Photo by maklaakie at deviantart

Greetings to everyone from my internet-free (kind of) vacation. The lack of wireless internet may be bad for my writing, but I’m catching up on reading with my iPhone and what a great week it was in the personal financial blogosphere! Here are some of my favorite articles from this week, you’ll note that there are more than usual. Don’t forget to check out the ABDPBT and ABDPBT Tech versions as well. See you next week!

• Trent at The Simple Dollar reviews Amazon’s “marketplace for work,” Mechanical Turk. Can you earn more than minimum wage there? Find out here.
• Goldman Sachs is everywhere, says The Great American Bubble Machine:

  The first thing you need to know about Goldman Sachs is that it’s everywhere. The world’s most powerful investment bank is a great vampire squid wrapped around the face of humanity, relentlessly jamming its blood funnel into anything that smells like money.

  (Rolling Stone via brip blap). Frank at Bad Money Advice has a well-reasoned retort that’s worth reading as well (as we’ve come to expect).

• Read the July 2009 updates on the net worths of your favorite personal finance bloggers at Suburban Dollar.
• And finally, check out these strategies to curb lifestyle inflation at fivecentnickel. In the wake of Michael Jackson’s death and revelation of his finances, it seems a particularly timely topic.

"Of Note This Week–Personal Finance Edition" was written by Anna Viele for ABDPBT Personal Finance and was originally posted on July 11, 2009. Copyright ®2009 Anna Viele for ABDPBT, Inc. and licensed for reuse under Creative Commons BY-NC-SA 3.0. All other rights reserved.

People, we’re on vacation this week at this quaint place that doesn’t have wireless internet. This makes it hard to do new blog posts, and also there are these things called “family time” and “relaxation” that keep getting in the way of blogging progress. So today we’re in reruns–I’m bringing back a classic post for the benefit of people who might have missed it the first time around. This post originally appeared on December 8, 2008. Enjoy. Again.

Now that you’ve been working on your debt snowball, you might be wondering how we can get this whole debt-repayment process moving a bit faster. One of the easiest ways to do this is to look around your house for things to sell. On Friday, I outlined some tips for selling books, DVDs and CDs on Amazon, and today I’m going to give you some tips on how to use eBay to your best advantage when trying to sell off household goods.

1. Always consider shipping costs when listing an item on eBay. Not only do you need to have a shipping cost listed with your item’s auction, you need to keep an eye on price and ease of shipment with all items you list for sale on eBay. Learn to appreciate the value of selling small, light items–it is on these items that you will make your highest profits. Maybe you have a valuable piece of furniture you’d like to sell, but eBay is probably not going to be the best place for this kind of sale. Even if you use the ‘local sales only’ feature on eBay, the fact is that the market shrinks considerably when you are dealing with large items that will require the buyer to pick up the item or pay exorbitant shipping costs. Consider Craigslist or local consignment stores for these types of sales.
2. Be careful with fragile items. Though there is a good market for pieces of art and other fragile items on eBay, you have to be careful with selling this type of stuff, just ask anyone who has had to deal with breakage! The best bet with these items is to insure heavily or, again, look to a local selling option to avoid the headache.
3. Use 7-day auctions. Different ebay sellers have different strategies, but my experience is that the longer the item is up, the more time you have to attract sellers and drive up the price. There are people who say that setting your auctions to end on a Sunday night is a good strategy as well, since more people seem to be online and looking to buy on those days.
4. Communication is key. Letting your buyer know what is going on is the easiest way to keep them happy. After a successful auction, email the buyer and let them know when they can expect their item to be shipped, and via what method, etc. Remember to always receive your payment before shipping anything.
5. Do your market research. Some things don’t sell well on eBay for some reason–an example, generally speaking, is fine jewelry. Similarly, some things sell very well for a certain time, and then the sales die off. We can only offer conjecture as to why this is–sometimes it has to do with availability on the regular retail marketplace, as is the case with the sales of Ugg boots and Wiis for inflated prices before Christmas. Other times, it has to do with buyer confidence–there are some things people want to see up close before they commit to buying (again, this may be the case with the jewelry example). You should always look up an item on eBay before you attempt to sell it–find out what it is going for (price point), how many are on the market already (the competition), what the interest in the item is (are there any bids?). All of these factors should be considered in listing–in some cases, these numbers will guide you in setting a price, and in others, they will tell you whether it’s worth it to list the item at all. Other things that market research can tell you include: 1) should you sell an item as a set, or individually; 2) will the item get more if sold in a lot with other like items?; and 3) what is the best category for an item that could be listed several places?
6. Use low start-off prices and avoid using reserves. This is a largely psychological issue, but for some reason buyers feel like they’re getting a better deal when items start low, even if the end price is the same. For the same reason, I would often list items with a start price of 9.99 instead of 10.00, even though it seems like a superficial difference–there is a reason people have done this in advertising for years. My rule of thumb was to start off a low priced item at $1.99 or $4.99, depending upon the basic idea of what I expected to get for it. A higher priced item might start off at $9.99. Only in a very extreme situation would I inflate the initial price–let the market do its work in driving up the price (if you’ve done the research, you should be more comfortable with this). Similarly, only in a very extreme situation would I use a reserve (like a very valuable piece of jewelry or something, which I probably wouldn’t be selling on eBay anyway), because it turns buyers off and costs more to list.
7. Provide clear, high-quality pictures of the exact item you are selling. People like to see what they are buying. Don’t make them wonder–take a good quality picture and put it in your ad. Do not take other people’s pictures, or pictures off the web.
8. Right or wrong, feedback is king. There are a bunch of crazy feedback mafia types out there these days, I’ve heard, who will withhold feedback and/or threaten bad feedback if you don’t bend to their will. I’ve never personally encountered such people, but if you’re communicating well with your buyers and providing good products as advertised, you should be OK on this front. Make sure to leave feedback and try to please your customers–your rating does affect people’s confidence in buying from you.
9. Do your best to estimate a fair and reasonable shipping cost. One trick for getting more money per item on eBay is to inflate the shipping cost, and people have been doing this since the beginning days of eBay. Now that shipping costs are listed right next to the item price, it’s much more difficult for sellers to take advantage this way. Do your best to estimate what a fair shipping price will be. You should include materials (if any) in the shipping cost, and let your buyers know that the price includes these incidentals.
10. Utilize free shipping supplies whenever possible. The post office has standard sized priority mail boxes that go for a flat rate regardless of weight. These can be used for free when using priority mail–but you can also get a supply of them to use for your own regular parcels–just cover up the priority mail stuff with a brown paper bag (shhh!) or a priority mail Tyvek envelope (also free) that you’ve cut open and wrapped around the box. If you are questioned by any postal employees, don’t say you got the idea from me, though.
11. Online shipping. Kerry was kind enough to add the folowing tips to the comments when this post originally appeared. I’ll add them here to make this post EVEN BETTER than the first time around:
    

