March 2007

Yesterday, I was trying to read up something on the origin of social security numbers, and found a lot of interesting facts about them through various sources. I am compiling them below and hopefully it will provide some interesting reading material in this boring tax season. To my learned readers, some of the information might seemed cliched, but I am sure there are a lot of people out there who have never heard about most of these facts. Here is what I found out:

• The original social security card was designed by Fred Happel of Albany, N.Y in 1936. He was paid $60 for his work.
• The first social security record was established for John David Sweeney on December 1, 1936 with a social security number of 055-09-0001. However, this is not to be confused with the *first social security card* issued. No one can point out the first card issued because hundreds of thousands of them were distributed around the same time through 45,000 post offices throughout US. Ironically, Sweeney died at the age of 61 without receiving any social security benefits.
• The lowest SSN was given to Grace D. Owen of Concord, New Hampshire in 1936 and it was 001-01-0001.
• The first recipient of social security benefits was Ernest Ackerman who received a lump-sum payment 17 cents in 1937.
• Social security numbers are not allocated serially; meaning, the first number ever issued was not the lowest and the latest number issued will not be the highest.
• So what’s the meaning of the numbers on the card? Most people probably know this, but I will mention it nevertheless. Below is a schematic of a typical social security card.

  

  The first three digits are called the area number, the next two digits are called the group number, and the last four digits are the serial numbers. The area numbers are assigned on the basis of the zip-code on your SSN application. The group numbers are just for bookkeeping purposes only, they don’t have any specific meaning. In each group number, the serial numbers are allocated consecutively from 0001 to 9999.

• Area numbers increase from east/northeast coast to west coast. People living on the east/northeast coast have the lowest area numbers (for example, people who apply for SSN from New Hampshire have the lowest area numbers) whereas, people living on the west coast and southwest areas have the highest area numbers.
• Apparently, there have been rumors in the past about the group numbers being used for racial profiling. Here is an interesting *clarification* on www.ssa.gov regarding group numbers:
  

  Apparently due to the fact that the middle digits of the SSN are referred to as the “group number,” some people have misconstrued this to mean that the “group number” refers to racial groupings. So a myth goes around from time-to-time that encoded in a person’s SSN is a key to their race. This simply is not true.

• 078-05-1120 is the most misused social security number ever….some 40,000 people have claimed this SSN as their own. Here is the story behind it:
  

  In 1938, wallet manufacturer the E. H. Ferree company in Lockport, New York decided to promote its product by showing how a Social Security card would fit into its wallets. A sample card, used for display purposes, was inserted in each wallet. Company Vice President and Treasurer Douglas Patterson thought it would be a clever idea to use the actual SSN of his secretary, Mrs. Hilda Schrader Whitcher.The wallet was sold by Woolworth stores and other department stores all over the country. Even though the card was only half the size of a real card, was printed all in red, and had the word “specimen” written across the face, many purchasers of the wallet adopted the SSN as their own. In the peak year of 1943, 5,755 people were using Hilda’s number. SSA acted to eliminate the problem by voiding the number and publicizing that it was incorrect to use it. (Mrs. Whitcher was given a new number.) However, the number continued to be used for many years. In all, over 40,000 people reported this as their SSN. As late as 1977, 12 people were found to still be using the SSN “issued by Woolworth.”

• From the start of the program in 1936 till 2005, an estimated $8.9 trillion have been paid out as social security benefits. In the same period, the program has received $10.7 trillion in income.
• In the present times, invalid social security numbers include numbers with set of zeroes ( as in 000-xx-xxxx, xxx-00-xxxx, xxx-xx-0000), numbers starting with 666, numbers from 987-65-4320 through 987-65-4329 - which are marked for advertising, and numbers with the starting three digits above 770, which are not yet allocated.
• Social security numbers are not reassigned after a people die. Here is what socialsecurity.gov says about it:
  

  We do not reassign a Social Security number (SSN) after the number holder’s death. Even though we have issued over 420 million SSNs so far, and we assign about 5 and one-half million new numbers a year, the current numbering system will provide us with enough new numbers for several generations into the future with no changes in the numbering system.

