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September 13, 2014 / Paul Balyoz

Personal Finance Tracking For Financial Happiness

The idea is simple: watch your personal income and add up your expenses to see how much money you’re gaining/losing each month. Are you actually spending more than you’re making? That would be bad. Are you making more than spending, saving the rest for a rainy day? That’s probably good….

…just not so simple. You can easily add up the bills you paid and the things you bought in the past month, and look at your pay stubs to see your income. But if that’s all you do, you’re not seeing everything.

Obstacles:

1. Annual / Quarterly / Half-yearly Expenses

Examples: car insurance, property insurance, property taxes (paid on houses that have no mortgage), home warranty, annual fees to services like AAA, Costco/Sam’s Club, your 401K manager, tax preparation costs each year, backup services like Carbonite, magazines you pay for once a year, online software services with annual fees like Nozbe, etc.

For annual costs, divide by 12 – add that to your monthly expenses. Because you effectively need to save up that much money each month, to easily pay for that item when it swings back around again.

Example: the home warranty on your house costs $500 per year. $500 / 12 = $41.67 per month of effective cost. If you’re able to set aside $42 each month, that will completely pay for the $500 bill when it suddenly hits you next year.

In fact, you can create an “escrow” account for yourself, maybe in your savings or money market account, so that you can set aside 1 month’s worth of money from each of these yearly / quarterly / half-yearly bills.  Create a small spreadsheet with all of those type of bills on it, add up the annual amount (with a column-summation), and divide that by 12.  That’s the monthly amount you should set aside every month.

You can even figure out how much to set aside per-paycheck, if that works better for you – most direct-deposit systems let you set aside an automatic dollar amount into a savings account, so you can automate this completely.

Then, when you get one of those special bills, transfer the money from savings to checking – and pay the bill!  Zero stress.

2. Credit cards expenses might get counted twice!

For example, let’s say you buy a toaster with your credit card. You enter the receipt into your expenses spreadsheet at home.  But then, when you pay your credit card payment, you add all of that to your expenses, too!  You’ve counted that toaster twice – just not in the same month.

What’s better to do is to record just the interest that the credit card company charged as an expense. Because that interest is completely new to you, it’s the cost of having a balance on your credit card; it’s an extra amount you’re having to pay the credit card company for the right to use their credit card.  Even if you didn’t pay it this month, you accrued that expense this month, so I’d record it for this month. At least that’s what I do.

3. Using cash can make you count some expenses twice!

Withdrawing cash (and entering that in your expenses), then buying something with that cash (and entering that receipt in your expenses) – you just counted it twice!  Instead, you should pick one of those only, and stick with it. Enter only the moment you withdraw the cash OR the moment you bought something. Not both.

The good thing about entering the cash-withdrawal, and not the thing you buy with the cash, is: you can hide the surprise of a birthday gift better that way. The other family member(s) won’t discover what the present is, because it’s not being listed on a credit card statement or in your expenses spreadsheet. But the bad thing is, you probably had to categorize the money withdrawal as something like “miscellaneous” or “other”, so later when you look at your expenses by category, you won’t know what that money counted as.

If you intentionally don’t enter the cash-withdrawal, instead entering the receipts that you got from spending the cash, that makes better categories – maybe 1 cash withdrawal was partly Groceries, partly Entertainment. It’s easier to tell how the money was used at the end of the month.  But it remove s the element of surprise a little bit if the birthday-person uses the same expense-worksheet that you are. Besides, it’s too easy to not get a receipt when spending cash; then you have no reminder to enter that in your expenses – so you spent money that you didn’t track, which is bad.

My suggestion: avoid using cash as much as possible. That’s what I do.

4. Unexpected Expenses

There are many things that can come up in a person’s life that are unexpected, and cost money.

Car repairs, towing, medical expenses, books for work, fines, fees, lab costs, visiting sick relatives, replacing a broken chair/TV/, etc.

These things are often completely unexpected; but if you live a busy life like most people, you can roughly predict the basic amount of those things that are likely to hit you each and every month. Seems like there’s always something.

It’s tricky though – “my car got a flat tire while driving across the desert between Arizona and California and the spare tire is flat too! It had to be towed 85 miles to the nearest gas station for repair! Heh heh, that surely won’t happen again for a long time!” And you’re right, that won’t happen again next month, next year, or any other year for the rest of your life. But something else will. Next month maybe your pet will have a mysterious illness that the vet can’t seem to diagnose (at great cost to you); then mysteriously heal itself 3 weeks later for unknown reason. The month after, your daughter/son/mother/father/brother/sister calls because they’re in a terrible jam, can they borrow $800 for a couple months?  They promise to pay you back (but you know they probably won’t). The month after that, you might fall and sprain your ankle; that incurs multiple doctor visits, pain killers, and maybe some rehab costs; thank goodness for health insurance; and then you’re fully recuperated 6 months later. And life goes on.

Keep an Emergency Fund

To be ready for the unexpected, I recommend building an emergency fund in your savings or money-market account. Choose a level of cash that you’re going to hold in that account as much as possible. Let’s say you choose $5000.

