A Story for Mother’s Day

Sunday, May 12, 2019

My mother is one of my most loyal blog readers. She would like me to write more. A few months ago we were talking on the phone and she commented that I hadn’t written anything in a long time. I agreed that that was true. Things have been hard around here, especially the last 18 months.

She said, “Maybe if you wrote shorter posts you could do it more often.” But I am like Blaise Pascal who apologized for writing a long letter because he didn’t have time to make it shorter. Shorter is not easier. I can only write what I can write, and I can only write it when I can write it.

Sorry I don’t write more, Mom. Hopefully things will be getting better soon.

And for Mother’s Day 2019, here is a post for you, and about you.

My mother is mostly known for making things. For many years she made very beautiful baskets — she was a Roycroft Artisan and sold at shows across Western New York. She has always knitted, mostly sweaters but lately socks. She volunteers at church and knits hats and scarves that are given to street people and others in need. But even more than her baskets or her knitting, my mother is known far and wide for her cookies. This year at Christmas my brother’s wife played a trick on her nieces and nephews who came over for Christmas dinner (which my mom still makes every year, she says it’s easy), she put out a plate of cookies that someone else had given them. The kids came in the door and headed straight for the kitchen in search of Grandma Currie’s cookies. They found the plate of cookies that my sister-in-law had put out and each took one. They were not fooled. After one bite they looked at each other and said, “These are not Grandma Currie’s cookies. Where are the real cookies?”

When I was growing up, my mom was known less for making things and more for knowing things. She was like the all-seeing eye — she knew everything. She knew things about my friends that I didn’t know. She probably knew things about my friends that even they didn’t know.

I think of her as a kind of savant.

Here is a story I tell about my mother sometimes, because I think it is funny and because I think it epitomizes two important things: (1) college kids don’t know anything, and (2) my mother has all the answers.

My senior year in college I lived in a house with six other people. It wasn’t supposed to be that many but we kept adding people as we looked for a house, like the Canterbury Tales or the Wizard of Oz or something. People kept joining our merry little band. We ended up finding a great house that wasn’t quite big enough for the seven people we had ended up with, but we took it anyway because it was beautiful and not too expensive and we figured we could make it work. And we did, mostly. (And we are actually all still friends, lo these many years later.)

The house was in Durham, North Carolina, where you have a pretty good chunk of the year where you can get by without heat or air conditioning. Especially in the fall, you have a nice stretch where it’s not too hot anymore but it hasn’t started to get cold yet either.

Our lease started in June, and two of us spent the summer in Durham, along with one or two of the people who had lived in the house the previous year, and one or two random summer sublet people. Then the other five housemates came along when school started at the end of August.

By the middle of October it was starting to get cold, and eventually it got to the point where we actually needed to heat the house. We knew where the thermostat was, because we’d been using the air conditioning all summer, but when we put it on heat, nothing happened. No heat.

This was the first time any of us had lived on our own in a house, we had no experience with anything. We didn’t know what to do to make the heat work. So of course I called my mom.

I said, “Mom, we don’t have any heat. We put the thermostat on heat, nothing happened. What do we do?”

She said, “Well what kind of heat do you have?”

I said, “I don’t know. What does that mean?”

She said, “What kind of heat. Is it oil? Is it gas? Electric?”

I said, “I don’t know. How would I know that?”

She said, “Well it depends on what kind of furnace you have. Do you have a furnace? If it’s oil there’ll be a big tank somewhere that the oil goes in. Is there a tank anywhere?”

I said, “I don’t know.”

She told me it would be outside the house somewhere, I’d see a big metal tank, probably somewhere close to where the furnace was. I knew we had a furnace because the furnace was in front of a small addition that was the laundry room. Even a dumb college student could figure that one out.

I said, “Okay, let me go look. I’ll call you back.”

So I went outside and walked around the house, and on the north side, next to the wall of the room with the furnace was a big metal tank.

I went back inside and called my mom.

I said, “Yes, there’s a big tank outside.”

She said, “Well then you have an oil furnace. You need to get oil.”

I said, “How do we do that?”

She said, “You call the oil company and they bring it to you.”

Oh! Okay.

This was 1988 so I’m sure the next step involved looking in the phone book and figuring out how to order a tank of oil for our oil furnace. So we had that delivered and — ta da! — we had heat in our house.

