Thursday, April 14, 2016

How I Lowered My Cable Bill 10%

When I saw my March bill from Cox Communications, I was shocked to see $163.53, an increase of 8.87% over my previous bills of $150.20 per month, for both TV and Internet services.


I decided to call Cox about the bill. Eventually I was transferred to a department in Texas. A woman named Bianca helped me.  I asked her why my Cox bill increased to $163.53 per month. She said my "discount" expired after a year. I told her we have to get the bill below $150, otherwise I will have to drop services or move to another carrier like AT&T. Without hesitation, she said she would lower my bill to $135.20 per month, which is a 10% cut from my previous bill of $150.20. She said this new rate will last one year. Then I will have to re-negotiate my bill.

I've been negotiating with Cox over my bills for years.

In the early 2000s, I paid $150 per month for TV, Phone and Internet, but that number ballooned to $185 per month by 2013. I tried to negotiate with Cox, but the company refused to lower my bill, so I dropped both phone and TV services. We added Netflix and tried Roku TV, but didn't like Roku. So I went down to the Cox office and a person there gave me TV and Internet for $111 per month. That number went up and up to $163 before I finally called again to complain.

If consumers don’t stand up for themselves, they may get run over.

Telephone companies, cable companies and utilities are constantly looking for ways to raise revenue. Cox Communications and AT&T are popular choices in our community. If we did not have competition, consumers really would get hurt.

Conclusion

If you are not happy with your cable bill, call and complain. See if you can negotiate a lower rate. I was successful, perhaps you can be successful too.


Sunday, April 3, 2016

Life Is Amazing, Dripping With Sweetness

Life is amazing, with many beautiful opportunities, but some people can't enjoy it because they are slaves to their jobs and slaves to the material god of trying to keep up with the Jones. People are buying cars, boats and new kitchen stuff, borrowing, borrowing, borrowing money and living beyond their means. No matter what income level, they all do it and they all go broke.

People have so much stuff that they have to rent storage units to store their extra furniture, clothing, baby toys and kitchen cutlery. Storage companies are making a mint off people who can’t stop buying things. Because things are so cheap in America, this addiction is available to everyone, rich or poor. You see the poor’s things left on the side of the road, there’s too much stuff, they can’t take it with them.

There are a few people who say to themselves, “I’m sick of being a slave, I’m sick and tired of doing a job that I hate, just so I can pay a mortgage and credit card bills and medical bills.” These rare exceptions of people actually have a plan to get out of debt, save their money and work on doing what they really love to do. They work their plan daily and over time, they achieve their dream.

My dream was to become an independent writer and write for myself, and work from home and live with my books and my art, my scholars and my poets, my family, my friends and my garden. 

I have a friend who was working in an office, she was like several other people in this office. She ate too much and got no exercise and was obese. My friend had the body of 62-year-old female even though her actual age was 47. Her heart and lungs had the capacity for a sedentary life. She got upset with herself and did something about this problem. In 12 months, she lost over 100 pounds through diet and regular exercise. My friend is amazing. She is an inspiration. She hikes in the woods to lose weight, connect with friends and nature and create moments of lasting joy. She is happier today than she has been in years. She learned this valuable lesson: If you have your health, you have everything.

The key to happiness is this:

The less you have to own in your life, the more stripped down your wants are, the happier you become. You become connected to the ground level elements of nature, the flowers, the birds and the bees and humanity. No need for fast food burgers, no need for a chocolate latte, no need for cookies, cake and Pepsi-Cola. It’s enough to eat rice, broccoli and an apple.

We all have our pain, agony and demons, but I choose to focus on whatever is lovely, whatever is divine, whatever is kind and of lasting value.

When I was living in Europe in 1990, I stripped down my needs to the very basics. Literally, all I owned was in a backpack. My diary, my camera, my socks, my underwear, shorts, shirts and pants and sleeping bag. I had a little food and a jacket for warmth. I kept my money and my passport in a money belt around my waste. That was it. I stripped away everything else, no car, no wardrobe, no TV, no boat, no phone. Yet I lived amazingly well, life was so full of color, adventure, beauty. Each moment was like a brilliant awakening of dripping sweetness. The sun rises for the poor and the rich alike. I was poor at that time, I had a negative net worth financially, but yet I was rich in experience and life. I saw beautiful cathedrals, fascinating works of art, Picasso, Van Gogh and Goya. 

