I got an email from a former colleague. He told me that they recieved a resume that had the name of his project on it. So they sent it to my former team for review. The resume had my alias on it instead of my real name. They knew by looking at it that it loked like my resume. I never submitted my resume to this company. It obviously came through a recruiter. I told them to fire the recruiter.
You can't trust recruiters. You really don't want them floating your resume all over the place. Use an alias to be safe. Only give them your real name when you give them permission to submit you. Keep in mind that if you contract you can often have significantly different rates for the exact same job. I have seen rates vary by $25/hour for the same job depending which contract company you use. If one of those companies up and decides to submit you. You are their property with that company. However, if they submit your alias resume you have proof that you never gave them permission to submit you. It also makes them look really bad. Since they don't know your real name they won't know who you are. They see so many resumes that they won't remember you.
Saturday, July 28, 2007
Monday, July 9, 2007
Why the Indian Rupee is Strengthening vs. the US Dollar
1. The Indian economy is hot. You are getting alot of foreign direct investment. So people are selling their currency and buying yours. This strengthens the rupee. Its not just the dollar.
2. Your inflation rate is at about 5%(does not include housing). Not horrible, but higher than first world economies. This leads to higher interest rates. High interest rates lead to less people selling the rupee and buying other currencies.
3. In the past the Rupee was kept low, by the central bank and Indian investors buying US Government Treasury Bonds. These have low interest, but no risk. It's a good hege. However, since the Indian economy is growing so fast you have an opportunity cost(you can make more money investing in India) if you buy treasury bonds. In the past the Indian economy had a big risk factor, but not that capitalism is in full force, there is less risk so you don't need to be as conservative and buy US Bonds.
4. US Bond Prices are low because China is pooring money into bonds. This works out well for the US deficit and works out for US investors. All of the interest rates in the US are based off the the US Bond + some risk. So China buying lots of US bonds leads to low Mortgage Rates.
5. China does not have a democracy. It can force people and more easily invest in the US Treasury Bonds. China also pegs the exchange rate. They are able to have the peg because they force people to buy treasury bonds which balances out the exchange in payments. Basically the US trade deficit sends money to China. China takes alot of that money and buys Treasury Bonds. So basically we are paying for our TVs we get from China buy issuing federal government bonds.
6. There are 2 reasons why the US dollar is weakening. A huge trade deficit coupled with low interest rates(due to China buying tons of bonds). In the 1980s we offset our trade deficit with high interest rates. High interest rates drew alot of foreign investment to the US. Now that money can go to China, India and other developing countries since they have higher interest rates and faster growing economies. This leads to a weakening of the dollar.
Second, China is pegging their currency to the dollar. The Bush administration is letting the dollar weaken against other currencies BECAUSE the Yuan is under valued. If we strengthen the dollar vs. other currencies it would strengthen vs. the Yuan and hurt the trade deficit more. Basically if China floats the Yuan, the dollar will strengthen world wide to some degree.
7. The Europeans are pissed that the dollar is so weak. Its nothing to brag about. Our economy is stronger than theirs by ALOT (unemployment is 10% or higher in most EU countries) and our dollar is weak. Its because of China, but it really hurts their ability to sell to us.
Those are the reasons why the Rupee is strengthening vs. the dollar. It's also strengthening vs. other first world countries. Europe and Japan have enemic growth rates. So investors in Europe can get a better return investing in India. This strengthens the Rupeee. The Indian central bank can alleviate the strengthening rupee some. However, they don't have the cash reserves that China does so this would only be temporary. Also weakening the Rupee could spur inflation. So is it worse to have 15% yearly inflation or a strengthening rupee?
International exchange rates are not as straight forward as they seem. When I get home I'll post our textbook from the class. It was a great book.
If you have any more questions please post. BTW, this does not mean the rupee won't weaken since you can't predict the future.
2. Your inflation rate is at about 5%(does not include housing). Not horrible, but higher than first world economies. This leads to higher interest rates. High interest rates lead to less people selling the rupee and buying other currencies.
