Here is an important travel lesson learned.  I was planning on flying to Europe from the U.S. this week and my flight was cancelled due to mechanical issues. This flight was on United and they did offer me a $300 travel voucher for my inconvenience but under EU rules for EU based airlines I would have been entitled to 600 euros ($700) in CASH compensation for my inconvenience.

Think about this – you receive horrible service from an airline and the compensation you get is a voucher to get right back the same horrible service airline?

The alternative – get on an EU based airline and if they screw up, you get $700 cash to apply that to any airline, ship line, train line, or even an Uber to get to your final destination.

Which model makes the most sense for the public?  Which model is going to encourage the airline to work harder and better on behalf of the customer?

At this point, I am hard pressed to understand why I should ever fly on United, American, Delta or any other U.S. based carrier to Europe over an EU one?

Why don’t EU airlines advertise this as their business model?  “If we make you late, we pay you!”   That one consideration alone is enough to make me want to fly EU airlines over US airlines any day of the week!

If you are planning a trip to Europe, here are some EU based airlines you should consider and remember to book your flight on the European side of the website and not the U.S. side.   Oh and if you’re worried about earning frequent flier miles, most airlines have partnerships with EU ones that will count your mileage but read the fine print.

http://www.lufthansa.com/uk/en/Homepage

https://www.airfrance.co.uk/

https://en.wikipedia.org/wiki/List_of_largest_airlines_in_Europe

 

Yesterday I wrote about the abysmal state of retail affairs and I wrote mostly about my personal experience but I also wanted to cover another topic on why I think retail is suffering.  A few years ago, I cut the cord and switched most of my TV viewing habits primarily to three mediums: Netflix, Hulu, Amazon Prime.  I frequently alternate between HBO and Showtime when new seasons of my favorite shows start so that’s technically a fourth.

Initially, my wife and kids mostly watched Hulu but begged me to get rid of the commercials so I paid the extra money to avoid commercials.   It didn’t occur to me then but it did hit me recently with this thought.   As my kids began watching commercial free TV, they also demanded less and less products.    Over the last three years, I can’t think of a single thing that my kids have asked for me to buy them aside from Apple products.    Long gone are the days where they watch a TV commercial and say, “I want one of those.”

It’s not just my kids though, I too  haven’t seen too many commercials either.   And I not only avoid commercials on TV, I also have numerous ad-blockers on my computers and electronic devices that I rarely see an ad.   I mostly listen to Spotify now and it is also commercial free – no more radio ads for me.   I recently got a new computer at work and it did not come pre-loaded with ad-blockers and I was shocked to see so many ads on web pages!    I was even tempted to buy some items that were deeply discounted but they disappeared as soon as I loaded the ad-blockers!

Yesterday, I wrote about the retail “ecosystem” and it occurred to me that the “ecosystem” also includes advertisements but in this case ads are an inverse reaction to successful retail.   Combine the horrible retail experience with ad-blocking TV, Music, Internet and it’s not too hard to figure out why retail is suffering tremendously.

I am going to share a secret with you, it has been over 3 years since I’ve set foot in a traditional retail store.  I do almost all of my shopping on Amazon and the only two other places that I visit occasionally are the grocery store and Costco.   The grocery store I visit almost weekly however Costco I now only visit about once a month at best.

So what’s wrong with retail?   Let me tell ya!

