My Approach Toward Personal Finance (or: How I Learned to Stop Worrying and Grow Money)

As of this writing, 2015 has not been a great year for the United States financial markets.  As of
today, the S&P 500 index (possibly the truest representation of the US stock market, seeing as it's the broadest index) is down 6.69% for the year.  To contrast this with previous performance of this index since 2009:

• 2009: Up 23.75%
• 2010: Up 13.14%
• 2011: Down, but only 0.87%
• 2012: Up 13.91%
• 2013: Up 30.5%
• 2014: Up 12.93%

With the exception of 2011, the last six years have been like a shotgun blast, and everyone who had the cujones to buy and hold through an awful 2008 has made a ton of money since then.  For every dollar you invested on January 1, 2009, you had $2.60 on December 31, 2014 (not adjusted for inflation).

Over the last decade, I've had more than a passing interest in the field of personal finance, since I believe it informs us a great deal about the human condition.  Conservative or liberal, Democrat or Republican, we're all capitalists and we all work to make money, hate it or love it, ostensibly to improve our lives.  Money is inherently neither good nor evil; it just is, because of rules we've agreed upon as a society.  It's truly fascinating, especially when you consider how even the world's greatest economists can make only marginal progress toward understanding how money "works".

Anyway, I wanted to devote some space here to discuss not only my approach toward personal finance, but also some of the best teachings I've ever had regarding the topic.  I'll try in this article to keep things interesting and not go too deeply into the weeds.  I will also try to show you with concrete examples how I calculate stuff (this may be in polar opposition to the previous statement), because I've developed a system over the past several years that I feel works very well - at least for me, though I admit I am the type of guy who is happiest inside a spreadsheet.  Let's get started...

Belief #1: Invest, and Ye Shall Be Saved

When I graduated from Rutgers in 2006 and got my first job, my father insisted I start contributing to my employer's 401(k) plan as soon as possible.  As I've mentioned before, I lasted at that job for about eleven months before leaving for graduate school.  I invested about $3,000 over those eleven months, rolled it into a self-directed IRA after I quit, and lost almost half of it in the Great Recession.  (I made a stupid investment - I failed to diversify, a mistake I routinely try not to make again and invest dozens of hours each year in order to avoid in the future.)  Since then, though, I've turned that three grand into over four grand, just through compound interest (without saving a single additional dime into that account).

In fact, in thirty years (when I'll be 61 years old), that measly three grand will have grown to over $146,000, not counting inflation and assuming the S&P 500 index continues to grow over the next thirty years the same way it's grown over the last hundred-plus years*. (*NOTE: This may not happen, but it likely will.)

One of my favorite tools on the entire internet is MoneyChimp's Compound Interest Calculator.  It's simple, but elegant.  You input the amount you've already saved; how much you plan to save each year in the future; input an interest rate and a number of years, and that's it.  The calculator spits out how much money (in present-day dollars) you'll have at a certain point in the future.

You can play around with the above calculator as much as you'd like, but over many instances of using it, I've learned the following:

• Interest rate matters a ton.  If you assume 7% compound interest over a thirty-year period (a safe, conservative assumption), you'll get about 20% the output as if you assume a 12% interest rate.  Which interest rate is more accurate?  No one knows for sure, but my favorite personal finance article ever claims that historically, over a thirty-year period, the S&P 500 index has never returned less than 12% annualized.  More often than not, I assume 7% because I'm a pessimist, but 10% or even 12% is probably more accurate. 

• Time matters just as much.  Realistically, most people I know will have to save at least one million dollars before they can retire.  Assuming you draw down 4% of the total in retirement each year, having a cool million saved means you can live on $40,000 each year (tight, but maybe doable if you make some adjustments).  That 7% (or 12%, or whatever) interest rate really works its magic over medium-to-long periods of time.  That's the power of compound interest; it, y'know, compounds.

• Continuously investing matters, but not as much as having already invested.  It's pretty clear, if you didn't know this already, that continuously investing a set percentage of your paycheck matters a lot toward building wealth.  You get to "dollar-cost average", which essentially means you invest the same amount whether the market's up or down at a given time.  Your dollars are more powerful when the market is down, but since you've set it and forgotten it, it only matters in the long run.  As an exercise, though, hop on the Compound Interest Calculator and assume you've already invested $200,000.  Set your interest rate to 7%.  If you set your annual addition to twenty grand, you'll have $3.7 million dollars after 30 years.  If you invest thirty grand instead, you'll have $4.7 million; more, but not a ton more than $3.7 million, in my opinion.  What matters most is having the two hundred grand already invested - if you only had, say, twenty grand in the stock market right now, you'd have to invest $45,000 each year in order to hit that same $4.7 million dollar mark in thirty years.  Since no one I know can afford to save $45,000 per year, it makes sense to save a little bit each year, starting from an early age.

The point I'm trying to make here is, I've made a number of important decisions in my life, most of them good ones (I think).  Perhaps the most powerful of them is to save early and often.  I'm not sharing specifics in this blog post (with good reason), but if anyone's ever looked at me and thought that I have my shit together financially, it's because I saved early and often.  Even when it would have looked better to spend.

Belief #2: Track EVERYTHING.

I keep tons of spreadsheets, but the two most germane to this article are (a) my monthly budget spreadsheet and (b) my net worth tracking spreadsheet.  I'll discuss both of these in some detail, below.

I update my monthly budget spreadsheet every time a significant life event happens (e.g, a change in income, a change in employment status, a change in family status).  What it contains changes each time I update it, but the core worksheet is always the same.  Down the left-hand side, our household's monthly expenses are listed, row by row.  My wife and I have separate columns, beginning with our gross (pre-tax) monthly income and ending with our net (post-tax) monthly income.  After that, we deduct each expense from that amount (depending on whose responsibility it is to pay that bill).  At the bottom of the spreadsheet is the amount of money we have left over each month after saving and  paying our bills (a very fortunate thing for us).

Below is an example of what I'm talking about, with the details completely blacked out:

The devil is in the details: your spreadsheet is only as honest as you are, and if you routinely blow your stated budget on "Credit Cards" or "Dining Out," you might as well wipe your behind with it.  There are several items on this list I've had to revise (sadly, mostly upward) over the years to reflect reality.  But in the long run, it's turned into a highly useful tool which has allowed me to quantify our ability to output more money as a household than we've input, each and every month.

My net worth spreadsheet is password-protected, and if my wife outlives me, it's going to be a pain in the ass for her to open it.  I update it twice per year; once in May (which happens to be the month we closed on our house in 2011; this was the single most impactful financial decision of our lives to date, so it makes sense to track our wealth each May) and once in December (as my income is bonus-dependent and I get said bonus in December each year).

I update this spreadsheet relatively infrequently, because a person can drive themselves nuts (and make bad decisions as a result) worrying about month-to-month fluctuations in net worth which end up signifying absolutely nothing.  While there are personal finance sites (such as Consumerism Commentary) out there which focus on regular people updating their net worth monthly, this feels less like reasonable personal finance and more like lifestyle porn to me.  If I have my specific details taken care of with my monthly budget spreadsheet, the net worth spreadsheet is for the big picture stuff and as a result, it does not need to be updated any more than twice per year.

