The Wonderful World of eReaders

For my birthday a few months ago, Alpaca bought me an Amazon Kindle. I guess it was not difficult for her to find out that I wanted one - it was listed in my Amazon wishlist... Being the gadget lover that I am, I have been playing with my new toy quite a bit since I got it, and here are my thoughts on the subject:

Bad Financial Decision - if you are thinking of getting an eReader because you think that this will somehow save you money, think again. Alpaca bought this device for me for $269, before Amazon reduced the price to $189. Kindle books cost a dollar or two less than a paper book, so at that price you'll have to read about 100 books before you get to the break even point. I read about 10 to 15 books a year, which means that it would take me about 7 years to re-coup Alpaca's investment in the machine. If cost savings is the goal, buying a Kindle is probably not the best move.

There are a few exceptions to this rule. I am currently on a family vacation in Israel, and before getting on my flight on the way over I bought a copy of the latest issue of the economist. The news stand price is $7 and I picked up an electronic copy - on the spot - for $5 (and, of course, no taxes). If I do that every time I fly, the savings could potentially add up.

Another important area of savings are best sellers. Amazon sells kindle editions of NY Times best sellers for $9.99. If the average book costs $15 and you read a lot of best sellers, you could probably make up your initial investment pretty quickly.

Free Samples - with the kindle you can download the first chapter of pretty much any book you want, for free. I no longer decide to buy books by reading the back cover or just on the strength of reviews or recommendations from friends. I read the first 20 or 30 pages, in the comfort of my living room, and then I decide whether the book is worth spending my hard earned money or not. Speaking of which...

The Convenience is Amazing - people rave about how awesome it is not to have to carry a lot of books around. I find that pretty amusing myself, since I rarely carry more than one book with me and I am guessing most people fall into that same category. On the other hand, the ability to buy books ON THE SPOT is incredible. The other night I was reading a book review in a magazine after 1 am at night. The book seemed really interesting. 60 seconds later I had a free sample of it on my kindle. When I was done reading the sample, I had the full book on my machine less than a minute later.

No more waiting for boxes to arrive via USPS, no more paying for shipping. Presto. Book available.

Love the Dictionary - what does "eponymous" mean? Darned if I know. With a regular book I would vow to look up the word later. Of course, I would never actually get around to doing that. Not with Kindle. I move my cursor to the word and a definition just pops up: "giving their name to something". Ahhh, now that sentence makes sense.

I Never Worry About Battery Life - unlike a computer (such as the iPad), the Kindle doesn't use a typical screen, it uses something called eInk. Essentially the Kindle only draws power when you turn the page. Once the page is presented, it just stays there without consuming electricity. This means that I typically only have to charge my kindle every 2 to 3 weeks (assuming I turn off the wireless connection when not in use). It means I can go on vacation, and never worry about chargers or access to electricity.

But, Not All is Well in the Kingdom of Kindle - just so that you don't think I am completely in love with this machine, it's not perfect. It still has many flaws and little annoyances. For one thing, the screen is only grey-scale. No color for the kindle. This is not an issue for most books, but for magazines, where pictures are part of the fun, this is not such a great thing.

Another annoyance is the ability to sort and file your old books and magazines. Magazines are simply not filable and they just linger on your home page. Clutter, clutter galore. Books can be sorted into different folders, but the process is very cumbersome.

You like lending your books? Well, you're out of luck. The books you buy are stuck on your machine. Your friends have to buy their own. From my perspective, this is not such a horrible thing given that many of the books I lend to friends never find their way back home.

Perhaps the biggest problem of all is that Kindle is a closed system. You can only buy Kindle books from Amazon. You can get plenty of free books from other sources, but if it's a paid book you are after, only Amazon can sell you one. I think that this is patently unfair. It's like only being able to buy movies from Sony on your Sony television, or only being able to buy applications for your iPhone from Apple... oh, wait a second... I am tired of every technology company intentionally crippling their products to lock me in and get more of my money.

There are many other small and large issues and annoyances, but all in all, the Kindle is a really cool device. I am sure that in a few years, when I get a newer, better version of the machine I will be amazed at the primitiveness of this one, but for now, I really like my Kindle.

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Car Dealers Suck - Part II

Last week I wrote the first part of this article, in which I described how I got a crooked car dealer on tape explaining how he likes to bait and switch his customers (I was also stupid enough to erase that tape rather than send it to the local TV station as one of my readers suggested). Today, I'll share another installment in the series.