(Mini side story: We had heat in our house until we ran out of oil just before it was about to get warm and had a pitched battle between me, who said SUCK IT UP PEOPLE, it’s going to be warm in like a week, we do NOT need to spend money filling an oil tank in a house that we are about to leave, and everyone else who said OMFG IT IS FREEZING IN THIS HOUSE. I lost that battle. Here is one famous line from that time period: “If we have to hear one more time about how you are from Buffalo and this not that cold we are going to have to kill you.”)

So thanks, Mom, for many things, including helping us get heat in our house in 1988.

I don’t know what other people do when they can’t figure something out but I call my mom.

She knows everything.


Friday, April 5, 2019

So I took the day off from work on Tuesday, because I worked both weekend days two weeks in a row, in addition to my regular weekday work. There’s only so much a person can take.

I didn’t do much, tried to get caught up on some things around the house and pull together my tax info. At around 6:30, I checked my regular email, the one I’ve had forever, then I checked my gmail account, which I set up when I went back to school, because I needed an account that wasn’t my regular account. I don’t use the gmail account for much, but it is the account that WordPress comments in need of approval get sent to, comments from someone who hasn’t commented before. I don’t often get a new commenter but every now and then something shows up. I try to make sure I check that account at least once a week.

So I check the gmail messages and I have two comments from Nancy K. waiting to be approved.

With the exception of two comments I got in 2017 praising Donald Trump — I seriously think those were from a Russian troll farm, or maybe they were actual Americans inspired by Russian trolls, the whole thing was completely weird, how did these people find me, anyway? — all of the comments I get are nice. People I don’t know thank me for writing and share interesting thoughts. It’s really very uplifting.


I look at the comments to be approved and they are filled with vitriol! Here is one:

10 years ago is 10 years ago…not sure why you felt like your 15 minutes meant that people continued to want to read about your boring ass life. You seem kind of stuck up and conceited overall, and I generally dont like you. The original teachers at least made it enjoyable to read and didn’t have a holier than thou attitude. Stop writing as if you’re better than everyone else. Stop writing period (you’re not a very good writer), get a real job, and give up this blog. No one reads or cares about it anymore. Stop grasping straws of minor fame from a decade ago please and get on with your life. The rest of us did, 9 years and 11 months ago lol

lol is right!

Like all I’ve been doing for the past 10 years is lollygagging around trying to make hay from my MOMENT OF FAME. I didn’t even make hay from my moment of fame when it was happening! Come on people!

(And for the record, I do have a job; whether or not it qualifies as a “real” job is open to debate.)

I went down the list of people who hate me right now. (This list is longer than you might think given what a NICE PERSON I am.)

All of them seemed possible — at this point, nothing is going to surprise me — but somewhat implausible. I could definitely see any of them trolling me on my blog, but it didn’t seem likely that they’d go after me about whether or not “anyone gives 2 shits about whether or not you use a packet of ketchup from a restaurant.” It just seemed like they might go after me for different things than Nancy K. did.

I looked at the whois record for Nancy K’s IP address to see if that gave me any clues. It was a New York Public Schools address, which seemed to eliminate most of my local enemies. Maybe it was just some random person who doesn’t like me? A wannabe high school bully doing some target practice?

While pondering these possibilities, I thought more about the content of the comments, and noted that the first comment was on a post where I clarified something that my friend (not random dude) Tom had needled me about, accusing me of “cheating.” It also referenced taking ketchup and sugar packets from restaurants, something the “original teachers” did and which I specifically said in my ground rules that I wouldn’t do.

The second comment (given above) directly mentioned the “original teachers” and how their project was better, at least it was “enjoyable to read.” Unlike my tedious slog. That this person is forcing themselves to get through. Ten years later.


After putting in my monocle and considering the evidence, I decided that the comments are probably not from a local hater, or from a random hater, but from someone who is a fan of the “original teachers” and who was offended by my snarky attitude toward them. (It’s true. I could have been nicer to them. I apologize.)

While all of the possibilities seem weird, it is hard for me to imagine that someone who doesn’t know me at all and has no connection to anything on my blog would come to this blog — which is not advertised anywhere, I’m not selling anything, and I hardly ever post — and say mean things about me, without some motivating factor. I think my local haters have bigger fish to fry, I don’t think they would bother with trolling me on my blog.


