Hey kids, don’t act like a grownup!

“The process engages all the hidden forces of economic law on the side of destruction, and does it in a manner which not one man in a million is able to diagnose.”

– John Maynard Keynes

This post is about something that just about everyone is experiencing, but this post is for the next generation, and how they can avoid one of the mistakes nearly every adult makes. This is about not borrowing to fight inflation.

I recently received a notice of our utility bills increasing nearly 5% for 2017. The notice emphasized that they limit utility increases to less than 5% annually. This gives me the impression that they’d like to increase it more, but they are being kind to us by limiting it to 5%.

All of the grownups are ignoring real inflation and are supplementing their lifestyles by borrowing all the money they can. They are also doing everything they can to avoid looking at the math behind their lifestyles.

I don’t know too many people who’s income is increasing anywhere close to even four percent annually. How many of us know how much a five percent increase ads up to when compounded annually for ten years?

http://www.bankrate.com/calculators/savings/compound-savings-calculator-tool.aspx

Let’s look at an example. Let’s say you were all grown up and earned $50,000 ten years ago. If you were to maintain the same lifestyle today while your costs were going up 5% yearly, do you know how much you’d need to be making today? Just to stay in the same place, be able to pay your inflating bills without taking any steps backwards in your lifestyle.

The answer is you’d need to be making just under $81,500.

US_Real_Household_Median_Income_thru_2014

https://en.wikipedia.org/wiki/Household_income_in_the_United_States#/media/File:US_Real_Household_Median_Income_thru_2014.png

But, this is definitely not what’s happening. Median income in the USA has fluctuated between $52,500 and $56,500 in the last decade. While some might be tempted to say that this is due to the 2008 mortgage crisis, let’s pull back some more.

Let’s say you made $50,000 twenty years ago. To keep up with true inflation, not adjusted by some magic factor, for things you actually need to purchase to live, you’d need to be making $132,665 today. This is not to live like a rock-star, this is what you need today to maintain the same lifestyle you did in 2005, assuming it’s 2015 now, which it’s not anymore.

Since the FRED Chart goes back to 1985, let’s guess how much someone getting by on $50,000 in 1985 would need to be earning today, just to maintain their lifestyle in 2015? The answer: $216,000.

That’s the power of compounded inflation that all the grownups are feeling but not understanding. Now of course it’s not exactly 5% each and every year. Sometimes it’s more, and sometimes less, but the effect is the same. The average grownups income is not growing anywhere near the CPI, let alone real inflation, which according to some economists has been closer to 9% some years.

Taking to the inflation calculator again, looking at the FRED chart we can see that median U.S. income has increased less than 1/2 a percent over the last 30 years. So when you get a utility bill that boasts about how they are limiting their increases to less than 5 percent, know this: It’s getting tougher.

You have two choices, one on the income side, the other on the spending side.

For income you will have to get creative in how you make money. Maybe you can AirBnB your extra room, or work with Uber. But none of these are long-term solutions. By long-term I mean something that would work for more than, say ten years. Over time more and more grownups are looking for ways to make up the difference between their wages and their living costs, resulting in less money being made with rentals of all types. Once we’re past the point were everything is for rent, then there’s no advantage left in it. That’s an economic law.

One day you’ll be a grown-up and you’ll need to focus hard on continually reducing how much you need to purchase to compensate for increases. For example, if you own a home you might want to invest in solar heat and electricity to offset increases in your utilities. Eventually you might be able to live virtually off-grid in the middle of your city. When you look for a house, look for one that has a lot of sun exposure. Fortunately sunlight is not diminishing in value with inflation.

For that reason, forget the flawed return on equity (ROI) models that the adults bought into hook-line-and-sinker. They were duped into thinking that it takes decades to recoup an investment in solar by using flawed assumptions. What’s the value of a $10,000 investment in solar if it knocks out a utility bill that increases 4.7% per year for 30 years? Do the math the grownups forgot how to do.

Look to take « off-grid” every cost that is increasing with inflation:

Electric (can you go PV?)

Heat (can you use solar heat collectors?)

Gasoline (can you charge your Nissan Leaf from your solar array?)

Water (what can you do to reduce use and are you allowed to capture and store rain in your area?)

Food (a greenhouse in the yard?)

Taxes (haha, no sorry you have to pay those everywhere and no matter what)

Speaking of taxes, you do have some choice over the community where you choose to pay your taxes. There are big differences between state and cities, so do your research.

To be fair, the reality is that inflation is hitting utilities hard too. Costs of materials and resources which utilities need to pay may be increasing more than 5% annually. The reality is that everyone is in the same boat, except for some that get lucky once in a while by speculating on resources, or choose to live more simply.

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Exploring A Little Piece of Route 66 History

I’ve recently been thinking about New Mexico history and how quickly things have changed in the last fifty years.  We’ve lived here for over 20 years now, and it’s amazing how it’s changed in just that short time.  

