I was in unique fanboy mode last night when I made the pilgrimage to Books Inc. in Mountain View to hear Christopher Kimball. Mr. Kimball may be the single greatest influence in my culinary transformation, although I am equally indebted to the great food resources in the area. As I've documented before, an unsolicited copy of his Cook's Illustrated magazine helped turn me on to cooking, and turned me into the enthusiastic and less-untalented chef that I am today.
He was scheduled to start at 7:30, so I had time to eat dinner before going down. It was leftovers, but what leftovers they were! I had a slice of Cook's Illustrated's lasagna bolognese, a very rich and satisfying meat-centric lasagna; on the side was a sweet butternut squash puree from Joy and two handfuls of grapes. I decided to save the slice of pumpkin pie for my return, and hit the road. Immediately after arriving in the store, I realized that I would need to learn the opposite rule for book signings as I had learned for political events: get there early. I walked in the door at 7:25, by which time all the seats were filled, and the standing crowd extended most of the way to the door. I found a perch partly behind a standing display case, and stood my ground while still more people filed in behind me. We really packed the place. The store, which is off Castro street in downtown Mountain View, has a relatively small footprint but is two stories tall with a cafe on the second floor, and a good number of the visitors were perched up their with their coffee and books.
Scattered applause broke out when Christopher appeared. He is a pretty easily recognizable figure; a sketched portrait appears in every issue of Cook's Illustrated beside his editorial, which reads like a mildly demented version of Garrison Keillor's monologue in A Prairie Home Companion. Perhaps more importantly, he is the host of America's Test Kitchen on PBS, which is consistently judged as the best cooking show on television. He is tall, thin, bespectacled, and always wears a bow tie. It was actually that final detail that seemed a little off; he was wearing a full overcoat, and so had no visible tie. One of the bookstore employees escorted him into a back room, and we realized that the program wasn't actually ready to begin yet.
The audience waited patiently for another fifteen minutes. Meanwhile, I struggled mightily to get my iPhone to join Google's free wifi network. No dice. By the time the owner took the microphone, dark conspiracy theories were dancing in my mind about Google's hostile salvos against Apple's flagship product.
After a very short introduction, Christopher took the stage again. This time he had stripped down to his ATK clothing. Throughout his talk, he was every bit as animated, intelligent, and witty as he is on his show, which was kind of cool to see... I have the impression of him being a very bright person, and it was nice to have that confirmed. He also had a good sense of humor and a wryness that was very attractive.
As usual, I think I'll give a semi-random recounting of what I remember from his talk.
He loves coming out to California because of how nice the weather is. However, he thinks we Bay Area people are slightly spoiled for great food choices, and so we have unrealistic expectations for what food people will have access too. For example, eating locally in the Bay Area is great, but in Vermont, that would mean eating potatoes for six months of the year. He (good-naturedly) blamed Alice Waters for this.
They've finished shooting the first season of Cook's Country, a companion series to America's Test Kitchen that focuses on the home-cooking style of their Cook's Country magazine. The series wasn't shot in their Boston labs; instead, they bought and converted a Vermont farmhouse, and moved the staff up there. Kimball says that they will eventually move everyone up there permanently, "although they don't know that yet." The series should start airing in January.
He has had some interesting encounters with people on his tours. You would tend to think of Vermont as being a conservative place, but that isn't always the case. A lady in a black coat came to a book-signing and asked if she could take a picture with him. He said yes, and looked down to sign the book. When he looked back up, he saw that she had taken off the coat, and underneath she was wearing an apron... and not much else. They took the picture from the front, though, so it turned out all right. Another time, a young woman of about 28 came, which is about half the age of his typical fan. She was very nervous, and at one point blurted out, "It's just like meeting Brad Pitt!" Everyone at the test kitchen laughed out loud when he told that story. He took a video of the audience (that is, those of us there at Books Inc.) yelling "It's just like meeting Brad Pitt!" After he put away the camera, a woman in the audience yelled, "It's BETTER than meeting Brad Pitt!"
He's gotten a lot of letters over the years; most are positive, but the negative ones tend to be funny. When a Cook's Illustrated recipe goes "wrong", it's always because the cook deviated from the recipe. He can understand this impulse - most recipes have problems, and so cooks form the habit of trying to anticipate where the disaster is going to be so they can head it off. However, the whole purpose of CI/ATK is to find and fix all potential problems, so you really should follow their instructions to the letter, at least for the first time that you try a recipe.
He told a few anecdotes of "bad" recipes. One person complained about a spicy chicken recipe, which was awful - it was really tough. Did he follow the recipe? Well, he didn't have any chicken, so he used shrimp instead. Yep... he roasted shrimp for 40 minutes. And complained about how tough it was.
Another time, there was a CI recipe for cooking a $60 prime rib steak. It involved using a Weber grill, and was fairly time-consuming but with guaranteed results. A person wrote and said that he hated the recipe. It was 17 degrees outside, so he didn't want to use his grill, and instead he stuck that $60 steak under the broiler. (With this story, and all the others, the crowd groaned and laughed at the appropriate moments. It's a little humbling to think that, just two years ago, I would have wondered what the difference between broiling and grilling was.)