    You can order Priority Mail shipping materials (boxes, envelopes, etc.) for free through eBay, and have them delivered to your door. It’s also wise to print your postage online through eBay after the item sells (and is paid for), because it’s fast, and you don’t have to go out in the snow, and it automatically sends the buyer a tracking number. You also get free delivery confirmation (good for you AND the buyer), and a discount on the shipping price. I use the full-sheet labels for them (Avery makes them, but the Office Depot brand is cheaper and just as good). You cut them in half, put half on the box (because it has the address and postage and delivery confirmation barcode), and keep the other half (which is your proof of mailing, and also has the tracking number in case the buyer says they didn’t receive it).

    eBay has also changed its pricing recently to encourage fixed-price listings instead of auctions (they’re trying to compete with Amazon, which I think is a bad plan, but whatever). Once you have a really good idea of what your price point should be for your stuff, they’re a good deal. If you’re less sure what something should sell for, though, an auction is still a better bet IMO.

    Thanks, Kerry!

12. Schedule your mail pick up. Becky also added to the conversation by offering this advice on scheduling your post office pickups:
    

    And I’m seconding Kerry’s info about using the online shipping. It is so, so much easier to automatically pay for and print the label in Paypal, and THEN schedule a carrier pickup for the mail person to come get the package. That way you never never have to go to the post office, which is a total pain with little kids. You gotta hand it to those ebay folks–they really have streamlined the whole process.

Happy eBaying!

"10 12 Tips For Maximizing eBay Profits" was written by Anna Viele for ABDPBT Personal Finance and was originally posted on July 10, 2009. Copyright ®2009 Anna Viele for ABDPBT, Inc. and licensed for reuse under Creative Commons BY-NC-SA 3.0. All other rights reserved.

You might have noticed that we’re in the midst of a kind of strange transitional period in advertising at present. Advances in technology (Tivo) and a more widespread use of technology (internet use has increased 342% worldwide since 2000) have finally forced traditional advertisers to rethink the way they try to reach consumers. But only because their sales have slumped, and rather than moving toward anything truly revolutionary in their thinking, traditional advertisers continue to try to make the media format fit their way of doing things, rather than retrofitting their advertising methods. And this is nowhere more apparent than with online advertising, where things just keep getting weirder, because nobody seems to know what the next step should be, though some have come closer than others to identifying new options for a changing marketplace.

For an industry that has built itself upon the idea of being cutting edge–always being able to know what we want before we know we want it–advertising has been remarkably slow in adopting new ideas for how to reach consumers in an age where we have the luxury of ignoring their messages most of the time. Not only can we fast forward through their advertisements during what few television shows we still watch by using Tivo, we can block their ads from appearing on the websites we read through clever browser extensions. Sure, they can still force us to look at billboards while we’re stuck in traffic, and if we want to use a convenience product like hulu to view back episodes of TV, then we’ll be subject to watching the commercials they place in between segments of the shows. But even in those isolated circumstances, we’re free to do what generations have done before us (use the mute button), or to open up another window and do something else until the annoyance of advertising goes away.

Hey look, it's that annoying ad for Mercedes Benz. Too bad this screenshot doesn't cover the floating layer that came with it, though.

