The Hypocrisy of Global Warming Alarmists

Now that we have achieved "consensus" on Global Warming what will the environmental activists force down our throat? No doubt it will be something to hurt our economic growth and reduce our lifestyle. Few are advocates for nuclear energy and many even oppose windmills (like the Kennedy's off the shore of Martha's Vineyard). I don't see many screaming about the coal fired plants that China will build (expected to be double the number that the US has by 2011), even though China is already one of the prime emitters of CO2.

I have speculated that environmentalists are irreligious people that have adopted love of the earth as their new religion. But maybe:

• they are anti-capitalist Marxists who are bent on the destruction of the US economy because we consume "too much" of the worlds resources (even though we produce much of the worlds goods). Many just plain hate the US.
• they are naive and ignorant do-gooders who have no idea of the economics involved in reducing carbon emissions (gee, if we all replace our light bulbs that will solve the problem)
• they are radicals who advocate massive reduction of human population and a return of the earth to its "natural" state (i.e. the animals rule) [Don't think these people are that uncommon - my son's 9th grade science teacher was preaching this during his classes all last year]
• they are people that wish for a return to an agrarian society where each individual uses solar or wind power to generates power for their own needs and we grow our own food so there's no need to drive (in this case we better hope for global warming or we'll all have to move further south)

Here's a post with lots of interesting discussion on the topic. I'm not sure if all environmentalists can be lumped together, but most have one thing in common - hypocrisy. Al Gore flying around the planet and consuming 10x the normal household consumption of electricity, while his movie asks for you to sacrifice, is one prime example. Few actually live the minimalist lifestyle and often their actions create more pollution (e.g. Prius owners are worse polluters than Hummer owners)

I've written numerous posts about global warming. My opinions:

• There is not enough statistical data to determine if the planet is warming or not
• Even if the planet is warming, there is no evidence that the cause is man-made
• Even if the planet is warming and the cause is man-made, there is nothing we could do to change the trend. CO2 does will not go away and our contribution is but a small fraction of the whole.
  
• There is no evidence that a warmer planet is a bad thing. Temperatures during the Medieval Warming were higher and the population was better off

The reality is that carbon based fuels are abundant beyond what we will consume for the next hundred years and for transportation are the only source available for the foreseeable future. For electrical generation nuclear is the best alternative. Nobody has died in a nuclear power plant accident in the US, while hundreds have died in refinery explosions. Our fear of nuclear energy is irrational and counterproductive.

There's only one thing you can do if you are really worried about global warming; stop building your beach house so close to the ocean.

More great predictions

Here's another article detailing predictions that I remember clearly (and even joined in the chorus) - Dogs that didn't bark. A reminder that we know little and can predict almost nothing about the future

Rutgers Vs Duke and racial slurs

There were two stories this week that highlight the racial divide in this country. One that received the most attention was the remarks of Imus regarding the Rutgers women's basketball team. The second was the dismissal of all charges against the Duke Lacrosse players.

The Rutgers women's team's feelings were hurt by Imus' remarks. I find Imus repulsive and don't enjoy listening to angry people vent, so I have no concern about him being fired. On the other hand, the story where real harm was caused is being largely ignored. Those 3 Duke Lacrosse players have had their lives irreparably harmed by racism far greater than anything that Imus did. Their names will live forever on the Internet in infamy and they have over $3M in legal fees to pay off. Yet the press sees racism only in the Rutgers story.

I dated a black woman in college and when I later married, my ex and I adopted a black daughter and a Hispanic son. During the last 35 years I have never been subjected to racial remarks from whites, yet have been subjected to lots of racial slurs from blacks in regards to dating a black woman or adopting a black child (and by the way these remarks have come from the "tolerant" Northeast - not while I lived in the "racist" South).

The worst of the bigots in my mind is Al Sharpton of Tawana Brawley fame, with Jesse Jackson a close second. Sharpton inflamed the whole Duke episode and while demanding Imus' firing, has yet to apologize to the Duke players. And he never will, because there is a double standard for race in this country at the moment. No doubt in my mind that prior to the 1960's blacks were discriminated against, wrongly jailed and despised by many whites. But the pendulum has swung far past center at the moment and white males are paying the price today.