CI focuses on making foolproof recipes, and a part of this is that after the test kitchen has come up with a recipe, it sends it out to a group of volunteers. You can sign up on their web site if you want to join the pool. They don't pay you, but you're expected to make the recipe and answer a few questions, the most important one being, "Would you make this again?" Unless at least 80% answer "Yes," the recipe goes back into the test kitchen so they can fix it.
Kimball's staff likes playing tricks on him. The best one was a few years ago, when they did a butter tasting with different kinds of butter on slices of bread. He didn't realize until too late that there was chili powder hidden under the butter. Fortunately, there was a big glass of water handy. He didn't realize until too late that the "water" was actually vodka.
He asked how many of us watch ATK. A majority raised their hands. "Good, that's what I love to see." He asked how many people watch Rachel Ray. "Ah, I got five of you!" He wants to know what the deal is with her neckline. A few years ago, she was very modestly dressed; now, she has this swooping neckline. He has brought this up with Bridget and Julia - he thinks it's important for ATK to follow suit to keep up in the ratings. Someone shouted out, "Keep the bow tie!"
He hates selling things - that's why there's no advertising in his magazines. Also, he isn't very good at it. But, he gave a ninety-second plug for the book he was promoting, "America's Best Lost Recipes." This is a contest that they started over a year ago, and that was promoted in newspapers across the country, to find the handed-down recipes that were worth saving. As part of his research for this book, he learned that, in the 19th century, there were hundreds of thousands of recipes. Recipes were local, not just by country or region or even city, but by family, and there was incredible variety in the kinds of food people ate. That started to change during the 20th century, and especially with the rise of food magazines in the 1960's; most recipes fell out of fashion, and people estimate that today, there are about 5000 recipes in America. (I may not have those numbers exactly right, but regardless, it's a big drop.)
Now, most lost recipes deserve to stay lost. He knows that those of us in California get really excited about "heirloom this" and "heritage that," but the truth is that a lot of those older things just aren't very good. Most heirloom apples taste really bitter, and most heritage turkeys are really tough. However, there are gems out there, and the purpose of this book was to unearth those recipes which aren't common today but are worth holding on to.
His favorite recipe name in the book is "Naked ladies with their legs crossed" - I think that was included in the first issue of Cook's Country that I got, and I agree that it's a very memorable name. He also likes the stories that go with the recipes, like Grandpa's Angry Deviled Eggs, about which the submitter wrote, "Grandpa was a mean, unpleasant man, but he sure knew how to cook."
He opened up for questions. It was hard to hear most of them, but he did a good job of repeating them before answering.
Someone asked about the difference between CI and CC. He affirmed my understanding, which is that CC is focused on regional cooking - the sort of food he grew up eating. Those recipes tend to be a bit easier to make, and they don't go into as much detail about how they tested them.
There were a lot of questions about Thanksgiving and specifically roasting turkeys. The first one was his opinion on brining turkeys. He said that when he dies, brining turkeys will be on his tombstone. That was something they figured out a while ago - when you soak a turkey in water, it absorbs moisture, but that moisture escapes when the bird is roasted. However, if the water is salted, it breaks down the cellular structure, with the result that the flesh stays moist even if the turkey is cooked at 400 degrees. You shouldn't brine frozen Butterball turkeys, which are already injected with a brining solution, nor kosher turkeys, which are already salted. However, any fresh turkey should be brined. This is especially important for wild or heritage breeds, which have a tendency to be tough.
Someone else asked whether you could cook a turkey in a slow cooker. People started giggling, and Kimball was obviously caught off guard. He asked what size the turkey was, and what cooker the man was thinking of. He concluded, "Don't do it" and "Good luck trying to fit it in there... unless it's a two-pound turkey, it isn't going in." Even if it did work, he thought it would taste awful - it would be a braise, not a roast. The man complained, "But there's no room in the oven!" Kimball said, "Then do what everyone else does: deep-fry it and burn your house down." People laughed, but as Kimball explained, this really is a problem: every year, people try to deep-fry turkeys in their garage or lawn, and flaming grease causes fires, which sometimes kills people. In some towns, fire marshals drive around with loudspeakers warning people not to try it.
An earnest liberal college student talked about the suffering of animals in factory farms, and asked if Kimball would consider promoting vegetarian alternatives like tofu. Kimball said that he agreed about how appalling conditions are for mass-produced meat. He lives on a farm and can raise his own livestock, so he knows that they are treated humanely. He told a funny anecdote about their neighbor who raises three turkeys each year, which are named Easter, Thanksgiving, and Christmas. This year, they're eating Easter for Thanksgiving, because a weasel killed Thanksgiving and Christmas. Kimball is making sure that his children understand where food comes from. The first year they raised pigs, the kids named the pigs, which "did not end well." Later, he thought his son was getting a little too hardened, when he would walk past the pig stys and whisper, "Bacon!" Getting back to the question, Kimball was a vegetarian for about six months. In Vermont, "meat and potatoes" really is all that you can eat during the winter, so it's very natural for people in that region to eat meat. He respects people who choose vegetarian lifestyles, but he disapproves of meat alternatives like seitan - in his opinion, if you're going to be vegetarian, you shouldn't try to fake meat; instead, just find and enjoy really good vegetable dishes.