The rows of this spreadsheet represent our core assets (e.g., investment accounts, home equity) and our debts (e.g., mortgages, car loans, student loans).  Each May and each December, I update the spreadsheet with the present values of each asset and each debt.  The formulas I've created calculate our net worth as the simple subtraction of our debts from our assets.  Below is an example of this, again with the details completely blacked out:

The most important column in the spreadsheet is the "YOY (delta)" column.  This calculates the year-over-year appreciation (or depreciation) of each row in the spreadsheet.  I mentioned before this is a big picture spreadsheet, and with the information this column provides, I make big-picture decisions about whether our household's finances are heading in the right direction.  I put a ton of faith in the "YOY" column.

The most important row in the spreadsheet is the "Net Worth" row (of course).  It's nice to see our net worth grow each year (though it frankly may not in 2015), and quantifying the extent of the growth builds confidence that what we've built so far can continue to grow with time.

Belief #3a: Buy and Hold
Belief #3b: Don't Trust Most "Experts"

I put these side by side because they together inform my beliefs regarding long term investing.  The first statement is my strategy for selecting investments, and the second is my strategy regarding taking advice about these investments.  (I realize if you're reading this column you may be taking my advice - do so with a grain of salt, as I am not a financial professional, just a regular guy making it through this mortal coil as effortlessly as I can.)

The second statement might be the more controversial of the two, so I'll address it first.  There are undoubtedly financial advisers out there who believe the truest way to grow their business is by serving in the best (e.g., fiduciary) interests of their clients, there are many more who believe the truest way to grow their business is through higher commissions charged to their clients.  In general, I don't trust many people in the financial field because through my work, I've seen many of them don't operate in the best interest of their clients.  I can afford to make this claim because of Belief #3a, which allows me to state virtually no one knows how to play the stock market in the long term, so the best you can hope for is to ride the stock market.

This, too, is a somewhat controversial claim.  Each year, there are mutual fund managers whose funds beat the market.  There are even some who may beat it reliably for a few years.  My argument is the percentage of mutual fund managers who routinely beat the market is the same as the percentage of online poker players who routinely make money.  (It's a low percentage, in both instances, though you wouldn't believe it if you heard other people's boasts.)  As a result, I invest my money passively - meaning I don't count on human beings to make informed stock picks, instead choosing to invest in entire markets and indices (such as S&P 500 index funds).

This doesn't mean I don't pick stocks occasionally.  I do, but it treat it the same way I treat my online poker habit - as gambling money.  I put a very small percentage of my portfolio towards it.  If I make money, great.  If I don't, no big deal.  It's just for leisure and entertainment.

But when it comes to saving for retirement - something I hope to do at some point in my fifties - the stakes are as serious as they can get.  My belief is that despite whatever amount of intelligence I may have, I am not smart enough to pick stocks and I am not smart enough to pick stock managers.  I can only control the fees I am charged, so I seek to keep these as low as possible.  I do it by investing in index funds, but there are other methods that work too. You can read one of the books I reference below, if you're interested more in this.

***

There are other topics I could write about here as well (such as diversification, which may alone be more important than anything else described above), but I'd be stepping way out of my depth in doing so.  I'm telling my personal story here, and of course, your mileage may vary.

If you're interested in learning more about this (to me) highly interesting topic, here are some books which have helped me over the last ten years:

• The Wall Street Self-Defense Manual, by Henry Blodget: The first serious personal finance book I ever read, written in newbie-friendly terms (and only 98 cents!).
• A Random Walk Down Wall Street, by Burton Malkiel: The go-to guide for the rationale behind passive investing.  A bit more technical, but still a good read.  I re-read it, usually on the beach, every couple of years.
• The Four Pillars of Investing: Lessons for Building a Winning Portfolio, by William J. Bernstein: The most technical book I've ever read on the topic (written by a neurologist and investor), but worth the effort.  When I mentioned diversification above, this is the book I refer to when rebalancing my portfolio each year.

And no, I don't think it's essential to give as much of a shit as I do about this in order to be ultimately successful.  I just think you need to care enough to (a) invest some money and (b) not get screwed over by nefarious individuals who claim to serve your best interests, but do not.  You'd take care not to get pick-pocketed when visiting a foreign city; you'd be well-served to do so when thinking about growing your money.

I Just Wasn't Made For These Times: My Disdain For Kid "Stuff" on Social Media

My notes regarding this blog post.

My daughter, thankfully healthy as anything, with ten fingers, ten toes and a smile that melts me, turns a month old on the day I write this sentence.  Today, I decided to scroll up and down my Facebook news feed, and am pretty disheartened by what I see - posts of substance pretty much ignored, immediately next to pictures of creatures that contribute nothing besides some sort of "cuteness" I don't really understand, which are themselves adored. 

I admit I pretty much do not like children.  I like my own kid, sure, but (with a few exceptions) I don't like other people's kids. That being said, I really have no way of understanding why other people like other people's kids so much, especially on social media.  In this post, I'd like to dive a bit deeper into my attitudes regarding this subject.  I do so well aware that my opinions may be somewhat unpopular and/or subversive.  To this, I say: tough shit.

I suppose I should start with a little background, explaining how I handle pictures of my own daughter on social media.  Thankfully, my wife and I are pretty much of one mind on this.  My opinion is baby pictures should be like sexual threesomes: pretty uncommon but when they happen, they're always conducted with trustworthy and tested people.  To that end, we created a Facebook group where people can ask to join, we can accept them into the group, and everyone is happy.  The people in the group can see as many pictures of our daughter as their heart desires, and everyone who doesn't want to join the group can have their News Feed filled with other material.

With a heavy heart and while grinding my teeth to nubs, I'll admit I halfway like it when people "like" pictures we post of my daughter.  It makes me feel important and that I've created something of value to other people.  But in reality, my daughter is at least two decades away from the possibility of creating anything of real substance and value to the world, and though it pains me to say this, objectively speaking she very well may never create anything of real substance and value to the world (though I truly hope she does).  Neither will your kid, most likely, or the kid next door.  Most of us are like that kid from the Super Bowl commercial years ago - desperate to claw our way up to middle management. 

What I'd prefer, regardless of the grim implications of the above paragraph, is for my daughter to grow up with a grounded and well-reasoned sense of individuality, personality, values and an appropriate level of self-importance.  And, frankly, I'm scared about her generation and what they might grow up to become, as it pertains to the impacts of the behaviors their parents use on social media on the healthy growth of these attributes.  Allow me to explain.  I was a Facebook early adopter, starting to use the platform as a college student in 2003 at the age of 19.  And predictably, I was a member of the first generation to seriously get themselves into trouble using social media.  Plenty of my female classmates posted ridiculously racy pictures of themselves on the platform back in the day - trust me, I (and my male cohorts from the Rutgers University class of 2006) remember this.  Some of these folks will eventually run for public office, and get in trouble for it - we've already seen this happen.  It'll get way worse in the years ahead.