Last Monday, at 4PM in the afternoon, I get a voicemail from an agent named Ron at Steven's Creek Hyundai. Saying something like "I got great news for you. We have found the car you want." I call back, and sure enough, Ron goes on and on about how he's finally found the car I have been asking about. Only problem is that it's in LA, but he's willing to ship it over - for a shipping charge of about $400. Awesome. Finally, I'll get my new car. I ask for a quote and he says, not to worry, he's already emailed me a quote. I tell him I will check my email and call him back later that evening.

In my email I find the quote, which includes the following excerpt (actual font sizes & highlights):

"Please note: The following price is good for the next 2 days.

Here is your Internet Pricing on the:2011 Hyundai Sonata SE with carpeted floor mats, cargo net, cargo mat, ipod cable, auto-dimming rear mirror.

MSRP: $23,845

Your Internet Price is: $20,597*.

...

!!This is an Internet Special Price only, You MUST Bring this Ad to qualify for this Internet Special Offer!!"

OK. Something is suspicious here. How can it be that the quoted price is so much lower than the invoice price? I send Ron an email reply which includes the following language:

"Thank you for the quote. 

Can you please clarify what other charges will be added to this quote?

Since I am paying cash (via BoA cashier's check) what would be the amount that I would need the check to be for?"

He doesn't respond to the email, so I call him. Over the phone he insists that it's all legit. This is the price, he says. There are no other charges, he assures me. I am still suspicious, but I decide to check it out. We agree that I would come to meet him onsite the next morning.

The next day, I print the quote, and I print the list of government taxes and fees (doubly so, after my previous dealer incident), and I take a break in the middle of my work day to drive to the dealership.

Ron greets me with a wide and friendly smile, asks me to take a seat, and says that he's going to print out the details and will be right back. He disappears for 20 minutes, which I spend doing my email and getting progressively annoyed. When he shows up, he has 3 pieces of paper in his hand. The first he shows me is a list of 5 cars he's located in California - this, he maintains, are all the cars in the state that fit my specifications. OK. Next, he shows me a poorly printed page with the vehicle specs. All seems to be in order. "Wonderful," I say, "how do we move this forward?"

"Let's talk about the price," he says and reveals the third piece of paper. The third sheet is a white piece of paper with three hand-written lines.

Ron points to the first line and says:
"Are you a member of the US military?"
I say, "Ron, you know I'm not. We spoke at length over the phone. You know I am a business executive."
Ron, with a note of triumph in his voice, says:
"well, you are not getting THAT rebate".
He crosses off the line that says: "Military Rebate - $500".

He points to the second line and says:
"Are you a college graduate?"
"Absolutely", say I with a grim smile.
"Ahh," says he, "but did you graduate in the last 24 months?"
"No", I admit.
A triumphant grin returns to Ron's face, and he crosses off the second line on the page, which says "College Graduate Rebate - $500".

Then he point to the third and final line. "Do you own a Hyundai?"
"No. I drive the crappy, old Geo Prizm that is parked on the street right there"
The third line disappears. When it was still there it said "Hyundai Loyalty Rebate - $400".

"Let me get this straight," I say, "you are expecting me to pay $1,400 more than the price you quote me in writing yesterday? Even though I asked you in email and you confirmed to me over the phone that this was the actual price you were asking for?"

Genius Ron looks at me with an innocent and injured face and fires off a volley of explanations in quick succession: "You have to understand, those rebates are not my money, I can't give them to you" and "how could I know that you are not a military man?" and so forth.

But I have no patience left. I cut him off at the pass, and I basically lose it. I say something like "Why the F*** are you wasting my time, Ron? I spoke to you over the phone at length. I asked you if there were any other charges. I asked you repeatedly if there is anything else I should know about your quote. You chose to drag me down here knowing full well that you had no intention of honoring the quote you gave me."

I then left, never to return.

I am still searching for a single, honorable car dealer, who will negotiate with me in good faith and honor his commitments. That dealer will get my money and will get a loyal customer who will gladly tell the world that honest dealers are not yet extinct. Sadly, so far, an honorable dealer appears to be an unfounded urban myth.

Don't shop at Steven's Creek Hyundai. They're just dishonest idiots who will waste your time and money.

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Car Dealers Suck - Part I

I am in the process of trying to replace my 1997 Geo Prizm. Much has been written in this blog about the adventures of my wreck of a car, but it's time to move on. I have done my research and decided to buy a new  Hyundai Sonata 2011. For the past 3 months I have been trying to put this decision into practice, but to no avail. I have been doing my shopping and price comparisons primarily online, but that did not help me to avoid the antics, stupidity and plain ugly practices of Hyundai car dealers of Northern California. Below is the first of two posts on the topic.

