Last night I had dinner with folks that included a couple who worked in the financial industry. As might be expected, the dinner conversation turned to financial planning, and what strategies are involved. The folks involved did private account management and financial planning, and as you might expect were quite financially sophisticated. I asked one of my favorite financial planning questions: if you needed $X in income over the next 60 years, how much in assets in a diversified portfolio (one that's close to the efficient frontier) would you need to be able to generate that much income in inflation adjusted terms?
Long time readers of my blog, of course, are well aware that the answer can be found on the retire early safe withdrawal spreadsheet. I wanted, however, to see what a conventional financial planner would say. The answer came out to be 150% of what the retire early number was. What was very interesting to me was that the number the planner used for the return from the average portfolio was described as a conservative 1.5% over inflation.
1.5% over inflation. Think about what that means. Current I-bond rates are at 1.4%. What that would mean is that the equity risk premium is only 0.1%. Can it really be that low? Even Warren Buffett, the pessimist, has been quoted as being able to expect a 4% real rate of return from businesses. So 1.5% seemed excessively conservative. Then I thought about the numbers from the conventional planner's perspective: the average cost of a separately managed account is approximately 1.5%. So that 4% real return now is really a 2.5% real return. Taxes can easily eat up another 1% of the remaining return, so now you're down to 1.5% real return.
So from an conventional financial planning perspective, the planner was absolutely correct! The lesson here, of course, is that paying someone else conventional financial planning fees is extremely costly, quite possibly costing you your retirement!. Which means that if you aren't doing your own financial management, you're really giving up half your real returns (to your financial planner, who probably blows 1/2 million a year flying private planes!).
Monday, February 26, 2007
Friday, February 23, 2007
Phil teaches Emacs
One of my former gtags interns, Phil, went back to school at MIT and taught a class about Emacs. His slides were great (much better than the ones I did for Google), and will soon be incorporated into the GNU Emacs distributions. Awesome work, Phil!
Sunday, February 18, 2007
Tuesday, February 13, 2007
Turbo Tax 2007 Review
This is a review of TurboTax for the Mac versus TurboTax for Windows. I've been a Turbo Tax for Windows user for years. This year, as an experiment, and since I had a Mac Mini, I installed the Mac version to see what the difference was.
The first two returns were for my mom and for Lisa. Neither were very complicated, though at least one involved the earned income tax credit. In both cases, I could download W-2s through Turbo Tax. So far so good. Both taxes were done in under 2 hours total (an hour on average).
Then I got to my own taxes. I'll admit that my taxes aren't the least complicated possible, but compared to another colleague who had to spend 50 hours on her taxes last year (because of multiple state taxes), I still consider mine easy. The first sign that all was not well was the investment downloads page. The investment download from Vanguard was straightforward, but the overview screen refused to show me the details of which investments yielded which numbers (capital gains, dividends, etc). This made it quite painful to use the downloaded results, since I couldn't corroborate the sells and buys with my knowledge of what happened.
OK, I know how to type, so I wiped out the imported data and entered all the data manually. This was fine until I got to individual stock sales. I entered all the data, saved and quit the application to get reboot my Mac for an unrelated reason, and then started up Turbo Tax again. To my surprise it refused to start from the saved file!
Chalking it up to user error, I started my return all over again and did my taxes again. The same thing happened when I saved and reloaded the application, this time, without rebooting.
I opened up Turbo Tax for Windows in a Parallels Virtual Machine and proceeded to do my taxes there. To my relief, not only does the Windows version of Turbo Tax happily load and reload my saved files (though it wouldn't load the Macintosh saved files, of course), the investment downloads page on the Windows version is usable, and saved me at least 10-20 minutes of data entry.
The moral: if your finances are non-trivial, get a Windows license and run the Windows version of Turbo Tax. This is another reason my next machine will not be a Macintosh.
The first two returns were for my mom and for Lisa. Neither were very complicated, though at least one involved the earned income tax credit. In both cases, I could download W-2s through Turbo Tax. So far so good. Both taxes were done in under 2 hours total (an hour on average).
Then I got to my own taxes. I'll admit that my taxes aren't the least complicated possible, but compared to another colleague who had to spend 50 hours on her taxes last year (because of multiple state taxes), I still consider mine easy. The first sign that all was not well was the investment downloads page. The investment download from Vanguard was straightforward, but the overview screen refused to show me the details of which investments yielded which numbers (capital gains, dividends, etc). This made it quite painful to use the downloaded results, since I couldn't corroborate the sells and buys with my knowledge of what happened.
