Len Penzo dot Com

The other night the Honeybee and I sat down and watched the 82nd Annual Academy Awards, and I have to say it was the most entertaining show I've seen since Billy Crystal was hosting. Naturally, we recorded the event to avoid all the commercials. Here's my minute-by-minute take... 7:30 PM: The Honeybee and I send the kids upstairs and snuggle up to the fire before hitting the play button.   I've also got with me my trusty bag of Hostess mini-donuts (chocolate) and a glass of milk.   The Honeybee goes the other route: A big bag of peanut M&Ms which she has decided to wash down with a Jack and Diet Coke.   I know. 7:33 PM: WTF is this?   Is that Doogie Howser doing a song-and-dance number?   Yep.   But you know what?   As I watch Neil Patrick Harris start belting out his number it is obvious that he is a capable singer.   Who knew?   I'm now suddenly intrigued. 7:34 PM: As the openly gay Harris continues his number, two beautiful show girls cozy up to either side of him, seductively pawing at his body.   A mere mortal man would easily have trouble keeping his, um, composure.   "Look at Doogie!" I tell the Honeybee, "The guy isn't even breaking a sweat."   If that were me instead of Doogie, decency laws would force the director to cut to a crowd shot. 7:35 PM: Harris continues his show tune, and is picked up by three male models that would make Brad Pitt look like a nerd.   Harris continues belting out his number as he sits on their hunky shoulders.   "I bet he's sweating now," deadpans the Honeybee. 7:40 PM: Steve Martin and Alec Baldwin just brought down the house with a hilarious monologue.   I bet they threw out 30 jokes in five minutes and maybe two of them fell flat.   The best line was Steve Martin commenting on the movie-star good-looks of young actors Zac Efron and Taylor Lautner, warning how time eventually takes its toll: "Take a good look at me guys," said Martin, "This is you in five years." 7:41 PM: Penelope Cruz comes out to give the Best Support Actor award and she looks absolutely stunning.   What was Tom Cruise thinking when he let her go?   Between Katie Holmes and Penelope, I'll take Penelope every time. 7:42 PM: Of the five guys up for best supporting actor, I'm rooting for Christopher Waltz for his awesome job as the Jew-hunting SS colonel in Inglorious Basterds. 7:43 PM: Waltz wins!   His acceptance speech is beautifully done, quick and to the point.   "We're off to a really good start!" the Honeybee says.   I have to agree.   I'm almost 15 minutes into the show and I haven't eaten a single donut yet. 7:56 PM: Teenagers Mylie Cyrus and Amanda Seyfried come out to give an award.   Unfortunately, Cyrus stumbles badly over her lines, finally apologizing to the crowd.   "As you can tell, we're both kind of nervous," she says.   We? I'm sure Seyfried, who had delivered her part flawlessly up to that point, had more than a few choice words for her "friend" back stage.   Welcome to Hollywood, kid. 7:58 PM: Wow. District 9 is a nominee for Best Picture!   I'd vote for it. 8:08 PM: "What's wrong with Molly Ringwald?" the Honeybee asks.   Giving a tribute with Matthew Broderick to the late director John Hughes, she looks like the proverbial deer caught in the headlights.   Either that, or she was trying to do her best impersonation of the eyeball scene in A Clockwork Orange. 8:10 PM: Dairies all over America are working overtime to print new milk cartons: Judd Nelson is alive!   He just walked on stage with a few other 80s brat pack members including Ally Sheedy and Anthony Michael Hall. 8:15 PM: The first injustice of the night: The great Nick Park, of Wallace and Gromit fame, fails to win best animated short film for A Matter of Loaf and Death. 8:16 PM: The Honeybee begins fast forwarding through the rest of the "film short" awards.   Meanwhile, I eat my first donut.   Mmm.   Hostess minis. 8:20 PM: Ben Stiller comes out to present the award for best makeup dressed up in the Avatar blue-face get-up of the Nav'i - complete with a fuzzy tail.     Stiller's irreverence is the perfect antidote for a crowd that tends to take itself way too seriously. 8:30 PM: Robin Williams informs the audience, "You've just seen the Governor's Award. Later this evening the Governor's ball will be held, just one of many balls being held all over Hollywood tonight."   After I was done rolling on the floor, I ask the Honeybee if she heard that, giving her a wink.   Her curt reply:   "He said Hollywood, Romeo." 8:45 PM: Almost simultaneously, the Honeybee and I can barely contain ourselves as we joyously exclaim, "Hey, look!"   Was it Jack Nicholson?   No.   Arnold Schwarzenegger?   Uh uh.   A Led Zeppelin reunion?   Nope.   It's the musical director from Dancing with the Stars, Harold Wheeler, being introduced as the Academy Awards' conductor! 8:48 PM: Pinch me.   An albino just walked up on stage to take the award for sound editing.   What are the odds of an albino winning an Academy Award?     They have to be astronomical.   