Tech - Solid State Drive

I tend to accumulate old computers. I freshen them up and put them to work.

One of the best ways to breathe new life into an old computer is to install a solid state drive. The increased read/write time improves responsiveness. 

Here's the old hard drive along with an external enclosure so I can use the older, higher capacity, but slower drive as a portable drive for backing up data. 

Home Improvement - Hose Reel

When we first moved into our house a few years ago, I installed a wall mounted aluminum hose reel so Rachel could water her plants. 

I decided to install another on the opposite side of the house so I can wash cars in the driveway. 

The mounting tabs on the hose reel don't line up with the mortar so I anchor some pressure treated lumber and mount the hose reel to the wood. 

Using the wood has an added advantage of adding some space between the brick and the hose to prevent scraping a full reel. 

I cut a hose to the correct length and use a hose repair kit to finish the end. This way I can tuck the hose that goes to the reel up against the wall and out of the way of the mower. 

Home Improvement - Ceiling Fan

This is the only HVAC vent in our guest room. The room isn't very big and the window faces north. But the room still gets stuffy in the summer. 

This is the light fixture that was on the ceiling. 

Picked up this nice 52 inch fan at Lowes. 

A little over an hour later...

Ceiling fans are pretty easy to install and make a big difference. Just be sure to cut the power at the breaker box and make sure the fixture box is supported. 

The previous homeowners forgot the latter point and installed a fan on the back porch. It held for a while, but a few months after we moved in I noticed the fan was severely tilted. Turns out they had replaced a light fixture with the fan and didn't check to see that the electrical box was supported. I had to replace the box with an "old work" ceiling fan box from the hardware store. This goes up in the ceiling and extends out to the joists. 

Tax - Deferred Tax Liability

I remember back when I was studying for the CPA exam how the ones who had gone before would wax philosophical about how nice it was to be finished with the exam and would tell me all about how nice it was to have free time, or even "a life."

Now that I've passed the exam, I try to be a little more encouraging to those who are preparing. Today someone asked me a great question about Deferred Tax Liabilities; one of my favorite topics. You have to be good with GAAP and tax to be able to work through DTA/DTL questions.

This particular reviewer asked why would an increase to prepaid expense increase the deferred tax liability?

Under GAAP prepaid expenses are recorded as assets since they represent a probable future benefit.

So in journal entries, we debit prepaid expense and credit cash when we make the payment and debit expense and credit prepaid expenses when the we receive the benefit.

Fortunately for tax accountants, the tax rules for revenue and expense recognition often differ from GAAP. Some differences are permanent. Fines and penalties are deducted from net income on a GAAP income statement, but can never be deducted from taxable income. This is called a permanent book tax difference and does not result in a DTA/DTL.

Temporary differences have to do with timing. In the case of prepaid expenses, the tax deduction is taken in the period payment is made. But the expense will not be recognized under GAAP until a later period when the benefit is received. This temporary difference results in a deferred tax liability because we pay less tax now due to the current deduction, but will pay more tax later when the difference reverses and we recognize the expense for GAAP, but have already taken the deduction for tax in a prior period.

In other words, an increase to a prepaid expense indicates that we have a deduction that decreases tax income currently as compared to book income and at some point in the future this difference will reverse and increase tax income as compared to book income, thereby generating a deferred tax liability.

Finance - Shaving

So I'm on my last  shaving blade. Pretty amazing since the last time I bought any was June 2010. At that time, I bought a box of 100 blades for under $20. You'd be lucky to buy 6 or 8 of the leading cartridges for that price. Furthermore, I get a much better shave with less irritation. Sometimes the old ways work better; and for much less money. You gotta hand it to the marketing guys over at Gillette though. I wonder how many more blades they're going to cram into a razor before they start telling us fewer blades is better?

Cars - Manual Transmissions & Clutch Delay Valves

I like driving cars with manual transmissions. My last 3 cars have had manual transmissions. For the most part a car with a manual transmission is cheaper to buy, often gets better fuel economy, and is a little peppier than the same car with an automatic.

But the real reason I like manual transmissions is driver involvement. I enjoy driving. Most people my age, however, seem to view it as a burdensome and expensive way to get from point A to point B. But with the right car, the right road, and the right conditions, driving for me is a great pastime full of challenges and rewards. Steering is carried out not only with the steering wheel, but also involves the careful use of the right foot. Deceleration is not a simple matter of pressing on the brake pedal, but also involves downshifting to the correct gear.

