Ask Gustav: Can you afford an emergency?

When Hurricane Katrina hit the Gulf Coast three years ago, the lives of some were lost and the lives of others were destroyed. Survivors, in addition to losing their homes, belongings, and loved ones, suffered devastating financial losses. As Gustav approaches New Orleans, I wonder what from the past will return to haunt veterans of Katrina. What did they learn? How have they prepared? Will their lives be any less devastated?

There have been nights in my life where I have laid awake, wondering how I would make ends meet. I don't need to go into the details of my monthly bills and income, but sometimes they were too close for comfort. I remember once, a few years ago, the last of my monthly bills came due three days before payday. Determined to pay them all on time and avoid carrying a balance on my credit card, I was left with $7 in my checking account until my next deposit came through. How's that for close? Fortunately for me I survived without incident, but it certainly got me thinking about changing my ways.

From then on, I started to live by the principal of "pay yourself first." I could always come up with a legitimate reason to not save money. Because of that I failed to look out for myself, not understanding that I couldn't afford an emergency. By not forcing myself into a "pay yourself first" mentality, I was chaining myself to a paycheck-to-paycheck lifestyle -- one that always left me above the surface, yet unprepared for a flood. I am thankful for having those three days with $7 in my checking account. It was that tiny amount that inspired me to start saving -- even just a little bit each month -- and escape the world of waiting for payday.

I hope that the residents of the Gulf Coast learned this lesson after Katrina. Undoubtedly, the city will close down for a few days, putting hourly workers on the bench and docking their paychecks for their downtime.

Here are my words to the working poor of that area: If you cannot afford to save $50/month for an emergency, you must save $50/month for an emergency -- by whatever means possible. The harder it is to scrape up a little extra money each month and stick it in a savings account, the more you need to start doing it. If you can't afford $50/month, you certainly can't afford an emergency.

Three easy, free ways to improve your relationship with your credit card

Depending on your spending habits, you probably have a love/hate relationship with your credit card company. You're also probably aware of how APRs, rewards, and balances work. But did you know that if you have a decent history with your credit card company, there are a few easy and free things you can do to improve your credit score? The following list describes a few activities that most card companies will allow:

1. Periodic rate reduction -
If you use your card regularly and do not carry a balance from month to month, check your credit card statement to see if your APR is automatically reduced. If it isn't, call customer service every six months and ask for a reduction.

Even if you don't carry a monthly balance, it's always a good idea to have the lowest APR available to you. If one day you lost your job and had to live off your credit cards for a while, it'll be much easier to survive with on12% APR than 24%. My Bank of America card automatically reduces my APR after a few months of good payment history. Over the past year, my APR has come down four percent.

2. Periodic credit limit increase -
If you have good payment history, halfway decent credit, and/or a recent surge in income, you can request that your card company increase your credit limit to a reasonable amount of your choosing. Doing this does not usually count as an inquiry to your credit report, thus not causing detriment to your credit score, but you'll definitely want to ask first. Be careful when doing this, as inquiries for your credit report knock down your credit score a few points.

Increasing your credit limit will increase your credit score. A significant percentage of your credit score is based on your available credit. An high, untouched limit represents responsibility on your part and results in a beefed-up score.

Note: Only do this if you've got complete control on your spending. If you're a person who treats your credit limit like a bank account balance, this is not a good idea; your limit should only be increased to improve your credit score. In fact, this would be a great move on your part in the months previous to buying a car or house (the limit increase takes a month or two to show up on your credit report).

3. Pay off before billing date -
I'm a proponent of paying off credit cards in full every month, as close as possible to the due date. This allows me to earn interest on the money in my checking account for as long as I can before writing a check to Visa. However, if you're trying to boost your credit score, it might be worth your while to pay it off early -- before the next statement date.

If you use your credit card for a significant amount of your purchases, pay it off every month, and are trying to increase your credit score (for a home or car purchase), try sending a check just before the end of the statement period. Look at your last statements and try to find the day of the month that the statement ends (not when it becomes due). The balance on that day is what will become due and is also the amount that is reported to the credit bureaus.

A significant part of your credit score is based on what percentage of your available credit you are using. By sending a check to pay off the credit card a few days before the last statement date, the credit bureaus will think that you have zero balances and report upon that fact accordingly (probably increasing your score). If you wait to pay off your debt until its due date, any new mortgage or auto lenders will see that debt and consider it while making their decision. Though a little bit of debt on your report is completely normal and OK, credit bureaus do not differentiate between those who pay it off each month and those that carry a balance. Personally, in the month previous to applying for a new loan, I pay off my balances early.

The transcription of recorded history

Yesterday TechCrunch revealed some interesting news about he WB, the popular teen-focused television station, who recently did a complete overhaul on its website. Powered by Digitalsmiths, the site's search engine features the ability to search the station's episode video library for character dialogue. Now, anyone can dig up a specific episode based on what the characters were talking about. And it's all powered by voice recognition software.

This technology will knock the socks off of any Seinfeld fan who can't remember in which episode they say "Schmoopy," "Serenity now!!!,"You're a very very bad man," or "The sea was angry that day, my friends."

I always pictured voice recognition software (VRS) to be a way of the future, but mostly with new media, never envisioning its impact on translating the world's recorded history. My Civic has VRS which I use to control my GPS hands-free while driving; I didn't picture it to go much futher than that. Google's mission is to organize the world's information and make it universally accessible and useful. So will their next project be to use their computing power to transcribe our diverse library of spoken information into searchable databases? They're already doing it with newspapers -- why not with news broadcasts?

The spoken word is found in so many places: movies, television, radio shows, the congressional floor, college lecture halls. How neat would it be if anyone could digitally record audio, upload it to an online translating engine, and receive an instant transcript? Translation errors could be manually corrected by the user, only making the engine smarter as time went on.

All of the sudden, instead of searching the internet for content that people have taken the time to sit down and write, you could search the things that people have stood up and said -- credible people, too. Imagine the technology's effect on college students who no longer need to take notes or go to class! All they'd need to do is nurse their hangovers at home and read a lecture's transcript.

