That car thing I do

Thursday, May 27, 2010 at 12:19
Here's a good video documentary explaining the sport of autocross. The narration is kind of wooden, but it pretty much captures the essence and fun of the sport: Precision driving, improving your skills, camaraderie with other gearheads and (usually) a nice day outside in the sunshine.

Autocross Documentary from Stephen Chiang on Vimeo.

I love Mondays!

Wednesday, May 26, 2010 at 12:15
When I first saw it last week, the video below from Philip McKernan really resonated with me. More than once in my life I've found myself dragging my ass into a job I wasn't enjoying and basically just working for the weekend. So I can say with authority that it's a killer. It wasn't that I had bad jobs or worked at bad companies; in fact, quite the opposite - I think I've worked for some great companies, with smart and engaged people that helped me to become better at what I do. But once the magic is gone and boredom at work sets in, wow is that a life-sucking experience. I really don't know how people can spend years in mind-numbing jobs and still be happy and satisfied with the non-work portion of their lives. Just doesn't work like that for me.

Lately, as I've been working some new business initiatives, I've found myself doing tasks that really aren't what I want to be doing or how I want to be spending my time, but because I can see the end goal I have in mind, doing them is not a problem. I've found that really interesting because in a different context of a Jay-Oh-Bee, I'd really resent having to spend my time on them, not digging in with enthusiasm.

Anyway, I hope you enjoy this little pep-talk. If you're stuck in a rut you need to get out of, DO SOMETHING. Letting it ride hoping it gets better is a waste of time and opportunity. Like Philip says, "In the absence of clarity, take action!"

My new website - early preview!

Thursday, May 20, 2010 at 17:01
I've been working on this project for a while now and I'm almost ready launch! The project is a new and unique Lease to Own (Rent to Own) property listings website. I'm excited about this, not only because I've put a lot of time into it, but because I really do think it will provide a great product for a market that is currently under-served.

The goal is to not only provide quality listings of rent-to-own properties but to be a valuable resource of information for buyers and sellers alike. So in the interest of getting some early feedback, here's the link:

http://easyhomebuycanada.com/

Check it out and either send me an email or post a comment here if you have comments or suggestions. It's a big job reviewing every aspect of a new project and after a while, it all starts to meld together into a blur. Having some more eyeballs looking it over will be helpful. Thanks, I'm looking forward to hearing what you think!

If you don't already know what Lease to Own / Rent to Own is all about, here's some basic info to get you started.

If you're an investor looking to try the site, from now until at least our formal launch, you can sign up for a free 60-day Gold Membership that will allow you to list your properties for sale and create your own company profile page.

The Widowmaker - Now with extra widow-making juice!

Friday, May 14, 2010 at 20:04
The Krazy Krauts at Porsche say the new GT2 RS 'Widowmaker' will do the 'Ring in 7.18. Are they $#@%ing serious? Check it out:

Fixed vs Variable Mortgage Rates - Which to Choose?

Thursday, May 13, 2010 at 16:42
This is a question that comes up in real estate discussions over and over again. Whether it's investors trying to manage their cash flow and overall expenses or homeowners looking for the best deal, the choice of fixed vs. variable rate can make a difference of thousands of dollars over the term of a loan.

The analysis isn't quite as simple as comparing fixed vs variable rates and taking a SWAG at what the bank prime rate will do in the future. The principal paydown on a mortgage varies over time (increasing with time), so a more precise analysis of fixed vs variable will look at the total cost (P + I) paid in various scenarios over a period of time.

To help understand the problem, I created a spreadsheet to analyze the cost differences between a fixed rate loan and several variable rate scenarios over a 5-year term. Five years is the typical term for a fixed-rate, closed mortgage so it makes sense to use that as the baseline comparison. I then modeled 3 different scenarios of rising interest rates: a low rate of 0.5% annual increase in the prime rate, an average rate of about 0.75% and a high rate of 1.25% increase. Obviously, there's no need to model flat or declining interest rates, since in those cases, the variable rate will always be cheaper.

Some additional assumptions/parameters of the analysis:

  • 25 year amortization
  • Bank Prime rate of 2.25% (this is actually irrelevant as all other rates are relative to this)
  • Fixed borrowing rate at P + 2% (more on this later)
  • Variable rates at prime
  • Variables rising at 0.5%, 0.75% and 1.25% annually
  • Prime moves up quarterly each year
  • Variable loan payments increase with each prime rate change
  • Costs calculated per $1000 borrowed
This graph shows the total (P +I) expense over a five year period, comparing a fixed rate with the three rising rate scenarios above:

So we see that in this case, only the highest rising rate ever costs more over the 5 year period. Comparing the costs on a percentage basis, that's even more obvious:

I also modeled a couple other scenarios:

1) What if prime moved up even faster? Here's the analysis for annual increases of 0.75%, 1.0%, 1.5%:
 Very similar to the first one. In this case, the highest increasing rate starts to cost more in the 3rd year of the loan, and the middle increase only costs more in the last year. Again, the percentage difference in total cumulative cost:

2) What annual rate of increase is required to exactly equal the cost of a fixed rate loan? Solving backward for this, we find that it's at about 0.825% annual increase for the 5 year term.