Oh, the halcyon days of the Italian-suited Mad Men! Are they gone so soon? Once, these well-heeled mavericks only faced with the challenge of making content that inspired us to buy a product. Now they are expected to capture our attention AND inspire us to buy? Why, the only people who could possibly do such a thing must be highly skilled individuals with creative talent of the likes that would garner gargantuan salaries! But hiring advertising agencies is going to be so expensive if we expect them to do all that now!

Wait.

That’s right, Donald Drapers of the world, the gig is up. You’re going to have to figure out a new scam to run to keep you in your Hugo Boss. And if you think this latest tactic of yours is an example of the kind of free-thinking solution and experimentation I’m talking about, you are wrong once again.

The double-wide skyscraper. Click on image to see what the ad size would be when fully expanded.

.

To give you some perspective on the horror that these new ad formats represent, here are the proposed formats of their three new “jumbo-sized” ad units:

• the first is 336 x 700 tall (see the Mercedes-Benz ad screenshot I took from the New York Times site (actual size), and (this is the best part) it remains in view as you scroll up or down the page, so you cannot escape it, no matter how hard you try;
• next, an “XXL Box” sized at (468 x 648) which is like a double-wide skyscraper ad in its regular position, but then expands to 936 x 648, and then allows you to turn a page for more advertising goodness (because, naturally, you’ll want to hear more about whatever this craptastically annoying ad has to say after it’s taken up half your screen); and
• lastly, my personal favorite, the “Pushdown,” an ad weighing in at 970 x 418, which opens even larger at first to display the ad, and then after seven seconds rolls up to the top of the page, resizing itself to a petitie, unobtrusive 936 X 66 banner

See, I’d like to give you a more complete view of the sizes of these new ads, but my screen is not big enough to accommodate all of the ads at full size AND a post at the same time.

Oh boy. Where to start with the problems here? Well, how about with the kowtowing? Because what else can you classify this when you consider that The New York Times and other content providers had to redesign their websites to accommodate new ads. Now, I understand that the news industry kind of has its nuts in a vice right now because, unlike the blogging networks with which they are shocked to find themselves competing, they have a huge apparatus that they have to keep afloat. They need revenue to do so, and so they are doing what they can to support their news system with the advertising methods they have used in the past. And the advertisers, so used to being able to gain our attention, provided they were willing to pay dearly for it, simply don’t understand why they can’t just have more space. So they needled the content providers until they gave it to them, everyone worried about their bottom line, probably eighty three thousand million advertising executives still having their pocket lined to come up with this totally uninventive method of advertising that–if it accomplishes anything–is just going to alienate its users.

Here’s what I want to know: are any of these people actual internet users? Does anyone at Interpublic Group (outside of the IT department) use RSS to read the news? Or are they still trading looks at broadsheets through their monocles down at the coffeehouse? Because anyone who has used the internet knows what users think of giant ads–THEY ARE ANNOYING. That’s right–this shit stinks. We don’t mind display ads, provided they keep their distance and don’t get all up in our grills all the time. And if they do get up in our grills, then we’ll stop going to the site. It won’t matter how good the content is, we’ll just stop going–either by using RSS or (if they use summary feeds) getting the news elsewhere. Ads like these do not make us want to buy a product. They make us think that the company using them is out-of-touch. Maybe they are.

"Online Advertising: Will The “Interruption” Format Ever Work Again?" was written by Anna Viele for ABDPBT Personal Finance and was originally posted on July 08, 2009. Copyright ®2009 Anna Viele for ABDPBT, Inc. and licensed for reuse under Creative Commons BY-NC-SA 3.0. All other rights reserved.

Photo by oguzlar on DeviantArt

This week, a list carefully compiled and researched by yours truly with the intention of protecting would-be frugal individuals from blowing their budgets on sports wholly inappropriate to their class identities. That’s right, these sports are ones at which you cannot ever hope to excel unless you are extremely rich, or dirt poor. So everyone else in the middle should just save their money and quit right now. That’s right–if you want to be a frugal person, I had better not hear anything about any of you taking up one of the following sports–that is, unless you’ve figured out a way to substitute in a dryer sheet for the required equipment. But where possible, I have provided you with rough middle class equivalents that can be had at a reasonable price as consolation. You’re welcome.

1. Tennis. Volleyball is middle class.
2. Sailing. Riding Pirates of the Caribbean is middle class.
3. Shooting. Paint ball is middle class.
4. Flying planes. Wii Fit is middle class.
5. Auto racing (Vintage or Formula vs. NASCAR). No middle class equivalent, unless you count those cars they make Cub Scouts race.
6. Golf. Extremely rough middle class equivalent: Baseball.
7. Cycling. Going to spinning classes is middle class.
8. Lacrosse. Hockey is a middle class substitute if you’re Canadian or from Minnesota.
9. Rugby, but only if you’re American.
10. Skiing. Snowboarding is middle class, though.
11. Fencing. Football is middle class and much more violent; but it doesn’t have swords.
12. Crew. Using the crew machine at the gym is middle class.
13. Jousting. Tough to find a middle class equivalent here, but I’m going with mailbox baseball.
14. Polo. Uh. Field hockey? Water Polo, despite its name, is not anything like it.
15. Equestrian riding (English). Horseback riding (Western) with a specific purpose that is not work can be middle class under certain circumstances (taking tours, pony rides at Griffith Park, for example.)