The above is sort of an extreme example, but on a day-to-day basis, I feel what most parents do (specifically, posting unfiltered and frequent kid pictures to their social media presences) is a well-intentioned mistake.  It's well-intentioned because it comes from a place of love and value - we love our kid so much, and clearly other people "like" the pictures we share, so why not share the pictures we take of our kid to other people?  But it's a mistake because it presumes something which is fundamentally untrue; specifically, that everyone who views these photos wants to see those photos.  Our children aren't as popular as they seem when we post pictures of them online, but the impression they ARE popular influences our other parenting decisions in ways we might not understand or even be aware of, and that's bad news bears for the future.  Think about the popular kids from your middle school days and how fucked up they likely grew up to become as adults.  That's what we very well might be turning lots of kids into - the gross manifestation of our adultified dreams of being the popular kids in middle school.

I've purposefully avoided the word "consent" so far, but I'd like to bring it up now as another pitfall of posting pictures of your children on social media.  We all know some adults who've elected to remove their social media presences entirely.  More rare, but still out there, are the adults who never signed up for social media in the first place.  We have no way of predicting whether the incidence of social media usage will continue to stay as high as it is at present - it could be the case, twenty years from now, young people will prefer to communicate with each other via Virtual Reality goggles, engineered telepathy, or not at all.  I'm being a bit absurdist here, but it's true that when you (or I) post a picture of our child to social media, we make the decision for them to put them out there, and they have absolutely no way of consenting to that decision.  They may very well elect to have no social media presence as an adult, and - to me, at least - it's a big deal that we honor that potential choice.

"This is all a straw man - much ado about nothing - you're making a mountain out of a molehill - it's no big deal," some may react to the tone of this article.  I agree I take social media more seriously than I should - I also take TV commercials (and just about everything else I somewhat care about) more seriously than I should.  I do this because my life philosophy, which has taken years of deep thought to flesh out, is everything we take the time to do in our lives has some importance, whether we consciously see it or not, and even if it outwardly seems like we're wasting time doing it.  I'm also an idealist with impossibly high standards, and I feel like in an ideal world, we'd take the time to preferentially "like" articles of substance (say, articles about new scientific or technological findings) vs. some post-fetus with crust on their face.  (Maybe I just need new/different Facebook friends, but I look down my list and see a ton of highly educated people, so I dunno...)

***

I've talked above about kid pictures specifically, but let's expand the discussion to include posting kid-related status updates, in general.  I do this sometimes, but before I do, I scroll down to make sure (at least) the previous two posts had nothing to do with my daughter.  This is because the last thing I want to seem to be to others is "one of those people" whose lives entirely revolve around their kid.  (Even if it's partway true, when you have the sundry demands which come with a newborn.)

I value my busy, non-kid-related adult life - I go to work and there I work creatively and productively, I hang with friends, I go to dinner with my wife weekly, and I have hobbies that have nothing to do with my child.  Forgive my judgment here, but I'm a bit scared of parents who don't live that way.  It makes me feel like they might be a bit lacking in the individual substance department themselves, like they became parents to fill some void in their personality that I'm fortunate enough not to have.

To an extent, I have fewer concerns about consent when you're posting some words about your kid than when you're posting a picture.  I feel like people are more protective of their pictures than they are of stories someone else tells about themselves.  Also, there's a relationship between parent and child that comes through in text better than it comes through in a picture, and there's nothing inherently wrong with a person sharing their thoughts or observations about parenthood online - especially if those thoughts or observations are funny.

But it's still a post about someone else who isn't you, and especially when the child gets old enough to conceivably have their own social media presence, it feels a little awkward and wrong to me.  I reserve the right to change my mind on this in the future, but assuming she grows up well-adjusted, I'm okay with my daughter having her own Virtual Reality-based, engineered telepathy system online presence when she's about the age of a freshman in high school.  From that point on, all Daddy is going to post about is his beer brewing, even though he'll remain very proud of you, sweetheart.  From that point on, you're in control of how you present yourself - to your peers and to adults - on social media.

With that approach, sure, she'll make mistakes.  But she'll also learn the same way my generation learned (from using AOL from the age of 13 on and from making mistakes in chat rooms - believe me, I made lots of mistakes in AOL chat rooms in the mid-to-late '90s) to cultivate a smart, sensible online presence.  That's probably the ideal, not only here but also in every parenting decision, right?  How do we get from a blank slate to making smart and sensible individual choices?

The online world is a scary place and I'm surprised at the cavalier attitude my (mostly well-educated, mostly intelligent and mostly high-achieving) social network takes with respect to their kids' online presence.  I'm not sure my opinions will ever jibe with the mainstream on this, but I felt like my thoughts had also never been written thoroughly regarding this topic.  Hopefully others can read this and maybe it'll provide some food for thought, if not getting people to agree with me, at least seeing where I'm coming from.

On Becoming a Dad, Somewhat, Kinda Soon

With the birth of my daughter likely just a few weeks away, it's difficult to parse and make sense of

what's on my mind.  It's a combination of nervousness, excitement, fear of not being ready, confusion, and (to be honest) a bit of mourning for my soon-to-be-gone, childless life.  I thought I might write a few paragraphs tonight on this, just to reflect and keep something in writing for the future - maybe one day I'll find this silly, who knows?

***

Those who know me know I vacillated for years on whether to pursue parenthood in the first place.  I have always envied (and perhaps will envy, moving forward) the childless couple, free to be the generous uncle or aunt, able to spend time with friends’ and relatives’ children, then go home and have some peace and quiet at the end of the day.  I also saw the financial benefit to never having children.  To be brutally honest, what we’re giving up by having this child is the near certainty of (a) retirement around age fifty, plus (b) having the ability to easily and less nervously travel the world afterward, or hop from cruise ship to cruise ship if we wanted.  For what in the world would we give up such a rare privilege?

A great deal, actually.  In my humble opinion, people should without a doubt abstain from having children if that’s their true feeling, but ultimately I wanted the ability to write every possible chapter in my life (including the one involving saliva, loose shit, and nasal crust, mixed with selflessness, adoration and unconditional love).  In the end, I knew I’d be selling myself and my full potential as a human being short if I didn’t hold my nose (literally) and take the leap into the deep end of uncertainty we’ll call impending parenthood.  

It's unbelievable and frankly weird to think that in just a few weeks, I'll have a creature I'll need to (jointly, with my wife) nurture, change, help teach, and generally raise.  For all my past achievements, I have never really felt I was qualified for this thing, parenthood.  Some people just fall into it naturally, it looks like from the outside, but I can't do that.  After all, my achievements so far have been intellectual, financial, logical.  They haven't been emotional, and emotional strength is (ahem) not my strength.  

I always assumed parenthood was designed for someone older, someone more balanced, somehow more equipped to handle the randomness and chaos which must certainly accompany having a helpless, small child.  In my mind, I'm still about 23 years old, which is great when I need to go for a run, drive somewhere quickly, or be creative at work.  It's terrible, though, when it comes to facing the reality that I'm no longer 23 years old, and I haven't been 23 for quite a while, in fact.

***

Uncertainty is not my thing.  I keep spreadsheets on minutia, I follow bloggers who write about Bayesian statistical applications, and I work in an research field because I seek to minimize uncertainty in every way possible.  As an extreme example, if I could know the precise moment I am supposed to die, I’d want to know it.  But I can’t know it – I can only know that I one day will die, and embracing my own mortality is a key aspect in embracing parenthood.  Some little part of me could, perhaps should, live on, long after I am gone.  Maybe that's a little selfish, but it's ultimately a part of the calculus that led me to decide to become a parent in the first place.  I admit this without any shame.