Percentage difference is (by definition of the solution) zero.


So the big takeaway here is this: Given a typical spread of 2% between fixed and variable rates, interest rates must increase at greater than 0.83% per year, every year for five years, before a fixed rate mortgage starts to cost less than a variable rate loan. Even in a climate of rising interest rates, if the annual interest rate increase is less than 0.83%, the variable rate loan is the better deal. That works out to a total increase of 4.25% in 5 years. So the question you want to ask is how likely is it that prime will increase by that much?

Another point to keep in mind is that in all scenarios, we're assuming the same prime +2% spread for the fixed rate, which is about the BEST available right in Canada now. This chart shows that some banks are currently quoting as high as prime + 4%! At that cost, prime would have to move steadily to over 10% in the next 5 years (+2% annual increase in prime) before a variable loan would cost more.

The spreadsheet I used to make this calculation is available in Google Docs for you to view or copy as you wish. If you choose to publish the spreadsheet elsewhere, I would appreciate an attribution. Thanks.

I was a bit unbalanced, but I'm much better now

Sunday, May 9, 2010 at 10:20
I had the opportunity yesterday to do a corner-weighting session on my car and a few others. For those that don't know, corner-weighting is done for race cars to even out as much as possible the amount of weight borne on each tire of the car by making adjustments to the suspension. Even weight distribution = better handling. The process is done using a special set of scales with a weight pad under each tire and a central readout.

While I don't have a set of those scales, I was fortunate to be able to borrow a set from a friend. I decided to make the most of the opportunity and got together with a few others from the Wild Rose Miata Club. We chose to do the work at Doug's Garage of Awesomeness and Car Parts Emporium. The Garage of Awesomeness has a lift, at least one (and usually two) of every useful tool known to man and enough spare parts inventory to build at least 1.5 complete cars from the leftover bits. As proof, see the photo at left. I mean really, who has that many 1/2in ratchet extensions? Show off.

So we started off the morning as any any great day starts: With hot coffee and Timbits. Then it was time to get down to business.

We started by lowering my ride height about 1 inch all around. This year I'm running some smaller diameter racing wheels (13in vs 15in) and it made sense to drop it down a bit more as I have an extra inch of fender clearance. I'm probably around 2-2.25 inches lower than stock now. I've got fairly stiff springs in the car, so bottoming out isn't much of an issue. I'm running at 12 in F, 12.5 in R, height measured from bottom of fender to center of hub.

Next up, the scales of truth. Good news! My Miata weighs quite a bit less than I thought it did. Weight without the driver and with 1/2 a tank of gas is 2075 lbs. That's encouraging as I haven't really done anything specific to add lightness to it. My racing seat is about 10lbs lighter than stock, but that's about it. I thought that the stock weight was around 2300lb but this is a good bit less than that.





Next step is to put the driver (that's me!) in the car and start adjusting the spring perches up/down as needed to balance out the weight. The target is for 50% crossweight and 50% F/R weight. Crossweight is defined as

(Right Front / Left Rear) / Total car weight

Adjustments are made at opposite corners of the car - RF/LR and LF/RR are adjusted in pairs to adjust the corner weights. It took us (and by "us" I mean "not me", because I was sitting in the car up on the lift) a couple rounds of adjustment, but the final setup was very close to the optimum.


With two of the cars (Doug's and Alvin's), we really lucked out because they needed no setup adjustment at all. They were already about as close as you'd need to be without making any new adjustments.

Doug's Car:

Admittedly, we forgot to put Doug in his car, but this was a pretty good result and he insisted we just leave it alone and move on to the next car. Not fixing something that isn't broken just doesn't seem right somehow and at this time I started to question Doug's sanity, but he was also wielding a large torque wrench and so I opted not to argue about it.






 Alvin's Car (without driver)



Alvin's Car (with driver)


Steven's Car (before adjustment, without driver)


Steven's Car (after adjustment, with driver)


Since we were already at the best shop in town, Steven took the opportunity to diagnose and fix a fuel leak at the fuel pressure regulator. In doing so, we discovered the custom bracket that holds the throttle cable to the intake was bent and almost broken off. No problem! After all the weighting was done, Doug fabbed up an even better stronger one from some angled aluminum. Nice work!

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