So long as the account doesn’t have $5000 in it, you will contribute a big chunk from every paycheck to it; say $250 a month, or more if you can. A lot more, hopefully.  This is money you will NOT spend under any conditions – unless you have an emergency.

When the account reaches $5000, happy day!  You don’t have to put anymore in there this month – maybe that’s extra play-money for you this month.  Once an emergency hits you though, and the balance goes down, time to start socking away some of that money every month or every paycheck again.

Saving Psychology

This is an interesting psychological exercise, not just a financial one.  Can you get yourself to do it?  Can you maintain that balance?  You have to think differently about your paycheck from now on.  You can’t immediately spend as much money as you do now. It feels different. You can do it. What you’re actually doing is buying yourself peace of mind. It’s a nice cushion if you’re ever let go from your job, too – that’s an emergency (hopefully that never happens).

Is $5000 enough?  Maybe you need $8000.  Maybe less.  Some wise people say you should maintain 3 to 6 months of your normal expenses – but that could be a LOT of money!  I haven’t been able to save that much myself, I set a target for myself of $8000, and I want to increase it to $10,000 next year.  Right now the balance is down around $5000 for reasons I don’t want to go into.  :)

More Savings Accounts?

By the way you don’t need multiple savings accounts to save for multiple things. You only need one account.

Create a spreadsheet where each column represents one category that you want to save money under. Example categories:

Emergency, Escrow, Vacation, Christmas Presents, Thanksgiving Dinner, Joe’s Birthday, New Laptop

Now, anytime you deposit money into your savings account, put the money amounts in the appropriate columns. Maybe it goes across multiple categories – you just deposited $300 from your paycheck, and you want $100 to go to emergency, $80 vacation, $70 Christmas presents, and $50 to your New Laptop fund (because sometime next year you’d like to buy a new laptop).

Now, when you buy that new laptop next year, you won’t have to charge it to a credit card – you magically have the money waiting for you in your savings account.  You’ll be saving yourself all the interest from not having to pay the Credit Card Company lots of extra money every month for the next few years or so. You’re basically paying monthly payments NOW, before you buy it, instead of after; and you’re paying yourself — nobody can charge you extra to do that. You will have extra cash in the future because you’re not buying into the bullshit of credit cards that our society loves so much. You’re your own credit-card-company this way. Money will feel a little tighter for you now, instead of a LOT tighter later when you have a higher credit card payment. You’re also lowering your personal danger of bankruptcy – by not increasing your debt and monthly payments, from the viewpoint of the credit bureaus.

I’m not saying that credit cards are evil – they serve a purpose. They can be your emergency backup if you ever run out of cash. But most people use them way too often, and pay exorbitant “interest” costs without realizing it. Why should you pay someone else “interest” when you could keep it, and spend that money on ANYTHING ELSE you want to?

What Software Should I Use To Run My Finances?

You don’t have to buy anything – you just need a spreadsheet, and there’s a variety of free spreadsheets today, including Google Drive’s spreadsheet system. You can do this all from your home computer, or possibly even from your cell phone, at this point. You can pay almost all of your bills online these days, including transferring money between bank accounts without having to visit the bank, and even sending money directly to friends & family online.

Congratulations, you’re more financially stable now.

Making Adjustments

With practice, you’ll see if something’s not working. If you constantly run out of money on the 25th of every month when trying to pay your bills, something needs to be adjusted. You have the tools now to find it and fix it. Another annual bill hit you that you forgot about? OK, paying that was painful just now. Dang it. Let’s set this up so it’s never painful again. Add it to your Escrow calculations; how much more do you need to set aside now? Do it. Next year this bill won’t hurt, because the money will be there, unlike this year.

Keep making adjustments as you need to, and the stress points will eventually all be gone.

Not Making Enough Money

If you discover that you’re spending more than you’re making, this is a very dangerous situation to be in – I fear for you. You should be shocked and on high-alert. It’s time to make a change.

The first step is to immediately reduce your expenses. Find what you can trim and shrink, that you’re spending money on every month. Look thru your credit card statements, is there anything that shouldn’t be there? Particularly payments that happen on every statement, like game companies that are charging you for some old game you don’t play anymore. Put a stop to it.

Trim down your expenses, stop the leaks, and then next month, do the same thing again. But you should also consider: can I make more money? Is there another company that will pay me more for doing the same job? Can I get a better job? Don’t get stuck in the rut of thinking your time is only worth so much. It’s a lie. When I was in college I did some computer typesetting for someone at $5/hour, because I thought that was the only thing they’d pay me (minimum wage was around $3.50/hour back then). My friends said I was stupid, I could easily get $15/hour for that work. So the next time someone wanted a book typeset, I was scared, but I said my rate was $15/hour. Without batting an eye, the customer was happy to pay me this higher rate!

Decades later, when running my own computer consulting and web development business, my standard rate was $75-90 per hour; for emergencies, which many customers seemed to have, I charged $125 per hour.

People paid this to me again and again.

For each hour of my work.

There is no limit to how much one hour of your time is worth. You could make $2,000 per hour, if your service is in high enough demand. It’s the same hour, for you, either way.  Especially if you live in the “free world” – there are many ways to increase your income! Find them.

