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Today I read an article in BusinessWeek titled . Basically, it talked about how Senator Obama is proposing raising taxes for “rich” families with incomes of $250,000 or more, and how some families feel that they are just middle class with that kind of income.

As the article pointed out, it really depends on where you live since the cost of living varies wildly around the world. My husband and I don’t make anywhere near $250k a year, but we would be considered extremely well off if we lived in China. We may be upper middle class in a lower cost state like Texas since we could afford a house there and send our future kids to private school. However, in the Silicon Valley, there is no way anyone would considered us to be rich. Personally I feel that “rich” in the Valley is probably someone with assets in the hundred-million to billion range, and I am realistic enough to say that I probably will never be rich here.

I think a lot of the angst in the article comes from people who have good incomes that live in expensive areas of the country. The fact is, the tax system doesn’t adjust for cost of living. So even though people in high cost areas like the Bay Area are compensated well, our real capability in saving money is vastly diminished. It is tough to equalize this situation, and adding more taxes to high income families will probably just make it tougher for families with children who need that income.

Personally, one thing that really annoys me about all of this isn’t even about taxes.  I feel that with every speech about raising taxes on the rich, the politicians are implying that there is something wrong with having good incomes.  It is as if it is a sin for a family to make over $250,000 so that they need to be punished.   Most people I know here in California who have good incomes are hard working and honest people who did nothing to deserve the ire of people who have less than them.  They are professionals who contribute quite a bit to the society just through their work.  Why is there a need to take away more from them?

One thing is for sure, taxes will go up after the Bush tax cuts expire in two years. I highly doubt that the tax cuts will stay with a Democratic majority in the government. The sting will be especially painful for dual income couples like us because the marriage penalty will probably go back in full force again and our tax rate will rise dramatically. It will probably cut into our savings rate, but we are socking away as much as we could now before that happens. Ultimately, I think the government should find more ways to cut spending rather than squeezing more out of married couples and the “rich”.   I also don’t believe for a second that they will draw the line at $250k.  So brace yourself for more taxes everyone!

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Well, after blogging for almost a year I have collected over a thousand comments on my articles. Some of them are really quite interesting. Previously and here are some more of my favorites.

In my , a woman named Nancy Lynn left a poem and I really loved it:

From Nancy Lynn

I have lived here since 1996, and realized the other day that I still don’t feel at home here. Here is my poem about California:

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It never rains here
This long-legged mistress is a mystery,
She is fake and beautiful
With no soul
But never changes.

The year is like a stack of blue cubes,
Square as windows of an Internet Company
Reflecting the sky
Of daily brightness
And vapid valleys streaming in cars
Climbing one hill and another
Which exit only for take-out coffee

The ocean is untouchable
Cold, colorless darkness
A metaphor for “the beach”
Where you may look, but don’t touch
It’s all a part of the perfection,
And you can insert your image everywhere.

The natives, having pushed out
Indians, Mexicans
But sit in trees and fight for the condor,
Must always defend how beautiful
And bounteous their land is,
Vain and proud of their humility,
Political correctness and perfection.
I listen, but only hear
The sky, void of thunder.

Thank you Nancy Lynn!

Speaking of poems, my dad is a budding poet. He left this comment a while ago that made me laugh a bit:

great job, Xin!

Send you a Chinese poem I just wrote for your future education of your kids in Chinese.

沿路春光

行进在加州12号公路上

苏醒的

呼啦啦一片

何止

是那五彩的春天?

路边绽开的黄花

向我坐车的大灯眨眼

沿路清澈的湖边

过冬的加拿大天鹅

盘点着回迁

雨后微涨的湖面

泛起美丽的漪涟

迎来成群的白鹭,水鸟,

鸣呤,盘旋—

广阔无垠的原野

带着雨季的寄托和眷恋

把生命的绿

在大地洒遍,向远山伸延

浅黄色的澳洲长毛羊

黑白相间的奶牛,

牛马群一点点,一片片

象繁星将这绿的苍穹装点

大洋春天的季风

顺着三角洲的水道线

牵动那百座百呎高的风车

飞旋—

高大的三角铁架

化作那永动的能源

电灯亮了,电车通了

风车啊,

天空感谢你

留给她一片蔚蓝的天

车还在向前

春光让我陶醉

突然

路旁车速灯提起意见

“超速,超速!”