This would probably be a nightmare for politicians. No longer would politi-sleuths need to dig through hours of video to find evidence of policy flip-flops. With a snap of the fingers, one could find every single thing that John and Barack said into a microphone about healthcare or Iraq...good luck, you two!

Some new technologies can be borderline creepy -- like cloning and killer robots. Despite their obvious differences, I would place mass automatic voice transcription right up there with the creepiest. Useful? Definitely. Comes along with limitless latent effects? Absolutely.

Scott to the RIAA: "Give your customers what they want!"

Of my two favorite music websites, Pandora and Muxtape, one has already been shut down and the other is just inches away. Both have been in the sights of the Recording Industry Association of America (RIAA) for some time now, and I guess that their demise has been virtually inevitable. Given the gentle, honest, user-focused values of the music sites and the wealthy, vinyl-and-8-track old-school mentality of Big Music, it's not hard to see why there's an inherent conflict.

I'm a steadfast supporter of capitalism, and firmly believe that consumer demand is the force that drives businesses. I tend to favor less regulation as opposed to more. I believe that businesses should be allowed to make mistakes because they will ultimately have to answer to the mob -- their customers (and potential customers) that demand (or don't demand) their products and services.

The internet challenges everything that our parents knew about procuring and listening to music. Thanks to digitital, downloadable audio, we can now instantly purchase songs and albums online and will someday no longer need CD players in our cars. But the internet changes other things about music -- not just how we buy it. Internet radio stations like Pandora let us discover new artists based on what we already like. Social music sites like Muxtape allow us to express ourselves with our musical tastes and keep tabs on what our friends are listening to. The internet enriches our melodic experiences in so many ways.

The demands of music consumers have evolved incredibly for the past ten years. We no longer want to walk into a record store and buy a CD to put on our shelves. We want to interact with each other based on the premise of song. We want to learn about new artists from our friends and not just Casey Kasem. We want to be musically enlightened. And we want to listen for free. But the RIAA is stuck on the old way of doing things. They have monopolized popular music and will do anything they can to keep our wallets feeding our ears, even though that is clearly the opposite of what we have demanded.

But it can't last forever. No matter how hard they try, the RIAA will fight an uphill battle against its customers. Without substantially changing their business model, they will fail. They do not understand that someone will always find a way to listen to songs for free on-demand. Unfortunately for them, because their product is digital and can be easily duplicated without variable costs, they will never develop a cost-effective solution to stop developers from coming up with increasingly clever back doors and untraceable workarounds. The RIAA's attempt to stop pirating is like trying to stop a swarm of bees with a .22 rifle -- sure they'll nab someone every now and then, but the stings will never stop unless they learn to embrace the swarm and give them what they want.

I believe that the internet has leveled the playing field for musicians. No longer is their success dependant on being discovered by a major record label. I believe that the days of the mega pop star are numbered. If super popular musicians continue to sign with record labels that are constantly at war with their customers, listeners will eventually start to follow the path of least resistance and explore the music produced by more forward-thinking labels.

I don't have a solution for the RIAA that details how they can survive, given the shifting demands of their customers. But I know that fighting isn't the answer.

The Earth (and everything on it) in our pockets

I've always loved maps. My most prized possession is my 4'x6' US map in my living room. On it I have circled all of the places that I've been, with at least one marker in each of the lower 48 states. And along with big paper maps, I love their digital counterparts as well.

Computerized maps can do a lot for us. They can change their level of detail on demand, hide or display different types of zone data, and even give us instant turn-by-turn directions. Recently, APIs for Google Maps and Microsoft Live Maps have allowed web developers to create nifty applications that utilize these digital maps, giving all kinds of information about specific destinations like restaurants and post offices.

Concurrently with digital map technology improvements, mobile phone technologies will grow as well. Since I got my first Blackberry in 2006, mobile digital mapping capabilities have skyrocketed. I used to be able to see just a plain, no frills road map. Next, I was able to see satellite images. After that, I could get turn-by-turn directions. Now, I can see my exact location and get directions based on the surrounding traffic patterns -- and I still have the same phone!

Check out this article from TechCrunch that talks about a 3D mapping application (similar to Google Earth) from a company called Earthscape.

Mapping software and mobile technology will continue to evolve together, and their synergy will grow as well. Before too long I picture in-vehicle GPS devices becoming internet-abled, probably by pairing it with a 3G phone. Instead of waiting for a map update from the manufacturer and plugging them into the computer, the devices will consume streaming map data from Google and Mapquest. Let's not forget that they'll also have access to current road and traffic conditions as well as local business listings. Today, to get the most up-to-date information from my built-in GPS system, I need to purchase a DVD that comes out once a year and costs $200.

Additionally, I envision social networking sites to partner with digital mapping and mobile phone companies. Currently, when you log into Facebook, you can see which of your friends are 'online.' Imagine being able to see where your friends are, and, if you're using their mobile interface, which are within a mile, a half-mile, or 300 feet. How much easier would that make a trip to Walmart with the family? How much safer would our young children be if their exact location could be tracked by mom and dad?

Privacy could be an issue, of course, but let's assume (just for fun) that effective controls are in place. A mother could set up an alert that would call her if her child traveled more than a quarter mile from his or her school during the day. A group of college kids going to Bonnaroo together could split up and then find each other later based on their locations. Imagine that when updating your Twitter account, you could send along a GPS update! I would imagine that would be useful if you were lost and on the phone, trying to explain to your local friend where you were. Users could opt-in and out at will, ensuring complete privacy and unbelievable utility.

I'll bet that pretty soon, with technology improvements and enhanced cooperation between digital maps and mobile phones, we will all of a sudden know a lot more about the world that we live in. We will have the world in our pockets. Because when you bring it back to the basics, all that maps really do is answer a single , simple question: "Where is ____?" It's up to us -- and our technology -- to fill in the blank.

Definition by consumption and impressions of affordability

I'll go on a limb and admit that I'm a bit of a hypocrite -- I'm going to criticize a behavior of which I myself have sometimes been guilty: Definition by consumption.