Problem #1 – The Experience

The premise of the retail store is to go out and acquire something you need.   Perhaps the retail experience long ago was also a way to socialize but I wouldn’t know because that must have been decades and decades ago.   So what kind of retail experience exists now?   Well first I have to get into my car and drive to a retail store.  With an ever increasing number of cars being added to the roadways, this means I have to sit in smog for a good 20 to 40 minutes depending on which retail store I am headed to but that’s not the worse part.   Next, I spend quite a bit of time driving around looking for a parking space.   I know what you’re thinking, I’m the kind of guy that waits for a nearby space so I don’t have to walk far but that’s wrong.   I usually take the first parking space I see no matter how close or far from the store but lately there are no parking spaces anywhere near retail shops except of course Sears.  After wasting time in traffic then at the parking lot, I then waste even more time walking down aisles looking for what I need.   I don’t bother shopping for clothes anymore at retail stores because they never have anything in my size – NEVER!    What ever happened to the promise of being measured once then having custom clothes made for you and delivered to your door?    If I do find something I need, I then have to wait for a cashier to ring up my purchases and there is almost always someone in front of me arguing with the cashier about a coupon, rebate, discount, or some other dumb items that will save them a couple of dollars on some stupid item they are purchasing.

 

Problem #2 – Crime

If you live in a big city, you know that on any given day your chances of being robbed or shot are better than winning the lottery.   Nothing is a bigger magnet to criminals than retail stores because criminals know people that are entering these shops likely have money or credit cards worthy of stealing.   Why should I risk my life to go buy a shirt or pair of pants when Amazon can deliver them to my door in a couple of days?

 

Problem #3 – Retail has become Lazy

When was the last time you saw any real innovation at a retail store?   Sure Starbucks offers free WiFi but why hasn’t every retail store setup WiFi hotspots?   Why do retail clothing stores prefer to stock items that may or may not fit people well instead of investing in scanning/measuring technology for custom built clothes?  It can’t be that hard to put a shirt or pants together can it?    Do you want to know where I get my clothes from now?   I had a tailor come out and take measurements then he flew to Hong Kong, had my clothes made then brought them back.  I paid $100 for each shirt and a few thousand for some suits.   Everything fits great so why can’t someone bring this to a larger scale?   It’s amazing that I ended up sending $6000 to Hong Kong when I wish I could have spent that money in the U.S. but retail is clueless!

At least Walmart is trying to change and bringing some minor innovation about 10 years too late but they still want you to go pick up items at their stores which doesn’t solve Problem #2.

The Solutions – THINK ECOSYSTEM

The most successful companies think in terms of ecosystems.  Apple sells iPhones but then sells music to play on iphones, then sells apps to use on iPhones, then sells movies to watch on iPhone, then sells laptops and ipads to view/use your content on different platforms.

Retail stores need to think of their customer as an iPhone.  Take my measurements then make custom products around what I need.  If you make me a custom shirt and pants then you can sell me a belt, then shoes, then socks and underwear.  But why stop there?  Now that you have my measurements, why not sell me a backpack or suitcase that fits my needs and size?   If you know that I like to play tennis, why not extend those sales to sports clothing and sports gear?   Why not then sell me luggage that can fit all of my clothing items?   All of these items eventually wear out and I need to buy them again so this means repeat purchases – GASP!

What’s that?  Your retail business model is to sell shoes only and not the “ecosystem”?  Well good luck staying in business because your main competitor right now is Amazon and I can pretty much buy anything there and it  has a fairly large ecosystem.   I’m just waiting for Jeff Bezos to send someone to my house to take my measurements so I can order custom clothes, I know it will happen someday.

If you haven’t seen the brutal video of a passenger on United being beaten to force him to give up his seat then you must have been hiding under a rock but that’s not what I want to talk about. I’ve read countless twitter posts, articles and opinions on this issue but no one has pointed out the simple and obvious solution to this problem to avoid it from ever getting to this point. What is that you ask?

All United needs to do is to add a simple tick box to their site when booking a flight that asked the question, “Are you willing to give up your seat for compensation if we are overbooked?” If no one had ticked the box, United would know that this is a full flight and no one is willing to give up their seats WAY BEFORE anyone shows up to the airport or boards the plane! The gate agent and flight crew would have PLENTY of time to figure out alternative arrangements for their employees and even other standby passengers.