Someone asked if he would do a book or program on recipes with fresh California produce, like figs and persimmons. Kimball said no, because it is too regional. He needs to pick recipes with ingredients that anyone in the country can get. Again, he thinks that eating fresh local produce is wonderful, but most of the country can't do it, or at least not with the good results that we can in the Bay Area.
Someone asked if they could make a strudel the day before Thanksgiving. He said no; it wouldn't stay crisp for that long.
There was a little chatter about pie crusts. Pie crusts can be very finicky. Last year, they had a group of Newsweek reporters out for Thanksgiving, and he wasn't satisfied with the way the pies they cooked turned out. So he gave this problem to one of their newest test cooks, a really bright MIT graduate, who spent several weeks on it. They ended up with a new recipe, published in the November/December issue of CI, for foolproof pie dough. The secret is adding vodka: vodka adds moisture, but it doesn't promote gluten formation, due to the alcohol. Of course, the alcohol burns off during baking, and so you're left with a stable, tasty pie crust. (With this comment and others, Kimball amazed me with his encyclopedic memory - he could remember the quantities of flour, water, and vodka, as well as the temperature and time to use in baking.)
"What was your worst kitchen disaster?" "Oh, wow... we don't have time for that." He mulled over it a bit, then settled on a time that he was going to cook a peach and blueberry cobbler for the national press. When he went to pull it out of the oven, he let the pan slip, and the whole mess fell down to the bottom. Since it's a gas oven, it immediately started smoking. His staff shoo'ed the reporters out of the room. In ten minutes, he mixed and rolled out another set of dough, tossed it together, and began baking again. He didn't have any more peaches, so it was just blueberries this time. The second version turned out great, but the reporters asked him, "Wasn't this supposed to be a PEACH and blueberry cobbler?" He said, "No, just blueberries."
An older man wanted to know if CI would make a recipe for fudge. Christopher would love to, but they won't do a recipe unless it's foolproof, and they haven't found a foolproof recipe yet. They put one of their cooks on it, who spent months trying hundreds of versions, and in the course of all the stirring he did, actually dislocated his shoulder. And, they never published the recipe... they just couldn't get something that would work every time. Afterwards, Kimball wondered, "Well, what does Martha do?" So he looked at a Martha Stewart recipe for fudge. At the end of the recipe, she says, "If the fudge doesn't turn out, then pour it over ice cream." She has an answer for everything!
Someone praised their web site feature Cooking for Two, and asked if there were any plans to do a "for two" book. Kimball said that no web site feature has ever had as positive a response as the "for two" one has, and so they're definitely going to be doing something with it. He joked that it was so popular, he was considering adding a new feature, Cooking for One. "How sad is that?" he asked. There was actually some applause when he first mentioned For One, though, and I have to admit that I was among them. He laughed, and said, "What's the next step? Cooking for None?" His overall feeling is that cooking for two means, cook for six and freeze the rest. That said, they'll probably be doing a book on it, sooner rather than later.
A young lady asked how to join the test kitchen. He says "the good news is, you won't have to work for me." They're fairly large now; the organization employs around 90 people, and they even have a full-time human resources employee. As a test cook, they'll bring you in and give you a few recipes to make. They'll watch you do it, but won't talk with you, since that can make people nervous. At the end of the day, they'll give you a recipe to fix at home. Everyone gets the same recipe. You come up with the best version you can, then you write about how you did it. The qualities they look for are patience, skill, and good writing ability.
After the questions, he started signing books. I headed to the front of the store to buy one - seeing the crowd when I first arrived, I grabbed a position without first buying one. I grabbed the one he was promoting, America's Best Lost Recipes. I would probably get more mileage out of the other books they had, like the family cookbook or best international recipe; the Lost Recipe "only" has about 150 recipes, and a good half of those are for desserts. Still, it's a fun book, and I really was buying it for the signature more than the content anyways... it's not like I've ever run out of dishes to make.
It took about an hour to reach the front of the line; he was being really kind and spending some time chatting with everyone who went through, posing for pictures, and so on. I had one of those weird shearing sensations when I finally got close to him... from a distance, he had looked and sounded much like he does on his show, but when you're right in front of him, you can realize just how old he is. That isn't meant as an insult or anything, it just surprised me a little, though I gather it's a very common reaction upon meeting someone from television or the movies. Regardless, he was really pleasant, and I happily walked out of the store clutching my precious book. I can't read what he wrote, but that's all right. It's another brick in the wall of Chris Getting Way Too Interested In Cooking.
Saturday, November 17, 2007
Thursday, November 15, 2007
O-ba-ma!