Peace of Mind – Paying Bills Can Be Fun

When you truly understand your expenses, and budget properly for the way your life works, paying bills can actually become fun. I enjoy paying my bills very much. I often pay them as soon as they come in. It feels powerful, because I’m directing energy (money) towards the things that are important in my life. And I’ve set up a system for myself so that when I need the money, it’s there. Either my paycheck pays for it, or my escrow account pays it, or my emergency account pays it. One way or another, the money’s there – I only have to remember to make adjustments in the future (add more or less to my emergency fund as it goes up and down; annual bill changes affect how much I put into my escrow account each month; etc.)

 TL;DR

If you want peace of mind with your home finances:

* figure out what you’re truly spending money on every month – don’t forget about annual/quarterly payments; beware of counting certain things twice.

* compare your expenses to your income, make sure you’re not spending more than you’re making! It happens.

* keep some money from every paycheck in your own “emergency fund”, for emergencies only.

* keep some money from every paycheck in your own”escrow account”, to pay those irritating bills that hit you only once a year / quarter / half-year.

Can you control your expenses, and track your income & expenses? I dare you! You can do it.

You will have a more stable & happier life from this.

August 25, 2014 / Paul Balyoz

Setting Any Price Partitions Humanity

When you set a price on a product or service, you are immediately partitioning your potential customers into two groups:

A. Those who can afford your product or service

B. Those who cannot afford it

Notice that these two groupings are completely separate from the two groups that are actually important to you:

1. Those who are interested in your product/service and want  it

2. Those who do not want it

You should be selling to those who want what you’re offering. And you shouldn’t waste your time trying to sell to those who do not want it. But the problem is, some of the people who want your service cannot afford it.  At any price.

How Companies Think Today

If you set a higher price, fewer people can afford it.  If you set a lower price, more people can afford it, but you get less money for each one you sell. You can make the most money by finding the “sweet spot” – setting the right price somewhere in the middle.  This divides those who can barely afford it, and those who can totally afford it.

For example, suppose you are manufacturing beautiful purses for women. Maybe it costs $250 to make one purse, and you want to sell the purses for about $500.  You run some statistics and the report comes back – if you sold them for $400, you’d get 1000 buyers. If you sold it for $500, you’d get 850 buyers; and if you sold it for $600 you’d get 300 buyers.  A good business will do the math –

$400 purse X 1000 buyers = $400,000, minus cost ($250 X 1000 = $250,000) or $150,000 profit.

$500 purse X 850 buyers = $425,000, minus cost ($250 X 850 = $212,500) or $212,500 profit     - better!

$600 purse X 300 buyers = $180,000, minus cost ($250 X 300 = $75,000) or $105,000 profit     - not as good.

So the business decision is made to sell them for $500 each – because that maximizes profit for the company.

The Problem This Causes

This doesn’t take into consideration the people who want the purses, but cannot afford them – they are left out now. That is just not acceptable. There are even people who might really need your item, more than other people – to look nice to get a good job, so they can feed their family, so they can take care of their elderly parents, their ailing grand parents; their special-needs child; their family pet that has come down with a serious illness.

Setting a price that maximizes profits has the bad side-effect of blocking many people from having the item, with total disregard to rightness in the world.

There is no right price that doesn’t exclude someone. You can calculate the number of people who would be customers, but cannot be, due to the price that is set. You can figure out the percentage of population you’ve failed to reach. Everybody in our world deserves to experience the product or service that you are producing, not just a few. Not just those that can afford it. Everyone.

How Companies Will Think In The Future

Businesses don’t know how to calculate factors like “individual need”, or “right distribution. So they don’t even bother trying. But these factors really exist, and they must not be ignored – the righteous thing, the compassionate thing, the human thing is to consider who you are leaving behind, and what the consequence of that is. I know that purses may not be vital. But food is vital. Housing is vital. Clothing is vital. Food has a price, and there are some people who cannot afford even enough basic foods to feed their families after paying outrageous medical bills. There are kludgy workarounds for the really poor like food stamps, but that kind of thing should never have to exist; it was not created soon enough when the need first arose; it doesn’t affect exactly the right people; it doesn’t help the slightly less-poor people that are still struggling; it encourages poor people to stay below a certain poverty level so they can keep getting their food stamps; there are many down-sides to a static one-tier solution like food stamps, when you have a rainbow array of people in society. It’s old fashioned and doesn’t solve the problem appropriately. It’s just wrong.

It could be that if you price your purses at $400 each, you’re leaving out 27% of the population from being able to afford one.  That’s a huge failed opportunity to help the under-privileged in our society.  At $500 each, maybe 35% cannot afford one; at $600 each, 55% of the population cannot afford one! All of these are a failure to meet the needs of Humanity, when you’re in the perfect position to do so.

You Are Missing Customers

Partitioning humanity by setting a price (any price at all) goes against nature. And Humanity is part of nature. You’re fighting a force far greater than yourself. My suggestion is, don’t do that.  Don’t fight nature. Cooperate with nature.  This whole system of finite-pricing has to go away some day, to be replaced by a system that more accurately reflects the need of the people whom the company calls customers.