3. In the past the Rupee was kept low, by the central bank and Indian investors buying US Government Treasury Bonds. These have low interest, but no risk. It's a good hege. However, since the Indian economy is growing so fast you have an opportunity cost(you can make more money investing in India) if you buy treasury bonds. In the past the Indian economy had a big risk factor, but not that capitalism is in full force, there is less risk so you don't need to be as conservative and buy US Bonds.
4. US Bond Prices are low because China is pooring money into bonds. This works out well for the US deficit and works out for US investors. All of the interest rates in the US are based off the the US Bond + some risk. So China buying lots of US bonds leads to low Mortgage Rates.
5. China does not have a democracy. It can force people and more easily invest in the US Treasury Bonds. China also pegs the exchange rate. They are able to have the peg because they force people to buy treasury bonds which balances out the exchange in payments. Basically the US trade deficit sends money to China. China takes alot of that money and buys Treasury Bonds. So basically we are paying for our TVs we get from China buy issuing federal government bonds.
6. There are 2 reasons why the US dollar is weakening. A huge trade deficit coupled with low interest rates(due to China buying tons of bonds). In the 1980s we offset our trade deficit with high interest rates. High interest rates drew alot of foreign investment to the US. Now that money can go to China, India and other developing countries since they have higher interest rates and faster growing economies. This leads to a weakening of the dollar.
Second, China is pegging their currency to the dollar. The Bush administration is letting the dollar weaken against other currencies BECAUSE the Yuan is under valued. If we strengthen the dollar vs. other currencies it would strengthen vs. the Yuan and hurt the trade deficit more. Basically if China floats the Yuan, the dollar will strengthen world wide to some degree.
7. The Europeans are pissed that the dollar is so weak. Its nothing to brag about. Our economy is stronger than theirs by ALOT (unemployment is 10% or higher in most EU countries) and our dollar is weak. Its because of China, but it really hurts their ability to sell to us.
Those are the reasons why the Rupee is strengthening vs. the dollar. It's also strengthening vs. other first world countries. Europe and Japan have enemic growth rates. So investors in Europe can get a better return investing in India. This strengthens the Rupeee. The Indian central bank can alleviate the strengthening rupee some. However, they don't have the cash reserves that China does so this would only be temporary. Also weakening the Rupee could spur inflation. So is it worse to have 15% yearly inflation or a strengthening rupee?
International exchange rates are not as straight forward as they seem. When I get home I'll post our textbook from the class. It was a great book.
If you have any more questions please post. BTW, this does not mean the rupee won't weaken since you can't predict the future.
Build up your Fuck You Fund
This is contractor speak for your savings. When you get a pay increase you should not run out and spend it. All of it should go into savings. You want to build a nice solid level of savings so you can afford to be unemployed. This significantly reduces stress and increases your ability to take risks by job hopping. I personally have several hundred thousand dollars. I can live without working for about 5 years.
I do not recommend putting the money strictly into a savings account. You need to invest in the stock market. The investment book that every technical person should read is "A Random Walk Down Wall Street" by Burton Malkiel. It provides a good overview of how the market works. It dissuades you from silly day trading and gambling on individual stocks. It also shows you data as to why long term investing where you put a steady stream of money in the market provides the best returns with the least risk.
I do not recommend hiring a financial planner. They are con-artists. Their fees are insane. The book backs this up with data. They typically charge 1% to manage your money, 1% to sell your investments, and then they have you buy more expensive mutual funds which charge fees immediately. The market averages 8.5%/year over the long haul. That means they have to beat the market by atleast 25% just to break even with the market due to their fees. They often try to get you to invest in funds that have 3% or greater fees.
Over the last 20 years, 88% of mutual funds have underperformed the market after fees. Financial Planners never keep data as to how they do managing money vs. the returns on the market. When you ask about returns they generally tell you about all their silly services and how much money they manage. All that matters is your return and your risk exposure.