There is still lots of racial imbalance today but I believe, as does Bill Cosby and others, that it has more to do with black culture than white racism. A culture that celebrates gangsta rappers who denigrate women as "ho's" and refers to other blacks as "niggas" keeps blacks suppressed far more than what any white person is doing today. The Bible teaches us that "we are what we think about" and if the typical black male teenager is regarding women as ho's, it' no surprise that 70% of black women are single and that the same percentage of black children are born out of wedlock.

I don't believe in the whole victim culture that is gaining ground in our society. Everybody wants to be a victim and few want to take responsibility for their words or actions. No group plays the victim role better than American born blacks today (black immigrants don't - think Colin Powell). I'm often criticized by blacks because my daughter is not exposed to black culture. But the truth is black culture right now is sick and whites are complicit in enabling this sickness. It reminds me of alcoholics and co-dependents. Race relations in this country will only get healthy when both sides are able to speak and act truthfully about all of the problems - not just white racism.

Becoming a Jack of all Trades

I work with many PhD's that constantly tell me that they are not "handy" and just totally inept at fixing things in their homes. I don't buy it, I think they are just lazy - both mentally and physically.

I've owned real estate as an investment for about 11 years all together and have done just about every job imaginable in fixing the properties up. Before that I renovated 2 homes. I did not grow up as a skilled tradesman. My father went to school nights or worked and I spent most of my youth either babysitting for my 7 younger siblings or studying. (I attended a Prep school, so we did not have any shop or tech classes.) So I never did nor learned how to do any work that involved manual labor in regards to fixing houses.

These are the skills that I possess today:

• electrical - any kind of wiring
• plumbing - done it all
• furnaces - installed them and the duct work
• painting
• kitchens - installed complete kitchens starting from 4 empty walls
• replacement windows - piece of cake now :)
• installing insulation
• carpentry work
• drywall and mud work
• gutting - my favorite!

I could go on, but you get the idea. So how did I learn to do all these jobs? I remember the first house I bought. It needed an exterior paint job. After, wearing myself out scrapping old paint, I read about using heat guns to remove the old paint. I ended up catching the house on fire (the insulation under the siding caught on fire). Now I could have given up at that point and hired someone to paint all my houses, declaring myself as not "handy". But I persisted and learned how to do the job.

The same has been true with every job I have done since. In the early years of learning plumbing I constantly started fires when I sweat pipes together in tight quarter. And I am still making mistakes!! I have screwed up more jobs then most people have even tried. Then I fix it. (I see a lot of poor work that homeowners have done that they never bother to fix)

I think that the main difference between me and my colleagues that are not "handy" has to do with a willingness to figure out how to do something and to persist until I learn how to do it well. And this is a lesson for anything in life that I preach to my kids. You've got to be willing to do something poorly until you learn to do it well.

Flipping Houses

I found a new blog yesterday by an individual that works full time and is buying, renovating and flipping homes in his spare time - Flipthyhouse is his website. He provides lots of details about his activities, costs and financing. Hope that as he continues he will have lots more information.

As far as my own efforts go, I am in the 7th week of the renovation of a home I purchased in February and the punch list of items to do seems as long as when we started. I had originally budgeted about $7000 for repairs and planned on having contractors do a lot of the work. After the homeowners moved out and the 2 feet of snow melted I found lots of additional items that I had either overlooked or were hidden:

• the roof is at least 20+ years old and will be an obvious negative
• the hot water heat boiler must be the original from 1955, so I think I need to replace this. I'm debating whether to put in an 80% efficient furnace @ $1100 or a 95% efficient furnace which costs $3300. Will a homeowner pay for the high efficiency boiler?
• the windows were shot and leaking badly. I've written about my experiences replacing them here and here.
• The bedroom doors were full of holes and needed to be replaced. Iordered replacement doors from Lowes but after I started installing them I noticed they were wrong. So there is a 3 week delay here. Lowes will not be on my list of purchasing "special orders" in the future.

So we have been doing most of the work ourselves and it is taking a long time. The house is the largest one I have rehabbed at 2880 sq ft, so just painting everything has taken most our time. We are nearly done with the painting. Fortunately, with the techniques I learned from Pete Youngs, my costs to do jobs (like windows) are far below my estimates. However, I expect I will spend $10,000 on rehab which is over my budget.

On the other hand, I feel that we may be able to sell the house for more than the $182K that the sellers paid last year. Unfortunately, I don't have any good market data to support this. There has been only one sale in this neighborhood for more than $182k and that house had 3400 sq ft of living area. The house is in a really nice neighborhood, but a really bad zip code.