It could be one hundred years or more before the Oscars ever see another sight like that again. 8:50 PM: Check that.   The same albino just claimed another Oscar - this time for sound mixing.   Good thing I'm not a betting man. 8:58 PM: Time for the traditional 15-second mention of the Oscars' ugly stepchild - the science and technical awards. "As an engineer, that really bugs me that they give no love to these guys," I complain to the Honeybee.   "Why should they?" she says as she downs the last of her Jack and Coke, "Nobody cares."   I tell her I care.   "Like I said..." she replies. 9:02 PM: Everybody knows I adore Sandra Bullock but whoever did her makeup tonight did her no favors.   That red lipstick makes her look like Bozo the Clown. 9:04 PM: Don't look now but it's Demi Moore - DEH-mi (not Deh-MI).   "Wow.   She's looking great!" says the Honeybee.   That she is.   DEH-mi is pushing 50 and she looks absolutely terrific.   Talk about cougar town - grrrrrrrrrr.     What was Bruce Willis thinking?   If I were Ashton Kutcher, I would send Bruce a thank you card every Valentine's Day. 9:08 PM: They're now playing the annual tribute to those in the Industry who passed away the year before.   "Why is Michael Jackson in the tribute? Does his Thriller video qualify him as a movie star?" the Honeybee asks.     I doubt it; she has a good point there.   Meanwhile, I'm still trying to figure out how the Academy could have left Farrah Fawcett out of the tribute.   Tragic. 9:09 PM: It's only fitting that Jennifer Lopez should immediately follow the Academy's tribute to the dead.   Come to think of it, they not only forgot Farrah, they forgot to include JLo's career in that retrospective too.   Time for another donut. 9:15 PM: Avatar just won the award for visual effects and director James Cameron looks ecstatic.   His movie has been getting trounced by The Hurt Locker, which was directed by his ex-wife Kathryn Bigelow, but now this win narrows the Oscar awards gap to 3-2 in favor of his ex.   There's still the four big awards to go, so this is anybody's contest. 9:18 PM: It had to happen.   The lone political statement of the night is made by some dude who raises a banner on stage during the acceptance speech for the best documentary award, which went to The Cove, asking us to "Text 'Dolphin' to XXXXX." 9:23 PM: Oops.   The Hurt Locker just took the award for film editing.   Kathryn Bigelow 4.   James Cameron 2. 9:33 PM: Uh oh. Somebody had a tailgater outside the theater before the show started.   Unfortunately, that somebody is an apparently very inebriated Buffalo Bill Cody, who just decided to jump on stage and accept the Best Actor award for Jeff Bridges.   Buffalo Bill is giving a rambling speech, punctuated by lots and lots of "yeah, mans." 9:34 PM: Buffalo Bill is still up there babbling.   Apparently his dad was the late Lloyd Bridges.   Who knew?   Meanwhile, we're at eight "yeah mans" and counting.   Hopefully, I have enough donuts to get through the rest of this. 9:36 PM: Cody finishes his speech and not a moment too soon.   I've got one donut left.   How many grams of fat are there in an entire bag of Hostess mini donuts? 9:45 PM: Sandra Bullock wins for Best Actress!   That's my girl.   I've always said she was a highly underrated actress - so this award is justly deserved.   In complete contrast to Buffalo Bill's acceptance speech, Sandra's is both touching and magnanimous.   She thanks all of her fellow nominees and even mentions her Razzie award for Worst Actress.   A real class act. 10:03 PM: If James Cameron wants to save face in his head-to-head Oscar battle with his ex-wife, he needs the billion-dollar grossing Avatar to take the last two awards, including the Best Director award. 10:04 PM:   This can't be good for Cameron: Barbra Streisand is presenting the award for Best Director.   Babs asks the crowd if it's finally time a woman won the award for best director.   Everybody knows what she thinks and, I gotta tell you, for Cameron it's now a lose-lose situation.   Even if he wins the award over ex-wife Kathryn Bigelow, I would half-expect Babs to hit him over the head with his statuette. 10:05 PM: Lucky for Cameron he doesn't have to find out.   Babs is smiling.   Bigelow just beat her ex out for the Best Director honor.     Bigelow 5, Cameron 2. 10:06 PM: The Hurt Locker finishes its evisceration of the mighty Avatar, winning the Best Picture award and taking its sixth Oscar of the night.   Avatar may be the biggest grossing movie of all-time (well, actually that depends on how you keep score), but in terms of Oscar hardware, it can't hold a candle to a lot of other films. 10:08 PM: It's finally over.   But even without commercials, the Academy Awards was still a marathon event.   In fact, Steve Martin just walked on stage and closed the festivities by saying the show had run so long that Avatar "now takes place in the past." 10:10 PM: While it looks like the Honeybee has squashed my plans for any after-parties tonight, it's not all bad.   I've still got one donut left. ...