"15 Sports That Require You To Be Filthy Rich (Or Dirt Poor)" was written by Anna Viele for ABDPBT Personal Finance and was originally posted on July 06, 2009. Copyright ®2009 Anna Viele for ABDPBT, Inc. and licensed for reuse under Creative Commons BY-NC-SA 3.0. All other rights reserved.

Photo by DavidDMuir on Flickr

Each week, I compile a list of interesting articles I read throughout the blogosphere and publish them on Saturdays. You can check out links beyond the focus of personal finance by following links to the ABDPBT and ABDPBT Tech editions. As always, if you have a suggestion for a link I should check out, please send me an email and I’ll check it out before next week. Oh, and Happy Fourth of July!

• How to do a background check on your financial advisor–seems particularly important in the wake of Bernie Madoff, et al.–at Good Financial Cents
• A new source for extra savings or extra payments: savings sweep by No Credit Needed.

"Of Note This Week–Personal Finance Edition" was written by Anna Viele for ABDPBT Personal Finance and was originally posted on July 04, 2009. Copyright ®2009 Anna Viele for ABDPBT, Inc. and licensed for reuse under Creative Commons BY-NC-SA 3.0. All other rights reserved.

Photo by instantvoodo at DeviantArt

Weight has been on my mind lately, as you might already know. As I struggle to get rid of the 18 pounds I somehow managed to gain last year, I’ve realized that all of a sudden weight is everywhere–everything I look at seems to have something to do with weight: yet another rise in childhood obesity, Americans are getting fatter, even the French are getting fat now, they’re promoting lap bands on network TV, and every website is papered with those hideous Google ads with the cellulite-ridden stomach and commands to “obey this one rule of weight loss,” whatever the fuck that means. Perhaps it has always been this way, and it’s just that now I’m becoming conscious of it. Weight is bleeding into everything these days, and the world of personal finance is no exception.

Weakonomics is a personal finance blog that I like and read regularly. It is written by a guy who is, I think, in his late twenties. That alone might explain some of the content of this post, including but not limited to the unapologetic use of the word “chunker.” Allow me to preface my critique of his post by stating that I’m not even really sure I disagree with his salient point–viz., that there may be some kind of correlation between weight problems and money problems, that overweight people are more likely to carry large amounts of debt as well (and vice versa). I feel like, barring the outliers–people who can eat whatever they want without getting fat, and people who can spend whatever they want without becoming debt-ridden or poor–there might well be a correlation. If nothing else, this would explain the proliferation of weight loss clubs among personal finance bloggers that have been clogging up my reader lately.

I digress.

In all honesty, it does seem like it should just be a simple math problem to stay in shape, in much the same way as a budget should be a simple math problem, but for countless reasons it is not. Isn’t that what Dave Ramsey’s program is all about? The fact that there is a psychological element to personal finance that does not strictly “obey this one rule” of sticking to a budget? And when I say that, I’m not just talking about the much maligned concept of will power, because–yes–you can get very far with a strong will, sure. But is that enough to get you the whole way? Shall we ask LeBron James if one man’s will power is enough? Are there not other, larger factors to consider? What about the game changing, larger-than-life things that come in from outside and wreck your budget? Like hurricanes and horrendous health problems? Sure, you can plan for those, but no plan is foolproof. Ultimately, even with our well-allocated emergency funds, aren’t we all are depending just a little bit on luck to keep us healthy and allow us to remain in good financial shape?

And with weight, there are similar game-changing factors, are there not? I suppose it would be hard for a guy in his twenties to imagine having a child–in effect having his body taken over by a host organism that then completely whittles down his metabolism to nothing, so that the sheer mechanics of calories-in vs. calories-out no longer has a direct relationship to what the scale reads for years (or lifetimes) after the baby is born. Nor does he know, yet, that each year you age your body becomes more and more efficient with its calorie burning, so that the diet that allowed you to lose weight two years ago is now not even going to let you maintain your already overweight frame. And then there are the socioeconomic factors that affect health and weight: healthy food costs more and is less available in different areas of the country and among different social strata. Try buying a green salad in Compton, for example. Cheap, easy food that is readily available to people who have to work two or more jobs to make ends meet is not likely to be healthy. That’s just the way it is, unfortunately.

And then there is this book, which kind of blows the whole debt and fat correlation out of the water. Basically, the author demonstrates that the link between obesity, gluttony and sloth has been way overblown in the past 50 years, and that genes, hormones and chemistry are just as much a part of weight gain as are the behavioral elements that everybody blames for weight gain. The theory is that charismatic personalities over the years have championed specific causes, and this is how some theories of weight loss have become more dominant than others. Anybody who has experienced a sugar addiction knows that there is something serious going on with your body chemistry based upon the foods that you choose–it stands to reason that these chemical reactions also have something to do with weight beyond a strict “calories in, calories out” theory of weight management.