Last night I was utterly exhausted. I was painting ceilings the last 2 nights which is literally a pain in the neck. We have been working until 11pm for 5 straight nights. I need to get up at 6:20am every day for my day job. Maybe this evening I can take a night off and watch the Sabres play some hockey.

Future Predictions

In 1954 Popular Mechanics showed this picture predicting what the home computer of 2004 would look like. Dead on - like most future predictions of the future :) As I talked about in Straight Line Thinking people seem unable to think about the future in anyway that is different from the past experiences that we have. People are innately creative and solutions to "problems" that face us today are not obvious to us at all. That's why all of the horror stories about global warming make me laugh. In 1900 the "realists" predicted streets full of horse manure, causing disease and death. I'm still waiting for the Skycar to be commercial - it's been over 20 years since scientists told me that it was nearly ready for sale.

Retiring with a mortgage

One of the prospects that I have pondered is the fact that when I want to retire, it's likely that I will have a home mortgage payment to make still. In fact my wife is wanting to buy a bigger house now, so I could be making house payments until I'm in my 80's!!

That's why I found this article at Liz Strauss' blog quite interesting - Two myths that get in our way. His advice re-inforces exactly the path that I have decided to follow. I took out a HELOC and bought some real estate and have continued that strategy to pyramid my net worth during the past year. My goal is to accumulate over $1M in net worth in real estate before I retire from my engineering job. I also am on a path to have nearly $1M in my 401k if I work until I am 66, so the prospect of 20 more years of mortgage payments after retirement doesn't seem as daunting.

I love this quote:

"Would you rather retire with $12,000 a month income and a $2,500 house payment? – OR $3,000 a month income with a free and clear home?

The answer to that question is the path you’ll be on for the rest of your life. "

Short Sales and the FHA

I've been buying property this year using short sales on property that is in foreclosure. All of the banks I have been successful with have been happy to know that no Realtor fees were involved (saved them money). Today I ran into my first FHA loan. The FHA requires that the property be listed with a Realtor for at least 90 days. This presents a couple of problems for the seller.

First, by the time the seller decides to act, there is often less than 90 days left before the foreclosure auction on the home. People in foreclosure are in a great deal of denial about their ability to save their home. Until they get the lis pendens they often feel that somehow they can catch up on back payments (and the bank is encouraging them to do so). The reason they act at all is that I tell them I can stop the foreclosure process and they do not have to pay anything at closing. So they are not thinking at all about listing their homes for sale.

Second, the seller owes more than the house is worth. I'm not a Realtor and don't know the ethical obligations, but I assume that if you list your property for $X and someone brings you an offer for $X, the Realtor might get upset if you don't sell it. And why wouldn't you sell? Unless you (the seller) are familiar with a short sale process, you probably don't want to sell at a price at which you have to come up with a lot of out of pocket dollars to close. After all, if you had the money, you would just catch up on your mortgage payments and avoid foreclosure. And even if the seller were familiar with short sales and accepted an offer for less than they owed, there is no guarantee that the bank will accept it. Will a normal buyer even make an offer under these conditions?

This an other government rule that makes sense from the governments perspective (and probably to the Realtors association) but makes no sense to a seller. Sellers in foreclosure that owe 100% or more of what their house is worth are not going to list their homes. Closing costs plus the Realtor commission will add to their costs to sell. By the time a seller is in foreclosure interest plus fees that the bank has added to the amount due increase the financial obligation by 10% over the loan principal, so altogether the seller must get an offer about 20% over the homes value to break even.

Putting together a short sale package for the FHA is the most complicated of any that I have dealt with. Are Realtors familiar with short sales? If so, are they will to put in the effort to put together the short sale package and negotiate with the bank? I know the government is trying to protect the public from us dishonest business people, but in the end creates a situation in which the property will go to auction and the seller will have a foreclosure on their record.

Festival of Frugality

The Festival of Frugality is being hosted by one of my favorite blogs - the DigeratiLife. It features me post on Car Saving Tips. I don't think of my self as a frugal person but I guess by most peoples definition, I am.

There's a post that caught my eye - Always Ask for a Discount. Often people will think of asking for a discount at hotels, but not other areas. Here's a tip I learned - if you have a business you can get contractor discounts. When you are remodeling a home, for example, you can often get prices below Home Depot or Lowes by going to a local wholesale supply store and buying material as a contractor. For example, I saved about $15oo off of Lowes price on replacement windows I bought for a house I am remodeling.