Continue reading Dear Diary: A Night at the Oscars with Me and the Honeybee

The Honeybee and I are extremely compatible in almost every way, right on down to when it comes to our philosophy on money and how we handle the household finances. I understand though that, for upwards of 80 percent of couples, money can be a real source of strife in a relationship. When it comes to money decisions, I think the biggest knock-down drag-out battle the Honeybee and I have had was whether or not to bundle cable and internet services with one provider or go a separate route with individual providers. Not very juicy, I know. Like I said, we really do see eye to eye on most everything. Now we have had a lot of dumb arguments.     Just not about money. We've actually had knock-down drag out fights over whether we were going to go out to eat at a Mexican or Italian restaurant before. I've slept on the couch because I refused to back down on the color of a bedroom wall.   Well, I refused until I got tired of sleeping on the couch. We've also been known to have a shouting match or two  over whether a picture has been hung  in a level fashion (and whether or not anybody other than the Honeybee  or the  International Committee for Weights and Measures  would ever  care that it  was off kilter by six-thousandths of a micro-arc-second). Good times. Which brings me to my first giveaway ever! I happen to have two copies of Get Financially Naked: How to Talk Money with Your Honey that I want to give away for Valentine's Day. It is an absolutely terrific book  that co-authors Manisha Thakor and Sharon Kedar have put together that  is designed  to help reduce tension in your relationship by teaching you and your significant other how to communicate about money.    It is easy to read and very entertaining too. If you are interested, you can check out  my complete review of this book here. Here's  all you have to do to win one of them.   Leave a comment telling me about either: 1. The biggest money argument you ever had with your spouse, boyfriend, girlfriend,  significant other, or even your mom or dad.     - OR - 2.  The dumbest argument you ever had about anything with your spouse, boyfriend, girlfriend,  significant other, or even your mom or dad. That's it! The contest will run until 11:59 pm on Tuesday, February 9, Pacific Daylight Time.   At that time, the contest will be closed. I'll pick two valid entries from all the comments received by a random number generator.     Make sure you include a valid e-mail address, so I can contact you if you win. Your odds of winning are simply based upon the number of  comments received - and based upon my readership numbers, that means your odds are going to be pretty darn good! Good luck! ...

Continue reading Valentine’s Day Giveaway: What’s the Biggest Money Argument You’ve Ever Had?

Our "household Constitution" requires the Honeybee, who is the family's household CFO, to deliver the family financial report every January to yours truly, the household CEO. For years, the Honeybee has painstakingly tracked and recorded our finances using a Microsoft Excel spreadsheet.   Last week she completed updating that spreadsheet for 2009. Having reviewed the latest numbers I am pleased to report that the state of the Penzo household is currently very good. This report is divided into three sections: 1. Net worth estimate as of December 31, 2009 2. Long term financial performance since 1999 3. 2009 Financial Performance The Big Picture As of 31 December 2009 the household net worth was just a notch under $700,000.   This represents a net increase of five percent from 2008. Overall, assets increased four percent while liabilities increased one percent. On the liabilities side, other than the mortgage, we have no loans, credit card debt or any other obligations.   That, ladies and gentlemen, is called financial freedom! The mortgage balance increased by one percent last year because I made two tactical decisions: 1)   refinance my 15-year fixed-rate mortgage to a 30-year fixed-rate mortgage, paying a little extra up front in order to lower the payments even further to help cushion the financial impact of a potential job layoff; and 2) Taking the money we have been allocating for over a decade towards extra mortgage principal payments and temporarily holding it in a separate savings account.   Back in June 2009 I explained my reasons for temporarily holding back the extra principal in this article. With respect to assets, I estimated our household personal property, which includes things like our two cars,   furnishings, jewelry, and collections. In January 2009 the house was officially appraised at $440,000; my local real estate blog noted that home prices in my community were essentially stagnant from the period from December 2008 to December 2009. Cash holdings decreased largely in part due to a drop in the value of some stock options I am currently holding. I track both our total net worth as well as net worth minus home equity.   I do this as a simple reminder to myself that our house is not to be considered a piggy bank that can be tapped whenever we have an urge to scratch an itch.   