But whatever. I don’t really want to become the champion of the fat people, to be perfectly honest. I’m as biased against fat as anyone you’ll ever meet. I guess I just took this as an opportunity to examine the moralistic tone we all seem to take (myself included) when looking at problems–specifically American problems. Americans are fat because they are lazy, slothful, have no self-control. Americans are in debt because they want everything now, whether or not they can afford it. Is it possible that our problems are a little more complex than that?

"Weighty Stuff" was written by Anna Viele for ABDPBT Personal Finance and was originally posted on July 03, 2009. Copyright ®2009 Anna Viele for ABDPBT, Inc. and licensed for reuse under Creative Commons BY-NC-SA 3.0. All other rights reserved.

This is Ryan. She’s my cat, and she’s dying.

Not today, no. Today, she’s doing OK. But in the last month or two, she has lost half her body weight and has had to be hospitalized. Her kidneys are failing, and in order for her to live comfortably, we have to give her subcutaneous fluids (using an IV bag and a rather large needle inserted into the loose skin behind her neck) once a day.

Our makeshift kitty subcutaneous fluid station. And lotion dish.

Because her kidneys aren’t working properly anymore, Ryan cannot metabolize protein very well. So she has to eat a special kind of cat food that has a lower protein content and requires a prescription to buy, for reasons I still don’t really understand.

Apparently, you can require a prescription for cat food.

We also have to give her liquid medicine orally two times a day that helps to normalize the creatinine levels in her blood. And a quarter pepcid tablet to settle her stomach.

It’s a lot of work, and yes–it’s a lot of money.

Ryan will be 16 years old as of this month. I adopted her from the Humane Society when I was in college, living off-campus in my first real apartment. Before college, I had always lived with animals, and couldn’t bear the thought of another year without a pet of my own to keep me company. Though I have always thought of myself as more of a dog person than a cat person, I knew there was no way I was going to be able to sneak a dog past the apartment managers where I lived. As it was, I had to give the Humane Society a phony number to call to confirm my apartment complex’s pets policy, and badger my friend, Daewon, into answering his phone by saying, “Oak Creek Apartments,” when they called. That’s right–my adoption of Ryan was perpetrated based on a lie, but it seems to have worked out well for us both.

Over the years Ryan has moved with me up and down the California coast, from Mountain View to Menlo Park, to Santa Barbara, and San Diego, and back up to Hollywood and beyond. There were many years there where Ryan was my chief support system–during isolated, pre-sober years while I was writing a Master’s Thesis, I would cry into her fur with loneliness and fear for my future. Later, when I was recovering from surgery, Ryan would tip toe up onto my pillow and snuggle against the side of my head. She has always slept on my pillow, every night, even after I betrayed her by getting a golden retriever, Sidney, who usurped her for time and attention the way that a dog always does to a cat.

Now that she’s sick, Ryan spends more time hiding in the closet, where she is safe from Mini and his toddler grabs and his “Meow-meow!” taunts. But when I wake up in the middle of the night, she’s still there, every night, purring away. And if I pet her, she will make the same peculiar noise of acknowledgment that she has always made, that sound that makes us think she has swallowed a pigeon and it’s stuck in her throat.

For now, Ryan is still enjoying a decent quality of life, even with all her medications and her IV routines. We will continue to give her the treatments until she stops being responsive, or stops purring so readily, because we do not want her to suffer. But for now, she’s still with us, and we are glad.

To keep her with us, we have had to spend a great deal of money on Ryan in the past few weeks. She was hospitalized for a few days, and all of her medicines and special hospital equipment do not come cheap. But what choice is there? Perhaps there was a time where a cat reached this point in life and people would just put them down in lieu of spending money on them. Or, perhaps, they would have noticed her dramatic weight loss, assumed she was dying of old age (which she is) and natural causes (which she is) and just have let nature take its course? I’m not sure.

Because the question of whether it’s frugal or penny wise to own a pet is akin–perhaps not identical, but yes, akin–to asking whether it’s frugal to decide to have a kid. Which is to say that, other than knowing it will have a financial impact, the cost is just not something that can fully enter into the equation. You do not decide to never have kids because they are expensive, and the same rule holds true for pets. If you decide having a pet is important to you, then you accept that responsibility, along with all of the possible complications that might occur much as you do when you decide to have or adopt a child. Ryan has been a remarkably healthy cat for nearly all of her life: all I’ve really had to buy for her in 16 years is food, cat litter, and some toys here and there. (Oh, and Doritos–she is a sucker for Doritos.) But as she declines, she may start to cost more than ever before, just to keep her comfortable. It’s kind of a deal I made with her, I guess: she gave me her 16 years on this planet as my companion, and in return I’ll make sure her time left here is as enjoyable as possible.

Ryan is living out her golden years with Coast, Mr. Right-Click's cat.