I will just say that I’m sorry for all of you out there, like Nancy K., who feel compelled to come here and read my bad writing, over and over again, year after year. I’m doing the best I can. I write this blog mostly for myself and everyone else is free to read it or not read it as they see fit.

I’m also sorry you think I’m stuck up and conceited and you don’t like me much. There’s really not much I can do about that, I am who I am.

And this seems like a good time to re-post my favorite sign from Cooperstown, New York.

And that is it for tonight.

Peace out.

Ten Years Ago

Monday, February 4, 2019

In February 2009, I did a project where I ate for a dollar a day.

I wrote about it on this very blog that I had created just for the project, and I didn’t expect anyone to take any notice of it, I did it for myself, because I was annoyed by someone else’s dollar-a-day project, which began with a $150 trip to Costco, and I wanted to do a straight-up dollar-a-day project, where you actually get a dollar a day, which seemed impossible.

But then lots of people paid attention to it and there was a full-page article about me in People magazine and I went on the Rachael Ray show and I had a brief moment of minor celebrityhood. Which is definitely not something I ever expected or wanted, or even particularly enjoyed.

And all of that went away almost as fast as it came in, but the blog is still here, and if my life ever gets better and I am able to think about anything other than surviving my current life I will start writing again.

In the meantime, you have 10 years of intermittent posts about food and frugality and a wide variety of other topics — some related but most not — to keep you occupied.

On doing things you cannot do.

Monday, September 17, 2018

My first job out of college was in book publishing, as a direct mail assistant in the marketing department of Princeton University Press. In fall 1989, I moved to Princeton, New Jersey, where I had never been prior to driving down for my job interview, and where I knew no one.

I interviewed in August, and got the job, and then my mom and I drove down to find a place for me to live. It turned out that housing in Princeton was hard to come by, and very expensive. I had no idea how bad this situation was when I accepted the job offer. (Sometimes I wonder if I would have taken the job had known this.) But I got lucky and found a place I liked that I could afford, subletting for $400 a month ($800 in 2018 dollars) a very small room in a very old house from an interesting person who worked as a corporate chef and caterer. The house was so old it had a name — it was the Bernardus Van Zandt house, and when friends came to visit for the first time they thought they were at the wrong address.

I moved to Princeton over Labor Day weekend, which gave me plenty of time to get settled, because I didn’t start work until Tuesday. However it turned out that I didn’t need plenty of time, because I had not very much stuff, so it took me less than a day to move everything from my little car into my little room, and to get it all set up the way I wanted. To put up my bookshelves and put together my stereo and get my books and music organized the way I liked, and put my clothes away in the built-in wardrobe and dresser that were in the room.

My housemate was there for a bit after I got there, she welcomed me and told me where the nearest grocery store was, but then she went away (as it turned out she often did), leaving me in a place where I knew not a single person, and had not a single thing I needed to do before I went to work on Tuesday.

As noted, this was September 1989, pre-Internet, and I was never a huge television watcher, but at that point in my life watching television was still a standard default activity. I had noted a large television in the dining room when I made my initial visit, so I didn’t bring a TV with me. So after I’d finished setting up everything in my little room I went downstairs to kill some time by watch some television only to discover that the TV wasn’t actually a working TV, it didn’t get any reception. (Later I learned that it had been set up to watch videos, but I don’t think I ever got that part to work either.)

So there I was in this house, by myself, with no TV, and nothing to do. And I wasn’t going to be making hardly any money, so I was completely focused on not spending money. And I didn’t know where anything was anyway.


I remember deciding to go out and get things for my room, I needed some more shelving, so I did that. That took a couple of hours. Okay, only two more days before I needed to go to work.

On Sunday or Monday I decided that I could go to the mall and just look at stuff. I remember being at Sears, in the TV section with the US Open tennis tournament on. That was so nice! To stand there and watch TV. I wondered how long I could hang out in the TV section of Sears watching tennis, I wanted to stay all day. But that didn’t seem like a good idea, and also it seemed sad and pathetic. Watching TV at Sears because you have no TV and no money and no friends and nowhere to go. Welcome to the rest of your life.