Far more people may be able to use the products and services – and, the company may actually make far more money because of it.  The company won’t be accumulating such horrible karma for causing suffering by many human beings.  If you want something, you can have it.

By cooperating with how things work in nature, companies will be able to heal humanity of may mistaken illnesses we have emotionally and mentally. Feelings of inferiority, racism, separatism, us vs them, “haves” and “have-nots”. All this is ridiculous and needs to go away as soon as possible. But it can’t, it won’t, if companies don’t change how they interact with their customers – how they sell their wares – how they price their items.

There are higher forces in our world that affect all of us whether we believe in them or not. Like Karma. Making something more widely available to people increases your company’s good karma; making it available to fewer people (because you make more money that way) can actually cause bad karma. Because it’s not righteous to partition people into have’s and have-not’s.

People are highly creative. You don’t necessarily know what some inventive people are going to do with your product or service. Watch, and it will amaze you. In fact, some of the most creative people are those who HAVE TO BE, to survive: the poorest people in our society. What will the poorest, most inventive people do with your product? More than you could ever have imagined. Some of the greatest things have been invented and accomplished with creative re-use of things that aren’t normally used for a particular purpose.

Good Examples Today

There are some companies that are experimenting with variations in pricing that more accurately reflect the customer base, and they’re succeeding more than the founders ever expected they would.

1. Amazon.com e-books

2. independent game sites – via Steam, etc.

In the future, nobody will be left out of anything they want, anything they need. In any quantity. Think to yourself how that can come about. Because it can, and it will. You can figure it out now, and be on the cutting edge; or you can wait, and someone else will run with the ball and leave you behind. It’s your choice. The motto of the next generation of our society is: Everything To Everyone.

Stop setting finite prices. Stop partitioning humanity. I know that’s the current model that works today. Come up with a new model, like Amazon and other companies have. Don’t chop off your fingers because you’re keeping your arm.

Start making your products and services available to everyone who wants them, everyone who needs them. Find a way to price your product in a way that works for everyone.

It takes more work, more thought. I know you can do it.

August 14, 2014 / Paul Balyoz

Secret Inflation

When a company lowers quality to lower the cost of manufacturing a product, sometimes they release that product as the “new model” at the lowest price of their line of products – and raise the price of the other products.  They can let inflation raise the prices of all their products, and at the same time introduce the new product at the lowest price-point that they’ve had all along. This causes their unsuspecting customers to think nothing much has changed – there’s still a product at the same bottom-line price, and there’s still higher priced models; things are the same, right?

No they’re not the same. The quality has changed.  The lowest item is now lower quality than it used to be; and each item at each tier is lower quality than it used to be. Yes you can pay the same amount of money, and get a similar-looking product, but it’s not as good. Cheaper parts; things don’t fit as well as with the old product; lower quality control; fewer features; shorter life-span; one or more of these things are wrong with it, that didn’t used to be wrong with the low-end product in the past.

If quality is important to you, or at least, if you want to buy a product at the same quality level that you bought your old one 10-20 years ago, you have to PAY MORE by buying a higher-end product, maybe a middle-of-the-line product now, so that the quality matches that of the low-end model from the olden days.  If you used to buy the middle-of-the-line model, now you have to buy the upper-level model and pay a lot more, just to get the same quality level.

This is a non-obvious form of inflation – it tricks the population into slowly becoming lower-and-lower class, poorer-and-poorer, without realizing it. Has anybody else discovered this happening besides me?

An Example

If a fast food outlet has a low-cost hamburger for $3, and they figure out a way to manufacture cheaper hamburgers, they make the new cheaper one $3, and raise their old $3 hamburger to $4, and their old $4 hamburger to $5.

You visit the restaurant. You see there is still a $3 hamburger, so you order it.  And it tastes awful. “This isn’t like the old days! Hamburgers used to taste better in the old days!” you shout, not entirely sure what is wrong with our society. People look at you weird, you’re that old guy complaining that the olden days were so much better… they don’t understand.

You think you are at the same level in society today, but you’re not. You’re poorer. Your income didn’t go up that much in the past few years, did it; and when you buy a $3 hamburger, you’re paying the same price you used to, but you got a lower-quality product. Congratulations, you are living a poorer life. You’ve been duped.

Inflation comes in many forms. One of them is lowering product quality in the low-end products.  To keep your same level of quality of life, you have to pay more money – sometimes a lot more – for the higher-end products, just to “tread water” – to keep the same quality-level of products you are used to. And there’s no clear way to know how to do that. Companies make sure of it.

So NOW how much inflation is there in our society? We already know that inflation is hitting us hard and will for the next few years; and some of us suspect the government is fudging the numbers that they publish a bit. But this, this adds to that even more.  How do we adjust inflation numbers to take this into consideration?  How do we numerify (if I may invent a new word) the concept of “inflation caused by companies lowering the quality and adjusting all prices upwards” ?

I’m sure that our inflation is higher than what’s being reported.