References:

• Social Security History , government source
• How Social Security Numbers Work, Howstuffworks.com
• Social Security Number, Wikipedia
• Image sources: www.howstuffworks.com and www.ssa.gov

Welcome to the 6th edition of the Carnival of Money Stories. This relatively new carnival is a product of Andy @ Money Walks‘ original idea with valuable inputs from SVB @ The Digerati Life. Since it is just starting out, there is a high probability that some of the content might overlap with the contents of other carnivals about money and finance. However, I am pretty sure that, in time to come, the carnival will shine with it’s own distinctive color, and will set itself apart from all other carnivals out there. With this positive hope in our hearts, let’s now begin with the submissions. There were 27 submissions in all of which 16 have been included in this edition. Only one submission from each blog was considered.

Money related posts with a personal touch

Adaptation: Lessons learned from being unemployed by Amy Lin @ Wisebread. Looks like unemployment is not that bad after all. There’s a popular saying, “Necessity is the mother of inventions” …after reading Amy’s article, I coined an analogous saying - Adversity is the mother of all adaptation. Or perhaps, stability makes us complacent. Think about it while reading this article.

Preparing Our Taxes Will Be A Cinch, Paying Them Won’t by Silicon Valley Blogger @ The Digerati Life. SVB shares her tax preparation experience using an “enrolled agent”. Apparently, she is having trouble with the cost basis information for her investments. I had similar trouble during last year’s tax time…and unfortunately, I have no idea what I did about it eventually. Most probably, it’s going to bite me this time too.

When Reality is Different Than Perception by Super Saver @ My Wealth Builder. Super Saver gives some examples of times when what you see is just an illusion. Here is one of his examples:

When I was about four years old, I remember becoming frantic when my uncle paid cash for a gasoline purchase. I kept telling him that my dad had a plastic card that enabled him to get gas without using any money. I recall thinking that my uncle was wasting money because he didn’ t have a plastic card.

Taxes and the Three Martini Lunch by Bill @ Ask Uncle Bill. Another one in the honor of tax season. Apparently, I just realized that I am having a hard time focusing on anything that has to do with taxes. Probably, some of you may extract more sense out of non-deductible martini expenses that Bill is talking about.

Timeshares: Should we buy one? by LA MoneyGuy @ It’s Just Money. LA MoneyGuy says he has a hobby of attending timeshare presentations and wonders whether he should buy one. There are some interesting comments on this post (most of them discouraging him from the idea of buying timeshares)…make sure you read them.

How I live on $600 a month by Matthew Paulson @ Getting Green. Hmm..interesting. You know, I have been with students who live comfortably within $400 a month in my town …and I am not talking about old times, this is just about 2 years ago. I guess cheap living is a virtue of not-so-large university towns.

“The Science of Getting Rich” Evaluated, Part Two by Debra Moorhead @ Debra Moorhead.com. I didn’t find much of *science* in here, but it may probably appeal to a section of readers.

Ten Money Questions for Jennifer Chrisler by Nina Smith @ Queercents. Jennifer Chrisler is the executive director of Family Pride, a national non-profit organization. Nina of Queercents asked Jennifer to share her views on money, relationships, equality and happiness.

Cash Flow is King by Wilson Ng @ Reflections of a BizDrivenLife. By the way of an example involving his student, Wilson talks about the importance of cash flow. Here is an excerpt that will give you an idea of what his student was up to:

He was risking virtually all his savings to build up a fast food restaurant. Not only that, he was going to borrow an amount that was twice his own money to fund the remaining amount. What’s more, in order to be able to build the restaurant, he was going to build the restaurant on a lot that he proposed to lease - as a way to lessen initial investment and a way to get a better location.

Tim of My Money Forest Contributes To Brass Magazine by Tim @ MyMoneyForest. Not much of a story here, but I thought it may be appropriate to congratulate Tim on the inclusion of his article in Brass Magazine - a publication aimed at informing young people about money. May be, you can try and get some good contacts from him.

Money related general knowledge posts

Don’t look for any personal stories in the following entries. These are some helpful “how to” type of posts dishing out some free advice. The titles are pretty much self-explanatory and hence I will abstain from adding my own jargon in trying to explain what the articles are about.

How to: Make Money with Balance Transfer Arbitrage by Jimmy Atkinson presents @ Ask the Advisor.

What Does it Take to Start a Startup? by John Wesley @ Pick the Brain.

10 Simple Ideas to Save Thousands of Dollars per Year by David @ Worldwide Success.

Money and philosophy posts

OK, I have to admit that I had a hard time understanding the central idea behind the entries below…and whatever is hard to understand can be safely classified as *philosophy* For most of you these may be just general rants, but who knows *shrug*…may be some of you can find the meaning of life and universe, etc., after reading between the lines.