I clearly remember that moment at Sears as the point when I realized that I may not have thought this through quite as much as I should have, that I had no idea what I was actually getting myself into, moving to a place where I knew no one. I guess I had been thinking it would be like college. For college I went somewhere I’d never been before and where I didn’t know anyone and that turned out fine. But that was completely different. At college you are surrounded by people who also have not been there before and do not know anyone, and the whole environment is structured to get you all to meet each other. Regular life is not like that. At all.

I didn’t end up staying at Sears all day. I went back to the house and figured out how to occupy myself until Tuesday. I listened to music and read and wrote letters to my friends telling them about the Bernardus Van Zandt house, and how to get in touch with me. I bought groceries and fixed meals for myself. Then I went to work on Tuesday and met people there and things started to feel more normal.

All of which is background to this story. The background is that I was living in a big house where I was by myself most of the time, I had no friends near by, and I had limited resources.

Because my room was small, and because it wasn’t exactly a full-on house share, it was more like “and this is your room” situation, I had decided I should get a futon as a bed, which would give me both a bed for sleeping and a place to hang out and read or visit with friends (assuming I might someday have friends). I bought the futon mattress in Buffalo before leaving, packed it in my little car with the rest of my possessions and brought it down with me, and slept on that on the floor for the first few days. But it wasn’t completely comfortable, and I seem to recall there being fleas, which was not ideal to be sleeping on the floor (and which I recall my hybrid housemate/landlady being embarrassed about, figuring they must be from her dog, Daisy.)

In the center of town was a store that sold futon frames, and I think my mom had offered to pay for the frame for me. (It is possible I was buying that myself out of money I had saved, but I am reasonably certain that if I had to buy it myself I would have just slept on the floor, so I’m going to go with the parents-buying-me-a-bed theory.) So I went to the store and picked out what I wanted — a nice, substantial, solid wood frame that folded flat for a bed and up for a sofa — ordered it, and then went and picked it up when they told me it was ready.

I had a Mazda 323, which is a small car, but it had a very deep trunk and the back seat folded down, and I am a small person so I can push the driver’s seat all the way to the front and you would be amazed at how much you could fit in that car when it was configured that way. That was a good car.

So I go pick up the futon frame and it is in a very large, rectangular box, with some of that plastic strapping on the outside so you could move it and carry it. They load it into my car for me, it fits and everything, and I drive up the Great Road to my house.

It is quite heavy, but I am able to get the box out of the car by myself without too much trouble, and I can heave it along the driveway, then slide it up the outside stairs to the porch landing, then over the door threshold and through the front door into the front hallway.

The house had a very wide entrance hallway, almost like a room; it was probably ten feet across and stretched completely from the front to the back of the house. It had two openings to the living room on the right and an opening to the dining room on the left. My housemate had an old Sigmund Freud style couch in the back, across from a telephone table. The stairs were at the back of the hallway, across from the Sigmund Freud couch, behind the telephone table and an old steam radiator, running up toward the front door.

The stairs went up along the wall then hit a landing and took a ninety-degree turn to the left (when you were going up the stairs). It was maybe six or seven steps to the landing then an equal number of steps after the landing. Both the hallway and the stairs were carpeted with a worn, low-pile carpet.

So I’m able to slide the box from the front door through the hallway to the stairs, and turn it onto the stairs and slide it up the stairs, but when I hit the landing I realize I need to get this very heavy, very wide box to make a ninety-degree turn in order to get it all the way to the top. My housemate is gone for the next few days so I am doing this by myself, because (a) I see no problem with doing this myself, (b) even if I did see a problem with doing it myself, I do not have anyone I can easily call to come help me, and (c) I am ready to stop sleeping on the floor.

So despite this slight complication with the landing, I decide to forge ahead with this plan of getting the very heavy futon frame into my upstairs bedroom by myself.

I try to maneuver the box and figure out how to get it to make a turn on the landing but the approach I take is obviously not the right approach because I get the box stuck on the landing. It is on its flat side, but there’s not enough room to flip it, and also it is too heavy. And I end up kind of stuck on top of it. Hm. But I keep working to try to figure it out and in the process of maneuvering to get myself underneath it or to somehow get some leverage so I can turn it and get it the rest of the way up the stairs, I manage to get myself not just kind of stuck but really actually stuck.

Like really stuck.

Like stuck like I am like holy shit I am by myself in this 200+ year-old house that sits on 100+ acres in the middle of central New Jersey on a stair landing trapped behind a box filled with a solid wood futon frame that I cannot move. I can’t move the box, and I can’t move myself out from behind the box. And I am by myself.