 

June 24, 2014 / Paul Balyoz

Learn About the World Around You

I recommend learning how the world around you actually works. Learn how money actually works in your society. It doesn’t matter if you are poor or middle class; that just means you REALLY need to learn how money works – how it actually functions, not how you believe it works; not like how your parents or friends told you it works; not like how the TV and movies and news have lied about how money works.  How it actually works, that you discover with your own eyes. It’s not a secret – yet so many people are content to stay their little-selves, in their own little world, not understanding how everything around them actually functions. Maybe others are OK with that, but you’re not. Because you’re right here, reading my words.

Learning About Money

Learn how people with money think, and see how they think differently from all the people you grew up with. There are subtle but serious differences. People who seem to make money easily – how do they do it? Because, you can still be yourself 100%, and learn 1 new thing – the science of how to make money. You learned 1 new thing when you learned to whistle or blow bubbles with bubble gum, or ride a bicycle or skateboard, or drive a car, or speak a language to other people at the age of 2. All of these learnings had something in common: there once was a time when you didn’t know it – you could see other people who did know it, and you wanted to be like them. You worked hard at learning it but you sucked really bad at it for a while, you failed and struggled, but eventually you got it.  Then you improved month after month, year after year, and mastered it.

Did you think “learning” was done after you graduated from school? That’s so not true. Learning goes on our entire lives.

You can do the same thing with learning about money.

Money is not Evil

Money is not evil. That’s a retarded lie that’s been sold to you. Money is just a man-made thing, which you can have, or not have. God or nature doesn’t care if you have money; it’s cool either way.

Money is for you – it’s not “just for other people”. That would be ridiculous. If others can have money, so can you. You deserve it. There’s no question about it.

You don’t have to act in evil ways to make money. You don’t have to “take money away from others” to make money. If you do it right, others will thank you for helping them with what they needed – you made money, and they made money, or met some other goal that they had.  I have some rental properties today, and it was very interesting seeing how the purchase helped the seller; fixing it up helped the contractors who did the repairs, because we paid them fairly and on-time; and the renter we put in there was really thankful that we offered such a nice property for rent at a fair price!

You can stick to your morals and still make money.  I’ve done it, and I live in America – and I think it’s true everywhere in the world. I think it’s possible to make more money than you have today, no matter where you are in the world.

Money is Energy

Money is a kind of energy. You have some energy that’s given to you simply by waking up every day. But other kinds of energy you have to work for – electricity, gas, money.  That’s not as free as the energy in your body.

Money is a motive force in our society. A lot of good can be done with money, if you are a good person. If you are a good person and you don’t have any money to spend helping in our world, then you have limited yourself MORE than you should have. Learn about money and fix that! If you are a bad, heartless, selfish person, then I suggest you don’t learn about money, because you won’t use it to help our society.

Change Is Coming

This is really important, because things are changing.  Our world economy is going to get a bit more painful before it gets better. And when it gets better, it will be on a whole new level of better.  Just, not yet.

You are going to learn how money works in our society, right here, right now, how it works today.

This will prepare you and your family to cope better when the world economy gets more painful for everyone.  You will be surfing, rather than drowning, as the economy changes.

Then, when it all changes for the better, we all will have to abandon what we already knew about money, and embrace the new money system when it’s adopted world wide. I believe it’s coming, and it’s a great thing, nothing to be scared of.  A fairer system for all people in all walks of life. A powerful, self-healing system that doesn’t take advantage of weaker groups of people. Because you will have taught yourself the skills of how to learn a strange new system (the current old money system), you will more easily learn this new one, and you will conquer it. You will master it and be great at it. Because you prepared yourself – you learned our current system, with all of its flaws and benefits. You got past your inner emotional hangups, you faced them and conquered them, so you could do something really new in your life. Your family benefited from seeing what you did, how you were, not putting up with limitations, expanding beyond yourself and all externally imposed limitations, and doing something new that helped yourself and everyone you know.

You will do it.

I have faith in you.

 

June 6, 2014 / Paul Balyoz

Future Money

Today, the customer pays all costs and expenses a company has, and then some! That extra “and then some” money is called profit.  How much profit does the company charge? As much as they can get away with!

“All the market will bear,” is their policy, which sounds to me like slavery. “Don’t leave money on the table!” one business person says to another. They’re incorrectly thinking there’s money just sitting around on a table, nobody claiming it; but in reality, the money is in the hands of a consumer with a limited income, it won’t go to waste. It will probably be spent on something else valuable to that person’s life and happiness, through another company, as long as the first company doesn’t take it all away in the name of profit, simply because they can.

Trying to Understand the Current Business Model

When I was in grade school and was trying to understand how businesses work in the most simple way, I could not fathom the thought that the customer pays all and everything that keeps the company running.  It was even more impossible for me to believe that the customer pays more than that, so that the company can make a profit, extra money that the company didn’t even need! I just couldn’t believe it. It sounds and feels so immoral and wrong. You can just tell from the sound of it that it is not a sustainable system.

I assumed the company didn’t charge the full cost of producing the products; that didn’t seem right to me.  I don’t know where I thought the extra money would come from, magically, maybe?  Or from the government?  (But then, where would the government get that money?  I hadn’t thought it through fully).

Our current system of business and finance is completely closed. There is no actual generation of money, just recycling the same money around and around. This poor-man’s financial system is outdated and inappropriate for today – which you can see by the fact that we’re encountering powerful negative aspects of it, like mortgage market implosions, unfair bank-bailouts, recessions and depressions, and many other out-of-control damages going on in our financial world.