Many people tend to define themselves by their possessions. I do it; my family does it; my friends do it; and you probably do it, too. We get excited by the things that we think are cool and hip and, in our interest of keeping our image commensurate with the times, we spend without thinking.

Advertisers understand this phenomenon and capitalize on it. Ads are designed to answer our questions about self identity and help us understand what's in and what's out -- all during primetime. It's partially because of ads that we feel the pressure to buy the high-def TVs and the iPhones. But it's because of the silent, yet sensed burden to please and impress our friends and family that we actually buy them.

By the time we feel that we've satisfied our friends and even ourselves with our possessions, our overspending has most likely become habitual. Just like smoking cigarettes, we know it's bad for us. But because the habit controls us, it clouds our judgment and keep doing it anyway. As a result, we have false perceptions about the affordability of the things that we buy.

When I see a recent college graduate spend his first paycheck on a 60" TV or a new gaming computer, I tend to wonder if his buying is in line with his own financial wellbeing. My first big purchase was a car. As soon as I graduated and started getting a real paycheck, I bought a brand new car that was out of my league. Though I still own the car and continue to make the payments, deep down I regret the purchase. I felt entitled to a new car; I deserved it because I had a great job. And I let that entitlement go to my head and refused to consult my financial plan and perform an objective analysis. Instead, I convinced myself that it was a good idea.

If I had performed an objective analysis of the purchase, I would have realized that I had an armload of student loans, several thousand dollars worth of credit card debt, and almost no savings. Let's not forget to mention that my current car was paid off and running like a charm. Yes, I had a decent salary and was managing just fine, but I didn't have any financial goals. I didn't understand the importance of saving for retirement or having money in the bank put away for an emergency. My own definition of affordability had a different definition in those days: if I had more money in the bank than the item's out-the-door cost (down payment, etc), then I could afford it.

What would happen if my wife called me, upset, and told me that she found out that she might lose her job? It would be a surprise to both of us, but neither of us would have to lose our minds. She and I have worked hard to make a financial plan for ourselves and we've stuck to it. Because of our emergency fund, we would be able to survive for a few months. No matter what your definition of affordability, I can tell you that unless you have some savings, you can't afford break in income.

So am I saying that you can't buy a new TV or go to a restaurant or ever catch a whiff of that new car smell? Of course not. But before you make your big purchases, think of the big picture. Pretend that you're a business analyst evaluating the cost-effectiveness of a new project -- and that project is your life. If you're a recent college grad, set a goal for how much money you want to keep in the bank on a regular basis -- one, two, three, maybe six months' pay. Establish your goal and stick to it. Once you've met your goal, or are at least headed in the right direction, then you can make the trip to Best Buy or the car dealership.

Sure, you can impress your friends with electronics and fancy service, but does that really matter in the long run? Any dork with a job and a driver's license can get a credit card. You show me a person that is financially independent and I'll show you a person that impresses me.

Olympics grab bag -- Who would win?

Olympians like Shawn Johnson, Michael Phelps, and Usain Bolt are incredible athletes. Their bodies tell astounding stories of weight lifting, skill training, and scientific nutrition. The athletes have built foundations of skillful, athletic precision that have earned them the title of "Best in the World" in their respective sports. But what if we mixed things up a bit?

Imagine an event that no one in the world has ever seen before: The Olympics Grab Bag.

Here's how it works: At the end of the Olympics, after all of the medals have been awarded, all of the medalists would write down their names, place them in a large spackle bucket, and then wait for the event raffle. Each Olympic event would take place once more, only now with athletes from different sport. How would it turn out?

The divers would probably be pretty quick swimmers, the bicyclists would excel at long-distance running, and the badminton players would ace everyone else in their tennis serves. But the exceptionally out-of-place Olympians would truly ensure hilarity:

• Shot putters on the balance bean
• Female gymnasts in the Taekwondo ring
• Basketball players fencing
• Rowers shooting
  

The Olympics Grab Bag could also combine single sports into new ones:

• Shooting and equestrian
• Weightlifting and water polo (let's see them tread water with weights around their ankles)
• Golf and handball
• Soccer and boxing (no more yellow cards)
• Cycling and archery

Please feel free to submit examples of out-of-place athletes and combined sports. A full listing of Olympic sports can be found here.

Twitter -- useful or creepy?

I usually give legitimate companies that hold personal data the benefit of the doubt and assume that they won't abuse it or sell it to anyone that will abuse it.  Google is sometimes under the microscope because of the wealth of information that they collect.  After all, their advertising engines read our emails and display ads that fit the context of what we're communicating about (except sometimes when they mess up, which I find hilarious).

Though an incredible potential for abuse exists, I'm not as afraid of Google, who comforts our fears with their company creed, "Don't Be Evil," as I am of connected individuals who might not have the same proclaimed level of integrity as Google.  And a lot of those individuals I don't trust are on Twitter.

One of my best buds talked me into joining Twitter.  He said it was "fun and easy."  I agree that sometimes it's fun and it's definitely easy, but it leaves me nervous that it can change the equation for those who think stalking is fun, but not easy enough.

I'm going to keep my twitter account, but will use it with a little bit of caution.  I will no longer use my full name as a username for most sites because of a bad experience on YouTube.  If you exercise this for Twitter, it will make it harder for people to find you that you don't want to find you; like your boss; like your mother; like your girlfriend.

Additionally, for my personal Twitter account, I don't allow people to follow my updates if I don't know them.  If I find that I'm being followed by someone that I've never heard of, I simply block them (which seems a little harsh).  I don't usually give a lot of specific details about what I'm doing, but if I'm going out of town, I'm likely to update my account to say what city I'm in.  If a criminal wanted to, he or she could follow my Twitter updates, do some research to find out who I am/where I live, and wait until I say something like "out of town with the misses for a few days" and then come burglarize my house.  Yes, it's a little out there, but it's a can of worms that I will just choose not to open.

