Snowy Halloween

Another Halloween is upon us. For the past many years on Halloween I have walked through the streets of New York and even the halls of Grand Central Terminal only to find all kinds of goblins, ghouls and freaks (or at least noticeably more so than on a normal day in the city). But this year I am reminded of another Halloween five years ago. I was in Salt Lake City at the time and decided to spend Halloween with my girlfriend and her younger cousins. They dressed up in their costumes and we took them out trick-or-treating around their cozy neighborhood. The weather was cold and as soon as we stepped outside it started snowing. “Snow?” I thought. “But it’s still October.” Having spent the prior three years in Hawaii, freezing weather in October, yet alone snow, was a bit hard to deal with, if only mentally. I missed the shorts and sandals and the proximity to the beach, even in October.

Needless to say, however, we were some of the few people out in the neighborhood that cold Halloween night five years ago and had a great time as the snow quickly started accumulating around our feet. When the kids had collected what we deemed to be enough candy, we returned to their house to warm up. It was a memorable experience and one that resurfaced today as I think of Halloweens of my recent past.

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Mint.com

I have always considered myself frugal, but I have never been good at keeping a budget. I live within my means and know when I can afford something and when I can’t. But a hard-numbers budget allowing me to only spend a certain amount on one category is not something I have done well in life, married or single. My current budget is essentially an amount that I want to save each month. If I can stash away that amount in the bank each month then I know that I am living within my “budget.” My hesitation to have a more established budget may stem from fear that if I want to see a movie or go to dinner one night my budget may not allow me. I want to be freer than that.

But recently I have discovered a free, online budgeting and financial tracking program that allows its users to sync their online accounts and helps keep track of them. The program is mint.com. It helps me know how much I spend for each category and allows me to create customized reports. Linked to my mint account are my checking and savings accounts, the credit card I constantly use and my Scottrade account. From the assets and liabilities of these accounts, mint recalculates my personal net worth each day, an interesting, if not humbling experience. New programs such as mint.com are continuously being launched online, luring new users through free registration and use. I have signed up for other programs before, such as rememberthemilk.com, but have failed to stick with them for long periods of time. My relationship with mint.com, however, is different, and although the program is far from perfect, I may be a mint user for years to come.

Home-Grown Concerns

Some say that home ownership is wonderful, but purchasing a home is a horrible experience. I must say that I agree with the latter. After sitting on the sidelines for years and paying specific attention to the market for the past fifteen months, my wife and I are now ready to take the plunge and buy our first house. Buying a home by itself can be a daunting experience, but buying a home in New York can be frightening. For one thing, a twenty percent down payment is seen as customary these days, given what has happened to the lending market, and twenty percent of current New York home prices, even though they have declined a bit, is still a lot of cash to drop at once. This is in addition to the high property taxes New York imposes when compared to most areas of the country. Public schools in this area may be better than most, to be sure, but our daughter will not be using the schools anytime soon. We can only hope that the location and nearby schools will be attractive to potential buyers when we go to resell it.

At the time of closing, it seems as if every person involved, directly or indirectly, wants to take a piece of the pie, requiring even more cash to be on hand at the time of purchase. And then there is the uncertainty, a consideration that wasn’t one too long ago. How far will home prices drop and how bad will the current economic situation become? Is now still a good time to buy? Will mortgage rates drop by the end of the year, rise, or remain about the same? What will the resale market be like in three or five years? No one knows the answers to these questions, but they are on my mind. Should we stay renting and save as much money as we can, or do we buy now and hope to ride an upside in the years to come? With a loan of over a half a million dollars on the line, we must ensure we do this right the first time at the right time. Stay tuned.

Beautiful Seattle

Every time I’m in Seattle I am impressed with its beauty. Growing up there I didn’t always appreciate the beauty in the area. There are few other places in this country where one can live with a moderate climate, instant access to a major ocean and nearby mountains. San Francisco and Portland are two other locations that come to mind immediately (as does Kobe, Japan, one of Seattle’s sister cities). I was only in Seattle for a few days this past weekend, but had the chance to do quite a bit of driving around the area. There are few inner-city drives as pretty as the drive west on I-90 from Bellevue across Mercer Island and the floating bridges on a clear fall day. As for beautiful city views, try heading south on I-5 from North Seattle at sunset as you approach the central business district and downtown. The setting purple sun will be to the west, just behind the Olympic Mountains, casting its glare on the Puget Sound. Although the lights of the city are on, the sky is still light enough to allow one to clearly view Mt. Rainer in the distance, snowcapped and majestic, yet close enough to appear as if keeping watch over its city. It is one of my favorite drives, provided that it’s not rush hour and I’m stuck in traffic. New York has its beauty too, but Seattle’s natural and manmade beauty is hard to beat.