OK, I know how to type, so I wiped out the imported data and entered all the data manually. This was fine until I got to individual stock sales. I entered all the data, saved and quit the application to get reboot my Mac for an unrelated reason, and then started up Turbo Tax again. To my surprise it refused to start from the saved file!
Chalking it up to user error, I started my return all over again and did my taxes again. The same thing happened when I saved and reloaded the application, this time, without rebooting.
I opened up Turbo Tax for Windows in a Parallels Virtual Machine and proceeded to do my taxes there. To my relief, not only does the Windows version of Turbo Tax happily load and reload my saved files (though it wouldn't load the Macintosh saved files, of course), the investment downloads page on the Windows version is usable, and saved me at least 10-20 minutes of data entry.
The moral: if your finances are non-trivial, get a Windows license and run the Windows version of Turbo Tax. This is another reason my next machine will not be a Macintosh.
Saturday, February 10, 2007
No, I did not cheat...
Your results:
You are Dr. Doom
Click here to take the Supervillain Personality Quiz
You are Dr. Doom
| Blessed with smarts and power but burdened by vanity. |
Click here to take the Supervillain Personality Quiz
Wednesday, February 07, 2007
Review: Dreaming In Code
Scott Rosenberg follows the Chandler project as a reporter, unraveling the mysteries of software development gone wrong. What's interesting for me, at a personal level, is that I know several of the principles through work at a previous life: Katie Capps Parlante, and Aparna were both with me at Escalate, ironically, a startup that failed for business reasons. (To give you an idea of the quality of the folks at Escalate, at this point, 4 of its first 20 engineers are at Google, while another 4 or 5 are at Yahoo)
The part of the narrative that sticks out to me like a sore thumb is the lack of impatience at OSAF. In fact, the general approach was so muddled that even software luminaries like Andy Hertzfeld left. When building a project, the most important thing to do right away is to build something that works as quickly as possible and get it out there. It doesn't have to be pretty, and it definitely doesn't have to have a fancy object layer. It has to work and do something useful. That gives you a user base that can drive more feedback to help you refine future versions. On top of that, once you have a significant user base among early adopters, you'll get more contributors to your open source program, and the code will snowball. The architecture astronauts approach, however, seemed to have overtaken OSAF, which led them down the garden path of building infrastructure first without an application in mind. I don't under-estimate the importance of infrastructure: I build it all the time, as does the company I work for, but infrastructure for the sake of infrastructure is wasteful, as you'll invariably build the wrong thing.
The book is well-written, and worth reading, even if you work in software on a daily basis. If you're successful, you'll say to yourself, "at least I'll never get caught in this morass." If you're unsuccessful, you'll comfort yourself by Rosenberg's repeated assertions that software is hard. Ultimately, however, there are lots and lots of ways for software projects to fail, and only a few ways for them to succeed, so this book is another reminder that unfortunately, the state of software engineering is such that you can go years without reading many new books and still be ahead of most of the field.
I met Rosenberg when he visited Google to promote the book. As he signed my copy, I quoted one of the original hackers Brian Harvey, "All the best software is written by one person." Rosenberg repeated something obviously told to him by many other practitioners, "The software systems we build now are too big, too complicated for one person." I told him that I didn't believe that for a minute. Even in his book, you could trace many programs to one person: Alan Kay and Smalltalk, Charles Simonyi and Bravo. I can name more modern examples: Paul Buchheit and Gmail, Louis Monier and AltaVista, Larry Wall and Perl, Linus Torvalds and Linux. Sure, as the programs evolved and grew, more and more people got involved and ended up building a big system. But right at the beginning you can only have a program written by one or two engineers to scratch their itch. While Rosenberg wasn't willing to write-off Chandler yet, I am. Today, Google's calendar does everything Chandler's trying to do --- by designing the program by committee instead of Mitch Kapor rolling up his sleeves and just writing code, OSAF has doomed Chandler to permanent irrelevancy.
