Sometimes I feel sorry for my husband

Email to DH this morning:-

Your mad, bad, and dangerous to know knitter wife has just signed herself up for two days of knitting in September. The I-Knit-London Day this year is a weekend and this time there are classes. I've signed up for four, two on each day. No, I'm not dragging you along. That would mean you have to learn to knit and I know you aren't interested. The dates are 11th and 12th September (a Friday and a Saturday). I get to meet two of the goddesses of knitting design (the Yarn Harlot is different - she's a knitting rock star).

I think I've spent my entertainment budget for the rest of the year. But I hope he'll forgive me.

First I signed up for both days of this year's I-Knit-London Weekender. Last year, I met the Yarn Harlot. This year, I've signed up for classes with Annie Modesitt (squeal!!! The Annie Modesitt!), Alice Starmore (both of her classes) and Yarnissima (a.k.a. Marjan Yarmmink - she's teaching toe-up socks).

Then, I went on line and bought us two tickets to see Spandau Ballet. They've re-formed after 20 years and are doing a concert tour in the Autumn. And we have tickets! This is the band that were the sound track of the 1980's. (OK, there were other bands, but when I think of Eighties music, it's Spandau Ballet.)

Poor DH. He gets to spend an entire evening with me reverting to a teenager.

- Pam

So much for good intentions

Inspired by Crazy Aunt Purl's recent post about travelling and the Yarn Harlot's one last weekend, one of the things I was planning to do this week was write a post about travelling light. I thought I'd have the perfect opportunity: three evenings to kill on my own in a country pub in the middle of nowhere. Not a chance! Those three evenings turned into dinner with the guy I used to share desk space with in Reading, working late last night, and tonight I was joined in the restaurant by the Regional Director overseeing my project. So you'll have to wait until later for my explanation of how to pack a small case for a week away for work, complete with laptop. Believe me, I'm good at it - in December it even held Christmas Party Clothes and proper shoes (with heels!), as well as my usual clobber.

Instead, tonight's plan is to do something similar to last night, when I unwound by knitting whilst watching episodes of Lets Knit Together via iTunes. I have created the perfect knitting/viewing space in my hotel room: computer on small table (so it doesn't overheat on the bed), knitting on my lap, phone on the bed, and drink on the floor beside me.

Good night.

- Pam

Dear internal alarm clock

Why are you waking me up before 5am? The alarm on my phone is set to go off at 6.

OK, I'll concede - I got up at 5 on Tuesday to come to Site. But that was a one off. It's no excuse for waking me up early on both of the last two mornings. It's not as if there is anything happening in the hotel at that time of the day: the kitchen is closed; the central heating isn't noisy and my neighbours weren't making any noise. Also my room is at the back and the hotel is a converted farmhouse in the middle of fields, so you can't blame traffic noise. And it wasn't as if you were waking me up with a Full Bladder Alert!! You weren't.

Please cease and desist from this behaviour in future and only wake me at the times I specify.

Thank you.

- Pam

The best piece of financial advice ever

The best piece of financial advice I was ever given came from Maya Rozner's mum. Twenty-plus years ago, Maya and I used to sing together and, after a carol concert, I cornered her mother and admiringly demanded to know the secret of her success. (Hopefully, I was more polite than that - I honestly don't remember.)

What I knew about Mrs R was that she was a successful businesswoman; a self-made millionaire who refused to give her children an easy ride (she owned the flat Maya lived in and made her pay market rent). She owned a business, multiple rental properties on the side, a farm and a large house in a wealthy suburb of Melbourne. I knew she had divorced Maya's dad a decade or so earlier, so all this wealth was her own work.

Mrs R told me she left school at 15 or 16 and worked as a shop assistant. She realised early on that if she wanted a better job she needed better skills, so she did a secretarial/business studies course at night school. It got her into the back office of the shop and she rapidly learned the business.

However, the big secret of Mrs R's success, she told me, was simple. From the day she started work, she saved one-third of her take-home pay. That gave her the capital she needed to buy shop when the opportunity arose - her big break, she told me. But she didn't stop there. Continuing to save a third of what she earned funded her investment properties, her farm and paid off her house.

It's the best piece of financial advice I've ever been given.

- Pam

Finance 101

(Sometimes when I start writing a post, it ends up in a totally different place to where I envisaged it going. This started off on Wednesday as a rant about cash flow.)