Let’s face a simple reality here, some passengers have critical events or activities they are traveling from point A to point B for and simply can’t miss that flight (weddings, funerals, graduations, etc). I am one of those people that would never give up his seat for compensation as I fly mostly for business. I get paid about $200/hour so if I’m delayed 4 hours, the delay costs my employer $800. Delay me 12 or 24 hours and that cost escalates from $2400 to $4800. The $1300 cap on compensation automatically puts me OUT of the running to give up my seat. I imagine the doctor in this incident also falls into that “high earner” category and the $800 meant little to nothing for him as it does to me. Eight hundred dollars is 4 hours worth of work for me, why would I give up my seat for this? Of course there are plenty of people that would jump at the chance at getting $800 or $1300 but this may have been a scenario where perhaps many high earners were on board and simply wanted to get to their destination. Contrast this with a minimum wage earner making $8/hr that would earn $32 over a four hour period, the $800 is a very attractive offer.

Perhaps United should use credit scores or net worth of its passengers to ascertain who is likely to want to get bumped. If they knew this about me, they would know not to bother asking. Why can’t United data mine from Facebook and figure out that Sally in seat 10B is going to her sister’s wedding in Louisville and won’t give up her seat? Or that Grandma is seat 11a is on a once in a lifetime vacation and can’t give up her seat?

In a day and age when we have iphones and apps for every conceivable scenario it is remarkable that airlines still can’t figure out that a flight is full and people on that flight aren’t interested in giving up their seats way before the flight even boards!

If this tick box existed on booking of this flight and someone had selected it then United should have known exactly who to offer compensation to right off the bat. Actually, United should get really smart and start letting people pre-bid on getting bumped – I’d put my self on the list for $7500 and up for a domestic flight and $20,000 for an international flight. So if I’m flying from New York to London and United wants my seat, they can come to me when they’re ready to pay 20k for that seat.

I know what you’re thinking..it’ll be too expensive to implement all of this but considering that United at one point today lost $700 million in market value, I don’t think they can afford not to do it!

I’ve been working on my taxes this year and was sadly disappointed to see that I would have to pay an additional $5,000 on top of the $70,000 I have already paid in taxes for 2016.    It seems that I was hit with multiple bonus taxes for Medicare and the AMT for some reason.  I’m still haven’t received all my tax documents so that number may fluctuate but it looks pretty gloomy nonetheless.

Since the majority of our income comes from W-2 (i.e. our employers), there aren’t too many things we can write off.  Worse than that, our son will start college soon and I doubt we’ll qualify for any tax deductions for higher education as our income limits our too high.

I hope Congress will do something to fix this taxation mess soon.  Having a tax system that penalizes people for hard work is just insane!   Think about it, if I just got lazy and quite my job, I’d be eligible for all sorts of tax deductions and credits.   What the hell kind of system is this?

This past weekend I watched the Super Bowl.  It was the ONLY NFL game I saw the entire season in its entirety and I thought it was the best game ever and I can’t wait till next year to watch this ONE NFL event either.   So why doesn’t anyone want to watch NFL games anymore?  Well it’s not just NFL games, neither I nor my family watch any “commercial” television anymore.

As you recall, a few years ago, my kids begged me to get them iPhones.  At the time, I gave them an ultimatum: You can have iPhones or you can have cable TV – you can’t have them both.  The kids chose the iPhones.    Immediately after cancelling the cable, I decided on trying to get lower cost solutions.  Over the air TV signals was the initial choice but the kids and I hated the commercials and the inability to time shift shows without having to buy a DVR was a deal breaker.

As a compromise, we went with Hulu Plus Commercial Free service, Netflix and Amazon Prime.   Between these three services, we get plenty of TV and the best part was that there were ZERO commercials on these services.    Over time I have added and removed HBO and Showtime whenever the shows I watched (Game of Thrones, Homeland) ended their seasons.   Everyone gets to watch the shows they want when they want too and without commercials!