That said, one of the things that freaks me out is that there is virtually nothing I (or any parent) can do to keep our future child from the (albeit unlikely) outcomes of having autism or schizophrenia, or from being a serial killer or a sociopath.  This is the unfortunate, perhaps less talked-about side of becoming a parent – perhaps only something really negative people ever think about, but that’s sort of what I am.  But it really does happen to people.

To that point, worry is my thing.  I worry about everything, including highly unlikely outcomes such as the ones mentioned in the previous paragraph.  It helps to remember that for someone who tends toward nervousness like me, it’s all too easy to spend your life hopping from one anxiety point to the next, and then one day your kid is twelve and a half years old and you’ve spent the last thirteen years worrying about nothing of substance.  It’s more difficult, but ultimately more rewarding, to just jump into the uncertainty and allow oneself to accept whatever happens next.

***

So I suppose I'll just trudge through the next few weeks, until the "best day of my life" happens.  But the odd thing about the best day of your life being something like four weeks away is it leads someone toward some oddball type of emotional performance anxiety - what if it's actually NOT the best day of my life?  What if, for some reason, my wedding day, or the day I moved into my house, or the day of my college graduation, trumps it?

At this point, and to conclude mercifully, I'm looking at what I've written above and it looks half like the writing of a very anxious individual and half like the scribblings of a madman.  I'm still going to publish it, though, because (a) YOLO, and (b) it might be worthwhile for someone in a similar position to read this and realize they're not nuts, they're only temporarily nuts.  Perhaps some of you who've been in this position before empathize.  But still, these are just my thoughts.

Ripping Apart Liberty Mutual's TV Ad Campaign

I haven't posted here in a very long time, not because I have stopped thinking of important things to say, but mainly because I'm not sure 8,000 words on how I'm terrified of becoming a dad in six weeks (probably my most common thought these days) would be an interesting or insightful read for my audience.  However, I was chatting with a friend recently about how I'd essentially stopped blogging, and he mentioned that it'd be great for me to try to "loosen up" the writing chops a bit with a post on terrible TV commercials.  So, I've decided to take his advice.  My apologies if this comes out terrible; I'll just blame it on rust. ::loosens up throwing shoulder::

I occasionally post about TV commercials and postulate on the reasons (typically corporate reasons that I have no business postulating about since I don't work for these companies, but hey, whatever) behind the awful ones.  Usually it's an indictment of corporate America as a whole and more specifically its politicized misread of the target demographic, but I'm going to do something different here today and focus entirely on advertisements from one company, since I think there's a common theme running throughout the ads that might be useful to talk about.

***

Liberty Mutual Insurance is the United States' third-largest property and casualty insurance carrier (behind Geico, which is owned by the massive conglomerate Berkshire Hathaway, and AIG), and was the 76th largest company in the US in 2013, per the Fortune 500 list.  They're a massive company, with 50,000 global employees, and as a result they can spend a ton of money on advertising.

We all know Geico's reputation as an innovative (if occasionally overbearing) advertiser.  Their commercials are some of the best-known ads in recent memory, and their "hits" often carry over into the popular culture mainstream.  Just ask my wife, who in 2013 won several Halloween costume contests at her company by dressing as the Geico "Hump Day" camel.  What the hell, just click the link below and remind yourself of the latent awesomeness of this ad:

This ad garnered (as of today's writing) 1,878 likes on YouTube, vs. 52 dislikes.  (Who the hell are those 52 people and can they please leave the country?)  The advertisement is memorable for all the right reasons - it touches upon an emotional string that most everyone who has ever worked in an office (or seen the movie "Office Space") can understand, it's whimsical, and it's funny as hell to top.  Does it remind people of auto insurance?  Not directly, but I bet if you asked most people about the "Hump Day" camel, they'd tell you it's a Geico ad.

Liberty Mutual's most recent ad campaign goes "all-in" on being all about auto insurance.  They use different actors in each, but the backdrop is always the same - a sterile, urban backdrop, with the Statue of Liberty in the background (perhaps to remind the viewer of the company's logo).  The actor shares a personal story about having auto insurance, either through Liberty Mutual or through a competitor, and the commercial concludes with some music and a voice over, with a brand logo screen.  It's standard commercial fare from a previous decade, and I'm personally surprised at how subdued it all is.

Where I think people get pissed off by this campaign is with the actors and their personal stories.  Check this one out, for instance:

Perhaps before designing this ad, Liberty Mutual's creative team should have thought a bit about what people who own (or lease) cars in the United States tend to already know about their cars.  This may be a bit of an elitist presumption on my end, but I think it's pretty common knowledge that a new car depreciates the instant you drive it off the lot.  Maybe other people don't know this - maybe I'm wrong - but I think I'm correct about this.  The average new car in the United States these days is owned for eleven years, and no day of that eleven-year experience is more expensive than the day you drive it off the lot.

Keep in mind this isn't a commercial for Liberty Mutual's standard auto insurance, per se.  It's a commercial for a specific rider called "New Car Replacement", which (if you read the fine print) is additional coverage (that you have to pay extra for) which only applies to brand-new cars under a year old and under 15,000 miles.  I'll give Liberty Mutual a few extra credit points for designing a commercial for a specialty rider vs. a standard auto insurance policy, but other people - who, unlike me, do not work as market researchers specializing in insurance - have absolutely no chance of getting the distinction.

***

Unfortunately, the guy above might be the least annoying actor/story combination in Liberty Mutual's most recent ad campaign.  Check out this lady:

The advertisement above is well-intentioned, and as someone who moderates focus groups, I can see how it made it through focus groups without any obvious red flags.  The story is earnest and emotional, and if you get people who are already thinking about insurance in a conference room together, they'll say something collectively like "Sure!  That makes sense to us!"

Unfortunately, people sitting at home on the couch eating potato chips are going to focus only on the superficial (the annoying and poorly executed "You freak out!" line, for instance, or the idea that the person who taps the station wagon - and is therefore at fault - being somehow the "victim" of the evil insurance company) aspects of the commercial, instead of what it's trying to sell - again, a type of additional optional coverage called "Accident Forgiveness" which is part of an overall insurance policy.

The ad actually raises a valid point - auto insurance companies do have an annoying habit of raising rates on people who've had an accident (often regardless of fault in the incident) and "Accident Forgiveness" might be an important value-add that could drive people to Liberty Mutual's product.  But ultimately, the executive above is too confusing and too annoying to get the average consumer to even think about switching to Liberty Mutual.

***

Here's the worst of the bunch.  I'll present it without context, below:

I hesitate to look at YouTube comments, because I am not a masochistic asshole who likes to punch himself in the head (most of the time).  But in this case, it was actually illustrative to look at a few of the comments for this video:

• A message to Liberty Mutual: Whoever you hired to create these ads has done you a disservice. Your audience understands that insurance companies are businesses, not charities. The fact that your rates go up after an accident isn't a penalty; the company is recouping its losses. 
• Whoever is their PR agency, they need to be fired...really? Brad? General, Geico, Progressive are all creative...but this is just stupid.
• This girl and this commercial are challenged!  The instant it comes on I have to mute or end up throwing something at the TV.
• This actress really annoys me. She tries way too hard to feign emotion. Someone needs to tell her it's just a commercial for a racket industry, not a Broadway play.