The Capital Asset Pricing Model argues that to a diversified investor, the only risk is market risk. This means that if you sufficiently diversify your investments your only risk is the cyclical nature market. You do not have to worry about Enron or the collapse of the telecom industry. The cheapest and most effective way to do this is with cheap index funds. Index funds track the market. They have very low fees. The cheapest fund I have seen is Vanguard's(vanguard.com) Total Market Index Fund which charges .19%(that is less than 1%) with no other fees. If you invest $100k in their fund, this reduces to .09%. So your investment basically go up and down with the market.
Also, keep in mind that if you hold an investment for 366 days you only pay 15% capital gains tax on it as opposed to your top marginal income tax rate(which for technical people will always be atleast 25%). You also only pay taxes when you sell investments. Index Funds buy and hold. So you do not pay taxes until you need the money. The only taxes you will pay will be on your dividends which you should have flagged to reinvest in the fund. Dividends are taxed at between 15-20%.
Money managers will buy and sell your stocks to "rebalance" your portfolio, this increases your taxes and forces you to pay them before you are using the money you made in the investment. As I said earlier in spite of all this active management, virtually all of them under perform the market, then throw in higher taxes that you have to pay sooner and you are getting totally ripped off.
A simple investment strategy is 80% of your investment in the Vanguard Total Market Index Fund and then 20% in a total international fund. Again I use Vanguard for this. You may find another online company that is better or cheaper, but Vanguard seems to have the lowest fees.
I also have a Tax Free Bond Fund with T. Rowe Price which is only available to residents of certain states. I use this to balance out the market. Bonds funds are very liquid and have lower downside risk, but have lower returns than the stock market. This is a hedge for when the market goes down. How much you put into bonds should be based on your age. As you get closer to retirement you should increase your exposure to bonds(and consider some US Treasury Bonds). However, if you are in your 20s you should be 90% in stocks. Since you can afford the risk of a big down turn.
Many of you will say, wait a second the market may crash and lose 30%. Correct, but these are your long term savings and you should not care. Leave the money alone. If the market goes down 30%, you are still getting dividends. Reinvesting those dividends will get you more shares. Plus the money you are investing in the market is buying more shares. So when the market rebounds you will have more shares. This acts like a multiplier effect and actually increases returns long term. The market has consistently gone up by 8.5% for the last 100 years. This basically means there is a steady stream of investment capital going into the market over the long haul. I believe Warren Buffet thinks the market will only go up by 8% due to "friction costs" (people getting ripped off by financial planners), that is still a good return for the long term.
Do not get fooled by investors who get big returns in the short term. The market has been hot the last few years so 15-20% are not unreasonable. However, these gamblers will under perform you in the long haul since you have a more sound strategy. People often fall for the high short term returns than start gambling and over the long haul either lose money or have lower returns than just tracking the market.
I also recommend using an online savings account. They have higher interest rates. I use ING Direct, but there are others. You can set up an ETF transfer from your personal checkings so you can put money into it. This is plus the money in your bond funds are your short term reserves.
You should start investing money monthly. This is called "dollar cost averaging". This is financial planner bullshit for investing money regularly. This reduces your risk. Since you are following a steady plan for investments, the market may go down one month and may go up the next. This reduces your risk exposure. Since you can't time the market.
Investing seems complicated, but if you simplify it and use market index funds, bonds, and an online savings account you can handle it with little effort. You will beat 90% of the financial planners after fees. You just have to accept that some years the market will go down and simply not care. The bigger your Fuck You Fund, the more freedom you have to tell your boss to fuck off. If you can afford to be unemployed, then you will have alot less stress in your life. I also recommend reading the book "The Millionaire Mind". Most millionaires are big savers. Most people who drive expensive cars have large debts. I'd rather have the piece of mind than a nicer car.
I do not recommend putting the money strictly into a savings account. You need to invest in the stock market. The investment book that every technical person should read is "A Random Walk Down Wall Street" by Burton Malkiel. It provides a good overview of how the market works. It dissuades you from silly day trading and gambling on individual stocks. It also shows you data as to why long term investing where you put a steady stream of money in the market provides the best returns with the least risk.