Life in the City: Before and After

Prior to moving to New York I had this idea of how I wanted to live my life there. It may have been just a dream, but it was what I wanted to do. In my four and a half years since coming to New York, my life has worked out a bit differently, although suffice it to say that things have worked out very well for me and my family. But I am a part of the bridge and tunnel crowd, which was not part of the plan. I wanted an apartment in the city with a view and I wanted a balcony. Each morning prior to leaving to work I was going to enjoy some breakfast on my balcony (with a nice view, mind you) while I read the morning WSJ. When ready, I would then walk to work, even up to one mile, since walking in the city is such an enjoyable experience, especially during the morning rush hour. I knew I would work long hours, but that was the life of the industry I was entering. I would enjoy the city on the weekends that I didn’t work and I would exercise as much as possible. That was going to be my life.

The reality is that I live outside of Manhattan and am married with a daughter. I rush out the door each morning without reading the WSJ most days and am a slave to the whims and delays of a commuter train. I still work the long hours and don’t always have a chance to enjoy the city on the weekends. I am considering buying a house outside of the city and will be lucky to have much of a view at all. Life, one might think, has gone not according to plan.

Yet, it has. I still am in the city each day and my office has nice views from the 39th floor. I rather (and need to) spend time with my family on the weekends instead of the city and get what exercise I can. All in all, I cannot complain and have learned that life cannot always go according to plan, but it can go well.

Unprecedented Times

These are unprecedented times, at least for my lifetime. From where I sit at work, I can hear the hedge fund guys speak with our clients/investors and with other hedge funds. Things are bad across the board out there. Sure, the DJIA falls quite a bit each day, but there are so many other gauges of how we’re doing than that, and all of them are scary. I don’t pretend to understand everything going on in the markets, but I know enough to know that there could be a lot more pain to come. If the credit default swap market comes undone, watch out. It will make the drops of the last few weeks look small in comparison. The scary thing is that I personally know people whose jobs are on the line. They fully expect to be laid off each Friday and rejoice if they’re spared another week. The sad thing is that they have no idea where else they would look for work. It’s not like other banks, funds or financial services companies are hiring. The way things are going, further consolidation will be coming, probably leading to even more job cuts. Bonuses will be smaller, if at all, additionally hurting the consumer spending and real estate markets. In my lifetime I have not seen anything like this. Yes I was around in 1987, 1998 and 2002, but maybe I just notice or care about business and finance more than I did before. But the reality is that we are in unprecedented times and no one knows what is around the corner.

Complying with Compliance

During my last year of law school I interviewed with one of the bulge-bracket investment banks in New York for a position in the regulatory compliance / anti-money laundering department. While I was hoping to get a job with a law firm, I was at least interested enough in exploring other opportunities. At the time, compliance had become an increasingly critical part of internal operations (especially for a financial or banking company), and as such, lawyers were being tapped to fill many of the jobs. Technically, licensed lawyers are not required to do the compliance work, but compliance positions at large companies have come to be known as law-degree preferred jobs instead of a law degree required. Going into the interview I knew I was interested in the company, but I was less interested in the position. Compliance isn’t interesting enough to me; in fact, it’s a bit boring, however necessary it may be to any well-functioning company.

Which is why I find my current position a bit ironic. I left law firm life to be at the New York office of a private equity firm as part of the legal team. When I accepted the offer, I was told that I would spend most of my time on transactional work, with maybe up to thirty percent spent on compliance given the changes the firm is currently going through. As I sit here and do the compliance work (which I am learning as I go), I can tell that I will be slated to be the compliance person for the New York office. The “up to thirty-percent” of my time spent on compliance work that I agreed to will be substantially more and more often, and there may be no end in sight. I am trying to not worry about what may lie ahead.

However, in the end, I like the company and I like the people. And someone has to be involved in the compliance work, understanding it and making sure that the company is legit with the SEC and other regulators. In the meantime, I hope I can actually fit some transactional work in there as well.