I don't know why someone would want to follow me that doesn't know me.  If a complete stranger wants to read my daily updates, I'm not comfortable with that.  I'll gladly share my unique username with my friends who can then see what I'm up to, but that's where my commitment lies.

Things I never knew about credit card companies

Last night my host and friend helped me get my weekend off right with an 18oz ribeye, expensive beer, and good company. After dinner, we sat outside and finished the evening with a bottle of bourbon and a long conversation about personal finance.

My friend and his roommate are employees of a major credit card company, and I enjoyed picking their brains for a while. I ended up learning a few new fun facts about credit card companies, their customers, and their business model that I thought I would share with my readers.

1. Decisions regarding a customer's interest rate and credit limit cannot be affected by a customer's age. If a 90-year-old has a credit score and income similar to a 30-year-old, he must be given the same interest rate and credit limit as the younger customer. This is related to the next point.
2. Because credit card debt is completely unsecured, the heirs of a deceased cardholder are not legally obligated to pay the card's balance. Approximately 90% of the time relatives do the right thing and use the estate of the deceased to pay off the debt. However, they are not legally obligated to. This is why credit card companies would prefer to not give credit to an older customer (fearing they might die). In theory, if someone has some foresight into their own death due to a terminal illness, that person could max out his credit cards and never think twice about it. He could buy a car, electronics, or the entire inventory of a liquor store!
   
3. As we know, credit card companies make their money in three ways: by charging interest on revolving debt, charging service fees (i.e. over-the-limit, returned check, late payment, etc), and charging a small percentage to retailers for each purchase. My friend confirmed that approximately 65% of their revenue comes from interest payments. The other 35% comes from the other fees.
4. If you separate customers into different bands of credit scores (350-400, 401-450, ... , 800-850), higher bands have a lower risk of default, with one exception. The inverse risk of default peaks at around 800 (meaning that a score of 800 indicates the lowest risk), and then moves down just a bit as it approaches until the maximum score of 850 (meaning that a score higher than 800 presents a higher risk of default). They believe this occurs because most customers with a credit score above 800 have had established credit for a long time...a really long time. In fact, they've had credit for so long, they're more likely to die and default on their balances. Though the difference isn't large, it's still an interesting phenomenon.
   
5. Body Mass Index, a standard for determining a person's overweight status, can be correlated with credit score. Essentially, the heavier a customer becomes, the better chance that he will have a lower credit score.
6. Finally, credit card companies are the almost the largest purchaser of envelopes and postage, second only to the federal government.
   

Buying tickets online and translating old newspapers

Do you remember the last time you bought something online and had to prove that you were a human? You know the drill: sites will display a set of hard-to-read characters that you must read and type into a text box before the transaction can continue. This is an important feature, especially for ticketing websites, ensuring that hackers can't write programs that will access the site, follow the appropriate links, and buy all of the tickets before anyone else is able.

By making the purchaser read and reenter text that is irregular and slightly challenging to discern, programs designed to cheat the system are stopped in their tracks. Most people don't mind this extra step that takes, on average, ten seconds to complete. After all, it levels the playing field for everyone interested in buying those Hannah Montana tickets the instant they become available on ticketmaster.

But did you know that when you're entering this text, you're actually helping the newspaper industry? Many longstanding newspapers have been converting their archives of old printed pages to digital text, allowing them to be indexed, searched, and browsed in a modern fashion. By using Optical Character Resolution (OCR) software, just like your home scanner may have, workers are able to scan the old pages and let the computer translate the print to editable, searchable text.

Quite frequently the computers come across a word that they are not able to translate. After all, some of these newspapers are dozens of years old and not in the best condition. Imagine how much time it would take to manually evaluate and correct the blurry, ink-smeared words in 50 years' worth of newspapers! It would take thousands of man hours. Who's got time and budget for that? Well, the Computer Science department at Carnegie Mellon University found a way to procure some pretty cheap labor. And it includes you and me!

CMU developed a system that extracts the words that the newspapers' OCR software can't identify and places them into a package that is provided to websites with the "prove you're a human" security measure. Instead of entering in randomly generated numbers, users will digitize the OCR-unreadable words from an old newspaper or book. The thousands of hours that humans spend entering in random words are now productive and helpful. To ensure accuracy, each unreadable word is showed to multiple humans. As long as there is consensus on its translation, the newly digitized word is returned to the New York Times or whomever asked for its translation.

Additionally, computer scientists at CMU argue that humans actually spend less time filling in the letters with this model because it is easier to type an actual word than it is a random alphanumeric phrase.

So the next time you post a blog comment or buy tickets online and have to fill in that annoying text box, know that you're contributing something to the information age. You're helping to index the writings and reportings of our pre-PC, typewriting ancestors.

The death of letter writing

Every once in a while I'll hear a friend, family member, or colleague bring up the fact that letter writing, a once beautiful communication platform, has since been slain and replaced by email and instant messaging. I myself remember hand writing letters to my best out-of-town friends when I was a kid, mostly those who had moved away from Cooperstown or caught my eye at summer camp. A trip to the mailbox in my adolescent days certainly had a different feel than it does today. But I dare say that even though today's peer-to-peer messages don't have the ink smears, stickers, lipstick prints or the other qualities that we loved about letters, our social relationships with one another continue to thrive and our understanding of each others' thoughts, feelings, and plans for the future has only improved.

Though handwritten letters may have gone the way of the milkman, our capacity for communication has scaled proportionately with our improving infrastructure and technology. As the internet flourishes, so do social networking sites like MySpace and Facebook, adding thousands of new users daily. And with more people to talk to, our personalized messages to one another have transformed from elegant & personal to lowercase & efficient. But I don't necessarily view this as a bad thing.

When I wrote letters to long lost friends and family members, a majority of their content comprised of updates about my everyday activities: who I was hanging out with, where I had gone on vacation, where I was working, and what music I was listening to. These details weren't customized for the recipient, but they were nonetheless important. Today, those "Scott-specific" life details that I want to share with everyone are delivered by a single Facebook profile instead of by dozens of of individual letters.