I do not recommend hiring a financial planner. They are con-artists. Their fees are insane. The book backs this up with data. They typically charge 1% to manage your money, 1% to sell your investments, and then they have you buy more expensive mutual funds which charge fees immediately. The market averages 8.5%/year over the long haul. That means they have to beat the market by atleast 25% just to break even with the market due to their fees. They often try to get you to invest in funds that have 3% or greater fees.
Over the last 20 years, 88% of mutual funds have underperformed the market after fees. Financial Planners never keep data as to how they do managing money vs. the returns on the market. When you ask about returns they generally tell you about all their silly services and how much money they manage. All that matters is your return and your risk exposure.
The Capital Asset Pricing Model argues that to a diversified investor, the only risk is market risk. This means that if you sufficiently diversify your investments your only risk is the cyclical nature market. You do not have to worry about Enron or the collapse of the telecom industry. The cheapest and most effective way to do this is with cheap index funds. Index funds track the market. They have very low fees. The cheapest fund I have seen is Vanguard's(vanguard.com) Total Market Index Fund which charges .19%(that is less than 1%) with no other fees. If you invest $100k in their fund, this reduces to .09%. So your investment basically go up and down with the market.
Also, keep in mind that if you hold an investment for 366 days you only pay 15% capital gains tax on it as opposed to your top marginal income tax rate(which for technical people will always be atleast 25%). You also only pay taxes when you sell investments. Index Funds buy and hold. So you do not pay taxes until you need the money. The only taxes you will pay will be on your dividends which you should have flagged to reinvest in the fund. Dividends are taxed at between 15-20%.
Money managers will buy and sell your stocks to "rebalance" your portfolio, this increases your taxes and forces you to pay them before you are using the money you made in the investment. As I said earlier in spite of all this active management, virtually all of them under perform the market, then throw in higher taxes that you have to pay sooner and you are getting totally ripped off.
A simple investment strategy is 80% of your investment in the Vanguard Total Market Index Fund and then 20% in a total international fund. Again I use Vanguard for this. You may find another online company that is better or cheaper, but Vanguard seems to have the lowest fees.
I also have a Tax Free Bond Fund with T. Rowe Price which is only available to residents of certain states. I use this to balance out the market. Bonds funds are very liquid and have lower downside risk, but have lower returns than the stock market. This is a hedge for when the market goes down. How much you put into bonds should be based on your age. As you get closer to retirement you should increase your exposure to bonds(and consider some US Treasury Bonds). However, if you are in your 20s you should be 90% in stocks. Since you can afford the risk of a big down turn.
Many of you will say, wait a second the market may crash and lose 30%. Correct, but these are your long term savings and you should not care. Leave the money alone. If the market goes down 30%, you are still getting dividends. Reinvesting those dividends will get you more shares. Plus the money you are investing in the market is buying more shares. So when the market rebounds you will have more shares. This acts like a multiplier effect and actually increases returns long term. The market has consistently gone up by 8.5% for the last 100 years. This basically means there is a steady stream of investment capital going into the market over the long haul. I believe Warren Buffet thinks the market will only go up by 8% due to "friction costs" (people getting ripped off by financial planners), that is still a good return for the long term.
Do not get fooled by investors who get big returns in the short term. The market has been hot the last few years so 15-20% are not unreasonable. However, these gamblers will under perform you in the long haul since you have a more sound strategy. People often fall for the high short term returns than start gambling and over the long haul either lose money or have lower returns than just tracking the market.
I also recommend using an online savings account. They have higher interest rates. I use ING Direct, but there are others. You can set up an ETF transfer from your personal checkings so you can put money into it. This is plus the money in your bond funds are your short term reserves.
You should start investing money monthly. This is called "dollar cost averaging". This is financial planner bullshit for investing money regularly. This reduces your risk. Since you are following a steady plan for investments, the market may go down one month and may go up the next. This reduces your risk exposure. Since you can't time the market.
Investing seems complicated, but if you simplify it and use market index funds, bonds, and an online savings account you can handle it with little effort. You will beat 90% of the financial planners after fees. You just have to accept that some years the market will go down and simply not care. The bigger your Fuck You Fund, the more freedom you have to tell your boss to fuck off. If you can afford to be unemployed, then you will have alot less stress in your life. I also recommend reading the book "The Millionaire Mind". Most millionaires are big savers. Most people who drive expensive cars have large debts. I'd rather have the piece of mind than a nicer car.