When I was in Greece, I remember meeting a young man who had made a small fort in some bushes on an island called Paros. He was an Englishman who had saved enough money in the wintertime, to live without working all summer on this island. His camp included a sleeping bag, a fire pit, a few utensils for cooking, water bottles, a book and a bottle of wine. Not much. But what freedom he had! The opportunity to go to the beach every day and feel the water on his body. He could run, he could swim and he could rest. And most of all, he could talk to people.

The most joyous moments in life don’t come from acquisition of things. No. I  believe the greatest joy is in sharing time with people, beautiful people, in long enriching conversations. I remember one night some new friends and I stayed out all night, drinking and dancing in this disco. At 4 a.m. we walked to a coffee shop and ordered coffee. We sat on the ground with some architecture students from Athens talking about architecture. Giant cathedrals, ancient buildings, the Acropolis and the modest white and blue houses of Greece -- all of these things were ours to see and experience. 

Purple colors of the Red Bud trees wash over my garden. The house finch takes a bath. The bumble bee dances around the flower. I am not dreaming. I am seeing the majesty of nature. And where is this color? In my backyard, in the public park across the street. It is all there before my eyes if only I  am willing to open my mind and look around. I remember getting lost in watching ants build an ant hill. They worked so diligently building their castle. If only I would work as diligently as these ants, maybe I would build something remarkable, too.

Live without things that cost money and focus on capturing moments that cost nothing but time. These connective moments with humanity and nature are what create joy and contentment, to me, a far larger accomplishment than acquisition of your latest trinket or toy or gun that you add to your ever growing collection of stuff.  Stay away from over-consumption, retreat to the garden.

Join the select group of people who want as little as possible. They are stripped of needless desire. They delight in the morning sun, they breathe in the air deeply and they smile at the house finch in the birdbath. They cherish love with others. They are content. They know life is amazing dripping with sweetness.




Friday, April 1, 2016

Railroad Profits Will Be Down 5% to 10% in Q1 Because of Poor Demand

Profits for U.S. railroads will be down 5% to 10% in first quarter 2016 because of substantial declines in traffic this year.


Union Pacific (UNP) rail volumes were down 9% year to date through Week 12 ended March 28, 2016. The declining volume trend has actually gotten worse. For example in Week 12, volumes at UNP were down 18% to 148,307 carloads/intermodal units from 181,857 carloadings during the same week a year ago. Coal volumes at UNP were down 41% in Week 12 and down 36% year to date.

Norfolk Southern (NSC) volumes were down 3.1% year to date through Week 12. CSX volumes were down 4.4% YTD.

Norfolk Southern and CSX showed positive volume growth for three weeks in a row ended March 5. The trend ended in Week 10 when volume numbers declined for both railroads. Week 11 was troubling, with NSC volumes down 9.5% and CSX volumes down 12.4%.

BNSF Railway, owned by Berkshire Hathaway (BRK.B), has seen its volumes fall 6% through Week 12. Coal volumes were down 32%, petroleum volumes were down 26% YTD. On the positive side, movement of motor vehicles were up 20% YTD. Container volume was up 10%, but trailer volume was down 13%.

Class I railroads report volumes on a weekly basis. CSX, Norfolk Southern and Union Pacific report volume trends on their web sites on Tuesday for the previous week. BNSF Railway reports its volume trends on Thursday. They all feed to the Association of American Railroads, which does an aggregate report every Thursday. 

In Week 12, the Association of American Railroads reported total U.S. weekly rail traffic was 470,271 carloads and intermodal units, down 16.5% compared with the same week last year.
Total carloads for the week ending Mar. 26 were 232,348 carloads, down 18.% compared with the same week in 2015, while U.S. weekly intermodal volume was 237,923 containers and trailers, down 14.5% compared to 2015.