And here's my favorite comment:

• These videos are insulting and annoying.  I made a special trip to YouTube just to let this company know how aggravating these ads are.  These ads show fictitious consumers who rail against insurance companies. Here's the kicker: the sponsor of the ad is an insurance company itself.  They obviously think the average consumer is brainless not to see right through this soap opera. 

That's really the issue here, isn't it?  I know lots of people within the insurance industry who rail against the Geicos of the world for creating advertisements that have nothing to do with insurance.  These folks need to take a second to actually think about perceptions of the insurance industry amongst mainstream Americans (hint: perceptions are awful).  Perhaps the only way to get people to think positively about your brand if you are an insurance company is to use smoke and mirrors (or camels, or Flo, or whatever) instead of focusing people on more "obvious" factors such as the products your company offers or your company's value proposition.

The product being pitched in the above ad is called "Better Car Replacement."  (Though I've seen this ad on TV hundreds of times, I actually had to write this blog post and freeze the video toward the end in order to remember this, so great job, Liberty Mutual!)  For all I know, "Better Car Replacement" is an excellent value for consumers - insurance companies have teams of actuaries who, if you ask them, will tell you their job is to find ways to maximize profits for the organization while offering a great deal to customers.  People are very fickle about auto insurance, and will change carriers at the drop of a hat - so the smart companies actually dedicate tons of resources toward trying to keep their customers loyal.  But all of this possible helpfulness is just completely lost in the horrid execution of the TV commercial.

***

The other item I wanted to bring up regarding this ad campaign is demographic in nature.  I do not think it is a coincidence that the actors in the above ads are a blue-collar dude and two young women.  Auto insurance companies often segment their customers into groups based on demographics, and it's pretty clear to me that Liberty Mutual was attempting to increase market share with these ads among "git 'er done" type guys and female Millennials.  It could because, when these types of people select an auto insurance carrier, they are less likely to switch companies no matter what happens - but who knows, I am only speculating here.

Will it succeed?  I actually plan to check out Liberty Mutual's earnings statements in the quarters ahead, because I'm curious to see if this ad campaign did anything to drive increased sales.  (I would doubt seriously if it did, but I'm no fantastic businessman, so I could be wrong about this.) Time will tell...

A Simple Analysis On Why the 2014 Yankees Should Make the Playoffs

If you don't like baseball, you might not want to read this one - sorry.  Also, I don't do sabermetric analysis for a living, so it's very much possible that (a) I'm incorrect, or (b) I'm correct BUT someone's done a better job of explaining this than me.  Where I think I am pretty competent is in marrying objective data with anecdotal evidence to tell a story.  So here's a story for you:

As of the morning of August 9, the Yankees are 61-54, tied with the Seattle Mariners in being just a half-game out of the second American League wild-card spot (currently held, very tenuously, by the Kansas City Royals).

It's possible, over the course of a long, 162-game season, for teams to experience a net aggregate of being either "lucky" or "unlucky."  This is typically defined using Bill James' Pythagorean Won/Loss Record, which provides an estimate for what a team's win-loss record should be based on the number of runs they've scored vs. the number of runs they've given up, as a team.  In the screenshot below, you can see the current run differential for each of the teams in the American League East in the circled column, labeled "DIFF":

By this measure, the Yankees have given up 19 more runs this season than they've scored.  (The first-place Orioles, on the other hand, have scored 46 more runs so far than they've given up.)  Since the object of the game is to score more runs than your opponent, as a general rule the better teams in baseball end up usually having positive run differentials each season.

This season's Yankees, as I mentioned above, do not have a positive run differential.  In fact, if you look at their Pythagorean Won/Loss Record, their expected record right now should be about 55 wins and 60 losses, which should put the Yankees somewhere around the Tampa Bay Rays and Boston Red Sox in terms of overall team quality.  Thus, one can say the Yankees this season have been "lucky," to the tune of six games they shouldn't have won, but ultimately did.

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But can a baseball team, to an extent, control their own luck (or, alternatively, render the idea of a "luck" statistic useless)?  It strikes me as possible that a manager can manage each game in a season in such a way to make this happen, and my hypothesis is that Joe Girardi and the 2014 New York Yankees have been consciously trying to do so.

Since "luck" depends on a run differential, one potential way to make it look as if your team's been luckier than it actually is would be to (a) make decisions in such a way to maximize your team's chances of maintaining a small lead, while (b) also making decisions in such a way to essentially "punt" on certain games which appear to be lost, turning the types of games you might ordinarily lose by 2 or 3 runs into games you would lose by 5 or more runs.

Anecdotally, watching the Yankees this season, it's my belief this is essentially how Girardi's been managing the pitching staff and lineup changes in his team's games.  (Independent of whether it was his decision or something handed down to him as an edict, if it works to the point that this particular, very much offensively limited Yankees team makes the playoffs, Girardi should earn at least some consideration for American League Manager of the Year.)  To test this hypothesis, I pulled down the Yankees' season data (game-by-game) from baseball-reference.com, and using Excel, created a quick PivotTable to test my hypothesis:

Hypothesis: Are the Yankees disproportionately winning close games and are they disproportionately losing blowouts?

Results:

The data in each cell represents the number of games so far this season (as of August 8) with that particular result.  So as an example, the Yankees have a 19-16 record in games this season settled by one run.  They are also 6-3 in games decided by exactly six runs.

Typically when a team looks like they're playing lucky over the course of a season, a statistician would first look at the team's record in one-run games.  A one-run game can, in theory, go either way by virtue of the very close score, so if a team somehow wins a disproportionately high percentage of their one-run games (like the 2012 Baltimore Orioles, who somehow - ridiculously - went 29-9 (!!!) in one-run games), this must be due to just variance.  But looking at this metric, the Yanks' 19-16 record in one-run games isn't too far off from the theoretical prediction of a .500 record in one-run games, so in this sense, the Yankees haven't been that "lucky."

Expanding the analysis to one- and two-run games, though, the Yankees perhaps look a bit luckier.  Combining these numbers, the Yankees have been 38-26 in games decided by two runs or less - a .593 winning percentage, good enough on its own to make the playoffs most seasons.  So maybe in this sense, the Yankees have been "lucky" - but here we perhaps need to stop talking about numbers and start talking about the actual New York Yankees, as a team.

The one true strength of this year's Yankees team has been their bullpen.  Joe Girardi has the (uncommon) gift this season of turning each close game into a 6- or 7-inning affair, thanks to exceptionally strong performances this season by set-up man Dellin Betances and closer David Robertson.  Additionally, you could argue the team's greatest weakness (at least at this point in the season) is its patchwork starting rotation - even though they've pitched well of late, many of their starters are outperforming their individual predicted performance, so you'd expect some regression to the mean over time.  My point here is, the Yankees' strongest point (their bullpen) is inversely related to their weakest (the rotation) - whenever the starter isn't out there pitching, a reliever is.  If you have a lock-down bullpen, you're way more likely to win the close games (defined here as 2 runs or less), vs. lose them.  It's what the Yankees did in 1996 with Mariano Rivera and John Wetteland in the bullpen, and it seems to be working this season, as well.

What about the second question in my hypothesis: are the Yankees electing to essentially "punt" on games when they're down by 5+ runs, allowing them to turn into blowout losses?

