Friday, August 29, 2008

Water, water everywhere, and hopefully a drop to drink

What's in the water that we drink? Maybe some nasty stuff (free WSJ Digg link).

Engineers say that U.S. water quality is among the world's best and is regulated by some of the most stringent standards. But as detection technology improves, utilities are finding more contaminants in water systems. Earlier this year, media reports of trace amounts of pharmaceuticals in water across the country drew attention from U.S. senators and environmental groups, who are now pushing for regulation of these substances in water systems.

Of particular concern, experts say, are endocrine-disrupting compounds -- found in birth-control pills, mood-stabilizers and other drugs -- which are linked to birth defects in wildlife. Also alarming are antibiotics, which if present in water systems, even in small amounts, could contribute to the rise of drug-resistant strains of bacteria, or so-called super bugs.
Then the article gets into some he said, she said debates about whether this stuff in the water is dangerous. Bottom line, I'd rather not be drinking this stuff. The story mentions some options.

Better (and more expensive than) the Brita

I use a Brita filter today. It's a simple carbon filter, and it makes my tap water taste better. I did a little studying of the reverse osmosis filter referenced in the article, the K5 Drinking Water Station.

Last April, Elizabeth Beyer, 47, purchased a Kinetico Inc. K5 Drinking Water Station for her father, who had a liver transplant in February. Doctors had advised him to drink only filtered water. The system, which cost $2,100, is meant to remove contaminants ranging from lead to chlorine sediment using reverse-osmosis technology and two additional filters.

Ms. Beyer, who lives in Venice, Fla., says it was worth it. Her water is clearer and crisper. "I can definitely taste the difference," she says. "You can see the difference."

There is a YouTube video on the K5. Looks slick, and is something I'll consider. My tap water tastes pretty good already, and the Brita makes it even better, but I wonder if the Brita is effectively filtering out any pharmaceuticals. Ideally, I'd get myself some double distilled water, but that is way too cost prohibitive.

The K5 is certified by NSF. The NSF site has a cornucopia of information on water, like rainwater collection.

Good tap water

Fortunately, I start with a pretty good base of the tap water I filter. An older story in the Times tells how good our City water is, but does raise some potential future problems.

The upstate water is of such good quality, in fact, that the city is not even required to filter it, a distinction shared with only four other major American cities: Boston, San Francisco, Seattle and Portland, Ore. New Yorkers drink their water from Esopus Creek, from Schoharie Creek, from the Neversink River, straight from the city’s many reservoirs, with only a rough screening and, for most of the year, just a shot of chlorine and chasers of fluoride, orthophosphate and sodium hydroxide.

But that state of affairs may not last. In late spring or early summer, the United States Environmental Protection Agency will decide whether New York water is still pure enough to drink without filtering. Development in the city’s upstate watershed areas, as well as the increasingly stormy weather that comes with climate change, is threatening the water’s mythic purity. If the federal agency does conclude that city water is too sullied to be consumed directly, New York will have to spend huge sums on filtering, close the book on 165 years of filter-free taps — and absorb a major blow to its hometown pride.


Today, New York water originates in watersheds that sprawl over nearly 2,000 square miles, filling 19 reservoirs and three controlled lakes. The aesthetic and mechanical beauty of the system — 95 percent of which is gravity-fed — causes some officials to wax sentimental. “It’s miraculous that the system replenishes itself,” Ms. Lloyd said. “And if we take care of it, it will provide drinking water for New York forever.”

Monday, August 25, 2008

Organic lawns continued

There's a followup to the organic lawn article (free WSJ Digg link) that caught my attention last year.

But now, a welcome détente has set in. My grass is holding its own and looks good enough that visitors offer compliments -- a first at my house.
I also found the original articles from the author about going organic on a lawn.

Replace your car's sunroof with solar panels

Sunrise Solar is making solar panels that will replace your car's sunroof, according to their press release.