Just finished a fun and bizarre evening - 30 minutes of awesomeness surrounded by eight hours of waiting and anticipation. As you may be able to guess from the post title, I have finally managed to fulfill my long-stated goal to meet Barack himself. I have also maintained my long streak of... Exceptional luck with MADD transit, and so I have 90 minutes to kill in Millbrae while I wait for Caltrain. So, you get a blog post that I'm tapping out on my iPhone while listening to Sigur Ros. Please excuse the inevitable typos - I am tired and while this interface is good for a cell phone, it's still very limited.
The event was held at Bill Graham auditorium, and was insane. The invite said that doors opened at 6:30, so I arrived there around then. Should. Have known better - both of the Kerry rallies I attended in KC were very late. Anyways, on my way over on BART, I started worrying as usual about the event - what if it was poorly attended? Would it only be die-hard supporters?
I need not have worried. The line was amazingly long. Bill Graham fills a full city block, and the line (which was several people abreast) stretched all the way around, overlapped itself, then crossed the street to continue. I was amazed.
The crowd was good; in addition to its size, it was broadly diverse, which is always encouraging to see at political events. I had a nice long chat with a grandma from The Avenues, saw plenty of students and professionals, and quite a few young kids. The crowd was predominantly white, but not overwhelmingly so, and a good number of black, Asian and Hispanic people showed up.
The line finally started moving after 7. I didn't get inside until after 8. Once in, I saw why it had taken so long - everyone had to go through metal detectors, of which they had only two.
The mood was festive and upbeat. I opted for a standing spot near the stage rather than a seat in the balcony. The music was actually good, and interesting, more modern that you tend to hear at these kinds of events. People moved around, and folks in the balcony even started doing the wave.
One interesting thing - the music wasn't painfully loud, but it was loud enough that you couldn't hear people on the stage who were not miked up. Some tried to start chants, but we couldn't hear the words, so it really didn't work. That seemed a shame.
Obama was introduced by Alice Walker, who gave a very short but good and well-received greeting. Then the man arrived.
He really does electrify a crowd. The only thing he said for the first minute was "hey," yet the response was overwhelming. He has an undeniable charisma and presence that can fill a room.
The talk itself was solid. Some of it was jockeying clearly aimed at Clinton, though he never named her. The bulk, though, dealt with his vision of America's potential, and his priorities as President.
A lot of what he said would be familiar to people who read the Times; a few things were new to me, though. His specific pledges included:
Withdrawal from Iraq in 16 months
Closing Guantanamo
He also called out the importance of equal rights for gays and lesbians, which of course got a huge reaction. My immediate thought was, "heh, I bet he doesn't use that line in the South." as I reflect on it, though, he probably does. Among the many things I love about Obama, he is very open about his positions, and doesnt shift his message to fit the audience. He'll tell labor groups that global trade is a good thing, and AIPAC that Israel needs to deal more fairly with the Palestinians. So I don't think we were getting the San Francisco edition of his stump speech.
I was struck by his utter hold over the audience (not excluding me). After most statements, wild cheering and clapping would rise in response. But, when he started talking about his mother's death from cancer, the whole auditorium fell silent, thousands waiting, hushed, for the story's end. It was a touching and slightly eerie feeling.
The night ended simply, with him thanking everyone from coming and waving goodbye. Instead of the mad rush for the exits that I expected, people lingered, perhaps hoping for an encore of some sort. Sadly, he will not return to the West Coast until after the primaries start. I hope that when he next arrives, it is as the head of a flush and confident majority, rolling into the general election and a brighter future for our country.
The event was held at Bill Graham auditorium, and was insane. The invite said that doors opened at 6:30, so I arrived there around then. Should. Have known better - both of the Kerry rallies I attended in KC were very late. Anyways, on my way over on BART, I started worrying as usual about the event - what if it was poorly attended? Would it only be die-hard supporters?
I need not have worried. The line was amazingly long. Bill Graham fills a full city block, and the line (which was several people abreast) stretched all the way around, overlapped itself, then crossed the street to continue. I was amazed.
The crowd was good; in addition to its size, it was broadly diverse, which is always encouraging to see at political events. I had a nice long chat with a grandma from The Avenues, saw plenty of students and professionals, and quite a few young kids. The crowd was predominantly white, but not overwhelmingly so, and a good number of black, Asian and Hispanic people showed up.
The line finally started moving after 7. I didn't get inside until after 8. Once in, I saw why it had taken so long - everyone had to go through metal detectors, of which they had only two.
The mood was festive and upbeat. I opted for a standing spot near the stage rather than a seat in the balcony. The music was actually good, and interesting, more modern that you tend to hear at these kinds of events. People moved around, and folks in the balcony even started doing the wave.
One interesting thing - the music wasn't painfully loud, but it was loud enough that you couldn't hear people on the stage who were not miked up. Some tried to start chants, but we couldn't hear the words, so it really didn't work. That seemed a shame.
Obama was introduced by Alice Walker, who gave a very short but good and well-received greeting. Then the man arrived.