Is the Will to Live losing out?

My daughter was watching a show last night (on Discovery Channel I think) about 3 British climbers who were trying to scale Mt McKinley and got caught in a storm (I think the show was called "I shouldn't be alive" or something similar). It was incredible to watch the degree of suffering these climbers were willing to endure to reach the summit. In the end they could not and tried to descend the mountain to save the life of one of the 3. When the incapacitated climber couldn't go on, one of the 3 tried to descend by himself. He fell over 2000 feet and broke both legs in multiple places, and cut some blood vessels which caused lots of blood loss.

Cold, in intense pain, suffering from blood loss and disoriented, the fallen climber willed himself to go on. It is incredible to realize that the will to live is so strong that most people will endure anything to live. This seems to me to be an evolutionary attribute that all humans should possess.

This is what puzzles me most about the Pacifists movement and Gandhi's letter urging the Jews to commit mass suicide in WWII. The will to live seems pretty innate in human beings. It is only when people have completely given up hope. So I wonder, have people in the pacifist movement given up hope? I would believe that this group is the same one that is committing slow suicide by not reproducing.

So is a large part of the West losing the will to live? Have we as a society given up hope?

The Faithful Respond

An apostasy brings swift condemnation.

Carnival of Life, Happiness and Meaning

I found this new Carnival of Life, Happiness and Meaning interesting. They linked to my post on Fear Keeps you from Living a Longer and Happier Life - check it out.

I also noticed the Digerati Life linked to my post on Car Saving Tips.
I enjoy the Digerati Life quite a bit- that couple seems to have a similar background to mine and are trying to start a business - so we have similar challenges and perspectives on many things.

Update to Networth

I've updated my net worth on Networth IQ and the graphic to the right. My net increased by $22k last quarter or 6%. My assets increased by 27% ($206) primarily as a result of real estate purchases while my debt grew by 43% ($102k) for the same reason. I've put the 2 new houses I purchased at "as is"value and increased my short term debt mainly as a result of borrowing to finance rehabbing costs. My 401k grew by 6% as well- combination of 9.8% growth plus savings. Hopefully, next quarter will reflect profits from the sale of one or more properties.

Challenges of a Business startup

The DigeratiLife has a great list of challenges to work through when starting up a new business. I can attest to every one of these items she talks about. We live on a Spartan budget and I have worked extremely hard to have adequate cash reserves to fund unexpected expenses and start up costs. I've also worked on lots of methods to get hold of OPM. Even though I have a full time job we also live with lots of uncertainty. Real estate is not very liquid and the time line between purchase, renovation and re-sale is very unpredictable. So far we have bought 3 houses and haven't sold any.

One area that she did not discuss was how to balance work and family. I have 4 teenagers actively involved in after school sports. I am working 14+ hours per day between my job and business. I used to be able to exercise or do yoga but have dropped all of that. I try to spend a little time attending my kids sports events but that is difficult. The most time I get to spend with my kids is when I can get them to work for me while we are rehabbing. Having my spouse working beside me while we are rehabbing allows me to spend time with her, but I find that is not really the same as going out on a "date".

At some point I hope we can achieve more balance, but until there is adequate cash flow, I see no way to avoid an unbalanced life.

Lock Bumping

Have you heard of lock bumping? I had not until just today. My company sent us a video of the process by which thieves can cut a key and using a simple tap, open 90% of the locks that secure our homes. You can even find a video of how to make a bump key at Wikepedia and a link to buy bump keys!

I guess we use locks only to fool ourselves into thinking we are secure. Determined thieves seem to be one step ahead of the naive public.

Rosie - the conspiracy theorists become the norm

By now many people have seen the video of Rosie O'Donnell waxing philosophically about the collapse of World Trade Center Tower 7. Her statement that for "the first time in history, steel was melted by fire" is pretty funny to anyone who's had any education (or maybe they stopped teaching about how steel is made in high school). Popular Mechanics debunked all the 9-11 myths long ago and responds to Rosie's allegations.

It's amazing to me that 30% of Americans seem to share her views. Most reasonable people do not spend their time convinced that conspirators are contriving plots to manipulate the world, yet the number seems to be growing. I'm not sure if it's because our educational system is failing to properly educate people or people feel powerless and want to attribute anything bad to a plot by their "enemies". Maybe this is all about politics. Hatred for Bush seems to drive many to irrational beliefs.