By this latter measuring stick, the household net worth is a much more modest $375,000 - although that represents an increase of 13 percent over the past year. Long Term Financial Performance 1999-2009 This long-term data reveals trends applicable to typical households with a genuine commitment to living within their means.   These long-term data allow us to glean additional insights regarding the advantages and benefits of sticking to a disciplined budget that just can't be seen over shorter periods of time. Keep in mind that, because the Honeybee is a hard-working but unpaid stay-at-home mom, our household has relied on only one income since our first child was born in 1997. For those of you in your twenties and thirties, not to mention those who may be questioning whether early scrimping and saving is really worth all the hassle, just take at look at the next chart.   It is a graphical representation of the Penzo family household expenditures between 1999 and 2009 as a percentage of my total take-home income, which excludes withheld taxes, paycheck deductions for health and other benefits, and contributions to my 401(k) plan. Let's analyze some key areas of this graph. Loans Worst Performance:   48.2% (!) of take-home pay   (1999) Best Performance:   8.9%   (2009) Current Impact: 8.9% Now, when looking at this summary chart of the household expenses over the past 11 years, the most glaring item is the red line on the chart.   This is the percentage of my take-home income dedicated to loans and, as you can see, in 1999 it was literally off the chart!   For the record, in 1999 exactly 48.2% of my take-home pay went to cover a car loan and the mortgage on my house. My original goal was to get this number down to 38%.   My assumption for this was the generally accepted 28% maximum for the home loan and an additional 10% for auto loans.   I realize conventional wisdom says the percentage of take home pay devoted to the car loan can be as much as 20%, but I prefer not to devote that much money to an auto. Generally, high debt-to-income ratios are usually the biggest hardship for those who are just starting out. The good news, however, is that over time those who hate to pay interest and choose to live within their means should expect to see less of their take-home income consumed by loans.   As the graph shows, this is clearly illustrated in my particular case. Look at how that red line plummets over time!   Each time that red line drops the choking vice-like grip of your debt eases until, before you know it, you no longer even notice it! For me, the first significant drop in loan expenses occurred in 2000 when we paid off our first car loan.     We bought another car in 2002 but the loan on that car was retired in 2005, resulting in the second significant drop in loan expenses. Key Takeaway: When you no longer are committed to servicing loan debt you suddenly find yourself with more money available to put towards... Savings Worst Performance: 1.9% (1999) Best Performance:   20.4%     (2006) Current Impact:   14.0% Next, we'll focus on the lime green line that represents my contributions to savings.   Keep in mind this is only cash savings extracted from my take home pay.   It excludes my contributions, for example, to my 401(k) retirement plan that are automatically deducted from my paycheck. Notice the impact that the loans had on our savings (not to mention all of the other expenses) in 1999.   That year we were only able to sock away a pitiful 1.9% into the emergency fund.   The irony, of course, is this is the very time when we were most vulnerable to defaulting on those pesky high loans that were eating up most of my take-home pay! As time passed, however, we were able to begin building a significant savings cushion. Key Takeaway: For those who can minimize their debt load, the ability to save increases over time. Utilities Worst Performance: 7.0% (1999) Best Performance:   5.5%     (2000, 2001, 2006) Current Impact:   6.9% Over time, our utility bills have thankfully managed to keep pace with my increasing take-home pay.   In 2009 equivalent dollar terms, our utility bills have increased over 30% over the period from 1999-2009.   I attribute a big part of that to the growing size of our household. In equivalent-dollar terms over the past decade, here is a breakdown of how much our utility bills have increased: Electricity: 4% increase Natural Gas:   4% decrease Telephone/Cellular:   54% increase Sewer/Water/Trash:   10% decrease Cable/Satellite:   175% increase (!) Key Takeaway: Technology costs money.   If you aren't careful, telephone and cable/satellite television bills can outpace the rate of inflation - and increases in your paycheck. Property Taxes Biggest Impact: 6.7% (1999) Current Impact:   4.4% I am extremely fortunate that our property taxes, represented by the white line on the graph, continue to drop as a percentage of take home pay thanks to California's Proposition 13.   I expect this number to continue to drop over the long run.   Before Proposition 13, property taxes were capable of doubling every couple of years, and putting significant numbers of people at risk of losing their homes to their inability to pay the outrageous taxes.   Hopefully, you live somewhere that has similar restrictions on property tax increases. Key Takeaway: Count your lucky stars if you live in a place with property tax restrictions. Groceries Worst Performance: 10.1% (2009) Best Performance:   6.9%     (1999) Current Impact:   10.1% The trend is gradual but unmistakable.   