Did I mention that I was by myself?

This is nearly a decade before most normal people had cell phones, and even if cell phones had existed at that point, I probably would not have had one with me. (In fact if I were doing this today, I probably would not have a cell phone with me.)

So my housemate is gone for three days. I am trapped on a stair landing behind a really big, really heavy box. I have no access to a phone. I cannot get myself out from behind the box and I cannot move the box. (Turn push urrggh push urrggh. URRRGGHHH. Nope. I cannot move the box.)

Well sh*t.

What are my options?

Option 1: I can remain trapped behind the box and wait until my housemate returns to free me.

Option 2: I can remain trapped behind the box and wait until someone (work? my mom?) realizes I haven’t been heard from in quite some time and calls the authorities to figure out what has happened to me.

Options 3: I can somehow figure out how to move this box which is too heavy for me to move.

Option one feels tedious and extremely embarrassing. Option two feels significantly more embarrassing, and at least as tedious. Neither of these is an acceptable option.

I have to go with option three.

So I take a deep breath and dig down deep inside to summon my inner superwoman — like you hear about on the news when a child is trapped under a car and the kid’s mom or some average joe bystander lifts the car to free the child — and I manage to push the box up AARRGGHHH, get out from behind it, and turn it so it is going in the right direction.


Pant, pant, pant.

Then I slide it the rest of the way up the stairs.

I get myself to the top of the stairs. I turn the box and slide it into my room. I take the futon frame out of the box and set up my bed.

All’s well that ends well.

And I suppose the lesson I should have learned from this episode was that I shouldn’t try to do everything by myself. But the lesson I actually learned was that you might end up in situation where you are sure you can’t do something but then it turns out you can.

So, as far as I am concerned, here is the point of this story:

Sometimes things are hard. Some day you might find yourself alone, trapped on a stair landing behind a really heavy box that you cannot move. Except you can. Because you have to.

You might choose to take something different from that story. But that’s what I’m going to go with.

Especially right now.

I was going to post a comment in response to this post on a personal finance blog that I had never read before coming across a link to said post, but then I decided I shouldn’t hijack that person’s comment section, I should instead just write my own post. BECAUSE THAT’S WHY I HAVE MY OWN BLOG.

Also this feels appropriate because July 1 (when I started writing this post) would have been my father’s 78th birthday, and I think that my father would have been proud of me for being able to write this post. He was a CPA who was very patient in letting me ask him dumb questions over and over again until things finally made sense. (We had probably 15 conversations about depreciation before I got it.) He also would never just give me an answer, he would send me the Rev. Notice or whatever his answer was based on and have me read it for myself.

This was his approach my whole adult life.

Like for instance in 1992 when I found myself with $3000 that I needed to figure out what to do with. (Despite making around $18,000 a year at my first job in Princeton, NJ, I managed to end up with that amount in a savings account that I needed to close following my relocation to DC/Virginia.) I asked my dad what I should do with it and he told me that before he would tell me what to do, I needed to learn about the stock market. He gave me a list of books to read, one of which (the only one I remember) was The Intelligent Investor by Benjamin Graham. Once I’d read that, he told me, we could talk about it and I could tell him what I thought I should do and he would tell me what he thought I should do.

So I read The Intelligent Investor and it helped me understand the stock market and not be afraid of it. I closed my savings account and with a third of the money I bought a new bike (which I still have, and still ride) and the remaining $2000 I invested in a couple of different mutual funds. Once I started doing my own taxes a few years later, I realized that the Vanguard fund I invested in was far better than the others, the returns were better and the taxes were lower, so I stopped putting new money into the others and instead put all of my monthly transfer into Vanguard.

By the time I bought my house in 1999, I had more than $30,000 in those investment accounts. I bought my house for around $100,000 so I only needed $20,000 for the 20% down payment, and the rest I left in Vanguard for later use. It’s been really great to have that money. I’ve been able to dip into it as needed — for work on my house, to pay off my student loans from grad school, and (in the past few years), to help prop up the nonprofit I work for to avoid fiscal crisis — as well as to have it as “just in case” money that keeps me from worrying about not having any money.

I thank my father every time I look at my Vanguard statement. He didn’t give me any money to put into it, but he gave me something much more important — the education and knowledge I needed to take care of things myself and to make good decisions about money.