One of the courses I taught, back when I was a Trainer, was on project finance. The aim was to explain to a room full of (mainly) engineers how our company accounted for its projects. Each project had its own Project Summary Report: a project specific Profit & Loss Account and mini Balance Sheet. Relatively early in the day, I'd introduce some accounting principles and basic concepts to help prepare them for the sessions on the PSR.

Since it was highly unlikely that any of the engineers would ever be interested in accounting and finance, I used to make it personal and keep it personal for most of the session:

While we all know we need to "work for a living", most people don't view their efforts as selling their labour for cash or that the stuff we spend our money on is cutting into our personal bottom lines. Think about it for a minute. If you view your Cost of Sales as your essential living expenses, then everything else you spend your money on eats into your personal profit. If you can cut your Cost of Sales down further, then that too will make you a bigger profit. Of course, if you spend more than you earn, you will make a loss, going into debt to fund your lifestyle.

After the P&L came the Balance Sheet and then a discussion on cash flow.

(Here, I'm showing them the other way around, cash flow first. I set that slide up so that the smiley face danced across the page, whilst the frowny face bounced "splat" into place.)


In business, poor cash flow isn't indicative of making losses. However, if they can't get/keep cash within the business then no matter what the paper profits, the company will go bankrupt. It isn't what is earned that is the problem, it's running out of money to pay the bills and buy more supplies. Only very small businesses run on a purely cash basis - most offer credit to their clients, even if they don't realise it. You do the work, send out your invoice and wait to get paid. (Most employees do it, too. We work first, then get paid afterwards.) Running out of cash is the number 1 cause of bankruptcies.

A Balance Sheet is a business' Net Worth Statement. Continuing the concept of personalisation, in class, I'd use this example to explain the main headings:


I'd tell my trainees that Current Assets are things which you can harvest readily for cash - in most companies that'd be debtors, stock and work-in-progress. Current Liabilities are things which need to be paid fairly immediately (i.e. suppliers of your materials), or things which could be cancelled almost overnight like overdraft facilities.

We'd pull apart the example, concluding that this person has a positive net worth, but their finance situation isn't that rosy:

• They have a lot* of credit card debt.
  
• They have very little in the bank and no investments.
  
• Their car has depreciated to a point where it is worth far less than the loan used to finance it's purchase (something that happens within 2-3 years on a brand new car).
  
• To have chattels worth £5,000, they must have spent closer to £50,000. Chattels are personal possessions: furniture, clothes, household goods; again things which depreciate massively from the moment they are purchased. Think about it for a second: how many top of the range electrical goods are next year's old junkers? Technology changes very fast. (That got the guys thinking.) So does fashion - if you had to sell the clothes in your wardrobe, how much do you think they'd fetch compared to what you paid? (That got the girls thinking.)

In class, there would always be a few "light bulb moments" when the above sunk home. Inevitably someone would grab me at the break with questions about personal budgeting. Depending on how receptive I thought they'd be, I'd either recommend they check out the discussion boards at the Motley Fool or read the Tightwad Gazette.

- Pam




* All things are relative. When I created the example, the average British salary was £27,000.

And the verdict is.......

The concert was a resounding success. The Bernstein was a universal favourite, much praised by the audience. I enjoyed it too!

It was preceded by Duruflé's Requiem, which DH says was "rubbish" (not true. He just didn't like it.), Mathias' Let the people praise thee, Oh God (sung at the wedding of Prince Charles and Lady Di - not a good omen), and Paert's De Profundus, a piece for male voices.

- Pam

Dear Mr Bernstein

Tonight my choir will be singing your Chichester Psalms. I'm really looking forward to it, but I have a few problems with lyrics to your score. It's in Hebrew and I'm a Jew, surely I shouldn't have problems?

Please tell me who did the transliteration of the Hebrew into the Roman alphabet. It's the first time I've sung in Hebrew for over 20 years, but I'm sure this is the first time I've seen a chai written as an "h" with a dot underneath. Why haven't you used the more traditional "ch", as in the Scottish word "loch"? You use it some of the time, maybe 20% of the chai's are written that way. As a result, most of my colleagues are singing anachnu as "anahu", which is totally wrong. (Anachnu translates as "our".)

Also, you have totally screwed up the stresses of the words, particularly in the middle of the first movement. You're a Jew. You must know that Hebrew frequently stresses the second to last syllable of a word, just like Italian does. And yet, when you get to the bit that goes bar'chu sh'mo, the stresses are all in the wrong place making it really difficult to sing and make sense of singing. Why? Did you expect your non-Jewish choristers to just wing it? If it's hard for me (and at least I know what the words should sound like), it's even harder for them.