AAR said two of the 10 carload commodity groups posted an increase compared with the same week in 2015. They were miscellaneous carloads, up 18.5% to 9,629 carloads; and motor vehicles and parts, up 0.1 percent to 18,676 carloads. Commodity groups that posted decreases compared with the same week in 2015 included coal, down 37.8% to 66,281 carloads; petroleum and petroleum products, down 22.1% to 10,738 carloads; and grain, down 16.1% to 19,144 carloads.

For the first 12 weeks of 2016, U.S. railroads reported cumulative volume of 2,905,113 carloads, down 13.7 percent from the same point last year; and 3,085,831 intermodal units, up 2.2 percent from last year. Total combined U.S. traffic for the first 12 weeks of 2016 was 5,990,944 carloads and intermodal units, a decrease of 6.2 percent compared to last year.

What is troubling about these latest numbers is this: Some analysts said comparables would get better for railroads because the slide in volumes started a year ago in March. Volumes were down throughout 2015. As a result, some analysts thought 2016 numbers would match or exceed 2015 numbers. But that has not happened.



Writer Michael Hooper owns shares of Berkshire Hathaway, Union Pacific, CSX and Canadian National Railway.

Thursday, March 31, 2016

Can The Green Monster Be Saved? Apartment Complex For Sale

Lyndon State Bank is selling St. Gregory Apartments, a 114-unit apartment complex located at 635 S.W. Harrison St., Topeka.
David Thornburgh, CEO of Lyndon State Bank, said the bank took over ownership of the property in summer 2015 from Athar A Kazmi. The bank is working to make the apartment building profitable. The owner has evicted multiple nonpaying tenants, so occupancy of the building has fallen to 31%. A new roof was recently installed. One elevator was upgraded and a second elevator is being rebuilt.

Photo Courtesy of Shawnee County Appraiser's Office

The building has 99 studio apartments, 13 one bedroom units and two two-bedroom units. Rent for a studio is $440 per month. A remodeled studio rents for $495. 
On March 30, 2016, when I toured the building, there were 36 units occupied, giving the building a 31% occupancy rate. There are 17 offices on the ground floor, but only one commercial space was leased to a barber. Most of the offices were in decent shape and could be leased immediately.
The big challenge with the building is the outrageous cost of heating and cooling. Heating and cooling costs are the responsibility of the owner of the property. Each apartment is heated or cooled with electric window unit. There is very little insulation. As a result, the heating and cooling units are extremely inefficient. In January, the bill from Westar Energy was $11,276, and that is paid by the owner, not the tenants. But if you divide the 36 occupied units into the $11,276 bill, that is $313.22 per apartment in January. But remember, the tenant does not pay a utility bill.
Because January revenue was only $16,700 and expenses were $26,607, the building incurred an operating loss of -$9,907, and that does not include expenses for insurance or property taxes. Property taxes are $2,901 per month and insurance is $2,634 per month. So if you include those numbers in January, the loss was -$15,442.
February and March numbers look better, partly because the weather was mild, but the property still has a long ways to go before it is profitable. The operating loss in February was -$13,444 and the loss in March was -$7,218 (this includes expenses for taxes and insurance).
Thornburgh said there are only two ways to increase profits: increase revenue or decrease expenses. On the revenue side, the bank has hired someone to renovate apartments at a cost of $2,500 per unit. There is no problem finding someone to rent a renovated unit. Tenants and prospective tenants all want to be in the renovated apartments.
Another way to increase revenue is rent out the commercial space on the ground floor. Currently only one space for a barber is occupied. There are 17 offices available and one small conference room and one big conference room on the ground floor. If you charge $400 per month for an office, that could generate up to $7,000 additional revenue per month. 
St. Gregory Apartments was built in 1955 as a hotel. At the time, lime green was a popular color in America, but the green has lost favor. People call the building the Green Monster and for good reason. The place was the site of multiple crimes in recent years, including a stabbing that left someone dead.
Management has kicked out people who do not pay rent. This has improved the safety of the building.
Whoever buys St. Gregory Apartments will need a plan to upgrade the heating and cooling system. The tenants need to be responsible for paying for their utilities. Right now tenants have no incentive to conserve energy. They could turn on the heat and open a window and not get charged for the waste of energy going out the window.
Natural gas is a cheaper way to heat than electricity as natural gas prices are near all time lows. The United States has an 84-year supply of natural gas, so prices should remain reasonable for a long time. But there is no natural gas hookups in each apartment. And then there is the problem with the lack of insulation.
My daughter lives in a Shawnee, Kan., studio apartment that had a $28.00 natural gas heating bill in February. Her apartment is modern, efficient and insulated, and heated by an efficient natural gas furnace. St. Gregory needs a super energy efficient heating and cooling system that would drop the bills by 50% to 100%.
Shawnee County Appraiser has listed the appraised value of the property at $1,436,950. The owner has appealed the appraisal and hopes to lower the valuation to $950,000.
Below is the financial statement for the property listing revenue and expenses for the first three months of 2016:


