Cracking the monthly nut

Every month, it pains me to see how much I pay to various companies for an assortment of poorly delivered services, which cost way too much. Sure, I probably have a large cost-of-living footprint, but with some clever lifehacks and more frugal alternatives, I’m betting there’s a way to decrease that footprint without sacrificing much quality of life. The first step is, of course, to take a look at where all the money’s going …

Verizon: $86/mo

$86/mo to Verizon for local and international calling on 3 landlines. Two of those landlines are for Panoptic, one for voice and the other for faxes. The third is the house phone.

One easy way to save $9/mo would be to eliminate the fax line. Currently, I’ve got a fax modem connected to it and use HylaFAX as a fax server and JHylaFAX as a client. I already have a VoIP DID through Junction Networks which I haven’t done much with, except for set up Asterisk to test that it works. I should spend some time getting faxing to work on Asterisk if it’s possible, then get rid of the dedicated fax line.

I could similarly get Asterisk fully set up to answer voice calls as a proper automated attendant/IVR and let it ring-through to my cell phone. I’m paying $9/mo for the Panoptic voice line as well as $8/mo extra for Verizon’s voicemail service. This would be a way to save $17/mo.

Of course, I’d really be saving slightly less, since the DIDs through Junction Networks cost $2/mo each and $0.029 a minute. But, the $8/mo for Verizon voicemail would be the same as a $2/mo DID and 200 minutes a month, which is probably a lot more than I actually use right now.

MCI: $38/mo

$38/mo to MCI for long distance and a toll-free number for Panoptic.

I rarely use US domestic long distance–almost all our long distance calling is international, either to England or South Africa. I picked MCI because it had the lowest rates of the major telcos: for $4/mo, you get the MCI Global Connection calling plan, with $0.07/minute to England and $0.39/minute to South Africa.

The toll-free number costs $5/mo and currently rings into the voice landline. Ideally, I’d get Asterisk set up and have it ring into that.

Cutting costs here might be tough, as my wife is the one who does the international calling and getting her to use a PC-based softphone could be difficult. However, Skype’s international rates to South Africa–$0.068/minute to landlines and $0.233/minute to cellphones–might just be worth the trouble.

Cingular: $155/mo

$154/mo to Cingular for 1,000 shared minutes between two Treo 650’s, including two unlimited PDA data plans at $39.99/mo each and 1,000 text messages at $9.99/mo.

It is mind-boggling that I ever agreed to pay this much for such lously cellphone service. It’s amazing what poor quality we, as consumers, will tolerate. In the 1990’s, the memorable tagline was Sprint’s “so clear, you can hear a pin drop” to Verizon’s “can you hear me now?” The jitter and lag on your average cell-to-cell call is so dramatic that I’d rather text someone than try to make out what they’re trying to say in between entire dropped syllables.

While the shared roll-over minutes between the two phones guarantee that we’ll never exceed our minutes, Cingular’s policy that each phone has to have its own $39.99/mo unlimited PDA data plan is a rip-off. Based on this past year’s usage, it seems that I average 30-50 MB of usage per month, while my wife usually stays under 10 MB. Effectively, I’m paying $0.80/MB for mobile bandwidth while my wife pays $4/MB. Cingular’s data plan pricing for PDA’s is insane.

I guess as long as we want to keep our Treo 650’s and have unlimited data plans, we’re stuck paying this outrageous price. Perhaps its time to upgrade to the iPhone–although whatever we’ll save per month will be spent on buying the phone. Two iPhones on the family plan will cost $109.99/mo. a saving of $45/mo. But, at $800 to purchase the two iPhones, it’ll be 18 months before it pays for itself. Sigh.

DirecTV: $63/mo

$63/mo to DirecTV, so that we can fill our TiVo with crap to watch.

Fortunately, we bought the Series 2 TiVo with a lifetime subscription for $300, but figuring on a 5-year life span on the thing, it’s effectively $5/mo. I can live with that.