 Future Money – Generated Organically

In the future, money will be generated organically, the way all other energies work in our world. Just by being alive you get some energy that’s generated just for you and given to you directly – not taken from somebody else.  This is how the energy in your body works when you wake up in the morning. This is how energy works in animals and plants, to live their lives in joy and beauty.

In fact, you are naturally granted more energy when you do things in line with nature and cooperation – have you noticed this about your life? If you don’t abuse your body, you get more energy than if you do abuse it.  If you hurt and yell at people, you have less motivation to do helpful work, you feel more like just giving up and hiding under a rock. Until you heal emotionally, then you’re back to normal again for the most part – with a normal amount of energy and motivation to do the right things again in your world.  If you exercise your body in the right way, you naturally get more energy in the future.  If you slack off, you get less energy in the future.  If you do something nice for someone without expecting anything in return, it boosts your joy and happiness to such a degree, life is good again, and you’re happy to do more for others because it just feels right. This Joy is a kind of energy, granted to you in increasing amounts when you create Joy in others in increasing amounts. Natural laws of nature that you can choose to cooperate with, or not, it’s up to you.  The consequences are very real, though, and you can observe them for yourself – rather than believing what I’m saying.

Our future monetary system will behave the same way – a natural extension of the energies of nature.

Old and New Systems

open-closed-money-systems

A closed monetary system encourages people to feel like there is no God, because nothing is given to you. If you do nothing, you heartlessly receive nothing, and you experience the most pain and misery.

An open monetary system acknowledges that there is a Source, and goodness comes from it to all the people simply because they are alive. A base amount of money goes to all people regardless of their sex, race, religion, wealth, mental capacity, physical ability, etc.

When you’re sick in bed, a bare minimum of money comes  to you naturally for basic shelter, food and clothing. When you’re well, the work you do creates extra money for you to enjoy more from life than the bare minimum.

The open system diagram above is also how electronic circuits work, if you think about it:

electronic-circuit

In an open monetary system, businesses will continue to look at the maximum price they can charge, as they do today; but then they will charge less, as much as possible for them – the difference will be considered the Good Will they voluntarily contributed to the world. In return, they accumulate Good Will for themselves – it will be recorded and studied, with graphs and charts and reports. It will be used in marketing, to show how great a company they are. “You want to buy our products because we return so much Good Will back to society.” The more products they sell at the reduced price, the more Good Will they accumulate over time.  How can they maximize the Good Will their company is producing?

Amazon.com – a Modern Open System Company

Amazon.com is a unique company today, in that they are already doing this from what I can see.  They don’t try to maximize profit. They don’t try to gouge the customer and jack up the prices to the highest the market will bear. They don’t want to turn a profit at the end of the fiscal year, they just want to break even.  This is a completely different model than 99.9% of the companies in our society today. Because of this, their prices are lower, and they can compete against their competition like no other company – which has enabled them to grow bigger.  When I think about buying things from Amazon.com, I’m consistently amazed by their products and the quality of their services and offerings – and I want to go back and buy more and more, again and again.  I can feel the Good Will that they are producing in their company somehow – I like it, and I want other companies to follow the same model, so I can buy more things from them like I do from Amazon.

Amazon needs to start counting all of the Good Will they a producing, measure it and report it – use it in their marketing. I think people would really like this.  “Here’s all the money we didn’t take from you even though we could have – because we love you, our customers, we respect you, and we want you to be happy and successful, so you can keep as much of your own money as possible when you come to our web site and buy our products.”  Everybody needs to win, in business; the customer, too, not just the business itself.

Think Differently

All companies will learn to think differently in the future – they’ll learn not to leave Good Will on the table.

 

April 4, 2014 / Paul Balyoz

LED 60W Light Bulbs – A Test Comparison

TLDR:  skip to Final Results below.

I recently tested three widely available LED light bulbs that roughly look like standard light-bulbs, and emit the equivalent of 60 watts of power from the “old” incandescent light-bulbs we grew up with all of our lives.

These LED bulbs use way less electricity and last much longer than the old bulbs – that would save me a lot of money over time. And the prices have come down dramatically since they were originally introduced; they’re between $10 and $20 each now, which means they’re “worth it” now, considering their extended life-span.

The Bulbs

1. Philips 424382 – 11W A19 soft white $19.97 at Amazon.com

2. Cree 9.5W 800 lumens soft 2700k, $9.97 at Lowe’s

3. SunSun – 9.5W 800 lumens A19 warm/soft 2700K, $11.99 at Amazon.com

I chose only LED bulbs that claimed to be “dimmable” – some that aren’t dimmable are cheaper, but I didn’t want to try those. I chose only bulbs that claimed to be “soft” or “warm” white, between 2700K and 3000K coloring.

I compared them to the Reveal 630LM old-skool incandescent 60W lightbulb.

Philips, Cree, Sunsun LED light bulbs

Philips, Cree, Sunsun LED light bulbs

 

The Tests

1. is the color roughly similar to a real light bulb?

2. do they shine as brightly as a real light bulb?