So on a recent drive on 333 (along I-40) to Tijeras I noticed an area near the highway where it looked like an old road had been built.  I had been wondering if there were any traces of the original Route 66 between Albuquerque and Tijeras.  So I parked and walked up an embankment to the graded area and sure enough, I found an old road.

rt66-westbound

These photos show the East and West views from the road.  At first glance there’s no sign of a paved road, it just looks like a dirt road that goes nowhere, ending at the edge of the Sandias.

rt66-eastbound

However it didn’t take a long walk for me to find what looked like scrapped road materials, namely very dry and brittle gravel and tar, along with some steel cables.  

rt66-archeology

After the Federal Highway Act of 1956, construction of Interstate 40 through New Mexico started in the 1960’s, and was completed through Albuquerque in 1970.  I would guess that this stretch of Route 66 must have been cut off from the world sometime around 1970.

I’m not sure if all of this is really a part of the original Rt-66 entering Albuquerque from the East, but it would have made sense to build it here.  Perhaps someone remembers and can post a comment about it here.  

rt66-roadpiece

In any event here’s I little souvenir from the ‘likely’ Rt 66 I explored.  Just like that last can of anchovies on Futurama, it will be for sale on eBay in 1,000 years for a trillion dollars.  In the meantime close your browser, and go explore our amazing world!

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A Little Solder Keeps an Old E320 Running

Living the good life means helping things last longer. It feels good to keep something from having to be replaced, plus it’s good for the environment given the resources necessary to make something big like a car. Last weekend it was a 1999 E320 that I’ve been slowly bringing back to “kicking strong” condition. After replacing the transmission and steering rack (I didn’t do that myself), the old machine needed new headlights. A previous owner had replaced the factory units with these super cool looking ones that worked like … well they didn’t really as far as I was concered. They were actually dangerous to use at night at any speed above 50 mph, wait make that 40.

Screen Shot 2015-11-18 at 4.50.48 PM

So I headed to eBay for some used original Mercedes headlights. I found a set for less than $140.00 with shipping, that were in fairly good condition. As you probably know, modern cars are required to use plastic lenses, and that plastic doesn’t hold up well to the Sun’s UV. So getting used headlights that aren’t completely “crazed” is a challenge. Fortunately some dismatlers (aka junk-yards) remove the parts off the cars they receive, then inventory and store them indoors. You pay a bit more than going to the open-air junkyard, but you’ll be more likely to get parts that have been basically “garaged” for the last decade or so.

I received the set and they looked as described in the Buy It Now auction. But one of the headlights had a surprise for me when I opened the back panel to check the bulbs. The wiring insulation was falling apart, and someone had previously used electrical tape to keep wires from shorting out. Cool, a new project!

Screen Shot 2015-11-18 at 4.12.12 PM

Car manufacturers experienced many problems when they transitioned to bio-degradable plastics in the 1990’s.  I’ve read that Mercedes was one of the first to adopt this practice and paid the price.  They lost a lot of loyal customers that had become used to the legendary longevity of their 60’s through 80’s cars.  Not only did the insulation fall apart after about a decade, but some car owners found out the hard way that rodents really liked the new flavors being used in the wiring. Many manufactures in an attempt to go green had used soy, vegetable oil and other natural materials in their manufacturing processes. The unintended consequence was that criters were finding a new mobile home with a good food source while the owner was sleeping.

I had to bring this unit back to like new condition before I was going to install it. Fortunately one lifelong hobby of mine has been tinkering with electronics, so I didn’t hesitate to pull out the solder and soldering iron. Since I was using non-biodegradable wiring from my used parts bin, my only expense other than time was solder and some shrink-wrap tubing. In a little over an hour I had replaced all of the wiring from the connector to each of the bulbs in this light assembly.

Screen Shot 2015-11-18 at 4.55.39 PM

Now I have a vehicle with industry standard lighting that should perform as designed for many years. Had I gone to Mercedes for a replacement set I would have been out over a grand, and the wiring would experience the same issues in a decade or less.

So in effect I undid a bit of the “green” work originally done by Mercedes. But, one could say that by keeping this machine out of the landfill with just a little bit of effort, I’m reducing an even greater need for energy and resources to make another. I don’t really know actually, I’m not a manufacturing or recycling expert. All I know is that it’s a tiny amount of plastic to keep this machine out of the landfill.

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Great Photos from Apple’s Early Days

A snapshot of Apple’s early days with some rare artifacts.

Sam Hotchkiss

apple1This article from the SF Gate gives us a peek into the early days at Apple. A picture is worth a thousand words.

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Learn by teaching, even when it’s uncomfortable.

I can attest making a mistake in front of a classroom is very very uncomfortable. But one never forgets, and perhaps the class seeing the teacher being humbled might even be beneficial for them.

