AskDong

Having had my iPhone for a full week now, I’m prepared to give a full evaluation of the phone itself. I’m still reserving judgement on how I feel about AT&T and the pricing plan. The initial butterflies have fluttered away, but I still very much love the phone, and in some ways love it more than the day I brought it.

I’ve always been weary of the size and shape of PDA phones in opposition to standard cell phone. PDAs are much wider than standard phones, and I always thought it looked odd talking to wide flat brick. Having used the phone to make a few calls, I’ve gotten used to the shape and realize it’s more important that a phone picks up sounds properly regardless of the shape of the phone. Psychologically, I’m still getting used to talking into a flat brick.

The iPhone as a Phone
So far so good. The iPhone has been a more than adequate replacement for my old LG 5200. The call quality has been good on the 3G network, and not bad on the old EDGE network. One of the more common complaints about the iPhone don’t apply to me. I don’t use voice dialing and as result don’t miss that feature. I also live in a major city and really haven’t noticed much of difference from leaving Verizon. I image depending on where you live, the lack of choice of carrier become a deal breaker.

The iPhone For Email
I haven’t had a PDA since my Handspring, and I’ve never had any kind of mobile device on which I’ve been able to read email in the past. Given this limited background, I’ve found the iPhone’s email functionality more than adequate. The mail client is easy to use, and has a simple interface that makes reading emails quick and easy.

That said, I know the iPhone is not the best mobile email platform out there. Apple’s mobile me service has had a rocky debut. Apple’s strong suit is not service offerings, and they would be better served sticking to their bread and butter (hardware and software). Push email works on the iPhone, and have had success with Yahoo, but comparing it with the Blackberry, the push is not quite as good. It’s not as quick. For most casual users of mobile email like myself, the mail services are more than fine. However, it’s in the email client that I most miss copy and paste functionality. If I were using the iphone for serious business correspondence, the lack of copy and paste really does become a deal breaker. Luckily, I’m more interested in reading email than replying to them.

The iPhone For Organization
I’m trying to become better at scheduling and organizing. I haven’t really ever kept a calendar. I don’t wear a watch and haven’t owned one except for a tourist trinket in over 14 year. I’m starting to keep a calendar, and so far so good. There’s not much in the calendar so far, but that’s probably because I really don’t like having plans…

Late last week, the aggregate value of one my larger holdings (WFIVX - a Wilshire 5000 Index Fund) turned red. Up through about November of last year I had been investing steadily since September of 2003, mostly through monthly purchases and occasional large purchase. I have since shifted over to Vanguard, but because of the rich history of steady contributions the value of those holdings serves as a bell weather of my overall investment exposure.

Lately that bell weather has behaved more like a canary in coal mine. Effectively all the paper gains of the last couple years have been erased. Everything purchased after November 2006 is worth less than what I purchased the shares at, and down enough that those losses offset the gains on purchases made before then. That’s over 5 years of investing that’s effectively currently a wash. I’m OK. For me right now it’s all numbers on a page.

For those are are near retirement age or retired, the current market conditions might be quite devastating. My parents fall in this camp, and they’re rightly worried but worried more than they should be. I’ve already moved a substantial portion of their holdings out of equities. For people like my parents who are dependent are investment income rather than real income to support their lifestyle, market moves can be gut wrenching. That’s why it’s so important to have the appropriate life stage asset allocation.

The other more salient point that I think we can all take away from the markets is not to count on 10% returns. I could easily go through my whole asset accumulation portion of my life and experience low single digit returns if that. Like so many things in life, it’s all about timing. While many people pooh pooh market timing, all investors are implicitly timing the market by virtue of what era they live in. Unfortunately, I don’t believe I timed my birth particularly well in terms of the market. Oh well.

A friend of me pointed to this article on NPR on the benefits of taking turns paying the tab. I’ve always been a fan taking turns. My friends and I almost always do it with drinks, and sometimes with smaller meals, but hardly with more expensive meals. Maybe we should start.

The basic premise is that whenever we have to spend money, we feel a little bit of pain regardless of how much that is. As a result it’s better to take turns paying the bill because only one person feels that pain. In addition that person who picks up the tab gets the opportunity to feel good about him or herself. It’s good feelings all around.

This is all great, but from purely financial perspective there can be pitfalls. There of course is the free loader problem, something I feel fortunate in not suffering from amongst my group of friends. However, usually there will be at least one person if not a few individuals who will take advantage of the generosity of others, purposely or by thoughtlessness. This problem can be avoided by not associating with these individuals which is generally advisable anyways.