My first incident happened about 3 months ago, and involved a quote I received from a Bay Area dealer. It looked good on paper and after comparing prices I was ready to do the deal. When the time came to close, the dealer tried to get me to pay significantly more than the price he quoted me by pretending taxes, registration and fees were higher than they were in reality. I'm not that stupid, I came prepared. I brought with me a complete list of all government taxes and fees, which I got from the California DMV website. When I confronted the dealer, he "explained" that the car he was selling me had more features and options than the one I wanted to buy and which he originally quoted to me in writing. I left, but that wasn't the end of it.

A couple of days after I walked out, one of the workers at the dealership left a voicemail on my cell phone, asking me to call back to do the deal. Thinking he hung up on the call, he continued talking to his boss, while my voicemail was still recording. In the recording the two are clearly heard discussing how it's a great strategy to give a low quote in email correspondence, only to change it later on. They called it "a hook".

Needless to say, I never called the idiots back. Incidentally, the name of that dealership is Magnussen's Hyundai, and it is located in Fremont California. I would strongly advise my readers to avoid those would be con-artists.

Now, if you can believe it, today I had an even more outrageous incident at Steven's Creek Hyundai. I would advise you right now to stay the hell away from those dishonest peddlers, but I'll tell you the details in part 2 of the story. Stay tuned.

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No "Means Testing" for Social Security

The social security system is broken. Pretty much everyone agrees on that much. In fact, even the Social Security Administration is upfront about its current fiscal prospects. From my own social security statement from earlier this year:

"Social Security is a compact between generations. Since 1935, America has kept the promise of security for its workers and their families. Now, however, the Social Security system is facing serious financial problems, and action is needed soon to make sure the system will be sound when today's younger workers are ready for retirement.

In 2016 we will begin paying more in benefits than we collect in taxes. Without changes, by 2037 the Social Security Trust Fund will be exhausted and there will be enough money to pay only about 76 cents for each dollar of scheduled benefits...."

Well there you have it. There's simply not enough money in the bank to pay for all the obligations. A solution must be found, and whatever proposal goes on the table is likely to raise serious objections from those whose financial interests will be harmed by the proposed solution.

Clearly, sacrifices need to be made, and a number of sound options have been put on the table, including raising the retirement age, indexing benefits to inflation rather than to salary increases and so forth. However, there has been one proposed solution that is really upsetting to me - the idea that Social Security benefits should be means tested.

My wife and I consistently pay the maximum annual amount in Social Security taxes - currently 6.2% of our salary, each. We make a decent living, and I am not going to apologize for it. It is already pretty clear that we can expect to receive far less in benefits than we pay out in taxes, and you know what, I am OK with that. I make more money, I will pay my fair share. This is part of the social contract - we should take care of those less fortunate in our society. However, I think that it is completely unfair to charge us hundreds of thousands of dollars over our working lives, claiming that this money will be used to guarantee us regular income in retirement, only to later take the money and run.

Alpaca and I work hard. We take take sizable chunks of our paychecks and save them - setting money aside for a rainy day and ultimately to give us the lifestyle that we want in retirement. And, yes, we also want to leave something to our kids when we are gone. The money which we save will become income generating assets. Under the means testing proposal, our hard work and propensity to save could be used to revoke or reduce our right for Social Security income. Income which we rightfully earned and paid for with our hard-earned, maxed-out taxes. We don't have to save. We could take the money and just spend it, but that would be irresponsible, wouldn't it?

Means testing is a pernicious approach that penalizes the saver compared to the spender. If instead of saving our money today we spent it all, leaving nothing for retirement, we would have no "means" that could be used as justification to reduce or eliminate our Social Security income. This policy would perversely encourage people to spend rather than save their extra income. Great for the economy today, horrible for our economic prospects as a nation.

I am willing to work a few more years before I am entitled to receive Social Security payments. I also think it's justifiable to index Social Security to inflation rather than to salary increases. I think that taking away our hard earned Social Security benefits for which we are paying over a lifetime of hard work is nothing short of robbery.

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Whale Watching in Monterey...

Spent the day whale watching in Monterey.

Not cheap, but we certainly got our money's worth. We saw at least 20 Humback and Blue whales.

Ended the day with some cotton candy and salt-water taffy. A good time was had by all.

California rocks...


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