The brown line that represents our household grocery bill is slowly increasing.   Since 1999 it has more than doubled in real dollars and I expect it will probably nearly double again over the next 10 years as our 12-year-old son, Matthew-the-Bottomless-Pit, begins to enter his teen years.     Luckily my income has managed to keep up with the increase in the grocery bill over the last ten years, but I expect the slope depicted on the graph will begin to steepen just a bit over the next ten years or so. Key Takeaway: Paybacks are a bitch.   I know I cost my mom and dad a fortune in groceries when I was a teenager and soon Matthew-the-Bottomless-Pit (God love him!) will be doing the same to me. Bonus Tip: Yes our grocery bill is large, but did you know our food bill would be as much as 20 times higher if my family of four ate most every meal at a restaurant?     You can see the complete analysis here. House Expenses Worst Performance: 19.2% (2006) Best Performance:   1.6%     (2001) Current Impact:   16.5% This category includes everything we spend to improve the house, from this year's block wall, to our new energy efficient front doors.   From plumbing repairs to paint and home owners insurance.   We also include the exterminator visits, lawn care, remodeling expenses, and even the cost of the furniture and wall clocks.   As the house is getting older, a bigger percentage of the money is going toward maintenance and less is going to the other stuff. Key Takeaway: The cost of owning a home is expensive and goes way beyond the mortgage. As I mentioned in last year's report, the long-term graph clearly shows that for younger households that are just starting out, say with a new house and car, by the time the everyday expenses are taken care of, there is very little left to devote to discretionary income.   The lesson here hasn't changed: Serious household CEOs have to be extremely vigilant in ensuring that budgets are adhered to because the money here can be so tight that the temptation to pull out that credit card and run up a few charges that you can't cover at the end of the month will be great. Needless to say, the Honeybee and I really sacrificed in the first couple of years.   In fact, for the first couple of years, as you can see from the graph we did not even track entertainment as a separate expense because we spent so little on it.     At that time, our entertainment was basically tracked by our ATM withdrawals. But the same graph should inspire you, for it clearly proves that disciplined households that are committed to achieving financial freedom will begin to reap the fruits of their hard work in a relatively short amount of time. 2009 Financial Performance Finally, here is an illustrative breakdown of my “outflow”, or expenses, for the year in the form of a pie chart.     The money that makes up the pie chart comes entirely from my take-home pay, which excludes withheld taxes, paycheck deductions for health and other benefits such as additional life insurance, and contributions to my 401(k) plan. So, in essence, this represents how we chose to allocate our take-home pay for the year. As you can see, the chart is broken up into various categories.   Essentially, by looking at it you can see that three percent of my take home in 2009 went toward medical and dental expenses, while fully ten percent went to groceries. The chart to the right shows the changes in where the household income was allocated from the previous year. On the positive side, I am happy to see that, thanks to the home refinance we did last January, the household had seven percent more take-home income to allocate to other areas in 2009.   In fact, our only liability is the mortgage and it takes up a measly nine percent of my take home pay. The mortgage is low enough now that even if I did get laid off from my high-paying engineering position, we would be able to make our payments for probably years (barring a catastrophic health event or natural disaster) even if I was unable to ever find a similar job. The entertainment expenses were lower because last year we didn't go on a major family vacation, unlike in 2008 when we went to Maui for ten days. Thanks to the lower mortgage bill in 2009, we had more money to devote to our savings. On the down side, we spent more money last year on maintenance for our aging (but paid for!) automobiles, and our house which is now 12 years old and getting to that stage where things are starting to need replacing.     The biggest expense last year was our decision to spend almost $7000 to replace our dilapidated wood fence with a brand new block wall. Well, that's it for this year's report. In Conclusion... I can't impress upon you enough the power that keeping track of your finances gives you.   Another benefit of keeping detailed records like this is it instills an immediate sense of purpose toward improving your financial situation.   It also allows you to set goals. If you aren't already doing so, I hope this report encourages you to take control of your own finances. ...

Continue reading My 2009 State of the Household Financial Report