Even with the expense, is there any other choice to be made?

"The Economy of Pets" was written by Anna Viele for ABDPBT Personal Finance and was originally posted on July 01, 2009. Copyright ®2009 Anna Viele for ABDPBT, Inc. and licensed for reuse under Creative Commons BY-NC-SA 3.0. All other rights reserved.

Artwork by Raouldraws

Back in the day, I guess I was as much of a Michael Jackson fan as any tween growing up in a lily white suburb of LA: I never had a sparkly glove, or a miniature photo button to put on my backpack, or that red leather jacket with all the zippers. But, I do remember skating to his music during birthday parties at Skating Plus, and I remember watching the Thriller videos in the heyday of MTV. While I cannot say I profoundly affected by Michael Jackson’s death, seeing all of those clips of him as a young child singing with the Jackson 5 did make me stop and think about how tragic his life ended up, and just how uncomfortable in his own skin he must have been to transform himself from that cute kid into the strange looking adult with whom I am more familiar. The other observations I’ve been making over the last week are the effects on the market and other aspects of the economy that his death has had, which brings me to today’s list.

1. If Michael Jackson’s death can break the internet, what will we do when there’s a global meltdown for reals? Unless you have been hiding under a rock, you must have read several articles about how news of Michael Jackson’s death managed to crash the websites for the LA Times, Twitter, CNN, TMZ, and (god help us) Perez Hilton, and probably others too numerous to list here. What does this mean, other than a buttload of people are dicking around on the internet when they’re supposed to be working? Well, if there’s a real emergency someday on a global scale, our current internet resources are clearly not equipped to deal with them. Ideally, if the internet is working how it was planned to work, the servers carrying all this information should be able to adjust to huge changes in traffic without much notice. Clearly, we’re not quite there yet.
2. Even a millionaire (billionaire?) needs a budget. At the height of his career, Michael Jackson controlled every aspect of his musical career and earned a higher royalty rate than “any any single person has ever taken away from the music business.” This is what allowed him to buy ATV Music, the company that controlled the Beatles’ publishing. Over the years, Jackson lost money as a result of various lawsuits and had to pay out settlements to make allegations of child molestation go away, and the staffing of his Neverland ranch cost $5 million a year just to staff. But, bottom line, Michael Jackson was spending about $10 million to $20 million a year more than he was bringing in towards the end. It’s tough for most of us to understand how this is possible, but it illustrates the point that most people tend to spend most of the money they make, regardless of how much that is. And as his experience shows, you are never to rich to need a budget.
3. Jackson’s debt-ridden estate might just be saved by an unexpected run on iTunes. If you’ve been paying attention to iTunes the past few days, you’ll note that nearly all of the best selling albums and songs are either by Michael Jackson or the Jackson 5. This goes for almost every genre into which Michael Jackson’s music can fit by any stretch of the imagination–pop, r&b, Apparently, Michael Jackson dead amounts to what appears to be a perfect storm of iTunes demand. If you consider that most people who liked Jackson’s music back in the day don’t have any of it on CD, much less on their iPhones, then what you have is a huge amount of people suddenly reminded that “Smooth Criminal” might be a good addition to their workout mix. Seriously. I even had to cycle through two songs at spinning class tonight. I actually hope it continues, because those Jackson kids are going to need the extra money for therapy later, provided they can pry it all from their grandfather’s hands.

"3 Unexpected Economic Effects of Michael Jackson’s Death" was written by Anna Viele for ABDPBT Personal Finance and was originally posted on June 29, 2009. Copyright ®2009 Anna Viele for ABDPBT, Inc. and licensed for reuse under Creative Commons BY-NC-SA 3.0. All other rights reserved.

As I indicated on ABDPBT, I’m launching a new feature where I compile interesting links I read throughout the week and publish them for you guys on the weekend. For this section of the blog, the links will pertain to personal finance, entrepreneurial adventures, marketing, and consumerism. If you have a suggestion for a link I should check out, please shoot me an email and I’ll check it out before next week–I’m always looking out for new personal finance blogs.

• As usual, Frank’s Bad Money Advice does not disappoint. Read his expose of the new online bidding company, Swoopo, and its business model, which seems to have borrowed liberally from the adoption of the dollar auction model from game theory economics. Bidder beware.
• Frugal Dad’s message to men who aren’t pulling their weight in terms of responsibility: it’s time to man up! Well said.
• I cannot really believe I’m linking to the I-will-teach-you-to-be-rich guy, but I am. Ramit Sethi discusses frugality this week, arguing that, “you can’t out-frugal your way to rich.” I tend to agree.

"Of Note This Week–Personal Finance Edition" was written by Anna Viele for ABDPBT Personal Finance and was originally posted on June 27, 2009. Copyright ®2009 Anna Viele for ABDPBT, Inc. and licensed for reuse under Creative Commons BY-NC-SA 3.0. All other rights reserved.


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Not all of my readership follows the goings on professional basketball–I know this. I’m sort of OK with it. I’ve learned to accept you people and even toy with the idea that you should be allowed to marry and share all of the same civil rights the rest of us enjoy.