Friday, July 6, 2007
Don't take an interview without talking money first
Do not waste your time going through rounds of interviews only to get to the discussion about money to find out your potential employer is not paying what you are looking for. This is a complete and total waste of your time. I have found that employers who will not talk about money before an interview generally do not pay that well. My standards for paying well are very high. The vast majority of companies that contact me about jobs do not get passed my alias email responding with what is the rate/salary and either not getting a response or something that is too low.
Talking about money first does not guarantee you that the company will not waste your time in a long series of interviews and then come back with a "lets talk about your salary requirements" or "are you flexible"? No I am not flexible. I am not here because your run of the mill company is fascinating. I am here because I want the money. Companies that don't pay well typically use the line "we want someone interested in more than money". Well of course they do. They don't pay that well. They want you to invest your time and effort to make them money for less than you can get elsewhere. I work for money. If you like to code, then use your spare time to code things you enjoy and possibly use that as a spring to start your own company.
Make no mistake about it. Hiring and firing you is about money. When executives look at the company they are review financial statements. They don't care about you. They are looking at profit and loss statements and looking at how to increase stock value. They will move your job to another country if they think they can save money. They will not tell you about this or mislead you to keep you from quitting. They will sell the company and make alot of money, while the new company comes in and closes your division. I actually heard an executive call this "dissipating the staff".
So go for the money. Please see my blog about being Ruthless, but not Bitter. You want to be ruthless without appearing to be ruthless. Have a positive attitude, be friendly, do a good job, but don't waste your time if you can get more money elsewhere and do not waste your time taking an interview if they don't talk about money up front.
I have to admit I have been bitter in the past. A few months ago I talked to a recruiter about a long term contract at $90/hour with 45 hours/week schedule. I don't take vacation when I contract so this is north of $200k. Well with in my current range. The client refused to give me a phone screen first(which I hate), but since the rate was good I took a chance on the face to face interview. They really liked me. However, they were a contract company also. So they had to sell my resume to someone else. The end client refused to pay that much for my resume so the counter offer was $70/hour for 4 months, but this was really expensive to them so they wanted me to go "salaried employee" after 4 months at $110,000/year. To alot of people this is alot of money. 5 years ago this would be great. Now its a waste of my time. Plus I don't want an employee job switch on my resume. I have too many of those. At the time my last contract was ending so I was going to take the contract, then continue to look for another job and quit as soon as I got my next job. This means I would have quit the first week if I got a new job. After 4 months, if I had not found anything I would have unilaterally refused to go employee and either continue the contract or go unemployed. I make enough money where I can afford to not work. I will make a future blog on what I call my "Fuck You Fund". I decided that it was better to be unemployed than have yet another "employee"(though an employee to a contract company) job switch to explain on my resume. So I went through the 3-4 week background check with them. While this was going on I had another interview and got another offer that was better. Instead of telling them right away that I was not taking a job, I waited until the background check finished. I had actually already started the job. Part of the reason I did not tell them is that if the new job completely and totally sucked I would just quit and take the first offer. Then we talked about a start date. Just before I was to start I passed on the job by email. Probably should not have done that, but I really do hate bait and switch interviews. Especially the "we want you as an employee so we can pay you less money" lines. I would still be a temp. If the client did not like me I could still be fired immediately.
When someone contacts your alias email about a job. Do not call them. Respond back with what is the rate and possibly attach your resume with your fake name on it. Do not talk to them on the phone without talking money first. If they won't tell you by email it is almost always a low rate/salary. This is typically just a recruiter trying to waste your time to see if you know anyone willing to work for his rate. All of the higher paying positions that I have seen will tell you by email what the job pays. Not sure if Google or Microsoft work this way. However, neither Google(not gambling on $500/share stock options) or Microsoft can afford me.