Well, in games decided by 5 runs or more so far this season, the Yankees are 10-16.  These numbers suggest that in a directional sense, the Yankees are more likely to be blown out than to blow out another team.  This could very well be a direct function of the season-long anemia of the current Yankees offense, and I don't think 10-16 looks too strong in one direction or the other, so I don't want to put too much stock in these numbers until the rest of the season plays out.

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I have two main points of writing this:

1. When someone looks at just the numbers and says "Oh, the Yankees are luck boxes this season, screw them," they're sort of missing the point - the Yankees appear, to an extent, to be gaming the very idea of "Pythagorean luck" and disproportionately winning close games, through leveraging the use of the strongest parts of their roster and advantageously matching up in ways that have mostly succeeded (though most Yankees fans, including this author, agree that Girardi over-thinks match-ups in the context of individual games - for me, though, it's more of an aesthetic annoyance in the sense that I don't want to watch so many pitching changes.  It's not that I don't get his logic.)
2. Ordinarily when a team is six games "lucky" at this point of the season, you'd expect them to limp toward the finish, ending the season with a record which more reflects the "zero luck point."  For the Yankees, that would be a full season record somewhere around 77-85 (give or take a few).  But this season, at this point, I think you can actually argue the opposite.  The Yankees have made it this far with a completely anemic offense and riding on the backs of their Triple-A pitching staff.  Their offense should be producing BETTER than they are, so if their performance actually improves the rest of the season - and, if, somehow, the team can manage to get an injured starting pitcher or two back - there's no reason why this Yankees team couldn't sprint to the finish, ultimately making the playoffs as a Wild Card (or maybe even a division winner).

Anyway, right now, the Yankees' chances of making the playoffs are around 20 percent.  If someone offered me 4-to-1 on the Yankees making the playoffs, I'd take that bet in a heartbeat, and so should you.

Observations on the Modern Business Trip

I travel for business just often enough to always have some kind of trip on the horizon, but not often enough to acquire any of the perks reserved for frequent business travelers (e.g., airport lounges, first class seats, shoe shines at the airport).  I recently had the opportunity to travel to Charlotte, North Carolina for a quick, two day business trip (FACT: Charlotte is the United States' second-most boring city, ranking below only my home city of Jacksonville, Florida).

Business trips are, to me, a manic cycle between three psychological states: intense action, nervous preparation for intense action, and sheer boredom.  Sometimes they combine; on Wednesday afternoon, for instance, I was bored as hell waiting for my focus groups to get started, but also incredibly nervous because I knew my clients would show up in the back room of the focus group facility any minute.  Anyway, in an attempt to turn the nervousness and boredom into something productive, I took some notes on observations I made during the trip, which I plan to share below.

It's a story that seems simplistic but it's actually kind of an outline of what I do, how I manage to do it, and what business trips can be like at the present time.

Let's get to it:

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WEDNESDAY, 5:30 am: Alarm clock goes off.  Exhausted, I do some mental math and realize I've greatly overestimated the time it will take to get to the airport.  My flight doesn't leave until 10:15 am, and even though I'm flying out of Philadelphia (NOTE: flying out of Philly always seems like a good idea when price shopping, and is always a terrible idea the morning of the flight itself), I have more time to sleep.  I'm the world's worst sleeper (more on this later), and I rarely snooze after the alarm clock, but this time, I manage to fall back asleep.

6:00 am: Alarm clock goes off.  I do more mental math and convince myself I can sleep until 6:30 am.  I set the alarm for 6:30 but my travel anxiety rears its ugly head and after ten minutes of tossing and turning, get out of bed at 6:10, instead.

8:45 am: Parked at PHL - it took an hour and and a half to get here, which is a comical amount of time to travel to an airport, given EWR is only 45 minutes away, but at least there was no traffic.

8:54 am: Through security at PHL.  There's a little known security line in front of terminal B that often has a much shorter line than the main security lines at the other terminals.  I don't avail myself of this travel hack often enough, but this morning it works out.  I'm not kidding when I say I was out of my car and through security at one of the country's most clusterfuckiest airports in nine minutes flat.  Now, time to grab coffee...

10:30 am: Waiting on the tarmac, in 14th position to takeoff (NOTE: I always appreciate pilots willing to tell you the bad news.  Hearing bad news always beats the living crap out of hearing nothing at all), because a runway was temporarily shut down due to a bird strike.  I read somewhere once that birds are a leading cause of plane crashes; we all know about the plane that landed in the Hudson in 2009 - that plane was impacted by a bird strike.  I'm not the most nervous flier (though I certainly used to be, before I flew all the time), but I'd be lying if I didn't say that plane wasn't on my mind as we take off.

10:55 am: I was in something like boarding zone 17 on US Airways for this flight, which most people hate but I actually sort of like.  You get to spend less overall time on the airplane, and more time standing to get to your seat.  In 2012, I flew enough to earn Silver status on US Airways, which earned me nothing in 2013 except (a) access to the front part of coach and (b) the ability to board super early in the process.  Access to the front part of coach was nice enough, I suppose, but boarding early in the process is highly overrated.  You just sit there and wait for other people to herp and derp their way down the aisle for 20-30 minutes.  Not fun.

11:30 am: Grateful for the window seat, since I actually feel like dozing this time and I can rest my head against the additional three inches of space between my seat and the window.  I catch a couple of winks, then work on studying my discussion guide for tonight's focus groups.  Moderating focus groups is one of the more challenging things I'm asked to do in my work, and the typical difficulty is, in this case, is somewhat amplified by the groups being for a brand-new client, and with a challenging demographic (small business owners).  Small business owners aren't like you (most likely) and me.  They're successful by the very virtue of their business continuing to remain open in this environment, and they tend to be high-energy and aggressive people (even in Charlotte). There are no guarantees these folks will be easy to interview in a group environment.

12:45 pm: I am amazed at the line at this airport Burger King.  They called out order #82 as I placed my order, which was #8.  This is the type of comment which reeks of classist hegemony and guilt, but I'm surprised at how smart the person who took my order sounded.  They sounded like a professor or poet or something.  I felt, legitimately, like I couldn't sound that intelligent in a random interaction with a stranger - and that Burger King attendant earns $7.25 an hour.  The world is a really strange place, it strikes me, as I sit down and munch on some french fries and chicken tenders.

4:00 pm: T-minus 90 minutes until the first group starts.  My boss' boss, one of the greatest focus group moderators I've ever seen, once told me that when he was starting out "doing groups" (as we like to say), he would get so nervous he'd sometimes have to throw up beforehand.  I never look, or feel, that nervous before groups - but man, do I wish it were 5:30 pm.  It's always a breeze once the research gets started.

4:30 pm: What's difficult about moderating a focus group?  Well, nothing, I suppose, except for (1) keeping the discussion on topic; (2) making sure Quiet Jim in the seat directly to my right is speaking up enough, so the clients don't complain; (3) making sure Veronica the Dominator, sitting at the rear of the group, doesn't speak up first with every question I ask; (4) making sure the group is running on schedule and speeding up or slowing down the pace of the discussion, as needed, to make the group run exactly two hours; (5) wondering if the clients in the back room are getting what they need from the research; (6) trying to remember what someone said 25 minutes ago, in order to tie it into a question I'm going to ask ten minutes from now; (7) making a funny joke on occasion and keeping everyone having some semblance of fun and engagement (difficult when the topic of the group is insurance).