Still, I’m going to talk a little bit about basketball today, and you’re just going to have to try to tolerate it. Because this post might actually be less about basketball than it is about the legitimacy of the claim that there is a “master narrative” to culture and cultural productions that concerns itself with money. The Del Marxists with whom I went to graduate school were always all torqued up about this “master narrative” that operated on a higher plane than other, less important narratives–silly trifling concerns like race, gender, psychoanalytics, post-colonialism–and whipped them mercilessly into submission. That narrative in whose supremacy they unwaveringly believed, and into belief of which they tried endlessly to convert me.

A belief in the master narrative, in this case, suggests that all historical experience–everything, at its core, is “about” the exchange of goods and services, and humanity’s relationship to the market, seen through the lens of the market and constructed within the terms of the market. Despite what you may think, and despite how things appear.

What does this all have to do with basketball? Well, in light of the recent Lakers Championship and this week’s NBA Draft, I’ve been thinking about the economic system of the NBA and the peculiar means of assigning value it sometimes exhibits. Not only does it have a means of assessing value that, on occasion, operates outside of a traditional dollar exchange system, the complexities involved in balancing economic interests (of players, teams, and franchises) is an intriguingly complex chemistry that is ripe for analysis. Add in the larger than life characters it usually involves, and you’ve got a good blog post on your hands.

The Economics of A Quest for The Ring

First of all, let’s assume from the economic standpoint, an owner’s goal is for his team to win an NBA Championship, or at least to get deep into the playoffs. (This is not true in the case of the Clippers, whose management seems to want to run a franchise for the least amount of overhead possible and is therefore content with losing–barring some kind of fantastical trade luck and convergence of galactic powers–more or less, forever. But for most other teams I think it is the goal, or at least a goal.) Because teams that win tend to have more fans and, therefore, they generate more revenue, both in terms of tickets, concessions, tv telecast deals, and team-themed paraphernalia.

The thing is, though, winning in the NBA is expensive. Sure, there is an element of luck to it–there is a draft in which everyone (theoretically) has an even chance of getting a good pick, but this is a dicier thing that it appears. Not only do teams trade draft picks with each other in order to acquire players (or auction draft picks to free up more money to pay the players they already have), the fact is that you cannot bet on a first round draft pick adding value to your team. For one thing, players in the NBA usually take a few years to get used to things: even stars like Kobe and LeBron took a few years to really warm up, and most first-round draft picks turn out to be busts like Kwame Brown. By the time your first round draft pick is warmed up and becoming a star, it’s time to renegotiate his contract. And he’s going to want a lot more money this time around.

In order to win an NBA Championship, it is pretty much established that you have to have not just one, but two potential Hall of Fame inductees on your team at once. Kobe Bryant is probably the only Hall of Famer on this year’s Championship team, but there are a couple potentials on the Lakers there and some for-sure all stars, and since people have argued this was an off-year for the NBA as a whole, he managed to do it with only the help of an all-star, Pau Gasol, and two likely future all star, Trevor Ariza and Lamar Odom. Juxtapose that with Magic Johnson, who had Kareem Abdul Jabbar AND James Worthy on the 80s Lakers teams, or last year’s champions, the Celtics, who had Ray Allen, Kevin Garnett, and Paul Pierce, all three of whom will likely be in the Hall of Fame. Point is, it’s pretty freaking hard. That’s why LeBron couldn’t make it to the Finals–he got very far, but bottom line is even if you’re the King, basketball is a team sport and it is hard, very hard, to win an NBA Championship all by yourself.



Linotype by ncrawler23 at DeviantArt

Financially speaking, getting two or more Hall of Famers on your team at once is tricky. By the time a player becomes good enough to be considered a potential Hall of Fame inductee, he is no longer earning the rookie salary, and already commanding a ton of money from sponsors. To get two (or more) of them on one team, you have to either have a team owner willing to go over the salary cap (an action for which the NBA imposes a hefty fine, but no disciplinary action) to get two, or you have to have enough luck to get a good draft pick who shapes up quickly (LeBron or Kobe are examples), and already have a veteran on your team. Teams that have won championships like this are the early 90s Lakers, where Shaq was already at the height of his career when Kobe was acquired (with some expensive maneuvering) as a draft pick, and Phil Jackson was the coach. They won three championships. Then Shaq went to Miami, where he played with a very young Dwayne Wade, another lucky happenstance, and after insisting that the original coach be fired, and airlifting in a veteran Championship coach (Pat Riley) Shaq won his fourth championship, this one without Kobe, and set off to nightclubs to make videos about how Kobe couldn’t win a championship without him.