This unique technology replaces the traditional glass sunroof with an advanced solar replacement. The solar sunroof will generate electricity to recharge the vehicles batteries while simultaneously cooling the car when parked in a hot climate or warm the car when parked in a cooler climate.
Their site's product page didn't have too much more information about this new sunroof.

Wednesday, August 20, 2008

Emerging market returns down; shift to frontier markets?

BusinessWeek (using Bloomberg Financial Markets data) has documented some poor returns over the last year for some emerging markets (link to the infographic). Mexico is down 6%, Peru down 42%, Argentina down 17%, Russia down 8%, ... (South Africa is up 2%). Now they're talking about a shift to frontier markets, and list some ETFs that invest in the frontier markets, some of which I've written about before.

Tuesday, August 19, 2008

Lowering power usage with smart meters

(Welcome to those visiting from the Carnival of Personal Finance #167. Read more about the Carnival of Personal Finance. Subscribe to this site.)

Smart power meters can lower power use by 13%. That's not just a couple of standard deviations in savings we're talking about. And if that power consumption cut comes during peak electric use hours, all of a sudden we're into some real dollar savings.

So what are these smart meters?

The BusinessWeek story sums smart meters (sometimes called advanced meters) up:

Hailed as the perfect marriage of high tech and conservation, smart meters replace the discs and dials of yesterday's meters with microchips and digital displays. When there's a blackout, they can instantly notify utility managers about which households are affected, speeding up recovery times. And paired with compatible appliances in the home, the technology can let customers know what power costs at different times of the day, so they can better manage consumption. Their biggest impact may be on utilities' bottom lines: Since the latest smart meters wirelessly transmit usage data, armies of meter readers could go the way of the milkman.
Another thing the smart meters can do (with the agreement of a customer) is remotely turn down appliances that use a lot of energy, with air conditioners being the best example of this. I would welcome this, since a certain anonymous family member runs our AC entirely too much.

So what's the argument against installing smart meters everywhere?

In one word, cost. It's costing more to install smart meters than the utilities projected (I know, shocking that a hi-tech project has cost overruns), and those costs get passed on to the customers.
just two years into the program, the company is already saying it will have to spend $600 million to complete the project, on top of the $1.7 billion already budgeted. That requires an O.K. from regulators, since the costs ultimately get passed along to ratepayers.

The problem? After upgrading hundreds of thousands of meters, PG&E says the smart gadgets came up short. Among other things, they were supposed to send information to the utility over the power lines. But that proved too costly. PG&E is now planning to replace them with sleeker wireless models.

PG&E says that 70% of the project's costs will be made up in operational efficiencies. That better be passed back to customers like the original project costs will be.

How much could I save if my utility adopted smart meters?

It just so happens that my electric utility filed for a rate increase in 2007, part of which would fund a $340mm project to install smart meters. I could find no mention of the smart meters in the 2008 press release for a rate increase, but I'll assume that the project is still on track.

Looking at the first article to which I linked shows the source of the 13% energy savings I referenced at the top of this post:

Quantifying the customer savings is a challenge. Ahmad Faruqui, a consultant with the Brattle Group, has studied more than a dozen smart-meter tests by utilities and helped conduct a statewide pilot program in California four years ago. He says communities using smart meters show an average 13% drop in peak power usage when customer incentives are in place. But there's a catch: Some 80% of the savings comes from just one-third of the customers.
Let's assume I could get a 10% electric power use savings. I used 1,945 kWh last month, so the 10% savings would be 195 kWh (rounding up). My electric utility has two different per kWh charges, supply and delivery. (I live in the Northeast by the way, where rates have been increasing rapidly.)

Charge typeDollar charge

My total savings last month might have been:

kWhxper kWh savings=SAVINGS
195x$0.235887=$46 (rounding up)

Last month was the peak power bill for the year (it had better be!), so in an average month I'd expect savings of around $30 in the best case.