"We've consistently overinvested in infrastructure and design, the fruits of which won't be realized in the next development cycle or even two---that is, not in the next six or twelve months. You pay a price for that in a loss of agility. The advice I would give is to do even more of what we've been doing in the last couple of years, which is to sequence the innovation, stage things, and be less ambitious..."
The part of the narrative that sticks out to me like a sore thumb is the lack of impatience at OSAF. In fact, the general approach was so muddled that even software luminaries like Andy Hertzfeld left. When building a project, the most important thing to do right away is to build something that works as quickly as possible and get it out there. It doesn't have to be pretty, and it definitely doesn't have to have a fancy object layer. It has to work and do something useful. That gives you a user base that can drive more feedback to help you refine future versions. On top of that, once you have a significant user base among early adopters, you'll get more contributors to your open source program, and the code will snowball. The architecture astronauts approach, however, seemed to have overtaken OSAF, which led them down the garden path of building infrastructure first without an application in mind. I don't under-estimate the importance of infrastructure: I build it all the time, as does the company I work for, but infrastructure for the sake of infrastructure is wasteful, as you'll invariably build the wrong thing.
The book is well-written, and worth reading, even if you work in software on a daily basis. If you're successful, you'll say to yourself, "at least I'll never get caught in this morass." If you're unsuccessful, you'll comfort yourself by Rosenberg's repeated assertions that software is hard. Ultimately, however, there are lots and lots of ways for software projects to fail, and only a few ways for them to succeed, so this book is another reminder that unfortunately, the state of software engineering is such that you can go years without reading many new books and still be ahead of most of the field.
I met Rosenberg when he visited Google to promote the book. As he signed my copy, I quoted one of the original hackers Brian Harvey, "All the best software is written by one person." Rosenberg repeated something obviously told to him by many other practitioners, "The software systems we build now are too big, too complicated for one person." I told him that I didn't believe that for a minute. Even in his book, you could trace many programs to one person: Alan Kay and Smalltalk, Charles Simonyi and Bravo. I can name more modern examples: Paul Buchheit and Gmail, Louis Monier and AltaVista, Larry Wall and Perl, Linus Torvalds and Linux. Sure, as the programs evolved and grew, more and more people got involved and ended up building a big system. But right at the beginning you can only have a program written by one or two engineers to scratch their itch. While Rosenberg wasn't willing to write-off Chandler yet, I am. Today, Google's calendar does everything Chandler's trying to do --- by designing the program by committee instead of Mitch Kapor rolling up his sleeves and just writing code, OSAF has doomed Chandler to permanent irrelevancy.
"We've consistently overinvested in infrastructure and design, the fruits of which won't be realized in the next development cycle or even two---that is, not in the next six or twelve months. You pay a price for that in a loss of agility. The advice I would give is to do even more of what we've been doing in the last couple of years, which is to sequence the innovation, stage things, and be less ambitious..."
Sunday, February 04, 2007
Review: Ex Machina
Note: My copy of The First Hundred Days was checked out from my local library, and it had pages missing.
Ex Machina is about a superhero who retires and runs for the Mayor of New York in 2001. Where his powers come from, what his past exploits were, and what the limits of his powers are is secondary to the story of his career as a politician.
The first collection (The First Hundred Days) covers his first days in political office, his origins, and a mysterious murder of snowplow men, as well as introducing the characters. The second collection, Tag covers a bit of the period before his election, gay marriage, and the a mysterious series of murders.
The plotting is tight, the art is acceptable, and the use of his abilities very well thought out. I'm considering buying up all the comics I can find.
Recommended.
Ex Machina is about a superhero who retires and runs for the Mayor of New York in 2001. Where his powers come from, what his past exploits were, and what the limits of his powers are is secondary to the story of his career as a politician.
The first collection (The First Hundred Days) covers his first days in political office, his origins, and a mysterious murder of snowplow men, as well as introducing the characters. The second collection, Tag covers a bit of the period before his election, gay marriage, and the a mysterious series of murders.
The plotting is tight, the art is acceptable, and the use of his abilities very well thought out. I'm considering buying up all the comics I can find.
Recommended.
Saturday, February 03, 2007
Review: Whistling Past Dixie
This book is an excellent companion and counter-point to Gene Sperling's The Pro-Growth Progressive. Rather than pontificate on policy that would be good ideas if the Democrats regained control of the government, Schaller focuses on how to win.
