Frugal in the Fruitlands

Interesting in discovering some new artists, free of charge? Amazon has over 500 free mp3s available for download, including some entire albums.

Some better-known artists you’ll find free downloads of:

• Bare-Naked Ladies
• Ani diFranco
• Willie Nelson
• Jamiroquai
• Ray Lamontagne
• Ted Nugent

Personally, I downloaded Very Best of Naxos Early Music, a sampler of early ecclesiastical music (yes, even as an atheist I enjoy this… it’s so cleansing).

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MSN Money’s James Scurlock published an article on Tuesday entitled “Stop Listening to Suze Orman.” I have to thank him for putting into words a sentiment that’s been brewing in me for a long time.

I will admit that my first exposure to Suze Orman was positive. Those “super simple mantras” that Scurlock mentions do initially point one toward fiscal responsibility. Even Scurlock praises her 2001 book The Road to Wealth as “comprehensive and useful.”

But I would venture the guess that the Suze Orman franchise has, like the Fonz, jumped the shark.

When Super Simple Goes Too Far

I think I started to lose faith in Suze right about the time I read Women and Money. Here’s what I wrote in my Livejournal about it, many moons ago:

On the other hand, If you like Suze Orman, and have already read The 9 Steps to Financial Freedom, stop right now, because everything she says in the first book is said again in Women and Money, only about eight grade levels lower. I think she makes the mistake of thinking that if women are ignorant about money, this means that they are really sloooow. Take her explanation of IRAs, for example. She never really explains why someone should have a Roth IRA versus a traditional IRA. She basically says that, “You have more flexibility with a Roth! And you pay tax up front! So your $200,000 at retirement doesn’t become $150,000. So fund a Roth! It’s unequivocally the better option!” Uh… While there are good reasons to pay into a Roth versus a traditional IRA, she doesn’t explain that the primary deciding factor in choosing one is what you expect your retirement income to be – which I think is a frightening omission.

Besides the fact that I felt patronized by the entire tone of that book, the discussion of retirement planning took a complex issue and made it unfortunately simple. I suppose, if you’re the kind of person (male OR female) who hesitates too much over any decision, putting money in a Roth IRA on Suze’s blind advice is better than not saving anything for retirement. But, unfortunately, Orman tries to simplify things that have no business being simplified further:

“But it is not Suze’s hypocrisy or even her intellectual laziness that really bothers me;” Scurlock writes, “no, that would be something Suze ‘loves’ called ‘dollar cost averaging,’ which involves buying the same stock over and over again as it falls.”

Okay, now Scurlock is simplifying (or rather, misrepresenting) the definition of dollar-cost averaging. Quoting About.com on on dollar-cost averaging, “Dollar cost averaging is a technique designed to reduce market risk through the systematic purchase of securities at predetermined intervals and set amounts.” DCA is a basic precept of value investing, embraced by financial analysts more respected and reliable than Orman, too – such as Benjamin Graham, the author of the classic The Intelligent Investor, and one of Warren Buffett’s greatest influences.

… with a proviso, that is: that you are never paying more than a particular security is worth. This is something Orman ignores; perhaps because it is very hard for the average person to know if they are paying more for a stock than it is worth. Graham handles this with a 500+ page book on how to value stocks; Suze Orman stops there.

So Scurlock is right that Orman’s techniques are too simple for something which is inherently complex – the stock market – and that it is likely to lead her readers to “buying the same stock over and over again as it falls,” but that’s not a fundamental part of DCA any more than puppy mills are a fundamental part of having a dog.

Blaming the Victim

Scurlock writes of Orman, “She has less patience for statistics. Although study after study has shown that personal bankruptcies are caused primarily by catastrophic events like divorce, job loss and, above all, medical bills, and that most of us are struggling with a gap between our income growth and the soaring cost of necessities like housing, Suze tends toward psychological causes that invariably blame the victim.”

Absolutely true. Telling us to not run up credit card bills is one thing; but it ignores the basic economics conditions that actually cause insolvency. In reviewing The Two-Income Trap I talk about these in greater depth; how rising costs but lagging salaries have created a perfect storm for the middle class. Additionally, a 2005 study by Himmelstein, Warren, Thorne and Woolhandler published in Health Affairs suggests that up to 55% of bankruptcies have a medical cause – over two million Americans annually.

And Downright Duplicity

One thing we all can say about Suze Orman is that she hates leasing cars, right? I remember an episode of Kathy Griffin’s reality show My Life on the D List where she invites Orman to give financial advice to her staff. Orman then proceeds to go off on one of those staffers for leasing a car. (Oh, how I wish I could find this video, but apparently all Youtube wants to show me is Kathy’s crush on Anderson Cooper).

Well, apparently Orman only thinks leasing is bad if she’s not getting a cut of the profits. Scurlock points out one of Suze’s biggest contradictions:

She has also hawked for GM, claiming that leasing a luxury car — you know, the kind that people drive to impress other people — is a terrific financial decision: “If you ask me, that’s smart money!”

In Closing

“Her previous book promised us that we would never be financial victims again,” Scurlock writes. You know who else says that? Abusive boyfriends.

In the immortal words of Dan Savage, DTMFA.