Money Plant by Gazzali Maidin @ Beneficial Learning for Outstanding Generation.

Don’t Eliminate Your Debt, Attract Abundance! by Maria Palma @ The Good Life.

What is Money? by Nenad Ristic @ Money Conciousness

That’s all for this edition of the Carnival of Money Stories. Hope you enjoyed your stay. You can submit your money stories to the next edition of the carnival by clicking here.

‘Adapt or die’ image source: tiki.oneworld.net

Over the last 2 days we watched 4 movies: The Illusionist, The Prestige, An Inconvenient Truth, and Stranger than Fiction. All four movies were worth the money and the time. The Prestige and The Illusionist were especially good with the magicians and the suspenses. An Inconvenient Truth is technically a documentary, and I would recommend watching it from an educational point of view rather than from a polictical, or entertainment point of view. Stranger than Fiction was a bit flat but still not at all bad. All movies were borrowed from a place that charges us $1.08 (including tax) for each movie (I will write more about this method of renting movies very soon). That’s about $0.54 per hour of entertainment for the weekend…pretty good.

Now, let’s get back to some interesting articles published over the week on some interesting personal finance blogs.

Successful Investing 101 - Value and Momentum Systems by Super Saver @ My Wealth Builder. Super Saver compares two, somewhat contrasting, investment strategies in this post. I am not yet a big player in the stock market, but I have started looking at stock prices carefully, and have realized that my natural tendency is towards value investing. However, I have also realized that this tendency is putting me in a sort of procrastinating mode about when to put my money in.

Why I Disagree with Dave Ramsey by GCS @ Gaming the Credit System. Here is an interesting rant about some of Dave Ramsey’s ideologies. I connect with the author on his personal view about cash…I have had similar experiences in the past. Here is an excerpt from post with respect to a popular point-of-view “people spend more when using credit cards“:

So you have to turn the question around: what if, instead of credit cards “making” people have larger transactions, having larger transactions “makes” people use credit cards?

Why You Shouldn’t Trade In Your Stuff by Amy L. Fontinelle @ Personal Finance Advice. Amy gives some examples about cars, cell phones, CDs, books, etc. in order to explain why trading your stuff might not be such a good idea at times.

How To Throw A Kid’s Birthday Party Without Spending A Fortune by SVB @ The Digerati Life. Some practical tips by SVB on how to celebrate frugal birthdays. On a related note, I have often wondered…parties for very little kids are more about the parents than the kids. Probably, some of them have genuine sentimental reasons, but most of the times I have felt that it is just a show-off…may be something like “how my party was better than your party” type of stuff.

Top 5 Ways Companies use Psychology to Trick You by Lazy Man @ Lazy Man and Money. Lazy Man points out to some commonly used advertisement strategies that companies employ to attract attention from customers. May be, it’s more like companies use psychology to advertise, and we trick ourselves into buying that stuff.

Check your change! by John @ Mighty Bargain Hunter. John draws our attention to some possible treasures that may cross your hand in the form of seemingly ordinary change. Watch out for those cents carefully, some of them might be much more worth than you think they are. Not very exciting for credit card users (like me).

Ten Reasons Why it’s Tough to be an Entrepreneur by Ben @ Money Smart Life. Being an entrepreneur takes a lot of guts and Ben explains why. Seems to me like it might be easier for people with a strong financial background to jump into being an entrepreneur….at least half of those problems, that Ben mentions, will be eliminated with a good financial backing.

Before I conclude, here are some carnivals that featured my posts this week:

Festival of Frugality #63 by SS @ Stingy Students.

Carnival Of Personal Finance Number 89: The Celebrity Edition by Henry @ Binary Dollar.

Carnival of Debt Reduction #76 - Free Debt Reduction Seminar by Ben @ Money Smart Life.

We have a couple of friends associated with a winemaking class on campus. One of them works in the lab in which students learn to make wine and the other one took the class (I think) last semester. Interestingly, it’s illegal to consume alcohol on campus, but legal to make it (may be, they make it but never taste it or something). Anyways, so these friends were helping their professor clean up the lab and decided to get rid of dozens of bottles of wine that had stocked up after the last winemaking class (it must have been sometime during the last year). Me and my wife *happened* to be in the vicinity and our friends were happy to dump three bottles of red wine into our backpacks.

We were a bit hesitant about how this free wine (made by students) would taste. However, I experimented with one of the bottles yesterday and found it to be extremely good (may be that one was made by students who got an A in the class). Seriously, I would have paid $12+ for this wine in a store. Assuming that the remaining bottles are equally good, we just got about $36+ worth of wine for free by just being at the right place, at the right time (accidentally).