Schaller's thesis is that the Democrats have shot themselves hard in the foot by trying in vain to appeal to the South, the most racist, backwards, and evangelical part of the country. Since that requires the party to hew harder to the right than its base wants to be, you get two problems: first of all, you get the general population thinking that there's no difference between the two parties (which is as wrong as you can get), since the Democrats try to blur the differences between them and the Republicans in the South, and secondly, the public gets the impression that the Democrats don't stand for anything by pandering to whatever the public says it wants through the polls, rather than leading the Nation.
Schaller brings plenty of evidence to the table, with charts, graphs, and statistics and numbers peppering the book. His answer is that the right thing to do is to stand strong on the Democratic progressive values by pointing out that the Republicans want to reach into America's bedroom by proscribing behavior ranging from sexual preferences to what women are allowed to do with their body. These themes resonate everywhere in America except the South, and the Democrats do not need the South's electoral votes to win (and they're not going to get them anyway, so why tarnish your brand by seeming desparate). Schaller proposes vilifying the most racist and evangelical and backwards citizens in the South the way the Republicans have turned all Democrats into latte-drinking liberals, and using that as a wedge issue to force the Republicans to defend themselves in the rest of the country.
Fortunately, I think the current Democratic candidates for the presidencywill have no choice but to follow Schaller's strategy: Hilary Clinton is too hated in the South to even have a chance there, and she knows it. Barack Obama is black, and doesn't stand a popsicle's chance in the South, and he knows it. So unless there's an unexpected entrant who beats out these two, we'll get a chance to see Schaller's theory in action. This book is highly recommended.
To build and unify themselves, and begin to drive a wedge straight through the heart of the conservative base of the Republican Party, the Democrats need to spend a little less time micro-targeting messages to this or that group based on the latest focus group results. Chasing voters only scares them away, and so Democrats ought to spend less time in pursuit and more effort luring voters by staking out firm positions and showing the resolve not to budge... No party should define itself entirely by its base, but neither should a party define itself by starting with the elements of its coalitionfarthest from that base. That said, it is time for Democrats to replace the party's passive, confused, and muddled national message with a muscular, unapologetic advocacy of an elevator pitch that will not only poll well in the swing states and regions of the country but, properly politicized, can win elections too.
Schaller's thesis is that the Democrats have shot themselves hard in the foot by trying in vain to appeal to the South, the most racist, backwards, and evangelical part of the country. Since that requires the party to hew harder to the right than its base wants to be, you get two problems: first of all, you get the general population thinking that there's no difference between the two parties (which is as wrong as you can get), since the Democrats try to blur the differences between them and the Republicans in the South, and secondly, the public gets the impression that the Democrats don't stand for anything by pandering to whatever the public says it wants through the polls, rather than leading the Nation.
Schaller brings plenty of evidence to the table, with charts, graphs, and statistics and numbers peppering the book. His answer is that the right thing to do is to stand strong on the Democratic progressive values by pointing out that the Republicans want to reach into America's bedroom by proscribing behavior ranging from sexual preferences to what women are allowed to do with their body. These themes resonate everywhere in America except the South, and the Democrats do not need the South's electoral votes to win (and they're not going to get them anyway, so why tarnish your brand by seeming desparate). Schaller proposes vilifying the most racist and evangelical and backwards citizens in the South the way the Republicans have turned all Democrats into latte-drinking liberals, and using that as a wedge issue to force the Republicans to defend themselves in the rest of the country.
Fortunately, I think the current Democratic candidates for the presidencywill have no choice but to follow Schaller's strategy: Hilary Clinton is too hated in the South to even have a chance there, and she knows it. Barack Obama is black, and doesn't stand a popsicle's chance in the South, and he knows it. So unless there's an unexpected entrant who beats out these two, we'll get a chance to see Schaller's theory in action. This book is highly recommended.
To build and unify themselves, and begin to drive a wedge straight through the heart of the conservative base of the Republican Party, the Democrats need to spend a little less time micro-targeting messages to this or that group based on the latest focus group results. Chasing voters only scares them away, and so Democrats ought to spend less time in pursuit and more effort luring voters by staking out firm positions and showing the resolve not to budge... No party should define itself entirely by its base, but neither should a party define itself by starting with the elements of its coalitionfarthest from that base. That said, it is time for Democrats to replace the party's passive, confused, and muddled national message with a muscular, unapologetic advocacy of an elevator pitch that will not only poll well in the swing states and regions of the country but, properly politicized, can win elections too.