刹车,减速,

我醒了,

醒来的还有那

永远赞不完的春天!

This my translation of it:
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Driving along California Highway 12
I am awakened
by a windy plain
it is the multicolored spring
The yellow flowers blooming next to the road
are blinking at my car’s headlights
The clear lake along the road
is surrounded by many Canadian geese.
The surface of the lake ripples after a soft rain
and welcomes flocks of chirping and hovering egrets and water fowl
The vast and endless wilderness
Carries the loving care of the rain season
and spread the green of life across the plains and towards the mountains
The light yellow long haired Australian sheep,
And the black and white cows
dot and flock the plains like
stars upon a green sky.
The winds of the ocean
flows from the peninsula’s shorelines
and make the windmills fly.
Its tall steel frame converts the renewable energy
The lights are lit, and the electric cars are moving.
Windmill, the sky thanks you for leaving her a blue body.
My car is still moving, and I am still mesmerized by the spring.
Suddenly the car next to me flashes its lights.
I am speeding.
I brake and slow down.
I am awake, and I still have the spring that I can never stop praising.

Anyway, hope you have enjoyed these diversions from personal finance and two views of California. My dad works for a foundation that helps people save energy all over the world so that poem has a bit of a hippie environmentalist ring to it, which is kind of cool.

If you want to read more about personal finance. Here are some recent carnivals I participated in:



That’s the ones I remember, but if I didn’t link you feel free to tell me! Have a great day everyone.

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Currently I work at a startup that does some brilliant technical things with software security. Honestly, I would not have thought of the idea the founders came up with in a million years. The funny thing is that no matter how powerful or brilliant of an anti-hacking software product we create, we can’t prevent the physical theft of machines from datacenters with it. It is basically impossible for our software to jump out and club a thief on the head. This means that companies still need to hire security guards at sensitive datacenters to prevent the physical attacks of information thieves. I think what is interesting is that the idea behind a physical security firm doesn’t take a PhD to understand, but these security firms are just as vital as my company in preventing data theft.

So what I have realized is that many thriving businesses are actually based on fairly simple ideas. As long as there is a need for a service or product, there is money to be made. The problem with simple ideas is that they are easy to copy so there might be a lot of competition, but with enough research and great execution they can still be very successful.

When it comes to execution of a simple business idea, technical ingenuinity and techniques could propel the business quite a bit. For example, many steps in a retail business can be automated, and having a good online store gives the business a huge competitive advantage. Great internet marketing also helps many small businesses make their presence known in the entire world. These technological advances make simple ideas easier to implement and become profitable.

Another great advantage to simple ideas is that the business could be very easy to duplicate and having a few simple businesses that run off the same infrastructure is easier than working on a complex business idea with a high barrier of entry. So even though there may be more competition, as long as the amount of available business is huge there shouldn’t be any problems to making a simple business profitable.

I am looking into starting a business or two that can be easily automated and generates recurring income. I have a couple ideas, and they may seem silly, but I think as long as I follow through and execute them well they can be quite profitable. Ultimately, I will need to be selling something that people want, and it is my job to create a product that helps people at a great price point. We will see if anything pans out and I will definitely announce my progress as I get to it.

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Every time I go visit my parents, my mom finds about twenty ways to call me fat and tell me to stop eating. Of course, she also did the same to my aunt during a dinner party so I don’t really feel singled out. Well, I guess in the past three years I did gain a few (25) pounds so now I am slightly overweight for my height. I am still a size 2, but a lot of the dresses I wore during college and high school do not fit anymore. The problem with the fat is that it all settled on my tummy and thighs and not on my boobs and butt. Anyway, the hubby recently gave me an incentive to lose some weight. Basically he said if I lose about 15 pounds, he will cut his to 1% of our income. Currently it is at 2% so a 1% cut is quite huge and could build up to thousands of dollars over the years.