However, considering all the trouble we’ve had lately with the shoddy DirecTV receiver–we’ve had the receiver replaced, and are on our second new access card–I’m really starting to see if we’d save money switching to Optimum Online. Unfortunately, the reason why we went with DirecTV in the first place is because Cablevision totally screwed us around on our install order–the installer was over 3 hours late and showed up without the necessary equipment to do the actual install–so we cancelled the install and went with DirecTV.


So, do you see any ways I could shave these monthly costs down? Without simply cancelling these services and “doing without”? Share your tips in the comments below!

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Paul Graham’s “18 Mistakes That Kill Startups”

Paul comes up with his list of 18 Mistakes That Kill Startups and shares a bunch of conventional wisdom that I’ll try to summarize quickly …

Worst Practices

It’s easier to catch yourself doing something you shouldn’t than always to remember to do something you should.

In consulting, “Best Practices” is all the rage. But, often, they’re not universal. They’re really “Best Practices for a specific condition or environment,” and those constraints can often be fine-grained. On the other hand, actual “Worst Practices” are more likely to be universal. This makes them orders of magnitude more useful.

1. Single Founder

Either you’re greedy and don’t want to share success, or you and/or your ideas suck and nobody will join forces with you. Smell that? It’s failure, cooking.

2. Bad Location

Why are there more startups in Silicon Valley than, say, New Jersey? I call it “density of interest.” There’s a high density of people who are interested in startups are. Like gravity, there’s a poorly understood and mysterious attractive force that continues to draw more people in, further increasing density. How’d it start? Perhaps there was a big bang. (Paul writes more about this here: How to Be Silicon Valley.)

3. Marginal Niche

Competition is good and healthy. If your idea is so great, wouldn’t you expect others to follow and try to compete? If you have no competition, perhaps it’s because your idea sucks. Smell that … ?

4. Derivative Idea

Someone has a great idea. Should you take it as your own and compete directly? Or, can you do them one better? Oh, an idea that scratches an itch you personally have improves the chances you’ll be passionate enough about it to make it work.

5. Obstinacy

Be resilient and tenacious. “A man can fail many times, but he isn’t a failure until he gives up.” But, learn from your mistakes. Repeating an action and expecting different results is insanity. Listen to people who care: your users.

6. Hiring Bad Programmers

A startup’s founders have to be experts in the necessary skills to get the startup started. If you want it done right, do it yourself. Hire less talented people later on, when you can afford the risk.

7. Choosing the Wrong Platform

Buying more hardware is cheaper than engineering time” is a lie. Anyone who says otherwise probably sells hardware or has friends who do. If startups could ever possibly succeed having made fundamentally wrong decisions, we’d be seeing a lot more successful startups in the news. In other words: don’t build your castle on a swamp.

8. Slowness in Launching

Don’t let the perfect be the enemy of the good. You don’t have a product until it’s out the door.

9. Launching Too Early

Don’t be a victim of your own success. If you’re not ready to win, don’t get in the game yet. Look what happened to Friendster (PDF). Don’t be a Friendster.

10. Having No Specific User in Mind

If you want to sell ice to eskimos, you have to have ice and you have to know some eskimos. If you don’t know any eskimos …

11. Raising Too Little Money & 12. Spending Too Much

Over ten years ago, Norm Brodsky said just because you run out of money doesn’t mean you were undercapitalized. Paul echoes this again, today. Yes, you need enough money to make your idea a reality, but the easiest way to end up with a million dollars is to start with ten million (and losing nine).

13. Raising Too Much Money

Unless your startup idea is “how to raise lots of money,” don’t spend too much time doing it. Raise enough to get going, then get back to work. Don’t let money be the boss of you.

14. Poor Investor Management

Just because someone gave you money doesn’t make them an expert in your area. A talented investor should be an expert in evaluating risk. If they insist on having control, that’s probably because they believe there’s too much risk to leave it in your hands. If they’re investing anyway, that’s probably a bad sign. Don’t let your investors destroy your startup.

15. Sacrificing Users to (Supposed) Profit

It’s harder to make something people actually want to use than to make something people are willing to pay for. If people actually want to use it, those who can afford to will pay for it. Don’t ignore monetization strategies, but remember: if you have nothing to monetize, what’s the point?

