Monthly Archives: July 2017

THE PHOTOGRAPHS IN MY MIND – PART IV

This is another installment in the series of photographs in my mind from the 80 plus trips we’ve taken.  I hope some of them will interest you.

Italy – East/west/north/south – what a wonderful country.  You have to see:  the lake country, Cinque le Terre, Tuscany, Rome, Venice, Sienna, Pompei, Pisa, Lucca, Parma, Milan, Capri, Amalfi, Naples and everything in between.  So much history, so much good food.  It’s a wonderful vacation for five or eight trips.

A few of the highlights included the Palio horse race in Sienna, the ancient ruins of the Coliseum and the Vatican in Rome, the water-logged streets of Venice, the gelato in San Giomono, the ruins of Pompei, and the linked picturesque towns of Cinque de Terre.

I’d go back anytime.

Southern Coast of California, including San Diego, Laguna and San Luis Obispo.  You can’t go wrong in any of them.  San Diego boasts Old Town, the zoo, Coronado Island beaches, Balboa Park with three great museums and a delightful year-round climate.

Moving north, you go to Laguna, a quintessential beach town with lots of galleries, great beaches and arts and craft festivals, as well as the unique and famous Pageant of the Masters every summer.  It’s a little like Hawaii, only closer.

San Luis Obispo is an orderly, pretty college town which offers a relaxing atmosphere and lots of outdoor activities.

Vienna is a super charming city which rivals Paris in every way—only less crowded.  It offers interesting old-world sights along with recreations of the music and costumes of the 18th century.   You can almost feel Mozart and Beethoven roaming the streets and parks with you.

Canadian Rockies – Waking up in the Fairmont Hotel in Lake Louise looking out the window was a photo I’ll never forget.  Our room overlooked the lake, which gave us a mirror image of the snow-covered mountain in the distance.  What a wow!

The rest of the Rockies—Banff and Jasper—were beautiful as well.

Santa Fe, New Mexico.  It was about 1983 when I first saw this sleepy town of unpaved dirt streets and an adobe vision of what you thought Mexico would look like, but never did.  It was charming and rustic and a sheer delight.

The years since and our half a dozen return visits have seen the growth and gentrification with over 100 galleries of art and jewelry.  Still charming!

Prague and Budapest—both fascinating, historic and picturesque old world cities that have a charm that’s hard to describe.  Both also have many remnants of the problems their Jewish citizens had at the beginning of WWII.  Well worthwhile places to visit.

Moscow – Standing in Red Square was one of the great photo memories of my life.  Felt like I was in all the newsreels I saw as a kid with the tanks and troops marching through.  A wonderful city to visit and some of the most beautiful women in the world; most of them looked like tall blonde models

Southern Africa – What an absolute treat!  Started with Johannesburg, South Africa, with impressive images of Soweto, Pretoria, and our first safari in Kings Camp—up close and personal with an abundance of animals our tracker sought out.

Then it was Victoria Falls, and it was still impressive even with “low water.”

On to Botswana and three different safari camps.  Our first was a sleepless night with the lions and elephants baying at each other and in the morning they sent a jeep to take us to breakfast because the lions were camped out at the pool.

Then to Namibia and three more and different safari camps, along with sliding up/down the red sand dunes, as well as Walvis Bay, where the seals jump in the boat.

Mendocino – The first of our half-dozen trips was 1997, when this river/bay side town had loads of water towers slowly being converted to B&B, restaurants and galleries.

It was like a charming replica of New England with great restaurants and dozens of galleries showing art, jewelry and crafts.  Unfortunately, not many of the galleries are left nowadays, but it still has an eclectic, outstanding 10-day summer music festival.

Thailand – a very interesting country.  We didn’t go to the popular beach area because we live in L.A. and go to Hawaii pretty regularly.  We did visit Bangkok and a number of mountainous areas.

Bangkok is a city of contrasts; very depressed living areas along the bank of the Chao Phraya River and sumptuous temples, palaces and hotels.  It is the capital and largest city in Thailand and offers tours of the ancient capital, the floating markets, as well as the diverse culture of Asian life, including stifling humidity and lots of traffic.

Then it was on Chiang Rai and Chiang Mai, cooler and very pretty with lots of gardens.  Nice escape from Bangkok.