Because of the inherent redundancy of the essential common, non-personalized details, letter writing was an inefficient way of meeting our "keeping-in-touch" communication needs. It was a time consuming process that forced us to either make extra time for writing or pick and choose our recipients. Now, the substance of our messages can be more relevant and customized for each friend, as much of the overhead is handled by our online bulletin boards. This lets us keep in touch with more people with less effort.

A criticized downside of our current forms of electronic communication is the degraded quality of individual messages; we don't write with the same beauty and prose as our ancestors. However, I believe that our beautiful, prosaic writing has simply shifted to another platform. As technology enables me to share my photos, status updates, profile information, and efficient instant messages with my friends, I am able to concentrate my real writing elsewhere. The way I see it, real writing is far from its death. And the capabilities of electronic socialization combined with our ability to communicate with more people compensate for potentially lower quality language and grammar in our personalized messages.

After all, why do most of us communicate with our friends? To impress them with acrobatic linguistics? Or to tell them what we're up to, consult them for advice, and remind them that we care?

Add some zing to your site (or cash to your pocket) with stock photography

If you're a photographer or a the owner of a website, you should check out iStockPhoto.com. iStockPhoto is a Canadian site that allows photographers to upload their own photos to a platform that sells the royalty-free photos to designers. Note: In this case, royalty-free means that the designer pays a single flat fee for the usage of a photo and does not pay the photographer or site each time it is used.

Here's how it works:

For designers:
You can purchase stock photography for one of two prices: an ad hoc price and a subscription price. Only site-proprietary credits may be used to pay for photos. Credits cost up to $.94 apiece with an on-demand purchase, and as little as $.29 apiece with a $521/month 60 credit/day subscription (which are use-it-or-lose-it credits). $.32 credits are also available with a $96/month 10 credit/day subscription.

The price of photos then depend on the size and resolution that you would like to download. Low-res photos cost one credit. Extra high-res photos cost 20 credits.

For photographers:
As you might imagine, there are a lot of photographers out there that believe that their work is cunning and genius and that graphic designers would gladly give a left leg (or something else) to get their hands on one of their photos. The truth is, there are lots of good photographers out there and iStockPhoto is very particular about the photos -- and types of photos -- that they post on their site. In fact, just to be able to post photos on the site, photographers must fill out an application, read about several of the site's guidelines, take and pass a quiz on the material, and submit three artistic samples. I've always considered myself a skilled photographer, but my own application was denied.

Remember, this is a stock photography site. Most of the photography is non-controversial and geared toward a corporate environment. The models are attractive, the kids are cute, and the colors are bright. Before you submit any of your photos, browse the site to see what has been the most popular. From what I can find, this is the most popular photo on the site.

Photos are heavily screened before being listed, and guidelines are clearly posted for the types of pictures that are in highest demand (currently businesspeople and sports). If you decide to submit some work, I would recommend taking photos specifically for the purpose of selling them as stock photography, ensuring that they are at high quality with a low ISO and not over or under exposed.

Photographers are paid 20% of the selling price of the photo. If your work is popular, you may become an Exclusive Contributor and earn 40% instead.If you have professional photography equipment, a good eye, and the ability to capture the types of photos that are demanded by graphic designers, iStockPhoto may be right for you. If you're like me and have less than $2,000 worth of camera equipment and take photos only of your friends (unless all your friends are smiling businesspeople with folded arms), iStockPhoto may simply be a place for you to explore others' art and get some ideas.

Felony DWI offenders

After learning about my cousin's recent arrest for DWI, I decided to digress from the normal genre of my site and share with you a letter I submitted to the editor of my hometown newspaper in upstate New York.

Though I love my cousin dearly and wish for nothing more than his wellbeing, I am enraged that he was allowed behind the wheel in the first place, which is what inspired me to write to the paper.

He has been convicted of driving while intoxicated multiple times. It had been a few years since his last conviction, and he was proud to recently recover his driving privileges. But before long, he was back to his old ways and got picked up Saturday for felony DWI. I am disappointed that drivers with multiple convictions are ever allowed to recover their unrestricted licenses. Repeat offenders, though requiring extensive alcohol and, potentially, mental treatment, are a complete menace to society.

Below is my letter to the editor:

As a former resident of Cooperstown, I regularly review the Daily Star online. Each time I read about an arrest for felony DWI, I applaud the police for their watchful, protective eyes. But I am beside myself with frustration and anger because the judicial arm of the law enables these repeat offenders to find their way back to the driver’s seat.

New York gives the moniker of Felony Drunk Driver for a driver’s second DWI incident. Repercussions of felony convictions are quite a bit higher than for misdemeanors. The maximum fine shoots from $1,000 to $5,000. The maximum jail time in a State prison skyrockets from one year to four years.

But clearly, the threat of State punishment is not enough to stop some repeat offenders, nor is the risk of seriously injuring innocent motorists and pedestrians. It should be obvious to judges that many criminals who continue to drink and drive despite previous fines and incarcerations are not capable of controlling their destructive behavior.

Sex offenders with multiple convictions are treated differently. Though not always permanently incarcerated, they often forfeit many civil liberties for the rest of their lives. So should repeat drunk drivers.

I challenge our judges to view repeat offenders as I do: as serious, uncontrolled threats to the safety of my family. Many of them need help; let us give it to them. All of them have been given a second chance; let us not be so generous with the third. After all, those to whom they pose the biggest threat are those of us who never needed a second chance.

Those who willfully risk the lives of their neighbors for mere personal convenience must be stopped with the utmost priority. Though the police can take them off the road, only the judges can keep them off.

Healthy Spending Series: Part 3 - Finding the right leisure activities

One of the bad habits that got me into debt was occupying my free time with costly activities. After finishing work, I'd go out for a drink with my friends, shop in the mall or online, or see if any concerts were coming the area.

Regularly seeking out leisure activities that cost money is a sure way to put your budget in the red. By replacing some of them with activities that have the potential to earn you income or further your career, you'll be on track to both improve your standing as a citizen and keep your budget on track.