5:30 pm: The first group files in, and we get started.

6:30 pm: Feeling pretty good...

7:30 pm: Group one is finished - clients seem happy.  Group two files in AS group one files out, and I really have to pee.  This is going to be a fun two hours...

8:30 pm: The participants must think I'm acting kind of funny, walking around like crazy around the room while I ask questions.  It's really just a Modified Pee-Pee Dance, but hey, no one has to know this.

9:30 pm: Oh thank goodness, group two is finished.  I'm going to give someone back at the office a very hard time for scheduling these groups back-to-back, without a 15 minute break in between.

9:45 pm: Focus group facilities - at least, the very good ones - are supposed to take good care of moderators and make sure they don't go hungry throughout the process.  This facility in Charlotte, which is actually typically very good, make a crucial faux pas - they forgot to make sure I had something to eat for dinner.  I don't eat between groups, and tend to subsist on caffeinated beverages (e.g., coffee, Diet Coke), so I was REALLY looking forward to having some food after these groups.  Now it looks like I'm going to have to scrounge something up around the hotel.

10:20 pm: Thankfully for me, the hotel's "bistro" was open.  My dinner tonight was not very bistro-y: it consists of what appears to be a microwaved bacon cheeseburger and french fries.  I also grab a Sam Adams because, YOLO.  Tomorrow morning, I'm going to need to eat something healthy and nutritious, or else I'm going to come down with something.

THURSDAY, 6:20 am: Rise and shine.  The first thought through my mind is, this will be over with at noon today.

12:05 pm: DONE!  As cranky and nervous as I get before being "on stage," as it were, I feel like a million bucks right now.  The good feelings are amplified further by the client complimenting me on the job I did after finishing the research - never expected, and always nice to hear.

1:00 pm: As I sip a Corona with lime and eat a salad for lunch (healthy food, for the win) at the airport restaurant, I watch and listen to the group of suited-up alpha males next to me getting pumped up for their big sales meeting, and think to myself how grateful I am to not have their job.  There's an element of our good friend, the Fundamental Attribution Error, in what I'm about to write - these people aren't me, I don't know them and I don't know their life stories, so by default they're boring people - but I'm going to assume based on their conversation they probably sell industrial PVC supplies, storage solutions, customer retention software, or some other kind of widget where the only differentiators between their ability to sell and some other competitor's ability to sell are their aggression and salesmanship.  That's gotta be tough and also dehumanizing, as it sort of turns you into a bottom line-driven sales machine.  You might end up being good at it, but at what cost?  Your spouse leaving you?  A heart attack at 48?  At least, doing what I get to do, I get to win sometimes on the merits of my intelligence, creativity, and guile.

1:02 pm: I think a lot these days about income inequality and specifically the sense I get that we're becoming a sort of caste society in America, where the privileged ones are increasingly the "creative class" people who get to think independently and make active decisions as part of their day to day work (except for academics, who aren't privileged because grad school is an awful life choice).  It's been a long time for me since high school, the most recent extended period of time in my life when I was surrounded by a group of people who largely either did not want to - or could not - think deeply about stuff.  So I tend to assume that most people want more responsibility, and want to have more ownership of things in their world, but they simply can't, and this bothers me more than it (perhaps) should.  I don't think there's a solution to this issue; it's like solving world poverty.  But suffice to say people watching at the airport has got me thinking about too much deep shit.  Maybe I can order a second beer...

1:15 pm: The airport bar is an awesome place, when you think about it.  Other people have said this more eloquently than me, but airports are places where everyone has an origin and a destination, and they're in between those two places at the present time.  Thankfully there exists the airport bar, a watering hole where people from all over the place can congregate to sip adult beverages and make small talk with people they'll never see again.  I find the "Carolina Beer Company" in an out-of-the-way section of CLT's international terminal and sit down at the nearly empty bar for a delicious local IPA.  It turns out there is no actual "Carolina Beer Company" brewery, and there are no other locations for the "Carolina Beer Company" besides Terminal D at the Charlotte Airport.  I can't get over this fact, and probably annoy the hell out of my bartender with my disbelief that something like this would exist solely as a single location to serve local beers to travelers stopping through the international terminal in Charlotte, NC.  Let's say you're traveling from California to Munich, with a layover in Charlotte.  Are you really going to care that much about North Carolina beer to stop in for a drink?  I don't know, but the place stays afloat, so I guess people do this.  Anyway, I'm probably annoying you as much as I annoyed the bartender, so I'll shut up.

2:45 pm: This is a big airplane, specifically a Boeing 767 Extended Range, which is (oddly) taking me and about two hundred other passengers on a 474-mile journey from CLT to PHL.  I haven't traveled on a plane this huge since my honeymoon, and the aviation geek in me is thrilled to look around and see something other than a 6-foot maximum ceiling.  You can actually stretch out in one of these planes and relax, if you wanted to.  I look around and watch lots of people sleeping in oddball ways - some are sitting straight up with no recline; others are resting their heads against the window (like I did on the flight down, yesterday); others have their tray tables down and are sleeping curled over, with their heads in their arms.  I know I just slept on a plane the day before, but I can't help but wonder, how can people fall asleep so easily?  I alluded to this earlier in the post, but I am an awful sleeper - I don't need to be 100% comfortable to fall asleep, but unless I'm dead tired, I need to be at least 90% comfortable.  Other people I know, like my wife and some friends, can fall asleep under any set of circumstances - it's like a switch they can turn on and off.  I am envious of having this switch; I can only sleep when my body tells me to, otherwise I am completely awake.

4:30 pm: Landed in PHL.
5:00 pm: On the road again...
7:00 pm: HOME.  Business trip: pWned.   

Travel Log: The Very End of the United States (Florida Keys and Key West)

From a very young age, I've found myself fascinated with maps.  I would spend hours studying road atlases (this was the 1980s), looking for cool and interesting locations, and I especially liked the idea of exploring isolated, out of the way places.  As an adult, and as someone who likes to travel (NOTE: I initially typed "lives", which was sort of a Freudian slip, now that I think about it), I've made one of my travel goals to explore some of these places.  I recently had the opportunity to knock one such location off my list - Key West, Florida.  The Florida Keys region is home to many unique nicknames; one of them is "Flagler's Folly."  There was a wealthy man named Henry Flagler who saw value in connecting Key West, Florida, to the mainland - even though Key West was over 100 miles from it (this was the "Folly").  His railroad, known as the Overseas Railroad, was completed in 1912, months before Flagler's death, having been wrecked by two hurricanes (these are common in the Keys) in the years-long building process.  Years later, the Overseas Railroad was replaced with an extension of United States Highway 1, a single, mostly two-lane concrete road which winds 107 miles from Key Largo (to the northeast) to Key West (to the southwest).  This road, called the Overseas Highway, is the only way in (and out) of the Florida Keys by car.  Coasting from island to island, with bridges every few miles, you sometimes feel like you're suspended over the water itself.

