money musings

Editor’s warning: I am about to sound like your grandmother for a second. But …

When I was a senior in high school, a gallon of gas cost 99 cents. (I can even recall seeing signs for 89 cents a gallon in parts of southern New Hampshire.) Not even 10 years later, I just filled up the ‘Ru’s tank for a whopping $4 a gallon. And that is actually after it peaked in San Francisco at nearly $4.70/gallon. Regardless, the increase is more than 400 percent in less than a decade. For some perspective, and I may be off by a quarter, in 1999 minimum wage in Massachusetts was $5.25. It is now $8.00 an hour.

Now, I may not be a math genius, but it seems that somewhere between 1999 and today, something went terribly wrong. And with the Fed proposing a $700 billion bailout for Wall Street firms it appears we are officially lodged somewhere between totally f-ed and start stuffing your mattresses with your savings. (Can anyone in the White House confirm if we in a recession yet?)

I will admit. I have no financial background or expertise. Only yesterday I learned how to invest online. But after reading reports about some of the Senators making decisions on this record-setting government bailout having almost as much experience in money matters, I am beginning to wonder if maybe I am not so unqualified after all. (Sidenote: Maybe now I can run as VP? I am female! I have fired a shotgun! I have creds!)

To me, the $700 billion bailout seems … vague. No one appears to be able to answer two very important questions: Is this the real cost? And more importantly, will it work? I realize this is totally irresponsible of me to pose, but what if we didn’t spend $700 billion bailing out Wall Street? What if we spent a small portion of it helping the people who purchased the bad loans to pay for their houses? What would happen then? Wouldn’t the markets eventually sort themselves out?

I just learned that Warren Buffett is going to invest $5 billion in Goldman Sachs. What if we fore-go the government bailout for firms and just let people like Buffett do the investing? Just a thought.

realization: another for the list

I have a running list of things I need to learn so that I am equipped to handle any emergency situation that may arise.

And I don’t just mean floods, fires, earthquakes, Bon Jovi concerts or other acts of God. I have had this same list for four years. Yet, somehow it seems that I am always adding to it and never crossing anything off. To make matters worse, I realized this morning that I need to start including acts of man such as navigating the recent nose dive of the stock market and learning how to change a bike tire. Damn! Two more for the list and it’s not even 9 am!

Anyhow, a dear friend gave me an unsolicited investment tip this morning. It sounded like good advice and a logical investment. Much better than playing the California lottery. Then it hit me: I have no idea how to buy stock.

It’s sad I know. Tragic actually. How could I have graduated from college and not know how to buy stock? It seems like it should have been a requirement. Instead of teaching students how to read Nietzsche or dissect Shakespeare, it appears a more practical course would be titled Life Skills. The course description: students will develop an understanding of the basic fundamentals of life. Topics covered include buying stock, updating their resumes, reviewing and negotiating a lease, mastering metric conversions, and parallel parking.

But here I am 27, a college graduate, and clueless about purchasing stock. I was envisioning how I would go about doing so and I am pretty certain you don’t pick up the phone and say, “Hello Fannie Mae? I would like to invest in your partially goverment-owned company. Where do I sign up?” I don’t think it works like that. Do you call the bank? Your dad? Who?

I was beginning to realize I was on the verge of flunking life, when my friend told me about online investment companies like Scottrade.com. Now, I am not certain if it’s smart, or just great business strategy, that people like me can begin investing in four minutes over the Internet. I will let you know after I either

  • A. make my first million
  • B. get arrested and thrown in jail for insider trading (where I will write my first cookbook Martha Stewart-style about dressing up prison food/cooking on a dime)
  • C. lose it all
  • D. break even and realize I could have just bought a latte.

We’ll see. But the way I look at it: I’ve already made progress. I can cross one new item off the emergency preparedness list today. I feel so productive.