Panama Canal – Fascinating, a great thrill and a very interesting experience.  Did it twice!  I’d go again.  Left Miami and trekked across the Caribbean to get to the staging area, then waited for our turn.  It’s an all-day, well-spent effort to get through the canal.  The history of how they built it is amazing.

Then it’s on to Costa Rica, with great beaches and exciting mountain areas.  Very inexpensive!

Australia – A wonderful visit down under!  Sydney is a great city with a beautiful harbor because all the commercial traffic is miles away.  Lots of beer and friendly, beer-loving people.  The Royal Botanical Garden leading to the historic Opera House, the Harbour Bridge and the beach communities of Bondi and Manly are all highlights to visit.

It’s a big country with a lot more to see.  Melbourne is a charming town that reminds you a little of New Orleans.  Then there are Cairns and the Great Barrier Reef, a paradise for snorkelers and divers.  Great trip!

Yosemite/Tahoe – Each is very special.  Yosemite is open winter and summer; waterfalls, great hiking, snow sports, camping and a host of outdoor activities.

The Ahwahnee Lodge and its dining room is one of the truly memorable places in America.

Tahoe is cool and gorgeous.  Here, too, there’s plenty to do in winter or summer.  The lake is a bit cool, but the north and south shore offer great hotels and lots of outdoor activities.

Vancouver/Whistler – Vancouver is one of the top cities in the world.  It’s a terrific place to visit with great museums, Stanley Park, Granby Island, the old gas town area and wonderful hotels and restaurants.  We first saw the city from a sea plane.  What a thrill!

Just an hour or so north is the site of the 2010 Winter Olympics, Whistler.  Great mountain area!

New Orleans – A great city on the mend from Katrina.  There’s a lot to see if you have any time left from going to hear all the fabulous jazz music.  The parades and costumes all welcome you for a great experience.

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RETIREMENT 102

In our last blog on this subject (June 7), we opened the door to this vast unknown by describing the different phases of retirement most people encounter.  Now it’s time to start getting into the nitty-gritty of what you need to consider.

We can talk a little about some financial aspects of this new life chapter, but your individual needs and answers may require a relationship with a financial advisor.

So let’s start here by differentiating between “thinking about retirement” and planning your retirement.  It’s never too early to start thinking about retirement.  If you haven’t already, you should join AARP.  I’m not always comfortable with their politics, but it’s an inexpensive resource to enhance your thinking.  Bookstores offer a wide selection of dissertation on the subject, although most concentrate on the investment aspects.

The thinking part can and should include seeking the experience and advice of others, as well as exposure to different lifestyles, locals and venues.  You want to get a lot of input and consider a variety of possibilities.

Perhaps the most important part of the thinking process is when you want to cross the line and your thoughts on whether it will be full or semi-retirement.  In a semi-phase, you can continue part-time work, consulting or try a related or entirely new line of work.

You should continue the thinking about your retirement and all the options you’ll want to consider right up until you’ve set a date.  Then it’s time to start planning.

Planning is the process of assembling and organizing your collection of facts and thinking and reducing it to writing.  It’s a plan you’ve laid out like a roadmap and entirely possible you’ll make changes along the way.

Your Retirement Planning (from the AARP Bulletin), Self-Interview:

  • Where do you want to live after you finish your current career?
  • What will your annual housing and transportation expenses be?
  • How much will it cost you each year to visit friends or loved ones?

Day-To-Day

  • What will you do with your time when you’re no longer working a full-tine job?
  • Do you plan to travel? Pursue hobbies? Babysit your grandkids?  Volunteer?  Something else?

Your Nest Egg

  • How much cash will you need for everyday expenses like food, entertainment and shopping?
  • How much do you currently have in long-term savings?
  • What, if anything, could you be doing to save more now?
  • List all your ongoing sources of money after you retire?
  • How much money will flow in each month from Social Security, part-time work, a pension, investments?

Staying Healthy

  • How much do you expect to spend for health insurance and noncovered health care expenses after retirement? This spending tends to increase as time goes by.
  • Do you need to budget extra money for fitness, supplements, special foods, eye and ear care, and other routine health needs in the future?

Investment Returns

  • If the stock market takes a big fall, will you be in trouble?
  • Is too much of your money in savings accounts that pay next to zero interest? It’s important to spread your retirement savings across a range of investments, so that a loss in one kind doesn’t wipe you out.
  • Prices for everything—rent, products, services, utilities—likely will go up each year. Are your investments and savings accounts keeping up with the inflation rate?