Do you have a seed of a business idea that's been budding in your mind and just won't go away? It happens to me sometimes. Do yourself a favor and entertain the idea -- even if you have no means to make it happen. By spending the time to develop your thoughts and legitimize your plans, you're only opening doors. Who knows, maybe you'll meet someone someday that loves your idea and has the means to make it happen. I'd call that time well spent.

If you don't have any be-the-next-billionaire business ideas, try finding a dollarless activity that can further your career or give you a sense of fulfillment. Work in IT? Go volunteer some of your time and help a nonprofit organization with its computers. You'll most certainly be helping people, you'll probably learn something, and with some luck, you might even make a few contacts. And don't forget how it will look on your resume.

If you're completely selfless, spend your time visiting with the elderly, feeding the homeless, or serving the community in any other way that is important to you.

Your personal finances are a significant piece of the whole You. If you've got personal goals that aren't necessarily related to finance, try to integrate your financial goals with your continued efforts to improve yourself. If you've made commitments to lose weight, volunteer regularly, or read more often, honor those commitments and realize that they will most likely have a profound impact in helping you achieve your financial goals.

How many of things we hope to do to improve ourselves as citizens hurt us financially? Not many.

Healthy spending series: Part 2 - Make a plan and stick to it

Continued from yesterday's post...

2. Make a plan and stick to it

This includes financial planning at all levels, from creating a budget for both spending and saving, always making a shopping list (hence, avoiding impulse buys), and establishing some long-term goals. Let's break it down one-by-one.

• Creating a budget will probably be your first step toward achieving your financial goals. When I was getting out of debt, I had to figure out what I needed to pay no matter what (like rent, utilities, groceries, etc), what I expected to pay for other miscellaneous things (including some fun stuff -- no one wants to live in the stone ages), and how much I'd have left over to contribute to debt. Once I realized how much I should be able to contribute, I sent that same extra $500 a month every month like clockwork, treating it the same as I treated my rent. It was only with planned discipline that I was able to eliminate $9,000 debt in less than a year.
  
  Creating a budget and getting to know it will guide your spending every day. Start with the essentials, and then with the non-essentials, and find out what's left to save. If you're not happy with the amount, adjust your non-essentials. Mint.com provides a nice interface to enter your monthly budget goals and has a reporting feature to show you if you're on pace to meet those goals.
  
  See also my post on the benefits of creating a simple budget.
  
  
• Making a shopping list before you go grocery shopping is important. Or if you're shopping for something else, make sure you know what you're out to get. If you're on a random, just-for-fun shopping trip, establish a spending cap ahead of time.
  
  Avoiding impulse buys is an important part of adhering to your spending goals -- even if you've spotted a good deal. Just because the DVD player is 50% off doesn't mean you need to buy it. After all, do you really need another DVD player around the house? If you hadn't been planning to buy a DVD player, you didn't save 50%, you wasted 50%.
  
  Of course nobody's perfect, so plan ahead and give yourself some leeway. When creating your monthly budget, budget some fluff money that you can use for whatever you want. That way, you can make a few of those irresistible impulse buys without as much guilt -- or at least with more predictability.
  
  
• Establishing long-term goals can be tricky. And I'm certainly not a licensed professional qualified to give you advice on how to save for retirement. If you feel like you need help, seek professional advice, preferably from a fee-only financial planner.
  
  Still, it's important to know the basics: The younger you start saving, the better. And the more you save when you're young, the better. If you're older and haven't started saving, you've got some catching up to do.
  
  Save for things other than retirement, like college and the purchase of a big-ticket item. If you own your car and don't plan on buying one for a few years, start making monthly 'car payments' now into a savings account so you can pay cash when it comes time to buy.
  
  Always keep an eye toward the future; understand the basics; don't invest in anything that you don't understand; know that unexpected things will come whether you like it or not.

Tomorrow on tepom.com, the Healthy Spending Series continues with Part 3: Finding leisure activities with income potential or the ability to further your career.

Healthy spending series: Part 1 - Replace costly activities with free ones

Everyone has their ups and downs when it comes to spending money. Hell, I sure had mine! When I graduated from college in 2006, I had about $9,000 in credit card debt that had been a parasite on my bank account for years. On a card with a $5,000 balance, I remember making the $175 minimum payment each month, of which only $25 or so went toward the principal. I had a spending hangover that I'll never forget; one that I hope I never have to experience again.

Like an oversized person commits to lose weight, I committed to drop my debt once I got my first 'real' job. It took a few months of monitoring my finances, but in the end it was less painful than I imaged it would be-- and what a weight it was off my shoulders! Since dropping the debt, I've watched my net worth start to climb, bit by bit, as I gladly pay myself each month rather than Chase. Now that I'm a better place financially, I follow these guidelines as best as I can to make sure that the parasite of debt doesn't return.

1. Replace costly activities with some that are free
Let me first say that it's OK to go out and spend a little money; just like it's OK to eat a cheeseburger for dinner every once in a while -- I mean, we need to eat! But too much of a 'good thing' isn't a good thing for anyone. And overeating is just like overspending. Regardless of your financial situation, it's OK to overindulge now and then. But day-to-day, you should fill your life with healthy spending.

Consider why you shop. Do you do it because you're bored? I know I used to. Going to the mall or to a movie or to a coffee shop are all fine things to spend your time doing, but they could easily be replaced by things that are less expensive or even free. Set a goal for yourself to replace one of your regular costly activities with something that doesn't cost anything. The next time you're considering going to the movies, stay in and watch one you already own (I bet you own quite a few). The next time you're thinking of going shopping for a new cell phone, stay in and call your mother.

The big difference between overeating and overspending is that it's much easier to spot when you've been overeating...Imagine a planet where the more money you wasted, the fatter you'd get. I bet that with such obvious, negative symptoms, the citizens of that place would be much more financially responsible.

[ to be continued tomorrow..."2. Make a shopping list and stick to it ]

Easy, free, accurate online personal finance tools.