This brings me back to the Super Bowl.  Watching George Takei plugging Pizza Hut was funny the first couple of times I saw the commercial but by the 10th time I saw the exact same commercial again, I wanted to take a baseball bat to George’s poor head.    The only commercials I could tolerate were the ones for T-Mobile which varied quite a bit over time throughout the game.

The commercial free experience in our family has now extended to radio.   My daughter begged me to get Spotify and they had recently came out with a family bundle that was pretty cheap so we gave it a try and ever since then, I’ve abandoned SiriusXM and all the commercial radio stations.  I simply hook up my cell phone to my car speakers via blutooth and turn on commercial free Spotify and listen to the music I want when I want it!

I will say this right now but the dimwits at the NFL won’t listen to it for years.  Offer a commercial free experience for a nominal cost ($9.99/month?) and watch the viewers come back to the NFL.  It’s just not fun watching a 15 seconds of play action followed by 5 minutes of commercials.  Until then, the young whipper snappers are moving to an entirely different experience that doesn’t include stupid and pointless commercials.

Christmas is just around the corner and I have been struggling with what to buy for others and myself.   I don’t really need nor want a new 4k TV since what I have now is fine – I even have TVs that I don’t use in the house!   The new MacBook Pro that I’ve been waiting years for turned out to be a gimmicky garbage laptop.   The new 3.5mm jackless iPhones are a no-go for me until the wireless technology can give me a FULL day use without needing recharging.  Heck with 3.5 mm headphones, I never need charging!

In talking to a friend about some ideas, he told me he had just bought a new Sonos 5 and that he absolutely loved it.  I read the reviews on Amazon and everyone seems pretty happy with the device.   I was set to buy a few of these for my home but decided to do just a bit more research and then I found a deal killer – this device has TWO built-in MICROPHONES.    Why on Earth does a speaker system need to have microphones?    This isn’t a recording device, it is a sound distribution node so WTF!

History and court decisions have already shown us that any device that has any kind of snooping technology will inevitably fall into the use of government agencies and bad actors.   Worse yet, to get the most out of this device, you need to connect it to the internet so how many of you want live microphones all throughout your house being broadcast to a government agency or criminal bad actors 24 hours a day seven days a week?     We’ve already seen baby monitors, OnStar systems, telephones, and probably a thousand other things we don’t know about yet but I’m pretty sure you’ll be able to add Sonos devices to that list.

Sadly, I won’t be buying any Sonos products anytime soon until this issue is addressed so in the meantime I am looking at alternatives that have more security in mind that stupid features that serve no real purpose.

I write to you with very sad news….I am no longer a Costco fan.   I fell in love with Costco many years ago, they always seemed to have great stuff and great customer service but my last few visits reminded me of why I stopped shopping at Walmart many, many, years ago.    The Costco store is always packed, filthy, disorganized and the worst part – very long check out lines.    What exactly is the point of having 12 check out lanes if only 3 or 4 are ever open?    What’s the point of self-serve check out lanes if they are always closed?     Gee Costco, can’t you do better?   What happened to the promise of running your cart through an RFID reader and have it automatically total up your goods and breeze through checkout?    If there is any store that is ripe for automating checkouts it’s Costco but they just don’t seem to care anymore.

Truth be told, the entire retail experience everywhere is horrible.   There is never enough parking, too many people walking around, not enough sales clerks so why would anyone want to deal with this nonsense?      I now do about 80% of my shopping on Amazon.com where in two days it’s at my door.    I recently discovered Boxed.com which is a Costco clone but sells entirely online.  Unfortunately it doesn’t offer free shipping like Amazon but it does sell many of the bulk items Costco has without the hassle of the store.

What should Costco do?   Well they need to offer online delivery of ALL OF THEIR PRODUCTS not just a few of them.  They need to hire more people and open more check out lanes or just automate the process.   They should probably raise their membership fee if they can’t attract enough people to work there and pay them better.    Until Costco makes their retail experience more pleasant, I’ll just order more and more online.