He really does electrify a crowd. The only thing he said for the first minute was "hey," yet the response was overwhelming. He has an undeniable charisma and presence that can fill a room.
The talk itself was solid. Some of it was jockeying clearly aimed at Clinton, though he never named her. The bulk, though, dealt with his vision of America's potential, and his priorities as President.
A lot of what he said would be familiar to people who read the Times; a few things were new to me, though. His specific pledges included:
Withdrawal from Iraq in 16 months
Closing Guantanamo
He also called out the importance of equal rights for gays and lesbians, which of course got a huge reaction. My immediate thought was, "heh, I bet he doesn't use that line in the South." as I reflect on it, though, he probably does. Among the many things I love about Obama, he is very open about his positions, and doesnt shift his message to fit the audience. He'll tell labor groups that global trade is a good thing, and AIPAC that Israel needs to deal more fairly with the Palestinians. So I don't think we were getting the San Francisco edition of his stump speech.
I was struck by his utter hold over the audience (not excluding me). After most statements, wild cheering and clapping would rise in response. But, when he started talking about his mother's death from cancer, the whole auditorium fell silent, thousands waiting, hushed, for the story's end. It was a touching and slightly eerie feeling.
The night ended simply, with him thanking everyone from coming and waving goodbye. Instead of the mad rush for the exits that I expected, people lingered, perhaps hoping for an encore of some sort. Sadly, he will not return to the West Coast until after the primaries start. I hope that when he next arrives, it is as the head of a flush and confident majority, rolling into the general election and a brighter future for our country.
Wednesday, November 14, 2007
I'm famous!
Just saw that my quote made the lead for Dice's analysis of the Bay Area IT tech market. I was surprised and pleased to see it... they had contacted me a few months ago for local information, but they hadn't told me that they'd actually be including my submission.
I'm actually a little embarrassed... my quote reveals my ignorance. I talked about how "J2ME" is the most requested mobile technology. Actually, it's now known as Java ME, and has been for over a year. You can tell I've been out of that game for a while. I suppose that's the downside to being accurately quoted.
The rest of the report is interesting as well. I'm really glad to see Dice giving statistic information in addition to the anecdotal stuff. The overall consensus seems to be that the Bay Area is continuing to see steady demand - not a return to the roaring days of the dot-com boom, but good growth nonetheless.
Oh, and in case anyone is curious - the "over a dozen interviews" are all more than two years in the past. I still use Dice to keep abreast of the market, but have been very fortunate in my work situation since coming out here. In a way, it's very ironic that they peg me as someone who knows their way around the valley, seeing as how recently I've arrived here.
Because I am shameless, I will close this post with the same quote that closes the report. I believe this to be completely true.
As the optimistic Chris King points out, there are always ways to find that next great gig. "If someone has an area of expertise, there is almost certainly a gathering of similar people in place who can help point them in the right direction," he says. "Make sure your skill set is polished and up to date. Attend conferences, read journals, browse technical articles and do whatever you can to keep abreast of the latest research so you will be able to intelligently discuss and select appropriate technologies." In Silicon Valley, you have to keep up if you want to get ahead.
I'm actually a little embarrassed... my quote reveals my ignorance. I talked about how "J2ME" is the most requested mobile technology. Actually, it's now known as Java ME, and has been for over a year. You can tell I've been out of that game for a while. I suppose that's the downside to being accurately quoted.
The rest of the report is interesting as well. I'm really glad to see Dice giving statistic information in addition to the anecdotal stuff. The overall consensus seems to be that the Bay Area is continuing to see steady demand - not a return to the roaring days of the dot-com boom, but good growth nonetheless.
Oh, and in case anyone is curious - the "over a dozen interviews" are all more than two years in the past. I still use Dice to keep abreast of the market, but have been very fortunate in my work situation since coming out here. In a way, it's very ironic that they peg me as someone who knows their way around the valley, seeing as how recently I've arrived here.
Because I am shameless, I will close this post with the same quote that closes the report. I believe this to be completely true.
As the optimistic Chris King points out, there are always ways to find that next great gig. "If someone has an area of expertise, there is almost certainly a gathering of similar people in place who can help point them in the right direction," he says. "Make sure your skill set is polished and up to date. Attend conferences, read journals, browse technical articles and do whatever you can to keep abreast of the latest research so you will be able to intelligently discuss and select appropriate technologies." In Silicon Valley, you have to keep up if you want to get ahead.
Thursday, November 08, 2007
Goodbye, money!
I'm pretty sure that money is one of those topics that you're not supposed to talk about. Like religion and romance, it's one of the things most adults spend a great deal of time thinking about, but are extremely unlikely to bring up in casual conversation. It isn't bad, but it's somehow impolite. So, I should warn you that the rest of this post will be all about money. I see two likely outcomes: it will make you uncomfortable, or it will make you bored. In either case, you probably don't want to read it.