The bigger problem is overspending. Because taking turns is really quite effective in minimizing the pain of spending money, we often spend too much. I know this is the case, and there is no place more obvious than at a bar when taking turns buying rounds of drinks…

I’m writing this from my new g3 iPhone. I was one of the fools to wait in line. Not at 8 am but later in the day when the wait at the Apple Store in Boston was down to a mere hour and half. It was money and time (I waited with a few buddies of mine) well spent. I’ve been thinking about this purchase for a long time and now having finally gotten this phone in my pocket, it’s lived up to the hype.

Now, I return my regularly scheduled writing implement (a computer). This is my first smartphone and am trying to figure out all the uses. Web browsing, email, games; those are the obvious ones. The question is what are the less obvious ones? Budgeting? Is the convenience and added functionality worth the extra cost? One functionality, I think I can strike is it’s use as blogging platform. It’s great platform to read blogs, but not so much to write them. I don’t think any hand held device is.

Cost Breakdown:
This is a personal finance blog. My transition to the iPhone 3G is a costly one. I was on a basic family plan that cost a little over $80 for three phones. I’m transitioning to a plan that will cost over $130 a month for two iPhones, and a yet undetermined amount for a 3rd regular phone. Yikes! Ironically the $299 price tag on the phone itself is the least of my worries. Buying the iPhone is not frugal decision.

Stay tuned for a full review later in the week, once I actually put some time into using the phone.

I hope everyone had a great 4th of July weekend. I personally spent some time at “the Beach”, though not actually at the beach. The weather was not cooperative, and to be quite truthful I’m not much of a beach person. I like going to beaches in far away and “exotic” locales, but don’t like going to the beach just to go to the beach.

Everytime, I go away for the weekend within driving distance, I wonder if having a summer or winter home makes sense. Would I use it? Would it be a good investment? I have only mulled the question without really coming up with an answer.

Would I use it?
This is the most important question. While making a great investment is all good and dandy, the real reason to own a place is to enjoy it’s use. Living in boston I’m within two hours of both the mountains and the beach. I firmly believe that if it takes more than 4 hours to get “there,” it’s not worth it. Both summer beach homes and winter ski lodges are really only useful 3 to 4 months of the year. The question is, would I use it enough to make it worthwhile? Given my current habits, I know I wouldn’t. However, I can envision changing my habits. I would have to go on fewer long vacations and replace them with shorter trips to the vacation home.

Is it a worthwhile Investment?
The question of evaluating a property as investment is much more straightforward, or at least on the surface. But really the question can’t be fully answered without also taking into account the personal benefits. Vacation homes are rarely good investments in themselves, but can be a fantastic investment when they also provide weekends spent with family and friends. With the housing market in turmoil, this might be a great time to get a great deal on a place, or not.

The one area that Vacation homes can provide unique benefits is in the area of taxation. The IRS provides a great deal of flexibility on how a vacation home is treated depending on how much it gets used as personal property or as rental property. While I have my own personal reservations on why the Government should be giving tax breaks on mortgage interest, let alone second home mortgage interest, I can hardly argue against anyone for taking advantage of the rules as they are.

A Home on the Cape:
For example a 2 bedroom home on the Cape near the beach would cost me about 300-380kk. If I were able to put down the full 20% down of a 320k home that would leave me with a mortgage of about 256k and monthly payments of $1620 a month (assuming a 30 year term and 6.5% rate) or about a little over 19,000 a year, and more like $21,000 after considering property taxes. A realistic scenario would allow me to rent out the unit for 8 weeks of the year for $1000 a week. Renting it out for about 8 weeks would then leave me with 2 “prime” summer weeks, and another 4 weeks slightly out of season. Without considering the tax consequences or other complexities; the question is $13,000 worth 6 weeks of a vacation home? I could spend $13,000 and have a fantastic 4 week exotic vacation for my girlfriend and I.

The last part is the rub really. A vacation home is much more worthwhile when you have a family to share it with. Being unmarried and without children that benefit is greatly diminished. Without expectations of inflated real estate returns, the economics do not make sense. A vacation home is best used when more people are able to take advantage of it. That’s why, I’ve actually never seriously considered purchasing a vacation home on my own. I would much rather go into such an endeavor with either family or friends at this stage in my life.