Thursday, February 01, 2007
Review: Nintendo Wii
I've never bought a game console in my life, though I did own an Atari Lynx once upon a time. But when a colleague brought in his Wii and I tried it, I thought that this game would be something that Lisa would love. So over the holidays, I brought her over to another friend's place to test that theory. Needless to say, she was hooked. She got so into the Tennis game that she kept hitting me by mistake. When she tried the boxing game, her palms were so sweaty that my friend had to wipe the controls dry when she was finished.
The hard part was to find a console. I was fortunate that Kekoa worked down the hall from me and had a script that scraped Amazon's Wii page, and when it was available (for all of 5 minutes) I got one. The console only comes with one controller and one nunchuk, so I immediately bought another set, and then signed up for Gamefly, the Netflix of computer games.
I've had the console for a week, and tried a couple of games with Lisa and a few friends. The choice of Wii sports as the game to bundle with the game is nothing short of inspired. Lisa would start having to remove jackets or sweaters by the second round of tennis, because she was getting such a workout. The internet features are a little disappointing, and I've crashed the console a few times, so it's not the most stable right now, but when playing the games you won't notice. (It's mostly crashed when I was running the beta Opera browser)
I also tried two games, Zelda: Twilight Princess is a fun console RPG. (Note the emphasis on console RPG. Balder's Gate or Neverwinter Nights this is not --- the story is strictly linear) The controls are very intuitive and a lot of fun, and the story is nice. But it's a little involving, and there are a few places where if you don't quite follow the story line you might have to do a lot of backtracking. Nevetheless, if the game appeals to you, it's worth buying since it's quite a long rental to finish it.
Trauma Center: Second Opinion turned out to be another winner. It's got amazingly intuitive controls (especially the defibrillator, which vibrates just enough when you activate it to feel real), and fast, short, uninvolved gameplay. You could pick this up and play for half an hour every other day, which I doubt you can do with Zelda.
In any case, the Wii has proved to be an amazingly good game, and in terms of the amount of use we'll get out of it, I think it will prove to be a fantastic purchase. My only complaint is that the SDK is extremely expensive (and not at all easy to get), as there are quite a number of games I can think of that can use this intuitive interface amazingly well. I think the Wii is the first truly original video game concept I've seen for a long while, and I am convinced that it's going to stay the runaway success it's been for the past few months.
The hard part was to find a console. I was fortunate that Kekoa worked down the hall from me and had a script that scraped Amazon's Wii page, and when it was available (for all of 5 minutes) I got one. The console only comes with one controller and one nunchuk, so I immediately bought another set, and then signed up for Gamefly, the Netflix of computer games.
I've had the console for a week, and tried a couple of games with Lisa and a few friends. The choice of Wii sports as the game to bundle with the game is nothing short of inspired. Lisa would start having to remove jackets or sweaters by the second round of tennis, because she was getting such a workout. The internet features are a little disappointing, and I've crashed the console a few times, so it's not the most stable right now, but when playing the games you won't notice. (It's mostly crashed when I was running the beta Opera browser)
I also tried two games, Zelda: Twilight Princess is a fun console RPG. (Note the emphasis on console RPG. Balder's Gate or Neverwinter Nights this is not --- the story is strictly linear) The controls are very intuitive and a lot of fun, and the story is nice. But it's a little involving, and there are a few places where if you don't quite follow the story line you might have to do a lot of backtracking. Nevetheless, if the game appeals to you, it's worth buying since it's quite a long rental to finish it.
Trauma Center: Second Opinion turned out to be another winner. It's got amazingly intuitive controls (especially the defibrillator, which vibrates just enough when you activate it to feel real), and fast, short, uninvolved gameplay. You could pick this up and play for half an hour every other day, which I doubt you can do with Zelda.
In any case, the Wii has proved to be an amazingly good game, and in terms of the amount of use we'll get out of it, I think it will prove to be a fantastic purchase. My only complaint is that the SDK is extremely expensive (and not at all easy to get), as there are quite a number of games I can think of that can use this intuitive interface amazingly well. I think the Wii is the first truly original video game concept I've seen for a long while, and I am convinced that it's going to stay the runaway success it's been for the past few months.
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