Thanks, Dad.


Okay, here’s the post I started to write, which is probably of interest to no one. But I am posting it anyway. Because this blog is not for you, Dear Readers, it is for ME. You’re just along for the ride.

Here goes.

Dear My Money Wizard,

Your post on earning tax-free income was interesting, but it seems to be missing some context. And since you work in finance, I’m assuming you know all of this, but I’m going to lay it out here anyway since I know there are lots of other people out there who don’t.

Here are a few things I noted and wanted to comment on.

1. A dividend is not a “thank you” from a company for buying its stock. You’re not doing a company a favor when you buy stock; you’re providing the company with capital, in exchange for which you are receiving an ownership interest in the company. (Whether you do this by buying an individual company stock or through a mutual fund makes no difference; the concept is the same.)

The company takes the money it earns from the sale of stock and uses that money to make more money. The reason people become owners of a company is to make money; that’s the whole point of investing.

The ownership interest you purchase when you buy stock gives you the right to have a say in how the company is run and the right to a portion of the company’s future profits (should there be any). If the company makes money, you as an owner make money. If the company loses money, you as an owner may lose money. (The amount you stand to lose is generally limited to the amount you invested.)

There are two ways to generate income from investing in a company.

One way is when the value of the company’s stock increases during the time you own it. This allows you to sell the stock for more than you paid for it. The difference between what you bought the stock for and what you sell it for is the amount of gain you make on your capital (i.e., your capital gain). This is what is taxed at the capital gains rate.

Capital gains can be short-term (property held for less than a year) or long-term (property held for more than a year). (Stock is a form of property.)

Through the workings of our elected officials, We the People have decided that taxes should be lower for gains someone had to wait more than a year for than for gains someone got by buying and selling in less than a year. This means that long-term capital gains are taxed at lower rates than short-term capital gains.

Stock prices can also go down.

If you sell a stock for less than you paid for it, you lost capital. For tax purposes, capital losses can be used to offset capital gains. But that would be another very long and very boring post so we’re going to skip that discussion. For now, let’s just assume that you can only make money in the stock market, not lose it. (Yippee!)

The second way that people generate a return on their investment by owning stock is by receiving a distribution of a portion of the company’s annual profit. This is called a dividend. The amount of profit to be distributed is divided by the number of shares outstanding resulting in a per-share amount (e.g., $3 per share). So if you own 100 shares in a company that has a $3 per share dividend, you would get $300.

As noted in your post, “qualified dividends” are dividends that meet certain criteria set by Congress. Again, We the People working through our elected officials agreed that most but not all dividends should get lower rates; others are taxed at the same rate as the rest of your income. (For federal income tax, that is. They are not subject to Social Security or Medicare tax. DIFFERENT POST.)

Got that?

To recap: Capital gains are the income you earn when you sell your stock for more than you paid for it. Dividends are a distribution of income you receive as an owner. These are the two ways that equity investors (owners) make money.

You can also be a debt investor (lender), loaning money to a company by buying bonds. But again, not going to go into that here. Too long, too boring. DIFFERENT POST. This is why the CPA exam consists of four separate 3-hour tests, each of which has multiple testlets (yes, that is an actual word). It just goes on and on.

Okay. Now into the weeds on dividend income.

Let’s say a company has 80 shares outstanding, it has two stockholders who each own 40 shares, and its total income tax rate (federal plus state and local) is 20%.

Further, let’s say that the company’s net profit for the year, after all of the expenses are paid — wages and rent and utilities and the costs to buy/make/develop the products or services it sells and to advertise and sell the products/services and to buy snacks for the staff break room and whatever else the company spent its money on during the year — is $100. With a 20% tax rate, it pays $20 in taxes, leaving $80 in net earnings. The company earnings are $1 per share ($80 divided by 80 shares outstanding = $1/share).

The company can take that $80 and do something with it that it thinks will allow it to generate more income next year — buy new equipment or hire more staff or upgrade the chocolate in the break room from Hershey’s to Callebaut — or it can distribute that money to the owners in the form of a dividend.

In this case, with two owners each having 40 shares, if it distributes all of its earnings as dividends, each owner would receive a $40 dividend.

