Merry Christmas everyone!

Speaking of Christmas, I find it funny that one of the most popular icons of Christmas is Santa Claus. I always knew that the jolly fat man riding with reindeers and elves is not real since he did not exist in China when I was growing up. When I moved to America I was still a child, but I was old enough to know that any presents I received were given by my parents. I really thought that American kids are really gullible to believe that a rotund man would come down their chimneys like a cat burglar and drop glitzy packages of presents. Yet year after year the lie is perpetuated and millions of children are disappointed when they find out the truth. So today, I’d like to salute those who really make the grand operation known as Christmas joyous and possible.

First I’d like to thank all of the dedicated United States Postal workers and the employees of other package delivery operations such as UPS, FedEx, and DHL for working overtime and getting billions of packages delivered this holiday season. One of my friends is a supervisor at UPS and he has been leaving his pregnant wife home to go to work everyday at midnight. During the holiday season the volume of deliveries grow so much that these real people have to work more to bring you that new sweater or digital camera. If you know one of these hardworking men and women go ahead and thank them this holiday! My parents usually give something for the mail lady during Christmas and I think it’s a well deserved gift.

Next I’d like to thank all of the operations departments of retailers such as Amazon, or Walmart. These big retailers have amazing operations facilities that serves so many transactions during the holidays in order to bring holiday cheer. I remember that one of my classmates used to work at Amazon and she said that during Christmas their project was titled “Project Saving Christmas”. Basically they ensured that everything was shipped out on time.

Now you may say, stop right there Baglady! You’re cheering for consumerism and spending! Well, actually I am saluting the people that make giving presents possible and these unsung heroes are the closest thing to real Santa Clauses. It is unfortunate that Christmas has become such a commercial holiday, but I do believe that Christmas is a celebration of Christ’s birth and giving presents during Christmas is a symbol of the gift of life Christ has given us. There is nothing wrong with making someone happy by giving them a gift! So finally, I would like to thank God, for letting me be on this earth this Christmas with my friends and family, and ultimately God is the one that makes everyone’s Christmas possible.

Have a safe and wonderful day today everyone!

Today I received an excellent email from a reader of mine and I have permission from him to post his email here. I thought the information is excellent for first time buyers who are interested in condos. It’s funny but my parents were just telling me this weekend that they met a taxi driver who bought a condo in San Mateo and was assessed one of these secret fees for $20,000 or $40,000. San Mateo’s condo fees seem to be extremely expensive and basically I really wouldn’t want to buy a condo here. The reader also attached a picture of the Colina Condos at 1 Appian Way. That address has been on the list in the past and it seems that more will flood the market.

Hi Baglady,

I just want to stress the importance of looking carefully into the signing documents when purchasing real estate, especially condos. Often, sellers may try to slide in information about “special assessment fees” hoping the buyer won’t notice. “Special Assessment Fees” are levied by the HOA for repairs that affect the whole complex that the standard monthly HOA fee can’t cover, usually as a result of shoddy construction, bad planning, or mismanagement. The HOA or property management company usually informs owners about these assessment fees a year or so in advance and sometimes set up an installment payment plan, as some of these fees are outrageously large. These assessment fees are a bad sign, as they often indicate possible future problems and therefore, more future fees. And unfortunately, you can’t deduct it off your taxes like a mortgage. It is an out-of-pocket expense. And unfortunately for some condo-owners, they are already financially stretched to the point where they can’t afford this surprise fee, thus forcing them to sell early before the fee hits them, hoping some other poor sucker buyer was
equally as negligent as they were and gloss over the signing documents in haste.

Here’s an example I saw earlier this year. The condos at Pointe Pacific at the top of San Bruno Mountain in Daly City had an assessment fee levied because the location of the condos was a poor decision. Pointe Pacific is on the side of the mountain, battered by rain and wind moreso than another condo complex no more than a block away. This
results in the buildings at Pointe Pacific requiring more repairs. The special assessment fee: approximately $15,000 per household. Even worse, this was not the first time its happened. Just about 5-7 years ago, the HOA levied a similar fee. So you can probably bet there will be another fee in another few years, after the current fee.

Its even worse when the HOA neglects the repairs as they snowball into a huge financial disaster in the long run. Probably the worst example of “Special Assessment Fees” gone awry is the one CURRENTLY HAPPENING at Colina Condos on 1 Appian Way (cross street Gellert) in South San Francisco. I know several people who have bought condos there. Apparently, the condos were poorly built as the original builder went bankrupt halfway through the construction process. The whole complex requires approximately $13.5 million to repair the run-down buildings. The HOA meetings are shouting matches and whole HOA board has quit in horrified disgust. The property management company has abandoned the complex. The only hope left is for the city of SSF to take over and help solve the process, something many of the homeowners are hotly debating. The ship is sailing in the dark with nobody at the helm, so to speak.