3. is there a delay before the light comes on, when I flip the switch on?

4. will they work with the dimmable touch-lamps I have?

5. do the bulbs feel like a regular light bulb to the touch?

6. will they work in reading lamps, do they shine enough light downwards?

7. will I be bothered by flicker from these LED bulbs?

Test Equipment

I do not need fancy equipment to make measurements – I only need my eyes to see if things are right.  After all, the goal here is to buy a whole bunch of LED bulbs and live with them in my house. My eyes are what will be experiencing the light, that’s all that matters – if slight differences aren’t really noticeable, then it’s not a problem.

Test #1: Color

The color was fine in all 3 LED bulbs, overall. The LED bulbs were a tiny bit yellower (less red) when I held my arm right up to the light, in side-by-side comparison to the incandescent bulb.  But looking around the room I couldn’t tell the difference.  My plan is to replace all my incandescent bulbs anyway, so this shouldn’t be an issue at all.

Test #2: Brightness

I didn’t think the LED bulbs would be as bright as a real 60W bulb, but I was wrong. Two of the three bulbs were the exact same brightness as the incandescent; the Cree was slightly dimmer than the other two, but not by very much.  I wasn’t very happy seeing that it was dimmer, but it’s not really an issue to me overall.

Test #3: Quick Turn-On

Two of the three bulbs were instantly on as soon as the light switch was turned on – the SunSun failed this test. The SunSun bulb not only had a delay before turning on, but the delay was variable – not consistent, not something you could ever get used to. It appeared to be about one-fifth of a second delay – extremely noticeable to me, and to my wife, once I pointed it out. Sometimes the start-time was less than that amount, but other times it was more. Very annoying to me. The other two bulbs were perfect in this area.

Test #4: Dimmable

All three bulbs claimed to be dimmable, however only two of them passed this test. The Philips bulb failed the test, which surprised me a lot! My dimmer-lamp has 3 brightness levels plus “off”. The Philips bulb would only do 2 of the dimmer-phases, with the highest-brightness setting failing – it would come on momentarily, then turn off.  Touching the lamp to flip through the 4 phases should have worked like this: low, medium, bright, off.  But with the Philips bulb it basically did: low, medium, off, off.  It just didn’t feel right.  Doubting myself I tried all the bulbs again in a different kind of dimmer-lamp I have in another room – but I got the exact same results.

Test #5: Texture

The Cree bulb has a strange rubbery coating on the “glass bulb” part of it (which is probably plastic, not glass). It feels weird when you hold it in your hand! I thought it would catch dust and not be very cleanable; but I have to admit, the rubberyness makes it easier than any other bulb to screw in and out of sockets. Kind of like a rubber case for your cell phone, you don’t feel like you’re going to drop it anymore. The other two bulbs felt like some kind of plastic, normal and smooth like you would expect.

Though you can see the different materials connected together for each bulb (plastic, metal, etc.), two of the bulbs felt solid – nothing felt wiggly about any of them. Only the Cree felt like the bulb-part was kind of separating from the base-part, which I didn’t like very much.

The Philips bulb was slightly heavier than the other bulbs, but not by a lot, and that didn’t matter to me.

Test #6: Reading Lamp

This test was about how much light was cast “below” the bulb, i.e. if it’s in a lamp, the circle of light below the lamp-shade – how much light was coming out down there. Because older people often need this part of the light for reading – and, as you may have noticed, a lot of these bulbs have a wide neck around the base, which could possibly block some of the light shining downwards. I was worried about that for reading lamps.

Two of the bulbs were the same as the incandescent in this test – only the SunSun was noticeably dimmer in this under-light area. I felt that this bulb would interfere with reading, if it were used in a reading lamp. You can see how the plastic base is the cause of the problem – the company needs to redesign this part so more light shines downwards.

Test #7: Flicker

This last test is kind of important to me; as an asthmatic I always see lighting-flicker more than anybody else I’ve ever met. Most people get headaches easily from misconfigured computer screens, even when they can’t consciously see the flicker – I was always the unofficial computer monitor adjuster at the companies I worked for. It was a chronic problem with the old CRT TV screens and computer monitors from the past. The flicker problem is largely solved now with modern flat screen TVs and computer monitors, thank goodness.

As I was testing these bulbs, I didn’t see any flicker whatsoever on any of them. I even tried the trick of scanning my eyes from side to side quickly, to see if it caused a jittery lighting appearance – but it didn’t. As far as I can tell, all three companies have solved the old flickering-LED problem on all of these bulbs.

 IMG_20140220_212946

Final Results

There was no single winner from these tests.

I have decided to buy the Philips bulb for general house use, but not for dimmer lamps; and to buy the Cree for our 3 dimmer lamps that we have around the house.

Every few months new, better, cheaper LED bulbs come out. If you’re reading this much after April 2014, chances are the bulbs in the stores are better than I have described here.

I feel ready to make the leap to all-LED bulbs in our house, right now.  I think you should consider it too. I believe you will save a lot of money over time with lower electric bills each month. If you can’t spend $200+ on a big pile of new lightbulbs, then just buy them as replacements once in a while, when your current bulbs burn out. I feel that LED lighting is really the wave of the future. It’s the next step of the digital age.

