Thursday, March 27, 2008

Multiple E*TRADE accounts

A couple posts ago, I commented on my spending discipline. I just took a step to help me maintain that discipline. I opened up a separate bank account just for emergency funds.

I used to have a E*TRADE Bank Complete Savings account. It has solid features and a high yield - beating Bank of America CDs, for example. The interest rate applies to every dollar in the account - it's not tiered. Now I have two! E*TRADE is kind enough to allow people to open as many as they want, it would seem. The interesting thing is that this basically eliminates the limit of 6 withdrawals a month because you can always transfer money over to another savings account and withdraw from that.

I have never hit the withdrawal limit, so that didn't enter into my thinking when I set up the account. I was just thankful to have the option to create a separate bank account with just as high of an interest rate. I can rename it to "Do not touch" or "Emergency Funds" or whatever else will make sure I'm not tempted to spend it. I then set up an automatic transfer from my old savings account (which gets my direct deposits) to my new one. Now I'll always have enough cash on hand in case I otherwise forget to set aside cash (say, for property taxes or insurance). Thanks, E*TRADE!

Tuesday, March 25, 2008

Seattle - Microsoft trip

On Sunday, March 16, I left for Seattle on business. It was a thoroughly enjoyable trip. You want to hear more? Oh, OK.

Flight out

I was a bit nervous about the flight out because my dad made a comment over the phone about having the option of crashing the plane and collecting on my insurance if my brother were to get in financial trouble. I figured the NSA flagged the conversation and would have me put on the no-fly list. Well, I got on the plane just fine, it turns out, and had a lovely 4 hours crammed between two random guys. I got my rental car without any problems, but did have to search for the hotel a bit (the sign from the road is tiny, so I drove right past it the first time).

The hotel

I don't have very high standards when it comes to comforts and amenities. I admit that the hotel didn't have anything to wow guests, but the bed was of the new comfort-top variety, the sheets were soft (as opposed to being heavily starched), and everything else worked as it should. The free continental breakfast was above average and I enjoyed the OJ immensely.

The best part had to be my noisy neighbors, though. They kept me up on Monday night, but they were entertaining for a few 15-minute periods. I think they spoke Spanish, as I recognized a few words, but they seemed to speak English quite a bit, too, such as: "But I was almost there!"

Microsoft food

In addition to the free continental breakfast provided by the hotel, Microsoft also included a virtually unlimited supply of food during the three days of work. They had breakfast items, midmorning snacks, a full lunch, and afternoon snacks available each day. Plus, there was another kitchen with a freezer full of ice cream treats, and both areas had various beverage options. Monday's lunch was salmon, followed by sloppy Joe's on Tuesday, and deli sandwiches on Wednesday. I had a few muffins, a glazed twist donut, a couple cookies, a couple cake-square cookies, a fudge brownie, a bag of Sun Chips, and probably a few other miscellaneous items I am forgetting. Basically, I was very happy in Building 20.

I went out with my architect for Monday's dinner, which was nice. We just went to Red Robin, but had good conversation and I was happy to meet him after a full 18 months of working with/for him. Tuesday, the Microsoft people took both of us to a nice Italian restaurant. It was rather expensive, in my opinion, but it did taste good. The conversation was excellent, again.

The trip wasn't just about food, though. In addition to being filling, my trip was actually productive. I just can't talk about that - it's top secret. I can say that everyone was very eager to help out. Every question we had prompted a new expert to appear in Building 20. The freezer full of ice cream was raided proportionately, according to my informal observations.

A close second to the food in terms of favorite Microsoft experiences was the accent of one of our primary contacts. She was from Ireland and so had an Irish accent (amazing how that works). I could listen to her talk all day. Thankfully, she had the pleasant habit of mumbling/humming to herself.


I was able to meet up with my uncle on Wednesday evening. He picked me up from my hotel and gave me a tour of the city. I have to say, Seattle is simply a beautiful city. There was a lot of traffic, but the drivers all seemed very courteous. Everyone I talked to had a long list of potential activities, whereas Kansas City has enough to keep its population sane, but little more. Throughout my trip, I found myself thinking "I could live here," or "I could work here." There's still a lot keeping me in Kansas City, but if someone wanted to drag me out to live in Seattle, I wouldn't be terribly opposed to it.

I drove by/across various lakes/sounds/rivers/bodies of water, the space needle, the sports arenas, the first Starbucks, some house boats, places that my uncle has kayaked, and quite a few other things. We ended up in a parking garage and then walked to a mall. I was told by a trusted source that I had to eat at a World Wrapps, and so we did. It was quite good, and it was also nice to get to talk to my uncle as an adult (mostly).

Flight back

The flight back was much better than the flight out. First, I had an aisle seat, so I had a bit more room in which to sit. Second, a very attractive young woman sat in the middle seat and was interested in entertaining me, for some reason. I did not object, naturally - she gave me her Travel Snacks, after all. She also loaned me a book by David Sedaris. I read the first story only, but it was highly entertaining. I did my best to be funny and entertaining myself, but she had extra food, books, and magazines. I had a pen that she was able to use for Sudoku (in case she ever finds and reads this, the bottom left square of the upper right block is a 4 [of puzzle #4]), and offered the novel I had been reading, but that's much harder to pick up and read than a collection of short stories. I'm afraid I just didn't have a whole lot to offer in the way of boredom relief. Anyway, it was a pleasant flight, and trip, for me.

Thursday, March 6, 2008

Managing debt

I grew up thinking that debt was a bad thing. Why buy a car when you can't afford it outright? I understood that houses required mortgages, but why put things on credit cards when you can pay cash? Managed properly, debt, even in credit card form, can be a good thing.