What Do You Owe?

  • What are your current debts—and what are their interest rates?
  • Could you lower the interest rates you pay on your debts by refinancing a loan or negotiating with a lender?
  • Should you allot more each month to pay down your debts right now?

The Tax Man

  • Which taxes are most likely to cost you lots of money in the future: income tax, property tax, sales tax?
  • Do you think your future taxes are big enough to influence which state you decide to live in?

Draft a Budget

  • What will your monthly cash needs be after you retire?
  • Can you write a monthly budget for retirement now, based on your retirement vision?
  • Have you covered all true costs? It’s easy to overlook items like restaurant visits, gift giving, hobby expenses, copays for medicine or visits to children.

Some experts say a good rule of thumb for estimating your financial need is to accumulate 10x your annual working income.  Keep in mind any monthly income, like Social Security, can be multiplied by about 300 to add to your asset base.

So if your Social Security income will start at say $1,500 per month, for example, you can add about $500,000 to your asset base.

The $1,500 will have inflation adjustments; so even if you live to 100, that should be a nice little egg to add to your basket.

The 10x figure is not a minimum.  It’s a comfort number.  So even if you have less, some adjustments in housing or geography, etc. can still offer comfort.

Here are some tax-friendly states you may want to consider:

  1. Delaware – no tax on Social Security benefits
  2. Florida – no tax on retirement income
  3. Nevada – no inheritance or estate tax
  4. South Carolina – no tax on Social Security benefits
  5. Arizona – property tax break for seniors
  6. New Mexico – tax rebates for those 65+
  7. Idaho – no tax on Social Security benefits
  8. Montana – No state sales tax
  9. Maine – no tax on Social Security benefits
  10. New Hampshire – no income tax

If you have a mortgage with only a few years left, keeping it for a tax deduction usually doesn’t make a lot of sense and paying it off may offer you a greater feeling of independence and security.

A mortgage with a longer term may suggest some different considerations, like preserving liquidity.  You should be wary of tying up a large portion of your net worth in a home if the equity would be hard to tap in an emergency.  Home equity lines of credit offer one way to assess that equity.

An FHA-insured reverse mortgage line of credit can’t be shut down once it’s established, as long as you abide by the loan rules (such as paying your property taxes and insurance, and keeping the home in good condition).  In fact, the amount you can borrow can increase over time with a reverse mortgage credit line.  You don’t have to make monthly principal and interest payments on the money you borrow with a reverse mortgage.

In any case, preserving an inheritance probably shouldn’t be your top priority.  You should focus instead on preserving your quality of life and your financial flexibility.

Reverse mortgages have gotten safer and less expensive in recent years, but you would need to exercise discipline not to waste the money you borrow on frivolous purchases.  You want that equity to be available for you when you need it, such as for assisted living or other long term care expenses.

So let’s summarize:

  1. Understand the difference between thinking and planning.
  2. For budget purposes, assume you will live to 100.
  3. Be sure to include in your total assets the approximate current value of all monthly payouts, like Social Security.
  4. Assume you can have a comfortable retirement if your total assets are 10x your last salary.
  5. Don’t assume all you will have to live on are your total assets x some interest rate (2 to 3%) or an investment return of 5%.
  6. There are several other options to enhance your income; periodic withdrawals, annuities or a reverse mortgage.
  7. If you need more help, consider a fee-based financial advisor.

Next month we’ll get into housing and lifestyle options.

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TRYING TO UNDERSTAND CLIMATE CHANGE – PART III

In our two previous blogs (April 26 and May 31), we tried to analyze the problem, as well as the practicality of the solutions.  Here, in our final blog in this series, we look at some other factors which contribute to both the problem and the solution.

What are the biggest challenges to meet the goals of the Paris Accord?

“Cost is one,” said Ethan Elkind, director of the climate program at U.C. Berkeley’s Center for Law, Energy and the Environment.

“Prices are coming down in all the alternative technologies,” he said, “but we won’t know how much it would cost.  We also presumably would have to retire some existing power plants, so the ratepayer impacts are unknown but could well be substantial.”

Another challenge is energy storage.

“A total reliance on renewable energy would require a major expansion of storage capacity for those times when the wind dies down and the sun fades,” said Sadrul Ula, managing director of U.C. Riverside’s Global Energy Center.