After digging a little bit more on my utility's Web site, I found a page where I can request to enroll in a program that will charge me less for using power in off peak times by installing a new meter that will measure use during specific time periods. I'll be requesting more information from the utility on this program.


The savings calculations were too good to be true

I received information back from my electric utility with information on their time of use program, and there are some big gotchas for me.

First, the utility's definition of peak time is 10A.M. to 10P.M. Monday through Friday. Even though I'm at work for a big portion of that time, I'm usually home from 6:30P.M. to 10P.M, and I'm guessing we're using a fair amount of power during that time.

Second, the charges are greater than my standard rate from above during the peak time, but less at the off-peak time. I'd be paying more than the standard rate from above in that 6:30P.M. to 10P.M window. I don't think I could shift a significant portion of my energy use to a non-peak time.

Third, the supply charge is de-regulated and can change monthly (my current charges are regulated by the state.)

Looking at the charges, the peak delivery charge for time-of-use metering in the summer months is nearly three times my current standard delivery charge. The off-peak delivery charge is about 1/10 my current standard delivery charge. The peak supply charge for time-of-use metering in August is nearly double my current standard supply charge. The off-peak supply charge is about 3 cents less than my current standard supply charge.

Saturday, August 16, 2008

Insuring the 70s Dodge Challenger

So you've got a classic American muscle car and you want to insure it. Insurance options should be getting better.

Earlier this year, Chubb ended its exclusive arrangement with Grundy Worldwide, the oldest insurance agency specializing in classic and antique cars, and now sells policies directly to collectors as well. To attract business, Chubb lifted a previous mileage restriction on coverage, provides free towing after a breakdown to the garage of your choice and has increased liability limits up to $50 million. Fireman's Fund Insurance Co., a unit of Allianz SE, and American International Group's Inc. Private Client Group are two other high-end property insurers expanding into the market. Added to the longtime players in the market, these new insurers -- which are trying tactics like dropping mileage limits or adding extra coverage -- give consumers more coverage choices.

Finding an estate planning lawyer

I'm searching for an estate planning attorney. I recently stumbled on a blurb in Business Week about, which rates lawyers. So I decided to try the site out.

I started with the 'Find Lawyers By Location' links on the right side of the home page, and selected my city (the service isn't available for all cities). That gave me too broad a list, so I clicked on 'Browse lawyers by legal practice area', which took me to the 'Lawyer Search' page.

On the 'Lawyer Search' page, I clicked on the 'View All' link next to 'Browse by practice area', to give me the site's canonical list of all practice areas. Conveniently, 'Estate Planning' and 'Trusts' are in the list, so I did a search on 'Estate Planning' in my area. It returned 640 results. Only 3 of them were reviewed, so the search didn't help me narrow down my choices much.

The next thing I did was to look at the 'Answers and Advice' section of the site, and look at all the estate planning questions and answers. Some of the attorneys posted answers to estate planning questions, so I'll probably at least contact those attorneys that have posted in the forums. It looks like word of mouth is still going to be my best bet to finding an estate planning attorney, at least until gets more attorney reviews.

The site also provides some guides to estate planning.

Sunday, August 10, 2008

Vanguard's estate planning terms you need to know

Vanguard's site is a great source of financial information. They recently had a story on the 5 estate planning terms you need to know.

Living trust

A living trust is established while you are alive. At your death, any assets in the living trust do not have to go through probate, but pass as you've stated in your trust document.

Common misconception: A trust's primary purpose is to reduce taxes.

"People mistakenly think this, but the trust's most important role is to control your assets," says Ms. Smith.

The story also links to their estate planning brochure.

Frontier funds coverage heating up

Frontier funds are in the news again, this time being covered by Money magazine (see my previous posts on the topic here and here.

Enter the newest fad: frontier funds. They go to places that may have barely functioning stock markets and shaky governments but often have astounding growth rates. Côte d'Ivoire's market spiked 122% in 2007. Namibia's rose 63%.

