictional company that just can’t keep up with the demands for #4 gas station sign letters. At this point, I had a few options:

  1. Confess. I could just tell this poor news program producer that I made the whole thing up, perhaps crushing his dreams and making his last 20 hours of research a waste.
  2. Confess and laugh. Same as above, but I add on six extra paragraphs mocking anyone who could possibly fall for such a tale.
  3. Start Industrial Signs, Inc., string this guy along on an elaborate ruse, see my fictional story on nationally televised evening news, and possibly go to jail or whatever they do to people who do something like this.

In the end, I went with option #1 since, looking back, I did write the article with a rather serious tone, and perhaps I could understand why someone might mistake it for reality. I mean, stranger things than a shortage of plastic lettering have happened.

I considered the matter closed until a reader sent me a link to the following article from the New York Times, which does not often make up its news anymore: Old Meters Mean Double the Price at the Pump. To summarize: apparently some gas stations really can’t charge $4 for a gallon of gas, though the reason is not due as much to a lettering shortage as it is to old technology in the gas pumps themselves.

After reading the article, I realized the terrifying truth: I can cause humorous financial news just by writing it! Sure, a few of the details get mistranslated, but there can be little doubt that I broke the gas stations with my original article.

I’m not yet sure how I’ll used my newfound powers—perhaps for the good of mankind, or maybe just to amuse myself. It might just be best if I stop trying to make up the news, lest I accidentally author something like “Personal Finance Writer Nick Given All the Money in the World.”

Oh look what you made me write.

Thursday, May 29, 2008

The Wonder of Ethanol: Lower Gas Mileage, Higher Food Prices, and Now Bonus Car Death!

Author: Nick
Category: Money
Topics:

comic 30 - alternative energy

You’ve probably heard all about ethanol fuel by now—the “miracle” biofuel made out of corn that will transform our reliance on foreign oil into a reliance on foreign corn, or something. According to some pro-ethanol scientists, ethanol is cleaner burning than regular gasoline, it’s a lot cheaper (around here, a gallon of 85% ethanol fuel goes for a buck less than a gallon of good old American gasoline), and it’s the only thing saving the U.S. from terrorism and Asian bird flu.

Despite the alleged benefits of ethanol, it has some pretty serious drawbacks that have been known to fuel experts since day one:

  • It lowers fuel economy. That 10% ethanol being mixed into your gasoline might be helping to keep it 10 cents a gallon cheaper, but you’re probably getting 10-30% fewer miles per gallon because of it. Since all the gas stations around here switched to a 10% ethanol blend, my gas mileage has dropped by about 15%!
  • It makes food more expensive. Rice is to Asia what corn is to America. Since the government subsidizes farmers to sell their corn as fuel instead of food, it’s pretty obvious that corn and anything made of corn will go up in price. But even foods not made of corn are experiencing skyrocketing prices. That’s because a lot of animals eat corn. So when corn’s price goes up 50%, Mr. Moo Cow’s own price (both meat- and milk-wise) won’t be far behind.
  • Ethanol’s future is uncertain. You can find a study to support virtually every stance on ethanol. Some studies say that even every pound of U.S. corn converted to ethanol would still only power a tiny percentage of our automobile fleet. Others say that the U.S. landscape could be transformed into an ethanol factory to power every car, though yet other studies say such a conversion would destroy the ozone in two seconds flat. It’s not even certain whether corn ethanol produces a net energy gain or loss, and ethanols from other crops may eventually replace corn ethanol altogether.

One thing is becoming more and more certain about the mysterious biofuel: ethanol is likely ruining your vehicle’s engine. Because ethanol-blended gas doesn’t burn as hot, the vapors usually emitted by fuel aren’t burned up and instead deposit themselves into your engine and other vital car components. Mechanics are seeing a big uptick in expensive repairs caused by gunked-up engines in ethanol-driven cars.

So what can you do about this conspiracy to kill your car? Well…

  • Uhh… You could, like, not drive? Ethanol is making its way into just about every gas tank nowadays, and fuel station owners love the stuff because it’s temporarily keeping gas prices in the realm of affordability.
  • Hmm… Drill your own oil field, perhaps? Build your own refinery?
  • Er… Flex fuel vehicles? Well, those use 85% ethanol, so your engine might gunk up eight times faster than with 10% ethanol.
  • What about… Electric cars? Hydrogen fuel cells? Solar power? Even if they were a viable alternative today, they’d probably have even more mechanical problems than the occasionally gunked-up engine.
  • Or maybe… Nope, that won’t work either. Face it, your car is screwed.

Okay, so maybe you do have one option: bump up the frequency of those oil changes and other car-cleansing maintenance intervals. Unfortunately, whichever route you choose for your fuel needs, you’re going to be throwing more and more money at your car’s problems. Soon your best bet will be to just sell your car, stay home, and eat your foreign-grown, $5-an-ear corn with the rest of us.

Monday, May 5, 2008

If Gas Suddenly Cost $100 a Gallon, Could You Survive?

Author: Nick
Category: Money
Topics: ,

comic 21 - world without oil

According to some guy who thought we were all gonna die on Y2K, the skyrocketing price of oil may soon doom suburbia. In place of the sprawling suburban landscape will be a return to small towns situated around retail hubs with everything in walking or bicycle distance. You’ll travel between towns by trains powered by enslaved poor people, and you’ll never eat fruit out of season again.

Okay, so maybe this guy’s just a bit of a nut-job and the future of American society isn’t that grim (or hopeful, depending on how you view suburbia). But there’s no debating that today’s world of the 100-mile commute only came about thanks to gobs and gobs of dirt cheap oil. If anything ever happened to that cheap oil, a lot of things we take for granted today would become a thing of the past.

So what would super-expensive oil mean for your life? Well, if you buy into the end-of-the-world theory, then things would quiet down pretty quickly after an initial few months of rioting that would leave millions dead of violence or starvation. Those small towns I mentioned would start to form gradually with support from local farms and nearby light manufacturing. If your current career is physician, barber, handyman, or prostitute, you’d continue in your profession; otherwise, you’ll become a common laborer hopping from job to job.

The good news is that all of those environmental catastrophes that scientists are predicting for us would go away because nobody would be paying scientists to make those sort of predictions anymore. The air would become cleaner, people would get more exercise from walking and performing more physical work, and the average American’s quality of life would ultimately reach a new high. Eventually your town would put up one of those adorable signs that says “Name of Town, Population: Some Teeny Number.”

Personally, I don’t think we’ll ever end up like this because most people would probably shoot themselves before giving up their automobiles. Or perhaps science will invent us a way out of this with a cheaper, renewable alternative energy source that will be quickly adopted and is already available in large quantities. And if not, when we’re lining up to exchange our office jobs for small-town work, I call blacksmith.