In the past we have heard numerous accounts of students getting free lunches/snacks by the virtue of their friends working in on-campus cafeterias…but we never heard of anyone getting free wine before this.

Btw, just to satisfy my curiosity, I checked online for some winemaking procedures and stumbled on this. It’s a pretty detailed, step-by-step, guide to making your own wine at home. I am certain that it would be extremely frugal to make your wine this way…but, I am also very sure that the whole winemaking-at-home thing will not be easy (those students must have done a really good job). If you want to be an oenophile for cheap, consider investing in a winemaking class or read this article at Get Rich Slowly.

I went for a haircut yesterday, paid $10 plus a $2 tip, and to make a long story short, let’s just say that every day will be a bad hair day for the next month or so. It’s not really new for me, this has been happening for quite some time. In the last 4~5 years, I must have had only 5 or 6 good haircuts. I have changed barbers, changed barbershops, tried showing loyalty to certain barbers (in the hopes that building a good rapport might get me a good haircut), but nothing seems to work.

I am not sure what the reason is, but the most probable culprit (to me) seems like the electric haircutting machine that these guys use. It’s a one-size-fits-all gadget and some barbers seem to use it like a chainsaw…no thinking, just hacking. Somehow, I get a better haircut when barbers rely more on plain old scissors than the chainsaw…I mean haircutting machine. Scissors make the process a bit slower, but I guess that’s what gives the barber some time to think about what’s happening with your hair.

The fastest (and the crudest) haircut I ever had must have taken like 3 minutes. I agree it’s a fast world, and everyone is in a hurry, but $10 for a 3 minute job seems like a bit too much. That’s $200 an hour. I don’t mind paying at that rate if it’s a good haircut…but that doesn’t seem very likely to happen.

Anyways, after some observations, I have figured out some hacks that may improve one’s haircutting experience (and yet, it does not mean you will get a *good* haircut…you may just get a better haircut than a bad one). Here are some of them:

• Don’t go near closing time or you will get a bad haircut.
• Go when you are not feeling sleepy; it’s very easy to doze off when you are doing nothing sitting in the barber’s chair. This is just so that you don’t regret it when you open your eyes.
• Don’t go when there is a football or basketball match going on TV. You will be watching the match and so will your barber (so nobody’s watching the hair).
• Keep talking to your barber (so that he/she is not distracted by other customers/barbers). If your barber starts talking to other barbers, it means he/she is loosing interest in cutting your hair.
• In addition to whatever numbering system they use (like number 1 = just cut 1/1000th of an inch or number 10 = make me bald) give some length clues. For example, “make it half of what it is right now” or “shorten it by 1 inch“, etc. The number system is tricking; different numbers mean different things to different barbers.
• Wash your hair before you go for a haircut. There are a couple of advantages to this. Your barber won’t need to spray gallons of water to wet your hair (I hate it when they spray too much and it starts dripping over the eyebrows). Plus, this will also keep your barber focused on cutting your hair instead of trying innovative ways to avoid the smell of dirty hair.

By the way, I still give them a 20% tip just for agreeing to cut my hair; this is to appreciate two facts: 1. it’s a standing job, and 2. if they refuse to cut it, there is absolutely no way I can do the job on my own. In fact, I am ready to give a 50% tip if someone does the job well…ever.

Some readers will probably remember my earlier post Cost Of Laziness: $14.40 And Some More, in which I whined about my laziness in applying for a scholarship. Fortunately, the application reached the organizers on time and yesterday I got a letter from them telling me that I am among the few people they chose for the scholarship award! Man…it’s one of those rare moments when I feel that good grades and hard work are worth the trouble.

Although I received a check right now, there will be a “formal dinner and presentation ceremony” sometime in middle of next month. In return for the dinner, I will have to bore some uninterested people to death about my research. Sounds like a good bargain.

Money comes and goes and this time it was no different. Here is a rough allocation of the windfall:

• Earmark for next year’s taxes (it’s a taxable income): 30%
• Transfer to HSBC savings account: 60%
• A hearty dinner for two in a good restaurant and some other personal cravings: 10%

The dinner and cravings were taken care of yesterday and the other two items were put in place today morning….so there’s how 100% of it is already gone.

The dinner was excellent and by far the most expensive one we have had. From the receipt below, the astute ones will quickly deduce the name of the restaurant.