Typically newer companies keep the money they make to invest and try to increase growth, while mature companies distribute profits to their owners. Retirees and people who are in search of steady income tend to prefer dividend-paying stocks.

Bottom line: Dividends are a return on investment, it’s why people invest, they are not a thank you for buying stock.


Okay on to the rest, which is slightly simpler.

2. Some people argue that investment income shouldn’t be taxed at all when distributed to owners, because owners paid tax on that income when the company paid taxes on its earnings. By taxing the income both when it is earned and again when it is distributed, the same money is being taxed twice. (You can read lots and lots on this if you search for information on “corporate double taxation.”)

This argument assumes that the corporation and its owners are a single entity, and that the corporate entity is being taxed both when the money is earned and when the money is distributed. This argument doesn’t quite work for me, because it seems to me that the corporate entity is one thing and the individual owners are a different thing. It’s hard for me to wrap my head around any other interpretation.

But your post seems to go even further by seeing no connection at all between the company and the owner/investor, considering the reduced taxes on investment income as some kind of crazy loophole.

But basically the reduced rates — with lower-income individuals being taxed at a 0% rate — is a compromise between the people who think investment income shouldn’t be taxed at all (because it was already taxed when it was earned) and the people who think investment income should be taxed a lot because it is mostly earned by rich people who can afford the higher taxes and who cares where it came from in the first place or what happened to it before the rich people got it.

3. Your “earn income tax-free” argument doesn’t completely make sense, because in order to execute your plan, you need to make as much money as possible, and that money is taxed when you earn it. (And taxed more if you earn enough to bump yourself into a higher tax bracket.) [Unless you are doing the 401(k)/Roth conversion thing, which I admit I do not understand the details of because I’m not about to do it and it depends on tax laws that may change by the time I ever need to actually know about it so I just skim over anything involving a Roth conversion.] Then you are using this after-tax income to earn more by becoming the owner of a company, and the company you own is paying taxes, thus reducing the amount they have available to distribute to you. So the money isn’t really tax-free — you pay taxes when you make the money you use to invest and then again when the company you have invested in makes money. It’s just that the taxes are indirect, they come out before you see the money instead of being something you pay on your own tax return. But nonetheless they are taxes.

If you really want to earn money tax-free you need to talk to Paul Manafort. You get paid cash for your work and park it offshore then use a shell company to buy a house with the offshore cash then take out a mortgage on the house to get cash in the U.S.. Voila! Cash! No taxes!

Except oops, you can’t talk to Paul Manafort because he’s in jail.

4. Regarding Publication 550 being the most boring IRS publication ever produced, I need to say that as someone who survived getting a master’s degree in accounting at age 48 (which involved, among other things, a class in partnership tax and a class in international tax), and who spent the past two summers studying for and passing all four CPA exams, I find it extremely amusing when PF bloggers read some IRS publication and declare it the most boring or most confusing thing ever produced by the IRS.

I am here to tell you that you have no earthly idea how confusing and/or boring information produced by the IRS can be.

Trust me on that.


Okay that’s it.

Congratulations to everyone who made it to the end!

I promise that I will not be producing a tax series. And if you are actually interested in understanding investing, you should go read The Intelligent Investor. It will change your life.

I saw my friend Muriel the other day, she stopped by The Scrap Exchange with her sister and I was talking to her and she mentioned that it was her birthday AT THE EXACT SAME MOMENT that a Facebook alert popped up on my computer screen telling me that it was Muriel’s birthday. Which was very weird. Especially since I do not have a Facebook account. (I was on someone else’s computer who is Facebook friends with Muriel.)

It was a strange meta Facebook reality convergence moment.

We discussed turning 50 and I shared with her the story of my 50th birthday lunch last year, at the American Visionary Art Museum in Baltimore, at which a friend who is 60 told us that the past decade has been the best 10 years of her life. The rest of my friends who were with me at lunch — all of whom were my age or younger — found that statement inspiring.

This morning I was reading through things on my computer and came across a quote I pulled recently when I re-read Anne Morrow Lindbergh’s Gift from the Sea, which is a book I saw on every bookshelf in the world when I was growing up and which I assumed was schlocky, like Jonathan Livingston Seagull, a book I hated so much it made me angry that I had spent time reading it, but which is actually a great book, beautifully written and insightful and poetic.