The average estimated cost per household for Colina Condos: $70,000. Yes, you heard right. buying generic viagra online cheapout-of-pocket repair costs for condos going for about $400k on the market.

Even worse, you may need to temporarily move when they finally do get the repairs going (and possibly spend even more money on renting a temporary place), as the condos have some deep structural integrity problems. (Some people have water-logged walls, others have collapsed bathrooms.) So, as you can imagine, many new condo owners with no equity can’t afford it and may need to sell. This will probably result in a bunch of impatient, panicked sellers putting those condos on the market all at once, driving value down further. They are hoping for a miracle of miracles: that someone else will be dumb enough to buy their lemon condo and lift the load off their shoulders.

Lessons to be learned: 1. Read all the signing documents carefully. 2. Don’t buy crappy condos. It is of such importance, I hope you publish this email on your main webpage.

For the past few days my colleague’s sister has been missing. Her family tried very hard to find her and tonight I heard that a suspect has been arrested for her murder . Her body has not been found so perhaps there is a chance she is still out there, but the police has told her family that they believe the personal trainer in custody did murder her. I am just in a state of disbelief because this is just so senseless and even though I don’t know the victim I know her sister and how close their family is. All her siblings have taken time off from work in this search effort and I hate to see a tragic ending to this. We were all hoping that her sister just took a little vacation, but now that doesn’t seem to be the case.

This is a bizarre feeling I am having now because I just think of how many times I have read stories about murders in the paper and didn’t think too much about them. I guess it never affects you that much when the story doesn’t relate to you personally. It’s so weird to realize that all of these stories are real and it’s so horrifying to think that something like this could happen to anyone.

Anyway, I am still hoping that my colleague’s sister is still alive and there will be a happy Christmas reunion. I am still in shock because no one expected that anyone would want to cause harm to this woman. It’s also frightening to think that perhaps someone you know would want to kill you someday. Perhaps I sound sheltered by saying this because some people live in areas where violent crime is almost a way of life, but maybe that is why I am extremely affected by this event.

On the other side of the coin I find the Nguyen family’s bond and love to be amazing and encouraging. Her brothers investigated and found the abandoned car and the suspect for the police! A lot of people in this world go missing and no one even cares to look. I know my family would probably look for me and I am extremely blessed to have people who love me. I firmly believe that in the end good will always win over evil, because God is good.

I don’t know what more to say except to cherish those you love this holiday season, and the next, and for as long as your have them, because you never know what darkness could come and take them away.

Albert Einstein once said that “the hardest thing to understand in the world is income taxes”. I definitely agree with him and I think everyone’s lives would be a lot easier without income taxes. Recently I came upon something called . It is a bill in Congress with a good amount of supporters and its goal is to establish a national consumption tax of 23% and eliminate all income taxes. I went to and read about the bill in detail. I must say that it is an intriguing and revolutionary bill, but is it really a fair tax?

The main point of the FairTax is that rich people spend more money so they will be taxed more. Since it is a tax on consumption instead of of income it encourages saving and investment. There is also a set level of expenditures that are not taxed. For a couple in the continental United States the limit is around $20,000. I do find this attractive because it should encourage people to spend less so that they can keep more. However, I can see how this can backfire and people will spend more than before because their paychecks will look much bigger and they will feel rich. If everyone’s social security and federal taxes were suddenly gone, many people will find their paychecks to be 20 to 30% bigger. That’s a huge increase on paper and psychologically it will induce more spending.

I am also skeptic about this tax because I still think that the rich will benefit more from the plan. There is a basic cost of living for survival no matter where you live. Suppose that amount is $30,000 a year for a couple somewhere in the United States. So they’re not taxed on the first $20,000 they spend and on the next $10000 they need to pay $3000 under the FairTax (The tax is $3000 on $10000 because $3000 is 23% of 13000). Suppose one couple in this area makes $35,000 a year and another couple makes $70,000 a year and they both spend the minimum they need to survive. The couple that makes $35,000 saves $2,000 because they spent $30,000 and paid $3,000 in taxes. The couple that makes $70,000 saves 37,000 instead, and pays the same $3,000 in taxes. The effective tax rate on the poorer couple is 8.6% while the effective tax rate on the richer couple is 4.3%. Is this fair? I think it’s debatable, but under the regular tax system the poorer couple probably could have qualified for a lot more tax cuts. Though, since these couples can’t escape the 7.65% payroll taxes on Social Security and Medicare, even the 8.6% tax rate isn’t too bad. No matter how we cut it, those who have more money will benefit more because they can live on a smaller portion of their income. The FairTax counts on the fact that richer people spend more money, but I don’t think that’s always true.  If you look at Warren Buffet, from all available reports it really seems that he doesn’t spend that much on himself every year, but his investment income is enormous.  If the FairTax were implemented, a gargantuan chunk of tax revenue that could have been collected from frugal billionaires like Warren would be gone.  It’s great for Warren, but is it really feasible for the United States government?