“Lithium batteries offer good potential,” he said, “but they’re still not there yet.”

Another Cost – To You and Me

In addition to the substantial costs we would have to pay to achieve anything close to the Paris goals ($2,500 to $3,000 per household to implement a carbon tax), the Paris agreement requires us to pay $3 billion or more to help undeveloped countries try to meet their goals.

An Alternative for Carbon Emissions

The climate change fight has focused largely on cutting emissions.  California is now considering another solution:  DIRT.

While an overabundance of carbon in the air has been disrupting our climate, plants are hungry for the stuff.  The Central Valley’s farmlands essentially operate as a vast lung, breathing in carbon dioxide through photosynthesis and converting it into plant tissues.  That results in less of the heat-trapping gas in the atmosphere.

But the healthier the soil, the more carbon is stored in plants.  Enter California’s Healthy Soils Initiative, a statewide program rolling out this summer that is the first of its kind in the country.

More than a quarter of California’s landmass is used for agriculture.  Over generations, farming practices like monocropping and tillage have reduced the amount of organic matter in the soil, affecting plant growth.  Some of that organic matter, which contains carbon, needs to be put back.

“If you don’t put carbon back in, you’re kind of over-mining the soil,” said Kate Scow, a professor of soil science at the University of California, Davis.

California’s initiative will give grants to farmers who take steps to reverse that nutrient loss.  Those could include adding compost on rangelands or seeding fields between harvests with so-called cover crops such as grasses and mustards, which add organic matter to the soil.

State officials say such measures could eliminate from the air the equivalent of millions of tons of carbon dioxide a year.  No one is exactly sure how much, however.

For now, the soils initiative is funded with just $7.5 million, a drop in the bucket for a state with more than 76,000 farms.  But officials hope it can be expanded after demonstrating enough interest from farmers.

To that end, they’ve pushed the program as a win-win by citing evidence showing healthy soils produce higher yields.  “But many unknowns still need to be sorted out,” said Cynthia Cory, director of environmental affairs for the California Farm Bureau Federation.

Even if the new measures are good for yields, whether they justify a farm’s time, labor and expense depends on its unique circumstances.

“We need to try it,” Ms. Cory said.  “I don’t know if bad or good is the question.  It’s just, ‘Is it worth it?’”

The Politicians vs. the People

poll after poll shows that “climate change” is not a high priority for American voters.

A recent Gallup poll found only 34% of Americans believe global warming will pose a serious threat in their lifetimes.  The poll found climate change was dead last on a list of 13 issues important to voters.  And when a recent Massachusetts poll asked respondents to choose the greatest long-term threat to the United States, they chose terrorism over global warming, 58% to 24%.

The Pew Research Center reports, “In the U.S., a solid majority believe there is evidence that global warming is happening, but they do not rank global climate change as one of the top threats facing the country.”

Yet all the liberal politicians and activists keep pounding the drum to tell us the things we have to do immediately to stave off this crisis.  What do they know that they haven’t told us?

Hoping for a Miracle

Last May, the state senate leader, Kevin de Leon, quietly introduced legislation that would require California to get all of its electricity from solar, wind and other renewable sources by 2045.  To do that in just the next 25 years would require a miracle.

Climate Goals Require Carless Cities

To meet climate goals, regulators are saying will require more dense cities.  Residents will have to walk to work four times more frequently along with a three-fold increase in bicycling, as well as a substantial boost in use of bus and rail ridership.

All this, according to Marlon Boarnet, chairman of the Department of Urban Planning at USC, Price School of Public Policy, who said, “You can’t be pro-environment and anti-housing,”

Many others reflect the skepticism of Issi Ronem, chief economist at BuildZoom, who said, “I can’t imagine this happening.  It’s just not realistic.”

It is clear that a majority, perhaps a substantial majority of the scientific community feel something needs to be done about the climate change problem.  There is no consensus.  I have found, however, that any of the modest goals of the Paris Accord or the ambitious goals of the California legislature can be accomplished.

Technological advances like getting more carbon into our soil, rather than the atmosphere may hold the key to avoiding a potential crisis.

As Bugs Bunny used to say, “That’s all for now folks.”

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TIME TO DUMP THE ELECTORAL COLLEGE?

Donald Trump had it pegged; the election was really rigged.  Hillary Clinton won the most votes, but Trump won the presidency.  It was rigged 229 years ago by the Founding Fathers.  They created a convoluted, undemocratic presidential election system that became known as the Electoral College.