It's kind of funny that I'm writing a whole post on finance, actually. I find that as I grow older, my basic nerd orientation is spreading to more and more topics. When I was growing up, I was nerdy about more conventional geek topics - fantasy novels, astronomy, computers, and the like. These days, though, I'm taking that same obsessive, anal approach, and applying it to things like cooking (hello, Cook's Illustrated!), nutrition, index mutual funds, and local planning commissions. Also, Battlestar Galactica. Hey, you can't change overnight.
I've said it before, and I'll say it again: in general, the more impersonal and inhuman a system is, the more I like it. It sounds harsh to say, but it's true. I'd rather buy something online through Amazon than at a store; I'd rather search for an answer on a company's Web site than pick up a phone to call them; I'd rather check in for my flight online than talk with a gate agent.
With that background, you can probably understand why I'm so drawn to the prospect of online banking. Now, unlike other industries, I haven't specifically had bad experiences with banks; the tellers and other people I meet with tend to be professional and pleasant. Still, it's another part of my life I'd like to automate as much as I can. I've been doing direct deposit through DuPage Credit Union for almost a decade, and am unlikely to stop any time soon.
My one gripe with DPCU, and banks in general, is the low interest rate. At one point, the savings account rate was something like 0.25%. After I graduated from college and paid off my highest-interest debt, I started looking around to see where I could more profitably park my money.
I ended up settling with ING Direct. They had a national advertising campaign, but in spite of that, they also run a really clean web site with quite high interest rates that generally hover above 4% APR, which is actually above inflation and provides some incentive to save. I liked the slickness of the system, which they probably didn't invent but did make famous: you link an online savings account to an offline checking account, and with a few clicks you can shuffle money back and forth. It's also fully FDIC insured, which takes a lot of the queasiness out of the idea of "online banking." My DPCU savings account went dormant, and my checking account became more of a sweep account: I would stash enough funds in there to cover the bills, and periodically move the excess over to the online portion.
This all worked well, and eventually I reached the fortunate place where I had enough cash "on hand" (in practice it takes a few days for money to move between accounts, but this isn't a problem so long as you are aware of it) to cover the recommended 3 months of living expenses. Diligently following the advice of personal finance authorities, I started to look around to see where I could park additional funds.
The standard tradeoff you have to look at in finance is between risk and reward. Over the long haul, few investments pay better rates than the stock market, but you always need to be prepared to lose a lot of money in any particular year. I won't need to tap my retirement funds for decades, so all that money is comfortably put away in mutual funds with Vanguard. My short-term funds are very happy in an online savings account. But what about the mid-term money that I may want to spend in the next few years?
Part of the problem for me is defining just what my goals are. Back when I was living in Kansas City, it seemed pretty clear: save up enough for a 20% down payment on a condo, and switch out of the renting lifestyle. In Kansas City, you could buy a one-bedroom condo for about $80 grand, and a luxury two-bedroom for around $150 grand. Since moving to the Bay Area, I've had to seriously rethink that. The absolute bare minimum you could possibly spend on a one-bedroom is $200 grand, and that is NOT in a place where you would want to live. Realistically, I would need to buy something in the neighborhood of $400 big ones just to feel like I wasn't stepping backwards from my current apartment.
I'm earning more now than I was in KC, but as you can probably guess, it isn't four times as much. So, that has forced some re-evaluations. Is it realistic for me to shoot for home ownership? If not, what should I be trying for instead? Because of this uncertainty, I've been less sure of how to best invest. I ended up, for better or worse, coming up with a hybrid strategy. Since it didn't seem likely that I would be purchasing a new house for five years, it made sense to invest at least some of my money in a mutual fund. I didn't want to dump everything in at once, though... I'm a believer in dollar-cost averaging, and with my paranoid orientation, I felt sure that if I plunked down a big check on one day, the next day would inevitably see a market crash. A better strategy, I thought, would be to gradually build up the fund through regular investment, similar to what I do for my retirement, and keep the rest in a more secure location until it is ready to move.
And what should that more secure location be? I'd been really happy with ING Direct, so I turned to them first. The traditional progression of investment options goes something like Savings Account, Money Market, Certificate of Deposit (CD), then Mutual Fund. Each step offers higher average returns in exchange for higher risk or less flexibility. In my case, CDs seemed like a perfect choice. I could earn an extra percent or so of return in exchange for locking up my money for a year. I staggered my investments to build a "ladder" - instead of having a lump sum that came up every year, I made multiple smaller investments with different maturity dates. That way, if I ever needed to start tapping it, I'd be able to do so right away instead of needing to wait a year or taking an early withdrawal penalty.
That's the system I followed for a while, but I eventually decided to leave ING altogether. This isn't in reaction to anything they've done; their site and service have remained as tight as ever, and they even have made some improvements along the way - in particular, they were the first financial site I know of to use a two-stage login with a secret image or phrase, and that is rapidly becoming the standard. No; I left for pure greed: I found a notably better rate elsewhere. Online banking is the ultimate fungible commodity: my money doesn't care what bank it's in, just what rate it gets, and as long as the site isn't too onerous, I'm happy to walk it elsewhere.