16. Not Wanting to Get Your Hands Dirty

Regardless of who wears the hats (or wants to), the hats are there. Between everyone in the team, they’ve all got to be worn by someone at some point.

17. Fights Between Founders

Every rose has its thorn. People change. Lives change. Hedge your bets, diversify: see #1 on this list.

18. A Half-Hearted Effort

Success and failure are binary states. The more effort you put in, the higher your chances of success.

Of course, my interpretation and condensation of Paul’s ideas may be incorrect. This was just an attempt to explain my understanding as tersely as possible. If you disagree with my interpretations or anything else for that matter, let me know in the comments below. Are there other “startup worst practices” you can think of that should have been on this list?

, = Motley Fool 2.0

Jason’s team at Weblogs, Inc. does it again: For a more mainstream writeup, read Heather Green’s article at BusinessWeek (via Nick Wilson at Performancing). has the Weblogs, Inc. look and feel to it, integrates AOL assets (links to Message Boards, Alerts & Reminders, Quotes, Portfolios, etc.) but is done in a way that’s very clean — not the usual AOL “Fisher Price” style of web design. This could be the watershed moment for AOL’s “audience” business.

What makes me really chuckle is that this feels so Motley Fool 2.0 to me. I mean, 11 years ago, to the month, AOL helped launch the Gardner brothers online.

Lets just hope that AOL can repeat that success again, in today’s popular format. Here’s to wishing that TWX stock price goes up.

Can money buy happiness? Maybe not, but you can certainly enjoy it.

Walking back from the cafeteria today, feeling bad that I just paid $7 for an overpriced sandwich and feeling poor, I started thinking about why that’s made me feel this way. I thought back to a blog entry by Ben Casnocha I read this morning where he links to Andrew Sullivan’s This I Believe: Life, Liberty and the Pursuit of Happiness essay on NPR. In it, Andrew says:

I believe in the pursuit of happiness. Not its attainment, nor its final definition, but its pursuit. I believe in the journey, not the arrival; […]

It occurs to me that while I’m not tremendously wealthy in monetary terms, I think I’ve figured out how to make money. While I often struggle to pay bills, I’ve always been able to make enough to never have to “go without” the essentials, and even many luxuries by common standards. What I’ve never really spent much time doing is figuring out how to enjoy money. I don’t mean spending it — trust me, I think I’ve got that one mastered, too. But, I mean, how to spend it so that I feel good about it, not badly about it like I did just a few minutes ago. Since I’m new to this, I really don’t have much to say about it, but I know everything starts with mindset. So, I’m going to start changing mine.

This might be an overpriced sandwich, but it’s the best overpriced $7 sandwich I’ve ever had.


What do you do with funds left in your HCFSA account?

This year, I decided to take advantage of a benefit that work offers: the Health Care Flexible Spending Account (HCFSA). Basically, you set aside pre-tax dollars to pay for certain otherwise non-reimbursed medical costs which you pay for out of your HCFSA account instead of using after-tax dollars. Without going into detail about taxes, the short explanation is that it’s always better to spend pre-tax dollars than after-tax dollars, so the HCFSA is good, in general.

The trick with the HCFSA is that you have to decide, up front at the start of the year, how much money to put into the account. This isn’t so bad if you already know what your yearly medical costs are, because you know approximately how much you spend. When I enrolled, I didn’t really have a good feel for how much we would be spending this year, so I estimated as best I could. The snag about the HCFSA is that at the end of the year, whatever funds haven’t been spent are forfeited! Yes, it’s “use it or lose it” so it’s important to avoid over-estimating, but under-estimating means not taking full advantage of the tax benefit the HCFSA affords you.

Today, I called to get the remaining balance in the account and it’s just shy of $770. I do have some medical expenses that I can file reimbursements for through the HCFSA which should be around $700, but what do I do about the remaining balance? Should I go and buy a ton of over-the-counter medicines and file for reimbursement to flatten out the account?