If you've never made the road trip down the Overseas Highway, and you're interested in a mixture of beautiful vistas, odd tourist traps, Americana kitsch, and delicious seafood, you should definitely make the trip at some point.  Speaking of food, let me get this out of the way.  If you drive down the Keys, recommended food stops include:

• Craig's Restaurant, MM 90, Bayside (What do I mean by this? Most locations in the Florida Keys, outside of Key West and Marathon, do not identify themselves via postal addresses - as you might expect, or might want to plug into your GPS.  Instead, as there is only one highway, locations on the highway are given by the mile marker ("MM") combined with the side of the highway, Oceanside or Gulfside/Bayside.)
• Keys Marina and Restaurant (35th street, Marathon, Bayside) - Amazing bayside views, comfortable seating and friendly staff.  If you eat one thing, get the Lobster Reuben.
• BO Fish Truck, Key West - this is the picture to the left; as the Yelp reviews suggest repeatedly, don't judge a book by its cover.  While slightly groaty-looking from the outside, this place was awesome in ambience and in the quality of the food, I had the Grouper Platter with a Key Limeade. 
• El Siboney, Key West - Key West is only 90 miles from Havana, Cuba, and sometimes it seems like the city relates more to Cuba (or some other truly tropical/Caribbean location) than the United States mainland.  More people ride bikes or walk than drive cars around the island; there's a casual attitude toward sidewalk consumption of adult beverages; and roosters are literally everywhere.  It's no surprise that at one point in the 1980's, the city attempted to secede from the United States (only half-seriously), calling itself the "Conch Republic" in reaction to a Customs checkpoint designed to attempt to slow the distribution of illegal drugs through the Keys.  Anyway, in no way is the Cuban influence in Key West more pronounced than in the incredible Cuban food present therein.  If you ever get to El Siboney, try the roast pork or the ropa vieja.  Drink some sangria and eat tostones.  The next day, repeat.

Driving down the Overseas Highway toward Key West, you get the sense that you're in a place unlike any other in America.  People in the Keys are different; they're quirky, casual, extremely friendly, and don't like to rush under any circumstances.  This last attribute was especially welcoming, coming from the hustle and bustle of the Northeastern Metropolis and needing a break from a few months of full work, sans vacation.  The drive itself would have been frustrating (two-lane highways provide limited opportunities to pass slower moving vehicles), had the ultimate destination not been so interesting.

Our home base was on a nondescript island called Cudjoe Key, approximately 20 miles from Key West proper.  There's not much on Cudjoe Key - a convenience store, a few restaurants, and a giant Goodyear-sized blimp the locals call "Fat Albert," created as a way to conduct surveillance of the surrounding waters (again: that pesky drug trade thing).  There are also a smattering of beach houses and cottages, such as the one my wife and I shared with some family earlier this week. Surrounded by blue-green water, so clear you could see lobster, octopus, and crab scuttling along the sea floor, with coral reefs and excellent snorkeling just a short boat ride away, it was easy to have the concerns of life on the mainland melt away.

Boating and fishing are the two main hobbies of people who live in the Keys (extreme consumption of alcohol may reside in third place, depending on your level of cynicism and/or who you elect to hang out with).  Our cottage had room for boats to dock (unsurprisingly), and we were fortunate to go on a boating trip with a friend of my dad and stepmom's, on his Carolina Skiff. 

There are literally hundreds of islands in the Florida Keys, but only about forty or so are populated.  For most of the good snorkeling, you need to go to an unpopulated island, such as Looe Key.  The boat trip in our family friend's Skiff to Looe Key was choppy, interesting, occasionally frightening... and ultimately unsuccessful, as everyone on the boat grew tired of the roller-coaster like feeling of fighting both the heavy chop and the stiff wind.  So we turned to the gulf side, to a calmer destination called Marvin Key.

Marvin Key is not known as a snorkeling destination - it's more of a place to lie out and relax.  But an adjacent mangrove bunch, on that particular day, proved to be a motherlode of snorkeling activity.  Fighting a strong current as best I could, I managed to see crabs, yellowtail, red snapper, a small barracuda, and thousands of smaller fish (who, thinking I was part of their school, assembled around me and floated in my direction, no matter where I went - this was the coolest part).  As awesome as it was to chill with marine life up close, snorkeling is not natural to me; I often feel claustrophobic because breathing feels artificial through a long plastic tube, as if I'm getting only 85% of the required amount of oxygen into my lungs.  It's impossible, though, to stay worried for long in the Keys.  Everything - the daily thunderstorm or shower included - blows away in a short amount of time.

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Most visitors to Key West arrive via cruise ship, and many of them spend their time getting tanked on Duval Street at one tourist trap bar or another.  To me, a cruise is a wonderful vacation - I've been on several in the past few years - but one of the downfalls of a cruise vacation is the chance that spending such a small amount of time in each port might lead a person to make a superficial, silly decision about what to do while in port.  I'm a bit of a travel elitist - prior to a cruise, for instance, I'll spend time researching each port, looking for something to do that's off the beaten path and offers a taste of local flair.  (If you ever find yourself in Grand Turk, I have two words for you: Jack's Shack.)

It strikes me that in Key West, Duval Street is by far the least interesting place to visit.  Every street we walked down had its fun stuff and its quirks.  But if you need to stay close to port for some reason, the adjacent north-south street, Whitehead Street, has much more to offer.  For instance, there is the Mel Fisher Maritime Museum is on this street (educational and fun, though somewhat controversial, as local nature conservationists do feel that Fisher was a plunderer who did more to hurt the surrounding waters than help them), as is the Truman Annex and the "Southernmost Point in America," which is also controversial because there are other places on Key West which are technically further south than the buoy you see to the right of this paragraph.  And if you feel like having a drink or three, you could do much, much worse than the Green Parrot, a dive bar which nonetheless offers a wide selection of beer on tap (ranging from local Key West breweries to Dogfish Head 60 Minute IPA) and brings in cool musicians and bands from all over the place.

Hanging out at the Parrot, which does not offer a bar menu but does provide unlimited popcorn to its patrons (hint: don't stand or sit near the popcorn machine unless you feel like doing an awkward dance every few seconds, which I personally deem the Popcorn Shuffle), it's easy to feel like a local.  While some Key West locals don't like tourists, the locals at the Parrot are friendly, perhaps because they assume anyone who's stopped by has consciously elected to avoid the tourist trap bustle on Duval Street.  And according to my wife, who doesn't drink beer, the bartenders pour a stiff (and damn good) margarita.  Watching the band play, sipping a drink and having an amazing time, I caught myself wondering how difficult it would be for us to move down here - my wife could open a used book shop, I would drive a bicycle taxi.  (Then, of course, reality hit - our lives in New Jersey are damn good, and it's hard to make a living in a tourist destination.)

I had always thought of Jimmy Buffett's "Margaritaville," the official anthem of the Conch Republic, as a sad song - after all, it's a song about loss, and about making obviously awful decisions in response to loss.  It always struck me as weird to consider the song as a sing-along, karaoke standard.  But thinking about the lyrics while in the Keys - living on sponge cake; watching the sun bake all of those tourists covered in oil - made me think differently.  Maybe it was meant to be a fun song, but in the same slightly twisted, tongue-in-cheek way that folks down the Keys think about stuff.  After all, we're all just moving through, following the currents as best we can, aren't we?  Might as well lay out in the sun and have another drink.  It's pretty much the way of life down there.