After one has driven a manual transmission for enough time, driving an automatic seems like driving bumper cars at the carnival, or a Power Wheels toy car. No apex, no matter how expertly negotiated, is ever as rewarding in an automatic as it is in a manual. There's just something special about using all four limbs to make a car go.

All that being said, there are a few things that can spoil a manual transmission. My last car, a Miata, had a bad clutch. It had an overly hard friction material that caused a shudder during shifts at low RPMs. After about 10 hours of hard labor, I managed to replace the clutch and the problem was gone.

My current car, a 3 series BMW, came with something called a "Clutch Delay Valve" or CDV.

This is about $0.75 worth of plastic that sits in the hydraulic line between the clutch pedal and the transmission. The job of the CDV is to slightly delay the engagement of the clutch pressure plate, ensuring that an unpracticed driver doesn't inflict undue stress on the drivetrain of the vehicle. Evidently the Germans don't think Americans know how to drive manual transmissions, as the European cars are not equipped with this valve.

Anyway, this valve only serves to frustrate those of us who know how to drive a manual. It causes the clutch pedal to feel vague and disconnected from the transmission. It makes it difficult to identify the actual point of engagement. And of particular concern to me, it causes a rather awkward 1-2 upshift.

Fortunately it is much easier to remove this valve than it was to replace the clutch in the Miata. Took the car for a quick drive and the difference was immediately noticeable.

Finance - Changing your own oil

At first glance it would seem obvious that a gainfully employed professional should not waste his/her time changing oil when the service is so readily available and inexpensive. From a pure time value of money perspective, I would have to agree. Especially since it takes a practiced DIY home mechanic 1-2 hours to do an oil change, whereas a shop with the aid of hydraulic service lifts can do the job in under 30 minutes.

The decision for me swings on the intangibles. First of all, I enjoy working with my hands. I find this sort of thing to be some of the best quiet time and a great way to decompress.

Second, I know that I do a better job than most oil change shops. This is because oil will drain out of a car for an hour or more, therefore it is impossible for a shop to do a complete, proper oil change in under 30 minutes.

Third, I know what I'm getting. Unless you watch the work being done at the shop, you have no way of knowing what products are actually being used on your car. You paid for synthetic, but are you getting conventional? I know I put good synthetic oil in and used a quality filter, so I can confidently reduce the frequency of oil changes. I only have to change the oil about once or twice a year.

Fourth, if something goes wrong, I know about it and can make sure it gets fixed. Shops and the DIY mechanic are both at risk of making mistakes. But, I can reduce my risk by going slow and taking care not to strip threads, or over-tighten the drain plug, I can double check everything. The shop will be in a hurry, and sometimes if they strip the threads, you won't know about it until the next oil change.

And finally, it provides a sense of pride. If you can change your own oil, I'd imagine you're in the top 10% of drivers as far as knowing anything about cars. It fascinates me how so many people rely on their cars so much, yet know so very little about them or how they work.

Ultimately, choosing to change my own oil is a more of an emotional than a financial decision for me, but don't knock it 'til you try it.

Cars - Oil Change

The oil light came on in Rachel's Pilot this week. So I thought a basic oil change would be an acceptable first post.

First, a disclaimer: working on vehicles is dangerous, do so at your own risk.

As with most projects, it is important to have the right tools. My dad always said "it is a poor workman who blames his tools," but his dad always said "poor people have poor ways."

In addition to the usual oil change tools (ramps, jack stands, drain pan, socket set) and supplies (oil, filter). It helps to have a filter wrench. I like the cap style:

The hardest part is getting under the vehicle safely. Drive on ramps are a good option for front wheel drive cars. Be sure to put jack stands under the car in case the ramps fail. Wheel chocks are a good idea too.

 

Once the car is safely up in the air, drain pan in position, it is a simple matter of locating and removing the drain plug, and removing the oil filter.

The old oil will drip for a long time. The longer the better. I usually get impatient after about 30 minutes.

Put the new filter on, put the drain plug back in, refill with the appropriate amount of new oil and reset the oil change light.