Do you have a HCFSA? What do you do at the end of the year with funds that are left in it? Is it better to just under-estimate to ensure there’s never a surplus in the account which you might forfeit when you haven’t spent it?

Carl Icahn, please help Time Warner’s stock. kthx!

Jeff Jarvis, a fellow TWX shareholder, links to a NY Times article about the possibility of Carl Icahn looking to push Time Warner forward.

I’m really starting to like Carl Icahn. I’m sitting on a +45% gain on my ANX shares after his recent buy of 12.3% in the company. If he can move the TWX stock to $27 by 2007, I’d really appreciate it.

(Full disclosure for people who haven’t been paying close attention.)

Alan Greenspan, you’re my hero!

Today, Alan Greenspan Touts Idea of a National Sales Tax (via AOL News). I’ve always said that the one person in the US Government who holds all the power isn’t the President, but the Chairman of the Federal Reserve Board, Alan Greenspan. He’s my hero and idol, and yet again, today he reaffirms my faith in his incredibleness.

So, the idea is to overhaul the tax system and move from an income-based tax system to a consumption-based tax system. This is absolutely fantastic! It encourages saving (read: no more Social Security problem if people can finance their own retirement) and places more of the tax burden on those who spend money (read: big business) — this is the only system that really makes sense. While I wholly enjoy the benefits of an income-based tax system where those with large incomes can find allowances by the tax code to reduce their net income and lower their taxes, it does favor the wealthy and places more burden on the lower-income constituency. This is fine if you’re on the “right” side of the equation, taking advantage of tax breaks offered — the current system is naturally biased in favor of wealthy land owners, who were the founders of this country. However, the lower-income working class get exploited by having the tax burden placed on them. Yet, according to the article, “Democratic critics contend such a consumption tax would hit low-income Americans the hardest.” It’s this same lack of understanding that the Democratic critics exhibit that make me glad they didn’t win the last election.

More evidence of Greenspans genius: “As in past remarks, Greenspan said he supports tax changes that promote capital investment, such as the reduction of taxes on dividends.” Gee, make it more attractive for people to invest their money in big businesses, who in turn spend money and paying consumption tax! How perfect is this? Since I’m not paying income tax, I can take even more of my earned income and invest it which will make me even more money as dividends and help big businesses grow, who in turn pay the taxes to fund the government! This proposed reformation to the tax code, it’s downright Edenian! (Okay, so I just created that word, since utopian carries the negative connotation of ideal but impractical schemes, the Eden in Edenian refers to the Garden of Eden from Biblical context, which is a true paradise and state of ultimate happiness.)

Of course, I won’t be able to totally stop being a consumer, so I’ll have to pay my fair share of consumption tax. But, if it’s collected like today’s sales tax at the time of purchase, rather than today’s income tax which causes much grief and anxiety once a year, it at least makes my life easier, and businesses are already set up to collect sales tax, so it really isn’t an added burden for them. Greenspan even recognizes this by saying, “‘A simpler tax code would reduce the considerable resources devoted to complying with current tax laws, and the freed up resources could be used for more productive purposes,’ Greenspan said.”

The one thing that wasn’t mentioned in the article was whether the consumption tax would be a tiered or scaled system, where certain goods are taxed differently than others. I think certain essential items such as food products — perhaps even a small subset of food products — should either be consumption tax free or have a reduced tax. Luxury items, on the other hand, might carry an increased consumption tax, such as jewelery, automobiles, etc. Regardless, a consumption tax-based system is orders of magnitude better than an income tax-based system, especially the one we have currently implemented in the US.

Now is the time for everyone to embrace change and be vocal about something that really matters. If you’re the type to write to your local government representative, do it, and tell them it’s important that they support a reformed tax code which is consumption tax-based. Hell, people who know me know my position on voting, but if this came up as a referendum on the next ballot, I might bend my personal rules and go stand in line with the dirty huddled masses and vote, just on this issue. That’s how much this tax reform means to me.

I just hope this tax reform happens … and within my lifetime …