Here is the quote:

For is it not possible that middle age can be looked upon as a period of second flowering, second growth, even a kind of second adolescence? It is true that society in general does not help one accept this interpretation of the second half of life. And therefore this period of expanding is often tragically misunderstood. Many people never climb above the plateau of forty-to-fifty. The signs that presage growth, so similar, it seems to me, to those in early adolescence — discontent, restlessness, doubt, despair, longing — are interpreted falsely as signs of decay. In youth one does not as often misinterpret the signs; one accepts them, quite rightly, as growing pains. One takes them seriously, listens to them, follows where they lead. One is afraid. Naturally. Who is not afraid of pure space — that breath-taking empty space of an open door? But despite fear, one goes through to the room beyond.

But in middle age, because of the false assumption that it is a period of decline, one interprets these life signs, paradoxically, as signs of approaching death. Instead of facing them, one runs away; one escapes — into depressions, nervous breakdowns, drink, love affairs, or frantic, thoughtless, fruitless overwork. Anything rather than face them. Anything, rather than stand still and learn from them. One tries to cure the signs of growth, to exorcise them, as if they were devils, when really they might be angels of annunciation.

Angels of annunciation of what? Of a new stage in living when, having shed many of the physical struggles, of worldly ambitions, the material encumbrances of active life, one might be free to fulfill the neglected side of one’s self. One might be free for growth of mind, heart, and talent; free at last for spiritual growth; free of the clamping sunrise shell. Beautiful as it was, it was still a closed world one had to outgrow.

So this is for Muriel, and for everyone else who is about to turn 50, or has recently turned 50, or who is dreading turning 50.

May the next 10 years be the best years of your life.

Things Can Always Get Worse

Friday, May 4, 2018


I feel like this should be my motto: Things Can Always Get Worse. (It pairs well with the Currie Rule.)

The place I worked throughout most of the 1990s and a little bit of the 2000s was run by a person who was very good at a few parts of his job but very bad at all the rest. He resembled in many key aspects Dilbert’s Pointy-Haired Boss.

His second-in-command was a woman who was, for lack of a better term, Insane. She lied and manipulated information. She told people she was a CIA agent. (Which may have been true, who knows.) She spoke with a British accent which made her sound very authoritative. She had stout legs and wore low heels and you could hear her coming from across the office, clicking her way through the tiled mail room. Click, click, click. She wore scarves and chunky necklaces. When she said, “Many people have said….”, you knew she was lying. The “many people” was a dead giveaway. (Hmm… who does that sound like?)

Eventually she did something so over the top that she got herself canned. I don’t remember exactly what it was, or maybe I never knew for sure. I have a vague recollection of it involving her trying to get someone else fired, but doing such a bad job lying that it was too much even for the Pointy-Haired Boss.

She was fired during the work week and escorted from the building. She was allowed back on Saturday to clear out her office, along with an escort. I was there that Saturday, working, and I think maybe they were supposed to have been there earlier, or to come in on Sunday, but changed plans but I wasn’t notified. I don’t think I would have gone in on purpose when they were there. I remember it being very tense and wishing I wasn’t there.

There was much rejoicing at our place of work after Insane Person was fired. Ding, dong the witch is dead, the witch is dead, the witch is dead. (She actually had a witch’s hat in her office. I ended up with it. It lives on a hat rack in my garage/studio/office. A friend came to my office once, saw the hat and said, “I always knew you were a witch.”)

We were all thrilled after this turn of events, the source of so much turmoil and so many of our problems was gone. Gone!

They hired someone new to replace her. And the new person was very nice, not evil at all. But she also appeared to be not at all qualified to do her job. Even after months and months to get up to speed, she seemed to have very little grasp of what was important or how things worked. She barely participated in meetings and rarely provided anything of value when it came to analysis or decision-making.

At one point I found myself saying, “I can’t believe I’m saying this, but I actually miss Insane Person. At least she knew what was going on.”

This was a great and lasting lesson for me.

I learned that no matter how bad you think things are, they can always get worse. You may solve one problem, and it may even be your biggest problem, but that doesn’t mean all of your problems are gone. You may just end up with a bunch of new problems that you never even thought about before.

This is what I’ve been thinking about lately.

But instead of focusing on the bad things that might happen, I will end on a positive note, with a link to my ’80s friend Howard Jones who tells us that the opposite is true: Things can only get better.

If you say so, Howard. If you say so.