March 26, 2014 / Paul Balyoz

Carbon Offsets Only Get Us Half-Way There

I love the idea of Carbon Offsets – companies that use clean energy instead of carbon-based energy get a special kind of “credit” for the amount used, which they can turn around and sell to the more carbon-dependent companies. It’s kind of like everybody wins: the sellers get some free money, and the buyers look “more green” than they actually are – they’re paying money to offset their carbon usage.

It’s a sort of asshole-tax levied against companies that haven’t gotten with the program – haven’t reduced their carbon emissions as much as other countries. Perhaps they plan to clean up their energy usage in the future, especially if newer government regulations require them to – but for now they are forced to buy Carbon Offsets to make up the difference. By encouraging them to spend more money on their energy usage, it will be easier for them to spend money on cleaner energy, thus avoiding paying this special kind of tax every year. By not having to pay that every year, they can stay more competitive in their industry, look better in the eyes of their customers, etc.

Other industries have a similar idea – solar and wind energy produces “green tags”, which is basically the same concept.

Getting Stuck at 50%

I have been thinking about this a lot, and realized that once we reach a perfect balance of half the companies producing Carbon Offsets, and the other half purchasing them, that is a sort of stable-state; half your companies are still polluting, and you can’t go any further. You can’t reach 100% clean energy this way.

Scenario 1 – one bad company goes good

100 “good” companies produce 1000 units of clean energy total, and generate 1000 carbon offsets they can sell to other companies.

100 “bad” companies only use carbon-based energy, and purchase those 1000 carbon offsets from the good companies so that they themselves look good, too.

What is the incentive for one of the bad companies to switch to clean energy?  Perhaps there is a financial incentive for them – maybe it’s worth it, so they convert.  Now that’s one less company needing to buy carbon offsets, – in fact, they’re generating 1 extra offset from now on.

Now it’s:  1001 offsets generated, 999 needed.

This is known as a surplus – and the principle of supply and demand states that when you increase your surplus, that usually lowers the price, because there’s too many of that thing on the market now.

The side-effect of that price-lowering is that the bad companies don’t have to pay as much for the same offsets, so now they have less incentive to convert to carbon-free energy. The more that other companies convert their energy usage, the more the remainders have even less incentive; less, and less, and less.

Scenario 2 – half the bad companies become good

Now it looks like this:

150 “good” companies produce 1500 units of clean energy and generate 1500 carbon offsets.

50 “bad” companies only use carbon-based energy and purchase 500 carbon offsets.

At this half-way point, there’s 3 carbon offsets available for sale for every 1 demand! The price therefore will roughly drop to 1/3rd of it’s value at this point – so the “bad guys” only have to pay one third what they used to, for their get-out-of-jail-free cards!

The way I see it, it’s kind of like a game of chicken – whoever holds out the longest, pays the least.

Doing it Right

That isn’t the kind of reward system we need. We need a system that progressively punishes the hold-outs, the late-comers to the game, exponentially – until they either convert their energy usage like everyone else, or declare bankruptcy and go under like the outdated dinosaur they’ve become.

One way to implement this is:

* take the total amount of carbon offsets, and the current price per offset, multiply them – that gives you the total monetary value of the entire body of carbon offsets on the market today. Let’s say the total is $1,000,000 worth of offsets.

* The government organization that oversees and enforces the carbon offset laws tells all the consumer companies this:  Each year offsets will cost $1,000,000 total.  If 1000 offsets are sold that year, the cost will be $1000 per offset.  If only 500 are sold, the cost will be $2000 per offset, because $2000 x 500 = $1M.

This way, the cost doesn’t go down, it goes up, when more and more companies convert! If 1500 companies are selling offsets and 500 are purchased, the buyers make 3 X more money, and the sellers lose 3 X more money!  And, when there’s 1 last holdout – that 1 carbon offset they purchase is the only one sold that year  – so, the cost to them is $1,000,000 for that 1 offset!

This system has many beneficial factors over the old system:

1. buyers make more and more money, as the prices go up for the offsets they’re selling.

2. sellers lose more and more money the longer they hold out and try not to convert to carbon-free energy.  At some point they’ll convert, when it becomes too costly not to.

Remember, businesses value money above all else. That is the core of every business. Sure, the owners of businesses may want to do good things in the world, but if their bottom-line is not met, money-wise, they won’t be around very long to do the good work they wish they could do. The purpose behind a company’s internal rules and policies all revolve around money: not wasting it, and making more of it. All companies value money, first. They have to, the way our system works today.

A really good book I read many years ago about the motive behind companies is The Goal: A Process of Ongoing Improvement. I recommend it highly to anyone wanting to learn more about how businesses really operate, how the leaders think about their businesses. The example in the book is about a manufacturing facility, but the basic principles are true for all companies.

If we’re going to move to carbon-free-energy, we need a plan to do it completely, over time – we have to be able to reach 100%. Anything less doesn’t make sense. It’s either the right thing to do, or it’s not. All, or nothing.  It doesn’t have to all happen at once, but it needs to eventually be finished.

It’s time to reach the goal by implementing a plan that actually works.

 

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