Courtesy of Lyndon State Bank

Lyndon State Bank is taking sealed bids for the property through 10 a.m. April 13. For more information, contact David Thornburgh at 785-828-4411.

Tuesday, March 22, 2016

Security Benefit Grows Assets 11% in 2015




Security Benefit Life Insurance Co. grew its assets 11 percent in 2015 to $27.7 billion recorded on Dec. 31, 2015, compared with $24.9 billion in assets a year earlier.
Security Benefit's surplus declined 1.6 percent to $1.28 billion from $1.3 billion a year earlier. During the year, Security Benefit increased its Asset Valuation Reserve to $354 million from $301 million. Asset Valuation Reserve is money set aside in case of unexpected debt or loss in the equity and credit markets.
Security Benefit has a separate accounting statement for its First Security Benefit Life Insurance and Annuity Co. of New York in Rye Brook, NY. The statement showed a slight decline in assets to $684.1 million, but an increase in surplus to $27 million and a slight increase in Asset Valuation Reserve to $2.5 million.
Security Benefit provides fixed and variable rate annuities to about 250,000 policyholders. Security Benefit's se2 division is administrator of annuity contracts, the division has $106 billion in assets under administration.
Security Benefit has about 1,000 employees, which include about 900 in Topeka. Guggenheim Partners purchased Security Benefit in 2010 after the company struggled during the financial crisis of 2008-09. Michael Kiley has been CEO since 2011, and has worked with the company since 2010.









Oil By Rail Drops 25% at BNSF Railway

If anyone needs proof that oil production is down in the shale play in America, look at railroads’ rapid decline in hauling oil in 2016.
BNSF Railway, the largest hauler of crude by rail, has seen a 25.7 percent decline in carloads of petroleum through Week 10 year to date; and Canadian National Railway’s shipments of oil dropped 14.4 percent through Week 11 YTD.
BNSF Railway shipped 75,322 carloads of oil through Week 10, down 25.4% from 101,373 carloads shipped through Week 10 2015.

In 2014 BNSF often hauled 10,000 to 11,000 carloads of petroleum per week, but has trended down over the past 15 weeks to 7,600 carloads per week.
Canadian National Railway’s oil by rail volumes have trended down to 5,000 per week from 6,500 per week a year ago.
Drilling for new oil has fallen off.
The U.S. rotary rig count from Baker Hughes was down 4 at 476 for the week of March 18, 2016. It is 593 rigs (55.5%) lower than last year. Rig count is at the lowest level since Baker Hughes started counting rigs in 1949.
Much of the oil hauled by BNSF Railway is from the Bakken play. 
A Bakken well's production may decline by more than half in the first year -- this is a much faster drop than conventional oil wells, because shale has very low permeability.


BNSF also has seen 31 percent decline in coal volumes and a 31 decline in metallic ores, but an 11.72 percent increase in intermodal units shipped.
BNSF's total volumes were down 3.53 percent YTD.
All Class I North American railroad volumes remain in a slump. 
Union Pacific's volumes were down 8 percent year to date through Week 11, with coal down 36 percent, metallic ores down 31 percent and no growth in intermodal shipping this year.