I came across Robby Soaves “Fired Yelp Millennial  earned what young workers are worth” and it boiled my blood.   What these so called “financial journalists” often fail to realize is that people like Talia Jane are victims of a grander failed policy plan of an organization called the “Federal Reserve” which is THE key enabler of destroying modern society and creating these wage problems from the start.

You see what Robby and Talia both fail to understand is what “young workers are worth” can’t be known until you evaluate the financial ecosystem they live in day to day.    Talia believes she’s worth $15/hr while Robby thinks she’s worth $8.25/hr or maybe even less so what’s the real truth?

Let’s get down to the brass tacks and evaluate this financial ecosystem.    What is Talia worth as a minimum wage employee?

If we use 1980 as a starting point (Minimum Wage History) and pull information on  minimum wage at the time it was $3.10/hour.   If we then assume an annual inflation rate of 3 percent per year then in 2016, the minimum wage should be $8.98/hour.    Is this the correct answer?   In short, no because inflation doesn’t always grow at an exact 3 percent per year.  Inflation can be higher in some years and lower in others so I pulled the actual inflation rates from 1980 through 2015 and calculated the minimum wage based on actual inflation rates.   By doing these calculations, I came up with a minimum wage value of $10.12/hour.  SEE CHART BELOW!

What is Talia worth as a minimum wage employee?  The truth lies somewhere between $8.98/hr and $10.12/hr however there is one last adjustment that needs to be made and that is the calculation used in making the inflation rate calculations (yeah iterative pun intended).    The Federal Reserve and the US Treasury has a vested interested in debasing the currency much like every empire has done so over the past 2000 years so it can continue to spend money that doesn’t exist.

I’m not sure what the Fed fudge factor would be but it’s not a stretch of the imagination to think that minimum wage should probably lie somewhere between $10/hr to $15/hr as it is what most people expect it to be.   After all isn’t inflation an expectation of reality?

After spending some time looking at the minimum wage rates, over the last 30 years it would behoove both Republicans and Democrats alike to simply tie the federal minimum wage to inflation rates and leave it at that because in the end not raising the wage rates regularly causes hate, angst, rage and eventual civil disobedience and makes for miserable living.  How is misery and resentment affecting your business lately?

Is it any wonder that the two leading candidates for President this year are very anti-establishment?  One candidate offers all sorts of goodies and freebies with a higher minimum wage because people can’t survive on their wages while the other hopes to make america great again by building walls, kicking out H1-B visa holders and everyone else, and in essence lowering the population volume which will naturally drive up wages.  It all makes perfect sense to me that those polar opposites are actually different sides of the same coin.

1980 to 2016 inflation

This Labor Day weekend I decided to stroll down memory lane and catch up with some personal finance bloggers that I enjoyed reading over the years and much to my surprise I find that most of them have either sold out and moved on or have left their blogs hanging out to dry in the Internet sun unattended.

I must admit that I’ve been a very infrequent blogger but I have very valid excuses:

  1. I have been traveling the world
  2. I am at my career peak and I am in very high demand
  3. I am trying to make the most of my time left with my teenage kids before they head off to college
  4. I am trying to make plans for the future (more global travel) over the next few years and that takes considerable planning

First up is My 1st Million at 33 which I read rather regularly a few years ago seems to be sporadically posting now.

I just clicked on Free Money Finance and see that his blog was abandoned about a year ago but seems to potentially be starting a new one.

Classics like The Simple Dollar and Get Rich Slowly have both sold out and posts are now more “advertainment” than anything useful.  There are many more but I won’t list them here since many are simply defunked.   It is good to see Lazy Man and Money going strong still though.

I remember the great debates around “frugality vs capitalism” or “buy new vs buy used” or “spend less vs earn more” and all that seems dead now.     I can only surmise that many of the finance bloggers were in a similar situation to me…started blog in 30s and is now in 40s and have better uses for free time than blogging.

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