On one hand I know that losing some weight would be great for my health and my family really cares about me, but on the other hand I really love to eat. In the long run being fit will probably save me money on health care but my lifestyle is so sedentary that I find no motivation or desire to exercise. Anyway, I am making an effort now to exercise more so I can still eat what I like to eat. I purchased on Friday and today I went to hike Mt. Tamalpais with the hubby and the parents. I only got to the West Point Inn before my left leg was filled with pain. Along the entire trail my parents made fun of me being the last one in the line as I plodded up the hills while huffing and puffing. My dad laughed at my slow march and then showed off his muscles to me and my hubby. He said, “you’re less than half my age and you can’t climb this? COME ON!” Then he loudly sang some Chinese song horribly out of tune and went about a mile ahead of me. On the way back I fell on my butt two times because the trail was steep and slippery. The hubby and I clung on each other for support and made it back to the car. As a reward, we had lunch at a restaurant in Sausalito called Spinnaker which had a wonderful view of the bay. That lunch probably undid all the calories I lost from the hike. Finally, when I got home I found a blister on my big toe that was as big as my little toe. Today’s harrowing experience showed me that I am definitely a lot less fit than my college years since in 2005 I hiked a much longer trail without that many problems.

Hopefully getting will help me organize my exercise routine. The hubby said he will do it with me and maybe that will motivate me a bit more. Though at work my coworker laughed at the idea of the WiiFit. He said, “you know you could just go outside and run instead of holding a little white remote and run in place!” I guess that is true, but I really wouldn’t jog outside when it’s completely dark. I am pretty i in losing about 10 lbs in 7 weeks with the WiiFit, but I don’t know how I would do and how long I keep up with the routine. However, the hubby’s incentive of cutting down his entertainment budget aligns the goal of losing weight with saving money, and perhaps that’s enough motivation for me to keep at it. We will see how this goes and I will report on whether or not this works.

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Lately my mom has been telling me that several friends of hers are snapping up real estate in the East Bay because prices have fallen anywhere from 20% to 70%. She argues that if I ever see a property that has a mortgage lower than my rent I should just buy it. Well, hasn’t really fallen to the extent that any mortgage is cheaper than a comparable rent yet. The average price per square foot in my zipcode is currently $571. We live in a place that’s about 1040 square foot and pay $1700 a month. So the purchase price for a comparable property would be $592.8k and it still doesn’t make sense to buy since I am 99% positive prices are still going down right now. Financially, it’s more beneficial to us to invest all the money we are saving rather than being tied to a $3000+ mortgage.

Financial considerations aside, I don’t think we’re very enthusiastic to be homeowners because of the maintenance it would involve. I read a pretty funny article on Salon.com recently about a. His conclusion was, “What the hell was I thinking?” He didn’t have the money to fix all the problems his home had and he didn’t have the skills to do it himself. While I am a renter I could just ask my landlord to repair the leaky pipes or replace the broken stove. Sure, I am paying rent, but I consider it to be outsourcing home maintenance to my landlord. The simple fact that renting is actually cheaper than the mortgage and property taxes makes the arrangement a sweeter deal for me.

Another ridiculous argument people have thrown in my face as why owning is better is that, “it’s better for the children.” I have no idea why this is remotely true. As long as children have a safe and loving place to call home, it doesn’t matter if their parents rent or own. I would actually argue that a home ripped apart by the financial stress of an unaffordable mortgage is a much worse place for a child to grow up than a family that happily rents without financial trouble. So before anyone tells me that I have to raise my kids in a place I own ever again, consider that I can rent in an excellent school district for less than 13% of our salary. On the flipside to own the same property in those school districts we would have to carry double or triple that cost. The money we save by renting could be used for tutors or a college fund for our kids. Renting gives us flexibility to live wherever we want, and that freedom is extremely valuable.

The hubby and I are pretty sure we won’t stay in our present condo forever, but I don’t know if homeownership is ever going to be right for us. I think I will only considering owning when it is cheaper than renting and we decide to stay in one area for more than ten years. If that never happens, then we just might rent forever. For me, I feel much more secure in managing a gigantic portfolio rather than a gigantic house. Currently my portfolio already generates enough income to cover approximately half of my rent, and to tie a lot of these perfectly sound liquid investments up in a house seems rather stupid at this point.

Anyway, here ends yet another one of my rants against the overrated ideal of homeownership. I think what frustrates me and several other of my friends is that our Asian parents are unhealthily obsessed with real estate and our parents want us to become indentured servants to the banks as soon as possible. I probably have enough material for that to fill up another ten blog posts, but I shall stop here. Finally I shall say that homeownership is not proof of adulthood or financial security. The ability to logically analyze your means and make responsible choices is better than succumbing to the pressures of society and doing something you regret later.

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