Another thing I don’t consider fair about this tax system is the minimum poverty rate. They really can’t say that $20,000 is the poverty rate throughout the whole country. In expensive counties like San Mateo and San Francisco a couple usually needs more than $20,000 a year just for the necessities. The average rent for a 1 bedroom is around $1000 to $1500 in these counties. If they really wanted to be fair they would adjust the poverty rate for each region. It shouldn’t be so hard because they already have a cost of living system in place for the military where soldiers get different in different parts of the country and world. The same system could be used to adjust the minimum poverty rate in each region.

This tax is also a huge boon to the bottom lines of corporations because the high corporate taxes are eliminated. The FairTax proponents argue that this is a stimulant to the economy because corporations would be able to hire more people and produce more with the income they have. Also, they argue that prices will come down because corporations will no longer have to pay their employees’ social security and medicare taxes so corporations can create cheaper products. Most of this sounds good, but I imagine it would be harder for small businesses to start because there will probably be legal barriers. Also, big corporations probably will not lower their prices just because their costs are lower. The whole point of capitalism is to make as much money as possible. If a consumer is willing to pay $100 for something, a corporation would not mark it down to $50 just because their manufacturing process suddenly became more efficient and they can produce twice as much. A smart corporation would continue to charge $100.

Anyway, this is an issue to watch for in the 2008 elections. FairTax.org has a list of presidential candidates who have stated in public Personally, I am wary of this proposal and I agree with what Giuliani and McCain said. This is a new system that will take a lot of effort to implement and get used to. It also needs to be fleshed out further and looked at more carefully by more people. I doubt that it will be passed in the near future because there is just too much logistics involved. I am glad that people want to change America’s crazily convoluted tax system, but I am afraid that there is really no system that can be simple and equitable to everyone. I think the FairTax is definitely an interesting idea, but it probably won’t get enough support to be passed into law in the state it is in now. Additionally, all 50 state governments will have to agree to it and implement it, and that may be more difficult than just getting it passed in the Congress.

On Friday I performed an interview for my team at work. My job was to take the candidate to lunch and answer questions the candidate might have and attempt to assess his intelligence and “fit” for our team. This is one of those very rare interviews that actually turned out well and everyone who interviewed the guy liked him and we decided to hire him.

However, I feel like he may not join us because he is actually currently living in Austin, Texas. He said that he went to a nearby open house in Foster City and was shocked to find that a tiny townhouse less than half the size of his home in Texas is listed for $900,000. He used to live in Sacramento many years ago but the cost of living there is nowhere near the craziness of San Mateo. Then we chatted about the Bay Area in general and I said that I actually did some research on Texas and found that I could afford a 40% pay cut and still afford a better standard of living. He agreed with me, and I asked him if he would consider relocating and he said he would probably prefer telecommuting. However, after he finished his 8 hour grueling interview my team lead did mention that he would like all core members to be close to the headquarter and telecommuting from Texas is probably a deal breaker.

I imagine this is happening all over the Silicon Valley. There are a lot of great talent from other states that are interested in the companies here, but are totally put off by the cost of living and the cost of relocating. Additionally, I know dozens of people who are exiting this place due to the same reason. Even though I love the energy and dynamics in this place sometimes I wonder if it’s worth it. Yes, we do have fairly high incomes compared to the rest of the country, but with that we have extremely high taxes and a ridiculously high cost of living. When all the math is worked out, I think many of us who live in the Valley could have better lives elsewhere.

I thought that the job candidate is wise to investigate the cost of living before making a decision. I doubt that he is getting a 70 to 100% pay increase because Austin, Texas is also a very lively city with an abundance of jobs. On one hand, I do want him to join our team, but on the other hand I was honest with him and I want him to make the best decision possible for himself. I really don’t want him to join my company and then regret it and become grumpy!!