A lot of proper debt management depends on a realistic assessment of your spending habits. I, for example, don't tend to buy things. Or, I didn't until I bought a house and needed to put things in it. I have no expensive hobbies (compared to my brother who buys guitars and related equipment quite often) and I keep my monthly spending constant within a couple hundred dollars, in general.

In short, my spending habits are well defined and I track them informally. I also have a pretty stable job. IBM is a $160B company and people seem to like what I do there. Thus, I have a demonstrated discipline when it comes to spending and a pretty solid income. The risk of me not being able to pay my monthly bills is fairly low, so debt shouldn't be an undue emotional burden.

Interest Rates

The rest of debt management is interest rates. Most debt is pretty simple, actually. The interest rate is advertised directly. Some interest is tax deductible, though, in which case you need to multiply the advertised interest rate by (1 - your tax rate). For example, if you're in the 25% tax bracket and have a 6% mortgage, you're effectively only paying 4.5%.

If you can beat the interest rate determined above through investing, you can actually make money by going into debt. Even with the recent downturn, The S&P500 index has seen annualized growth of 9.516% over the last 5 years. That pesky tax rate works against us a bit, here, though. Interest income and short term capital gains are taxed as regular income, while long term capital gains are taxed at a 15% flat rate. For a worst case scenario, we can assume everything will be taxed as regular income. We need to now divide our effective interest rate from above by (1 - your tax rate) to get an rate of return goal. That 4.5% becomes 6% again. An 18% credit card interest rate becomes a 24% goal. Whatever we invest in, we need to beat this final rate in order for the debt to be profitable.

Over the long term, an 8% annualized return is fairly achievable. If you can invest money borrowed at 6% (effective) or lower, it is likely that you will be able to make money on money you don't actually have. This whole argument only applies if you have the money available to invest, though. If you borrow money to buy things, then that money isn't working for you.

Credit Cards

When there is something you need to buy, credit card debt can still be a good thing (even a card with an 18% interest rate!). The key is to not keep an interest-bearing balance. Pay the credit card off completely each month and you've basically borrowed money for 30-50 days interest free. You can keep that money in a high interest savings account and earn an extra few dollars by using a credit card instead of cash. Even better, you can get a credit card with additional cash back like the Chase Freedom card and/or Citi Dividends card.

Keep in mind that interest-free financing isn't a free pass to go on a spending spree. You still have to pay the purchase price. However, a store's 0% financing credit line can actually be better than cash back credit cards. I'll leave it as an exercise for the reader to determine a formula based on bank account savings rate, b, financing period, t, and cash back bonus, c, that calculates the break-even surface.

Wednesday, March 5, 2008

Fileserver drama

It's been an exciting few days here in Geekland. I successfully installed my two new hard drives. That involved routing cables in an ugly manner, but was otherwise uneventful. I was not able to replace my north bridge fan, though - the wiring for the current one goes under the heatsink, but to remove that I think I need to remove the motherboard from the case. Anyway, at that point, I was all ready to grow my raid5 array.

But wait! How could this be? My 4-disk raid5 array is only running with 3 active disks1. It would appear that sometime on December 17, a power outage or similar caused a hard drive to be marked as failed. I should really set up some sort of notification. Well, I took the opportunity to learn all about recovering a dirty raid array. Good ol' mdadm was marvelous!2

With a fully functioning, clean, 4-disk raid5 array, it was time to grow the array. I called upon mdadm once again3 and got my two new drives added as hot spares. Just one more command4 to grow the array --

What's this? Linux and mdadm require versions 2.6.17 (2.6.19 according to some) and 2.4.1 and later, respectively, in order to grow a raid5 array? Surely Ubuntu, the most user-friendly linux version available will have a convenient upgrade mechanism - well, sort of. Upgrading reported a few errors, but I was running 2.6.20 and mdadm4 wasn't throwing an error anymore. Huzzah, my raid array was growing!

Kernel Panic? Aiee! Oh god oh god oh god. 2TB of data lost! Please let this reboot erase this bad dream... Eep! /dev/md0 no longer exists! There has to be a way to fix this - it's linux! Why, of course! I can always rely on mdadm. Why, once you reassemble the array5, it goes right on growing! Kernel Panic, again? Screw this.

After tiring of kernel panics and screaming "Aiee!" I downloaded an installation CD for the latest Ubuntu distribution. I had to reformat /root and /boot (and opted to format /home while I was at it), but I had a clean installation. In fact, it made everything easier. Once I reinstalled the mdadm package, /dev/md0 magically reappeared and was growing once again. It's now 56.7% done growing. After that, I need to resize the ext3 file system6, but I think that will go smoother.

At least I know the data is still there (at least mostly). After another while reinstalling and configuring samba and mounting /dev/md0, I have successfully watched an episode of TV. Indeed, I can still use my 2TB of file storage while it's growing into 3.5TB! If it weren't for a faulty upgrade, I probably wouldn't have had to reboot except for the hardware installation (and I admit that can even be avoided given proper cable planning in the case). I'm still amazed that mdadm can handle a bad disk, adding two disks, a faulty OS upgrade, kernel panics interrupting a reshape, reassembling unclean disks and making them clean again, resuming an interrupted reshape operation from a different version, and almost all while allowing the drive to remain accessible. Simply amazing.

Commands to remember:
  1. cat /proc/mdstat
  2. mdadm --add /dev/md0 /dev/sdd1
  3. mdadm --add /dev/md0 /dev/sde1 /dev/sdf1
  4. mdadm --grow /dev/md0 -n 6
  5. mdadm --assemble /dev/md0 /dev/sda1 /dev/sdb1 /dev/sdc1 /dev/sde1 /dev/sdf1
  6. resize2fs /dev/md0 (theoretically)