Certain teams are willing to go over the salary cap and others are more reticent, both of which factors are influenced by the environment in which the team plays. The Lakers have always been a team willing to spend more money on players, probably in part because Los Angeles is a basketball town, and a Lakers town in particular. The revenue will be there for teams that win, and it will pay off to give the city Championships. Boston is similar. Cleveland is different: sure, they have LeBron James, whom they acquired as a draft pick and whom they will pay to keep, but they are always at risk of losing LeBron for a number of factors: for one thing, Cleveland is not as appealing to a star athlete as might be New York, LA, or even Boston, and for another, LeBron might want to seek another team that is willing to spend money to give him a better supporting cast. Cleveland, quite frankly, doesn’t have the money that some other franchises do. So how do they keep LeBron? How do they convince him to stay in Cleveland, when there are so many other, more powerful forces, encouraging him to go elsewhere?



Artwork by bhound89

Shaquille O’Neil and the Economy of the Already Rich and Powerful

Enter Shaq. Just as I was falling asleep last night, Mr. Right-Click informed me that Shaquille O’Neil had been traded to the Cleveland Cavaliers, which is an interesting trade for several reasons, most notably: 1) whether the addition of Shaq will in fact help the Cavs get closer to an NBA Championship, and 2) what exactly will happen when you put Shaq on the same team with LeBron James, the NBA’s reigning MVP. Will they squabble, as Shaq did with Kobe Bryant, then a rising star, on the Lakers’ championship team of the early naught years? Or is Shaq far enough along in his career to let LeBron take center stage? Are Shaq’s talents going to mix well with LeBron’s point forward position and play-making superstardom? Or will Shaq just clog up the middle and foul out early in the third quarter? Will an older, wiser Shaq at least deign to give LeBron a high-five after a dish off assist? We in the world of basketball fandom are waiting with baited breath for October to arrive with the answers to these hypotheticals.

Shaq is past his prime, but he is definitely a hall of famer and he can still win (he shared the All Star MVP trophy this year with Kobe). He’s too old to be considered the top dog anymore, but he can still play a significant supporting role in a manner that most NBA players will never be able to do. Shaq does not have a choice about where he’s traded, but if you can get him enthusiastic about where he’s going–If you get Shaq excited about playing for Cleveland, you might just have a shot at a Championship ring. And you sell both players–LeBron and Shaq–on the deal by the promise of that ring. You keep LeBron in Cleveland by promising to get Shaq and, with him, a shot at a title. You get Shaq to come to Cleveland by dangling a ring in front of him, which–and this is the crux of my point–is the only thing that has value to NBA players of a certain breed anymore. All NBA players are rich by the standards of the popular imagination: they all drive nice cars and can afford nice homes. The really big stars are multi-millionaires from endorsement deals alone, so their NBA salary is more a means of ranking up against each other than anything else. Kobe’s day-to-day life, even with his wife’s $600 shirts being ruined by their maid, will not be affected much if the Lakers don’t pay him a lot. But a player’s salary does mean something in terms of street cred, and so getting a player to take less is highly unlikely.

Unless you give him a shot at a championship. Because that is the ultimate thing that every NBA Player wants: having achieved everything in terms of material comfort and public acclaim, an NBA Superstar never wants to retire without a Championship ring. Nobody wants to be Charles Barkley, one of history’s greatest players but always maligned for never winning a ring. And after they get one ring, they want another, or another under different circumstances. Can they win one without Shaq? Can they win one with a different coach? Shaq has four rings, and he wants another. So he’s willing to go to Cleveland, exchanged for two crappy players that would embarrass someone earlier on in their career, because there’s a shot at a ring in it for him. Money no longer has meaning for Shaq. It is all about accomplishment.

And this is true for all of the rest of the players, too. This is why the Playoffs are always the best basketball games you see in the year, in spite of the fact that players are not paid for playing in the post-season. You would think, since players are paid the same salary whether their team makes the playoffs or not, there would be instances of players wanting to quit or sit out during the playoffs. Just get a month or two off. But no–they not only play for free, while the team makes money off them, but they play their hardest. Because that win is the only prized currency in the exchange system of the premiere athlete: the thing that everyone wants but only some can get.

Now, the marxists will tell you that this is just another form of commodity fetishism, where the commodity comes to stand in for the relationship between people. In the sense that players, fans, and pundits refer to winning a championship (an achievement) in the terms of the physical symbol used to represent it (the ring), they have a point there. Or do they? Because you cannot buy a ring, can you? You cannot probably even literally buy a Championship ring, since most players would never part with theirs–though perhaps it’s good that Charles Barkley never won one, now that I think of it, since he might have had to pawn it to pay off his gambling debts. And even if you could buy the ring, you could never buy the achievement–it would be like trying to buy somebody’s college education from them, and so therefore meaningless.

The question is: if we remove money from the equation, how do we as a society assign value? Through competing with each other? Having something that someone else does not have, or having more of something? Bragging rights? Is this something inherent to humanity, or a uniquely American trait? When a player wants to win, does he want it for himself or for his team?

"The Peculiar Economy of the NBA: How Would We Act If Money Were Emptied Of Value?" was written by Anna Viele for ABDPBT Personal Finance and was originally posted on June 26, 2009. Copyright ®2009 Anna Viele for ABDPBT, Inc. and licensed for reuse under Creative Commons BY-NC-SA 3.0. All other rights reserved.


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