After reading about the next wave of online banks, I decided to move on to Grand Yield Direct from the Apple Bank. They actually have a kind of interesting story: unlike ING, Capital One, and the other big players in online savings, the Apple Bank is just a small regional New York State-based bank that decided to open a high-yield online savings account. And, really, why not? It's a perfect way for them to expand without investing in new branch offices. From my perspective, the fact that they don't need to advertise means that they can afford to give a higher rate. They have a minimum to open an account, but once you're in you don't need to maintain that minimum, and so they combine a great flexibility with a great rate. And, of course, they're still FDIC insured.
I've been with them for a bit over a year now, and have been pretty happy. It isn't as slick an operation as ING - in fact, I think they got their website software from the same people who did DuPage Credit Union's - but it is pefectly functional, and does what I need. An extra 0.8% APY may not sound like much, but it does add up, and it's all free money. It worked so well, in fact, that I started backing away from The Plan. I liked the idea of my three-tiered approach (Savings + CD + Mutual), but it no longer made sense, since my savings account actually gets a higher rate than my ING CDs. So, for the past year, I've been siphoning off my CDs as they mature and rolling them into the savings account.
Incidentally - we're now in an unusual situation known as an Inverted Yield Curve. Typically, when buying things like bonds, treasury notes, or CDs, you get a higher rate when you invest for a longer time. This seems rational - if I'm willing to give up control of my money for ten years, I'll want more compensation than if I just let you use it for six months. However, recently, the opposite has been true: you actually earn more money making shorter-term investments than longer-term. The consensus seems to be that this is The Market's indication that interest rates are going to fall in the near future. So today, you may be able to earn 5% on a six-month versus 4% on a ten-year, but a year from now, you may only be earning 3% on that six-month while still getting 4% on the ten-year.
All that to say, while this savings-account-centric approach is a big winner for me today, it's something I may end up regretting. Still, in the worst case, my interest rate drops... I don't have any risk of losing principal.
Anyways! What prompts this post in the first place is that, as of today, I am no longer an ING Direct customer. My last CD matured, and I moved it to DPCU, along with the solitary penny that remained in my savings account. As with every other transaction, ING's website had a great interface for this: when I withdrew that last penny, they said that it looked like I wanted to close my account, and asked if this was so. I clicked "Yes", then selected from a drop-down list explaining why I was leaving. I got a confirmation email, and just like that - poof! - our relationship was terminated. Nice and clean, and I didn't have to talk with a single human being. Needless to say, this made me extremely happy.
It's kind of funny that I'm writing a whole post on finance, actually. I find that as I grow older, my basic nerd orientation is spreading to more and more topics. When I was growing up, I was nerdy about more conventional geek topics - fantasy novels, astronomy, computers, and the like. These days, though, I'm taking that same obsessive, anal approach, and applying it to things like cooking (hello, Cook's Illustrated!), nutrition, index mutual funds, and local planning commissions. Also, Battlestar Galactica. Hey, you can't change overnight.
I've said it before, and I'll say it again: in general, the more impersonal and inhuman a system is, the more I like it. It sounds harsh to say, but it's true. I'd rather buy something online through Amazon than at a store; I'd rather search for an answer on a company's Web site than pick up a phone to call them; I'd rather check in for my flight online than talk with a gate agent.
With that background, you can probably understand why I'm so drawn to the prospect of online banking. Now, unlike other industries, I haven't specifically had bad experiences with banks; the tellers and other people I meet with tend to be professional and pleasant. Still, it's another part of my life I'd like to automate as much as I can. I've been doing direct deposit through DuPage Credit Union for almost a decade, and am unlikely to stop any time soon.
My one gripe with DPCU, and banks in general, is the low interest rate. At one point, the savings account rate was something like 0.25%. After I graduated from college and paid off my highest-interest debt, I started looking around to see where I could more profitably park my money.
I ended up settling with ING Direct. They had a national advertising campaign, but in spite of that, they also run a really clean web site with quite high interest rates that generally hover above 4% APR, which is actually above inflation and provides some incentive to save. I liked the slickness of the system, which they probably didn't invent but did make famous: you link an online savings account to an offline checking account, and with a few clicks you can shuffle money back and forth. It's also fully FDIC insured, which takes a lot of the queasiness out of the idea of "online banking." My DPCU savings account went dormant, and my checking account became more of a sweep account: I would stash enough funds in there to cover the bills, and periodically move the excess over to the online portion.
This all worked well, and eventually I reached the fortunate place where I had enough cash "on hand" (in practice it takes a few days for money to move between accounts, but this isn't a problem so long as you are aware of it) to cover the recommended 3 months of living expenses. Diligently following the advice of personal finance authorities, I started to look around to see where I could park additional funds.
The standard tradeoff you have to look at in finance is between risk and reward. Over the long haul, few investments pay better rates than the stock market, but you always need to be prepared to lose a lot of money in any particular year. I won't need to tap my retirement funds for decades, so all that money is comfortably put away in mutual funds with Vanguard. My short-term funds are very happy in an online savings account. But what about the mid-term money that I may want to spend in the next few years?