Funny thing is people want to hear this to confirm their own irrational beliefs. Why else would papers like National Enquirer do so well and why else could Rosie command a $40 million contract?

Update: Looks like the sinking of the Titanic was a government conspiracy as well - thanks to Andrew for enlightening me!

Car cost saving tip

I had written before about buying a new car Vs an old one. There are a couple of cost savings measures that I did not mention in my car buying strategy. The first has to do with collision insurance. I do not carry any - this saves me quite a bit of money each year. Even when I was forced to carry collision in the days that I used car loans, I always had a $1000 deductible. This can pay for itself quite quickly. Many people look at $1000 as a large sum, but it is the incremental $500 that you should be thinking about. You often pay quite a premium for that extra $500 of coverage. But it is better to avoid collision insurance altogether. If you are a really bad driver and get into lots of accidents, your insurance rates are going to be jacked up anyway, so you will be paying twice for this coverage. Since I buy cars that cost less than $4000, collision insurance makes no sense economically.

The other cost savings thing I do with cars is use synthetic motor oil. As a chemical engineer, I'm quite familiar with synthetics and lots of myths about them. I have my oil changed about every 12-15k miles at a quick change shop. I buy a 5 qt container at Walmart for under $20, so it costs me $37 per year for an oil change Vs ~$100 using conventional change intervals. In addition to the obvious cost savings Vs changing oil every 3500 miles, I get about 10% better gas mileage, better cold starts, less engine wear and reduce my environmental footprint. I've driven every one of my 12 cars over 200k miles and never had an engine problem.

Synthetic oil is used exclusively in high performance applications and has the following benefits:

• better low and high temperature properties
• better fuel economy
• resistance to build up of sludge and engine deposits
• there are no "natural" compounds (like sulfur which breaks down into sulfuric acid) to damage your engine
• extended change intervals

I've bought used cars with 100k miles and switched to synthetics and driven the cars another 100k miles, so I see no reason to think you shouldn't do this.

Big Traders Manipulate Market

I've been a critic of investing in individual stocks and wrote of how following investment newsletters will give you a negative return. I've also blogged about how risky individual stock market investing can be here.

Yesterday I read of a trader that routinely manipulates markets to drive prices up and down. It seems that Jim Cramer has a secret about what the pros are doing while you are deluding yourself into thinking you can outsmart the market. Hedge fund managers have tremendous influence on the market. Remember this the next time you get a hot tip.

Private Money and Real Estate Goals

One of the goals for my business was to find sources of private money for financing real estate purchases. I had put on a seminar and made a presentation to a few people but didn't get much interest. I had gotten a little discouraged by this since one of my weaknesses is approaching people one on one and asking them for something (one of the reasons I was not successful at Amway). However, on a whim, I called one of the people that had responded to my ad, but didn't attend the seminar. The gentleman asked if I could meet with him personally and I did last week. Friday he called and decided to provide $75k in funding from his IRA to houses I might buy.

So now I have well in excess of $900k in funds available to me for real estate purchases. I posted about the other funding here.

Looking at my real estate goals for the year, I seem pretty well on track. We have 2 houses purchased (A third home under contract is looking less and less likely to close due to an IRS lien). But after one quarter, I feel good about our progress.

Keeping goals in front of you all the time certainly helps you to stay focused.

The April Fools Joke is on me

Previously I had posted on installing replacement windows in one of the properties I am rehabbing. It was my first venture into installing windows and I had measured the vertical dimension incorrectly, requiring me to trim 1/8" from every window.

After installing 21 windows, I had a system down pat to install them and was getting full of myself thinking how good I was getting at this job ( I can put a window in in under 25 minutes now!)

Sunday I got ready to install the last 3 windows in the living room. I cut the windows down, hauled them into the house and opened the curtain - only to see 2 wide windows!!!

I spent the night beating myself up - I have no idea how I ordered 3 narrow windows where 2 wide windows sit. I know I measured the vertical dimension because these are the tallest windows (66"). Somehow I thought that every window in the house was the same width (the other 21 were) and just assumed the same for these. So I made a $400 mistake and feel like a fool. The old adage about assuming something (When you assume something you make an ass of u and me) certainly applies to me and I have been eating humble pie that last few hours.