Finally (and this isn't your fault), do you know how hard it is to not sing the very last verse as:

Hineh
Ma tov, umah
naim. Shevet achim gam yahad.*

to the theme from the Flintstones? Every time we've rehearsed it, I drive home singing that.

- Pam




* "Behold how good and how pleasant it is for breathren to dwell together in unity" per my score.

Time to buy

There is a lot of doom and gloom being spouted about the economy. I see it every time I switch on the news, or turn on the radio or open a paper. Banks are announcing record losses. Car manufacturers are asking governments for bailouts. House prices are falling fast. "Wall Street is plummeting. 12 years of gains have been wiped out", trumpeted this morning's news in America. On the radio tonight, one commentator described the stock market as "carnage".

(You know things have reached mass hysteria levels when the conversations you overhear in the pub or in the work canteen all sound the same: "Should I get out of the stock market? It keeps going down - should I get out now before it gets worse?" "Oohhh, you don't want to leave your money in the stock market. Shares are dangerous.", etc, etc. It's as if the sky has fallen in.)

The FTSE 100 index has fallen to levels not seen since the Second Gulf War started in 2003. It closed at 3512 today, down over 3000 points since its most recent peak of 6732 in June 2007. What should your average investor do?

Me? I'm going shopping. I'm going to buy the index.

As far as I'm concerned, if you drip feed your money into an index tracker, it's the perfect time to buy. Here is my logic: from the time I started watching the stock market as a teenager, I've witnessed at least three major stock market declines, including the "crash" of October 1987. After each decline, the market recovered, usually far exceeding its previous peak before the next great decline. I want to buy a share in that recovery growth.

Certainly, companies are failing and that is why I wouldn't try to pick individual companies to invest in right now - the world's rapid decline into recession and the credit crunch turns even normally healthy companies into far more risky individual investments. It is much harder to spot which companies will fail. However, investing in an index tracker spreads that risk across all the companies in the index (100 companies for the FTSE 100, 500 companies for the S&P 500). Most companies in the index will stay in profit; most companies will survive; some companies will even thrive.

Of course, the above is just my opinion. Feel free to argue with me. However, I am putting my money where my mouth is: this afternoon, I set up a regular purchase of a FTSE 100 tracker.

- Pam

Money March / Frugal February

How did your "Frugal February" go? I thought about doing a series of posts to mark Frugal February, but the month was half over before I got the chance. Instead, I'm going to devote the month of March to talking about money and saving it. Welcome to Money March.

Why do I call February, "Frugal February"? If you read my post about cheap food, you'll have noticed me mention a very tight February when I fed two adults on the contents of the freezer, the contents of the pantry and £25. That was back in 1991 and was probably the first time, I suffered the after effects of running out of money in January after being paid my December salary before Christmas (No Pay Day bit me rather badly). The month is etched into my brain. I had enough money for my monthly train ticket into London but not much else. I was overdrawn, my credit card was about to explode, and I was living with a leach (aka "Dumbo") who contributed virtually nothing to our living costs (he owned the flat we lived in outright, but I paid all the costs).

The pantry contained spices, flour and the odd tin of stuff. I remember going around the supermarket, calculator in hand, trying to buy enough food for the month on £20. I don't remember the whole shopping list, but I remember purchasing the following:

- 3lb frozen minced beef
- 1lb cheddar cheese
- 2lb rice
- frozen mushrooms
- probably some tins of tomatoes
- all-bran type breakfast cereal
- washing powder
- toilet paper
- bread
- eggs
- garlic
- squash / cordial to drink

When I reached £20, I stopped. I didn't have much choice. Later in the month, I stopped at the green grocer's near the station and purchased 5lb of potatoes and 10lb of onions and lugged them the mile home. We'd also run out of instant coffee, so I picked up a jar of disgusting own-brand pot scrapings for pennies from the nearby mini-mart. When I found out their tins of tomatoes were cheaper than Tesco's, I purchased 5 for £1. By then, I'd spent all of my £25 budget.

Fortunately, I got lunch for free each day at work, along with copious amounts of freshly ground coffee. I don't know what Dumbo did for lunch (and apart from the curiousity value, I really don't care). For breakfast, I ate the cereal. For dinner, I cooked quiches, curries, pasta, even a souffle. I got through that month without starving and, at the time, that was all that mattered. Later, it inspired me to investigate ways to stretch my food budget and to make all my money go further. And eventually it brought me to this: writing up my Money March....

- Pam