Within the past year, three funds specializing in frontier stocks have launched: T. Rowe Price Africa & Middle East, Fidelity Emerging Europe, Middle East, Africa and Claymore/BNY Mellon Frontier Markets, an ETF. And more are on the drawing board.

The T. Rowe Price fund and the Claymore/BNY fund were in some previous articles I cited in my old posts. The Money story goes on to point out some rather big risks in investing in frontier markets, and questions whether the individual investor has the stomach for the 50% swings that can happen in these markets.

The emerging markets are still tiny, with only a $191 billion market cap according to the story, so they have a lot of room to grow. But now that the mainstream media is covering these markets more and more, is it really the right time to invest, or is it a sucker's bet now?

Saturday, August 9, 2008

Real estate driven tax changes

I wasn't really paying attention to this before, but I've seen quite a few stories on the Housing Assistance Tax Act of 2008 over the last week. (The story gives better examples.)

A few things the new law encompasses

  • First-time homebuyer credit of up to $7,500
  • Property tax deduction even if you don't itemize
  • Better tax credits for low-income housing and renovating old buildings
  • More relief for 2005 hurricane victims
  • Changes in capital gains exclusion for real estate
  • Reporting of credit and debit card payments
Being a law written by our Congress, there are of course other provisions in it (why can't our laws ever be simple changes?). I'm interested in the first-time homebuyer credit and the changes in the capital gains exclusion for real estate.

First-time homebuyer credit

The first-time homebuyer credit is a credit up to $7,500. The 'credit' has to be repaid though over 15 years. And there is an income limit of $95,000 for individuals and $170,000 for married couples filing jointly, so those in the mass affluent segment may not qualify due to income.

Changes in capital gain exclusion for real estate
Previously, the tax laws allowed a homeowner to exclude up to $250,000 in gains (or $500,000 for joint filers) as long as the homeowner owned and lived in the house for at least two years out of the five years ending on the date of sale. Now, any gains will need to be allocated based on usage. Only gains allocated to time spent living in the property as a primary residence will qualify for the tax exclusion
OK, an example really helps to understand this.

Here's an example: Suppose a married couple buys a home on Jan. 1 next year for $600,000, says Mr. Olivieri of White & Case. They plan to hold it as an investment. On Jan. 1, 2012 -- three years later -- they begin using it as their principal residence. They live there two years and sell it on Jan. 1, 2014 for $1.1 million, for a profit of $500,000.

Under the old law, they would have been able to exclude the entire $500,000 gain from their taxable income, Mr. Olivieri says. But under the new law, they could exclude only two-fifths of the gain, or $200,000, since the other three-fifths would be considered attributable to the three years the home wasn't their principal residence, he says.

Monday, August 4, 2008

Insider take on hedge funds and separately managed accounts

Think that the "2 and 20" (or is it "20 and 2") fees charged by hedge funds are outrageous. An investment advisor agrees. It's refreshing to hear a professional give an inside scoop on high priced investment vehicles. The column talks about both hedge funds and separately managed accounts:

To be sure, some brilliant hedge-fund managers have delivered fabulous results. But the odds of getting into one of their funds without being extremely well connected on Wall Street are slim. What you're likely to be sold instead is a hedge fund run by a one-time mutual fund manager who decided to reach for the gold ring.

My strong advice: Stay away.

Separately managed accounts are a different animal. In an SMA, you actually own individual securities (stocks and bonds) rather than shares of a mutual fund -- which are, after all, for the riffraff.

But guess what? The people who run your SMA often work for a mutual fund company. In fact, there's a good chance they run a mutual fund that is similar, if not nearly identical, to your SMA.

He goes on to recommend the CGM Focus mutual fund. I've read many great things about this mutual fund. A story this year in Fortune gives some excellent background on Ken Heebner, the fund's manager.