It was part of a classic backroom political deal fashioned to appease southern slave states so they’d sign the new Constitution.  The south—slave owners, anyway—fretted about the north’s larger population and the political power that came with it.  They thought those Yankees might even abolish slavery.

So they infamously compromised.  Slaves wouldn’t be allowed to vote, but they could be counted as three-fifths of a person for the purpose of padding the south’s population numbers.  That way, Dixie would be entitled to more congressmen—and more presidential electors.

It wasn’t by coincidence that four of the first five presidential elections were won by candidates from Virginia, which had lots of slaves.  The three-fifths non-sense ended when slaves were freed during the Civil War.  But the Electoral College endured, still tilted toward the less populated states.

It’s because of how presidential electors are allotted by each state.  It’s mostly based on the number of U.S. House members, which is determined by population size.  But every state also gets an elector for each senator.  And every state is entitled to two senators, regardless of how many people live there.

So in the most extreme case, Wyoming gets one senator for roughly every 291,000 residents.  In California, there’s one senator for every 19.2 million people.

True, Wyoming has only one U.S. House member and California has 53.  When it’s all calculated, for every 194,000 people in Wyoming, there’s one Electoral College vote; but it takes 697,000 Californians to qualify for one electoral vote.

It’s long past time to clean up this absurdity and allow American voters to elect their presidents directly.  Our votes should not be filtered through an archaic system that enhances citizens’ votes in some states and dilutes them in others.

Citizens should be electing the president; states shouldn’t be.

Republican votes for president in deep-blue California are worthless; ditto, Democratic votes in bright-red Texas.  Such disenfranchisement occurs across the country.  That’s because all but two small states—Nebraska and Maine—cast their electoral votes on a winner-take-all basis.

Every other elective office in America is decided by who gets the most votes—all the way from U.S. senator and state governor down to first-grade class presidents.

Why do we still do it this way?  Because we always have.

It’s also because Republicans, who now control Congress and most state governments, certainly don’t want to change something that has been benefiting them.

Clinton is the second Democratic candidate in 16 years to win the popular vote but lose the presidential election.  Like Al Gore did to George W. Bush in 2000.

In all, five presidential candidates have lost the popular vote but won the White House.  The others were Benjamin Harrison over Grover Cleveland in 1888, Rutherford B. Hayes over Samual J. Tilden in 1876 and John Quincey Adams over Andrew Jackson in 1824.

There won’t be a constitutional amendment to change it, at least anytime soon.  A constitutional amendment requires a two-thirds vote of both houses of Congress—currently controlled by the GOP—and approval by three-fourths of state legislatures.

Red states aren’t going to agree.  Neither are purple states because they soak up a lot of attention and campaign bucks as “battlegrounds.”

The chances of getting a constitutional amendment passed to elect a president by popular vote aren’t very good, so what are other alternatives?

The District Method.  The states can choose any method they want for divvying up electors.  Some would love to see more states use the “district” method like Maine and Nebraska, where two electoral votes go to the candidate who wins the popular vote statewide and the rest go to the popular vote winners in each congressional district.

The National Popular Vote Interstate Compact.  In this plan, states award their electors to whoever wins the popular vote nationwide, not statewide.  So far, 11 states (with 165 delegates) have signed on; to take effect, the compact needs enough states to total 270.

Perhaps the simplest and best alternative would be to adopt The Proportional Plan, sometimes called EQV (electoral vote equivalents).  The states pass laws that dictate that instead of winner take all, electors are awarded proportionally based on the popular vote in each state.

The number of electors, as well as the way they are chosen, for each state doesn’t change, just the allocation of electors based on a percentage of the popular vote.

In the current system, nine or 10 states essentially dictate who gets the most electoral votes.  If, on the other hand, you rely strictly on the popular vote, the major populated cities and states—New York, California, Illinois—will become the determining factor.

Any change to the election system would probably increase the cost of campaigning, which is already obscene; campaigning in the major population centers will cost a lot more.  That, along with the length of campaigns, is part of another problem we’ll leave for another day.

In a nutshell, that’s why Democrats who dominate the population centers want to dump the Electoral College in favor of a straight popular vote and why, conversely, Republicans are against it.

I personally favor the Proportional Plan.  You think California would give up winner-take-all?

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