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Here in New England, we are in the coldest month of the year. This morning the temperature outside is a mere 8 degrees Fahrenheit, and snow and ice is packed thick around roads and driveways. And yet, inside my house, the heat is turned to a cool 60 degrees.

How do we keep warm without turning up the heat – especially at night? We use a heated mattress pad!

What is a Heated Mattress Pad?

A heated mattress pad looks much like a regular mattress pad and is meant to fit directly over your mattress and under your fitted sheet. The only difference is that it has conductive coils threaded through the middle of it, and there’s a plug at the head or the foot of it to connect it to a power source. There will usually be a control dial (or two) to adjust the temperature settings.

What Makes it Better than an Electric Blanket?

One thing I learned from my childhood spent wistfully browsing Boy Scout manuals (the Girl Scouts were never as much fun!) is that a heat source or insulation underneath your body is often more valuable than one above your body. With my own camping experiences, I remember placing my damp clothes underneath my sleeping bag to dry them while I slept. A heated mattress pad takes advantage of this, warming your body from below and keeping heat from dissipating into the mattress.

Is It Really a Frugal Option?

If the other option is turning your thermostat up five degrees, then undeniably so! Consider the following math:

My own heated mattress pad (a Biddeford queen size) is a 340 watt appliance when both sides are on (80 per side + 180 for the control). That’s .34 kilowatts. The national average cost of a kilowatt-hour is 12 cents (16 cents where I live!), so it costs about 4 to 5 cents an hour to run the heated mattress pad.

Assuming it takes an hour to raise the temperature of your whole house by 5 degrees, how much would that hour cost you? Here are some estimates (thanks to Mr. Electricity for the wattage estimates of heating devices):

• Electric furnace heating a 2,000 sq ft home in a cold climate: 26.5kW = $3.18 (!!!)
• Electric furnace heating a 1,000 sq ft home in a warm climate: 7.9W = 95 cents
• Electric space heater, high: 1.4kW = 17 cents
• Electric space heater, medium: 0.9 kW = 11 cents
• Electric space heater, low: 0.6 kW = 7 cents
• Gas furnace, for the blower: 0.8 kW = 9 cents

Now, obviously if you heat with gas or oil, this is much more difficult to calculate. You have to know exactly how much gas or oil it takes to raise the temperature of your house by 5 degrees, which brings in a score of difficult-to-calculate factors. But I have a hard time believing it would be cheaper than 4 cents per hour.

Even with this math, it may be hard to see the reasons why you should outlay $60-$250 on a heated mattress pad. Consider this: over any of the alternatives listed above, a heated mattress will pay for itself in the first year of usage.

How Do I Choose a Heated Mattress Pad?

Like any purchase, you need to consider durability and how well each model will meet your needs when purchasing a heated mattress pad. Some issues to consider:

• Reviews. The model I have actually has some fairly negative reviews on Amazon in terms of durability. It was given to me as a gift, and if I were buying one for myself, I would probably opt for a different brand, based on that. I have had some problems with it turning on – the dial will not light up and the pad will not warm up on occasion – but I have always been able to fix it by tapping the control dial against my bedside table. (See, hitting things really does fix them!)

• One control or two. Obviously, if there are two people sleeping in your bed, you’ll want two controls. As a caveat, most full-sized beds have only one control, so if you’re a couple that uses a full-sized bed, this is something to consider.

• Where does it connect to a power supply? Most heated mattress pads are designed to plug in at the foot of the mattress. If that’s not convenient for you, you can fit the pad the opposite direction. I don’t have a power source near the foot of my bed, so I flipped mine around. The disadvantage of this is that the plug sits right at the edge of my pillow, and if I’m sitting up in bed, it can be uncomfortable.

• Comfort. Some people are bothered by feeling the coils beneath them when they sleep. As I mentioned above, the plug can also fall in an uncomfortable spot, depending on how you position the pad. Most manufacturers do not recommend putting another mattress pad above the heated one, but I have seen several Amazon reviews suggest doing just that.

• Automatic shut-off. This is an important safety feature that I would suggest a heated mattress pad MUST have. For most it’s an 8- or 10-hour shutoff.

Okay, I’m Convinced! Where Do I Go Now?

Finally, here are some suggestions for heated mattress pads that might work for you. (In the interest of full disclosure, I do receive a percent of the profit should you decide to purchase from any of these links).

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Has anyone watched “Money As Debt” by Paul Grignon?

This video was recommended to me by a friend when TARP was passed as a way of understanding the crisis. I just got around to watching it, and I’m not sure what to make of it.

The basic thesis of the 47-minute video (divided into five parts on Youtube) is that in today’s world, money = debt, and bankers can basically “conjure into existence” money based (loosely) on loans they’ve made. With that understanding, Grignon explores what this means: an exponentially-increasing economy based purely on debt, where only bankers profit, which will eventually become unsustainable. He also discusses some alternative systems: he rejects returning to a gold or silver standard, but favors more nationalized banking.

I’m understandably incredulous (appropriately enough: the video features a quote, near the end, about big secrets being kept from the public by incredulity) but I don’t think I know enough about economics to judge the truth or accuracy of this video.

Anyone have any insight to share?

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