Sam Hotchkiss

If you need another reason to go speak at your local WordCamp or Meetup Group, try this one on for size: do it to learn something new.

I stumbled across this article from 2011 where Annie Murphy Paul talks about why we learn more when we teach.  There’s a deep level of satisfaction derived from teaching that is hard to get any other way, and it drives us to become experts in whatever it is we are sharing with others.

So don’t just teach for others, teach for yourself, and apply to speak at your local WordCamp!

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Simpler is Better with Solar

Our home is continually evolving in it’s energy efficiency, not by itself though.  Thankfully for it, I’m always looking for ways to reduce our dependence on natural gas and electricity by making as much use of the sun’s energy as practical.  So far I’ve installed a solar hot air system in the master bedroom and a solar hydronic system in the living room.  Together these systems have cut our energy consumption by at least 50% overall, but the lessons learned are important.  As a result I’m even more motivated to install a completely passive system than ever.

This year Albuquerque has experienced some large temperature swings.  Since December I’ve had to go on the roof to cover one of our home’s solar-hydronic panels on several occasions because it was too warm.  These panels heat water that in turn heats our living room floor.  My problem is that when it gets unusually warm the system brings in too much heat indoors, and makes the room too warm.  Also I get concerned that some of the synthetic tubing leading from the panels on the roof and under the tile floor could be damaged, even though it’s rated to handle very hot water.

Solar Hydronic Panel

Solar Hydronic Panel

Solar-hydronic systems are similar to nuclear reactors.  They both use a nuclear reaction to produce energy, which in turn heats water.  In both cases it’s possible for the coolant to overheat and cause damage to pumps and other components.  In my own design, I have not yet found an easy way to moderate the Sun’s output, so I’m left with needing to climb on the roof to put a shield between the Sun and my panels.

As we breach 400 parts per million (ppm) atmospheric CO2 in 2015 and continue higher, I wonder if this will be a more frequent occurrence.  Everyone has their climate opinion on this, but CO2 is CO2 at 400 ppm, and CO2 doesn’t care.  If climate science has any merit, I suspect I’ll need to build some sort of a louver or sliding screen that can be operated automatically when the weather gets to be too warm.  My goal of a simple system with few moving parts may be unrealistic.

Solar Hot Air

Solar Hot Air

Speaking of simple systems, I’m liking more and more the solar hot air system in the master bedroom.  This system uses hot air instead of water to transfer heat, and I can turn it off with the flick of a switch.  A 40 watt PV panel provides electricity to a 12 volt brushless motor that moves around 150 cubic-feet of air per minute (CFM).  There’s no sensors, or control systems, just a solar cell connected to an electric motor and a switch to turn it off in the summer.  When the sun goes down, the fan stops.  No need to worry about clearing snow of the PV panel to get the pump working as I do on my hydronic system.

Brushless blower motor

Brushless blower motor

I don’t recall when I built this but it was probably around 2007, so if I were to try and figure out how much energy we’ve saved with this system, I’m sure it would be impressive.  The air blowing into our master bedroom and master bath is warm enough to make that part of the house comfortable by 10:00 am most days.  The only downside, is that it quickly gets cold when the sun goes down.

This is actually what I like most about heating the floors using hot water.  The floor in the living room staying warm hours after the sun goes down is worth it, but I wonder where the trade-off is.  The moral of the story is simplicity probably beats complexity in the long-run.  So, instead of expanding the existing systems as I had planned, my next project will be building a totally passive system called a Trombe Wall instead.  Being a techie I may miss the technology, but after all I can always use technology to measure our energy savings and home’s reduced carbon footprint.

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No Need To Go To Mexico

After Saturday morning’s impressive snow fall in Albuquerque, people were cross-country skiing in the Sandia Mountain foothills.  We went on a very nice hike in foot deep snow.  Then just 24 hours later I was riding my mountain bike in the same area, wearing biking shorts and a t-shirt.

Sandia Mountain Foothills Saturday Morning

Seeing so much snow vanish in this timeframe caused a bit of mental dissonance.  While biking I thought about our hike the previous day, and remembered a trip to Mexico one winter.  Sunday afternoon it felt as if I had just debarked off a plane after flying for hours from the New England to Los Cabos, Mexico.  The contrast between Saturday’s snow and Sunday afternoon’s hot sun and the warm air was just as great.

Sandia Mountain Foothills Sunday Afternoon

So I decide that this was a gift from above in more ways than one.  We got to experience two different seasons during the same weekend and I got to participate in two really fun activities. The land and the aquifer both received some much needed water.  Once again I felt fortunate to live in a part of the country with such amazing diversity of culture, weather and outdoor activities.  This place really is The Land of Enchantment!

Mountain biking in Sandia Foothills on Sunday

Mountain biking in Sandia Foothills on Sunday

Saturday Hike With Dogs

Saturday Hike With Dogs

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