Part of the problem for me is defining just what my goals are. Back when I was living in Kansas City, it seemed pretty clear: save up enough for a 20% down payment on a condo, and switch out of the renting lifestyle. In Kansas City, you could buy a one-bedroom condo for about $80 grand, and a luxury two-bedroom for around $150 grand. Since moving to the Bay Area, I've had to seriously rethink that. The absolute bare minimum you could possibly spend on a one-bedroom is $200 grand, and that is NOT in a place where you would want to live. Realistically, I would need to buy something in the neighborhood of $400 big ones just to feel like I wasn't stepping backwards from my current apartment.
I'm earning more now than I was in KC, but as you can probably guess, it isn't four times as much. So, that has forced some re-evaluations. Is it realistic for me to shoot for home ownership? If not, what should I be trying for instead? Because of this uncertainty, I've been less sure of how to best invest. I ended up, for better or worse, coming up with a hybrid strategy. Since it didn't seem likely that I would be purchasing a new house for five years, it made sense to invest at least some of my money in a mutual fund. I didn't want to dump everything in at once, though... I'm a believer in dollar-cost averaging, and with my paranoid orientation, I felt sure that if I plunked down a big check on one day, the next day would inevitably see a market crash. A better strategy, I thought, would be to gradually build up the fund through regular investment, similar to what I do for my retirement, and keep the rest in a more secure location until it is ready to move.
And what should that more secure location be? I'd been really happy with ING Direct, so I turned to them first. The traditional progression of investment options goes something like Savings Account, Money Market, Certificate of Deposit (CD), then Mutual Fund. Each step offers higher average returns in exchange for higher risk or less flexibility. In my case, CDs seemed like a perfect choice. I could earn an extra percent or so of return in exchange for locking up my money for a year. I staggered my investments to build a "ladder" - instead of having a lump sum that came up every year, I made multiple smaller investments with different maturity dates. That way, if I ever needed to start tapping it, I'd be able to do so right away instead of needing to wait a year or taking an early withdrawal penalty.
That's the system I followed for a while, but I eventually decided to leave ING altogether. This isn't in reaction to anything they've done; their site and service have remained as tight as ever, and they even have made some improvements along the way - in particular, they were the first financial site I know of to use a two-stage login with a secret image or phrase, and that is rapidly becoming the standard. No; I left for pure greed: I found a notably better rate elsewhere. Online banking is the ultimate fungible commodity: my money doesn't care what bank it's in, just what rate it gets, and as long as the site isn't too onerous, I'm happy to walk it elsewhere.
After reading about the next wave of online banks, I decided to move on to Grand Yield Direct from the Apple Bank. They actually have a kind of interesting story: unlike ING, Capital One, and the other big players in online savings, the Apple Bank is just a small regional New York State-based bank that decided to open a high-yield online savings account. And, really, why not? It's a perfect way for them to expand without investing in new branch offices. From my perspective, the fact that they don't need to advertise means that they can afford to give a higher rate. They have a minimum to open an account, but once you're in you don't need to maintain that minimum, and so they combine a great flexibility with a great rate. And, of course, they're still FDIC insured.
I've been with them for a bit over a year now, and have been pretty happy. It isn't as slick an operation as ING - in fact, I think they got their website software from the same people who did DuPage Credit Union's - but it is pefectly functional, and does what I need. An extra 0.8% APY may not sound like much, but it does add up, and it's all free money. It worked so well, in fact, that I started backing away from The Plan. I liked the idea of my three-tiered approach (Savings + CD + Mutual), but it no longer made sense, since my savings account actually gets a higher rate than my ING CDs. So, for the past year, I've been siphoning off my CDs as they mature and rolling them into the savings account.
Incidentally - we're now in an unusual situation known as an Inverted Yield Curve. Typically, when buying things like bonds, treasury notes, or CDs, you get a higher rate when you invest for a longer time. This seems rational - if I'm willing to give up control of my money for ten years, I'll want more compensation than if I just let you use it for six months. However, recently, the opposite has been true: you actually earn more money making shorter-term investments than longer-term. The consensus seems to be that this is The Market's indication that interest rates are going to fall in the near future. So today, you may be able to earn 5% on a six-month versus 4% on a ten-year, but a year from now, you may only be earning 3% on that six-month while still getting 4% on the ten-year.
All that to say, while this savings-account-centric approach is a big winner for me today, it's something I may end up regretting. Still, in the worst case, my interest rate drops... I don't have any risk of losing principal.
Anyways! What prompts this post in the first place is that, as of today, I am no longer an ING Direct customer. My last CD matured, and I moved it to DPCU, along with the solitary penny that remained in my savings account. As with every other transaction, ING's website had a great interface for this: when I withdrew that last penny, they said that it looked like I wanted to close my account, and asked if this was so. I clicked "Yes", then selected from a drop-down list explaining why I was leaving. I got a confirmation email, and just like that - poof! - our relationship was terminated. Nice and clean, and I didn't have to talk with a single human being. Needless to say, this made me extremely happy.
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