This week, I started researching alternatives to Bank of America's MyPortfolio program -- the main reason that I'm keeping an account with BOA. After doing a little research and with the help of some friends, I found a few websites that provide a comparable service for free. Now, I'll need to think long and hard about whether I want to keep my BOA account or not.

There are few sites that I found that will synchronize your finances from all of your financial institutions and give you a compiled list of transactions that populate a spending profile. This repository of transactions will drive a graphical breakdown of your spending, showing where all of your money is going.

My favorite site so far is Mint.com. They boast that users are able to set up an account in five minutes and instantly be given suggestions on ways to save money (usually in the form of an opportunity for a lower APR credit card or a higher APR bank account). The interface is simple, and the extra features are helpful and relevant.

I particularly like the budgeting feature. After manually entering your monthly spending goals for all expense categories (some initial goals are set to values that represent your last three months of spending), Mint will tell show you how well you're adhering to your budget so far. If you're on track to spend more than your monthly budget (let's say you spent $100 of your monthly $150 gasoline budget in the first week of the month), you will be alerted by a simple change in color of your budget 'thermometer.'

Another tool compared your spending in a given category to the spending of other Mint users in other parts of the country. It will even compare your spending at a specific store to any other part of the country. I'm amused that I spent slightly more at Waffle House last month ($19) than that average American ($17). I would love to see a feature that shows you where people in your area that spend less in a certain category do their shopping. For example, if you spend 25% more than most people in your area on groceries or internet service, wouldn't it be neat to see where everyone else does their shopping or from whom they buy their internet service?

My main criticism of Mint is its inability to show my equity in my real assets. Some of Mint's competitors, like BOA's MyPortfolio, integrate with zillow.com to estimate your home's approximate value. Just because I owe tens of thousands of dollars on my home doesn't mean that I have a negative net worth. Because my house is worth more than I owe, it should improve my net worth. The same story goes for our two cars. I'd like to see an integration with a car valuing website like Kelly Blue Book. I own two cars; one is paid off and one is not. If Mint is going to take my auto loan into account when calculating my net worth, they might as well recognize that my car is worth something.

If you'd like to get a grip on your finances and have a single place to check in on them from time to time, I'd suggest visiting Mint.com. It's free and easy for those with already established online access to their bank, mortgage, auto loan, and credit card accounts.

Personal financial attributes driving spending behavior

Building on yesterday's post about predicting spending behavior, I'm trying to compile a list of personal financial attributes that might predict future spending behavior. I would appreciate some feedback from my readers on the matter. Here are a couple of examples that I have so far:

1. A person that has good income, a low debt-to-income ratio, significant savings and pays rent every month may be a good candidate for a home loan.
2. Someone that shops online, spends money at a vet's office, and spends money at a brick-and-mortar pet store might be the kind of person that would buy pet supplies online.

Advertising based on financial profiles

I used to bank with Bank of America because I liked the convenience of their branches and ATM locations. Additionally, their online banking is second to none with their notable MyPortfolio system. It's an online application, similar to Quicken or Money, into which you enter the usernames and passwords for all of your financial accounts (banks, 401(k)s, credit cards, etc) to see a dashboard that reports on your net worth and transaction history. After discovering that the interest rate on my wife's BOA student savings account was less than half a percent, I decided it would be best for us to switch banks. However, because of my addiction to MyProfile, I still have a foot in the door and would love for someone to give me an excuse to take it out!

Why am I addicted? I love that, for free, I can easily pull up pie charts that look at live data related to my spending and net worth. I value the convenience of having a single list of classified transactions, displaying each purchase from each credit card and each deposit into a bank account in chronological order. Every transaction is classified into a category of groceries, gas, and home improvement for expenses and investment income, salary, and gifts for income. The software will also track the value of your home, as reported by zillow.com, and will also keeps track of your reward points from credit cards, hotels, airlines, and more. BOA has a little bit of my loyalty because of their MyPortfolio system. Period. But once I find a replacement for that service, I'm through.

I don't know why the Google folks haven't jumped on this, wrestled it to the ground, and started running away as fast as they can with it draped over their shoulder. Imagine the value of something like this to their advertising business. Google specializes in, very simply, placing ads targeted at users based on where they go and what they talk about. Imagine if they could place ads targeting people with specific financial profiles, evaluating how a person actually spent his or her money -- literally. I can't think of a better way to advertise.

Let's look at a sample scenario, calling this future application GF (for Google Finance).
When creating my GF account, I enter in some personal information like name, birthdate, address, etc. Next, I provide the usernames and passwords for my different bank, credit card, mortgage, auto loan, brokerage, and reward accounts. I enter the makes and models of my family's vehicles and the address of my home. GF will do some processing and spit out my net worth based on my asset account balances less my debts, plus the estimated value of my home and vehicles. Of course, GF would be well-thought-out and apply GAAP principles, considering the liquidity of assets, etc.

Next, GF would establish a constant connection with my accounts, providing a list of transactions that could be classified into customizable categories. I could use ad hoc reports to evaluate how much I spent last month on gas and groceries and use it to create a personal budget.

Essentially, I'm not describing anything that Quicken or Microsoft Money can't already do -- nothing new here. But imagine the targeted advertising that could come of this. All of a sudden, Geico knows how much they really CAN save me by switching over. They can see what kind of vehicle I have and evaluate what I currently pay for insurance. The gecko might tell me "we could probably save you $100 by switching to Geico."

Or let's say I have excessive credit card debt. Google would classify me as someone who might receive ads targeted toward high debt-to-income consumers, indicating my potential interest in credit counseling, free balance transfers, or payday loans. Or if my credit is good, I might instead receive ads for low-APR credit cards, mortgages, etc.

Another consumer classification could be based on those who travel frequently. If you were a place like Orbitz or Expedia, wouldn't you want your ads shown to people who travel frequently? A traveler profile could be determined by either the purchase of plane tickets or the purchase of gasoline at gas stations outside of one's hometown.