Never forget. You are paid for a service. You are a business man. Your job is about money. This also means that you should do as good of a job as you can for that money. Your motive should be to improve your skills so you can get more money. Again if you really like programming or an IT profession and it is more about money to you, I suggest you start your own company or do work at home for fun. I know alot of people who do that. I know alot of people who put in there 40 hours, then go home and hack away for fun. They make applications and games for their families. That is your fun time. Work is about money.
Talking about money first does not guarantee you that the company will not waste your time in a long series of interviews and then come back with a "lets talk about your salary requirements" or "are you flexible"? No I am not flexible. I am not here because your run of the mill company is fascinating. I am here because I want the money. Companies that don't pay well typically use the line "we want someone interested in more than money". Well of course they do. They don't pay that well. They want you to invest your time and effort to make them money for less than you can get elsewhere. I work for money. If you like to code, then use your spare time to code things you enjoy and possibly use that as a spring to start your own company.
Make no mistake about it. Hiring and firing you is about money. When executives look at the company they are review financial statements. They don't care about you. They are looking at profit and loss statements and looking at how to increase stock value. They will move your job to another country if they think they can save money. They will not tell you about this or mislead you to keep you from quitting. They will sell the company and make alot of money, while the new company comes in and closes your division. I actually heard an executive call this "dissipating the staff".
So go for the money. Please see my blog about being Ruthless, but not Bitter. You want to be ruthless without appearing to be ruthless. Have a positive attitude, be friendly, do a good job, but don't waste your time if you can get more money elsewhere and do not waste your time taking an interview if they don't talk about money up front.
I have to admit I have been bitter in the past. A few months ago I talked to a recruiter about a long term contract at $90/hour with 45 hours/week schedule. I don't take vacation when I contract so this is north of $200k. Well with in my current range. The client refused to give me a phone screen first(which I hate), but since the rate was good I took a chance on the face to face interview. They really liked me. However, they were a contract company also. So they had to sell my resume to someone else. The end client refused to pay that much for my resume so the counter offer was $70/hour for 4 months, but this was really expensive to them so they wanted me to go "salaried employee" after 4 months at $110,000/year. To alot of people this is alot of money. 5 years ago this would be great. Now its a waste of my time. Plus I don't want an employee job switch on my resume. I have too many of those. At the time my last contract was ending so I was going to take the contract, then continue to look for another job and quit as soon as I got my next job. This means I would have quit the first week if I got a new job. After 4 months, if I had not found anything I would have unilaterally refused to go employee and either continue the contract or go unemployed. I make enough money where I can afford to not work. I will make a future blog on what I call my "Fuck You Fund". I decided that it was better to be unemployed than have yet another "employee"(though an employee to a contract company) job switch to explain on my resume. So I went through the 3-4 week background check with them. While this was going on I had another interview and got another offer that was better. Instead of telling them right away that I was not taking a job, I waited until the background check finished. I had actually already started the job. Part of the reason I did not tell them is that if the new job completely and totally sucked I would just quit and take the first offer. Then we talked about a start date. Just before I was to start I passed on the job by email. Probably should not have done that, but I really do hate bait and switch interviews. Especially the "we want you as an employee so we can pay you less money" lines. I would still be a temp. If the client did not like me I could still be fired immediately.
When someone contacts your alias email about a job. Do not call them. Respond back with what is the rate and possibly attach your resume with your fake name on it. Do not talk to them on the phone without talking money first. If they won't tell you by email it is almost always a low rate/salary. This is typically just a recruiter trying to waste your time to see if you know anyone willing to work for his rate. All of the higher paying positions that I have seen will tell you by email what the job pays. Not sure if Google or Microsoft work this way. However, neither Google(not gambling on $500/share stock options) or Microsoft can afford me.
Never forget. You are paid for a service. You are a business man. Your job is about money. This also means that you should do as good of a job as you can for that money. Your motive should be to improve your skills so you can get more money. Again if you really like programming or an IT profession and it is more about money to you, I suggest you start your own company or do work at home for fun. I know alot of people who do that. I know alot of people who put in there 40 hours, then go home and hack away for fun. They make applications and games for their families. That is your fun time. Work is about money.
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