Google's current advertising methodology is a step in the right direction, but by no means perfect. Just because I'm on a website that talks about dogs doesn't mean that I'm going to buy pet supplies. But if I'm on a pet website and, according to my GF account, I spend $50/month at PetSmart, that's a different story.

Furthermore, places like Monster and TheLadders could use my salary information and only show ads for employers who will pay similar to what I make now.

The possibilities of advertising based on financial behavior are endless. If Google eventually gets with the program, maybe I can finally shed my ties with Bank of America and look at ads that actually mean something to me! There are certainly some privacy issues with a system like this, but with regular analysis, proper care, and Google's famous statement of "Don't be evil," it may be a useful tool for consumers be a very real opportunity for advertisers.

Corporate IT as a service

The general consensus regarding today's business IT best-practices swarms around the idea of treating the IT department as a service provider to the business. Defined best-practices like ITIL and CobiT call for establishing service level agreements between IT and all other departments, ensuring that business priorities are always the focus of us nerds. They call for the business driving IT -- not IT driving the business -- meaning that requirements of new systems should be derived from functional requirements and not IT capability. They call for IT to enable the business, just as pieces of paper enable a writer. If a writer has only ten pieces of paper in his printer, his book shouldn't be limited to ten pages -- he needs some more paper!

As a result of business relying more on IT, global IT spending has grown incredibly. If my savings account grew at the same rate as global IT spending during the past 15 years, I could probably buy a small country. Even many non-technology companies have lots of technology in-house: email, online storage, a website, instant messaging, electronic timekeeping, an intranet, etc. And many hire a small army of a staff to manage it all. But as time goes on, the differences in how competing companies use IT will become smaller and smaller. Look at real estate agents -- all over the country they use the same MLS database to track information about homes on the market. After all, it doesn't make sense for individual agents to develop their own property database if MLS does all that they need! Instead, they can focus on what they do best: selling houses. This kind of IT standardization will happen to more types of companies as they try to focus on core competencies and cut operating costs.

Right now, Software as a Service (Saas) is a big buzzword in the IT world. With salesforce.com offering standard business software for a subscription price, its customers no longer have to invest tens of thousands of dollars in IT infrastructure or hire consultants to tell them how to do it legally and efficiently. All of the hardware, architecture, development, and best-practice compliance are taken care of by someone else -- someone who's really good at it and whose business it is to be really good at it.

When I was a kid, we would let our household garbage pile up in the garage for a couple weeks, and then my dad and I would throw it in the pickup truck and take it to the landfill. I remember seeing many of our other friends from town at the dump on Saturday mornings doing the same thing. But as we got busier and eventually sold our truck, it became more cost effective to hire Russ, the trash man. All Russ did was haul trash. He had a huge truck that could load itself without the dirty work. He would come every Tuesday, so we didn't have to worry about maintaining a mound of household trash in the garage for two weeks. And on Saturdays, dad and I could focus on building, repairing, and mowing around the house instead of finding time to load the truck and make the trip to the dump. Russ had the infrastructure, the established service levels, and the means to provide a useful, standard service all for nearly the same price that we paid every other week when we dumped it ourselves. Needless to say, with our newly-commoditized home trash service, I haven't been to the landfill in years (not that I miss it).

In the future, as technology and IT become more commoditized, the key to succeeding in business for many companies will be their exceptional execution of timeless business functions like marketing, sales, and human resources. Starting with smaller, simpler companies like restaurants and stores and working upward to larger, more complicated companies like banks and pharmaceuticals, IT will become an increasingly outsourced function. And as corporate IT becomes more regulated and efforts increase to build a fail-proof IT architecture immune to natural disasters and hackers, a small collection of IT-as-a-service companies will emerge, serving all of the IT needs of everybody. And maybe those organizations already exist...Could it be Google? Microsoft? Salesforce.com?

Sometime in my lifetime, I expect most businesses to lay off the majority of their IT staff and replace them by outsourcing to an IT-as-a-service organization. This organization will provide the infrastructure, applications, support, and administration for its clients. It will have a department dedicated to each major industry in the world: manufacturing, research and development, finance, retail, and more, as well as a department for each industry-agnostic business function like human resources, accounting, and marketing. The organization would be able to provide stable, secure, high-class IT services for everyone and everything.

With our increasing dependence on technology as well as its rising complexity, many companies will pawn the self-managed equipment in their data centers, fire their IT consultants, and migrate toward a workstation-only, outsourced IT environment. In time, these companies will improve overall efficiency and save money by focusing on their core competencies and leaving the IT to the experts.

Topography on Microsoft Live Maps

I am sometimes torn between using Google Maps and Microsoft Live Maps. Each has at least one unique feature that keeps me coming back. For example, Google Maps' ability to change my route by dragging it to additional waypoints is useful and intelligent. But Microsoft Live Maps has much better Bird's Eye View shots and satellite-photo coverage of rural areas, particularly Cooperstown, NY where I grew up. But Live Maps just got my attention on a whole new level with their 3D topology function.

When using their web-based 3D Virtual Earth tool, I can 'travel' to anywhere in the world and change my view to get a 3D representation of the view from anywhere. My first trip was to my cousin Kyle's house in Cooperstown, at the bottom of the hill that we used to climb when we were kids -- and there it was. With a few more mouse clicks and with a little help from their search bar, I was getting the view of the Himalayas from the top of Mount Everest, seeing the same terrain as what Sir Edmund Hillary saw after scaling the mountain for the first time.

I decided to put the rendered topography to the test and see how accurate it really was. I compared a photo that I took in Glacier National Park to a screen shot of the 3D representation that is displayed on Virtual Earth. See for yourself!

This is a photo I took at the
Many Glacier Hotel in
Glacier National Park, Montana

This is Microsoft Virtual Earth's
3D representation of the same location

3D rendering has been around for a long time, but not with the convenience, speed, and apparent accuracy of Microsoft Virtual Earth. I envision this to improve over time, eventually to a point when we can play a game like Chuck Yeager's Air Combat (remember that one?) and have a photo-quality 3D picture of what our world looks like with terrain and buildings included.