How did you spend the “bonus year”?

April 10th has come and gone.  It’s the anniversary of my narrow escape from death by car.  Read about it here.

As it turns out, during the exact moment of this anniversary, I was teaching a class at Stanford.  This is roughly what I said to class:

Exactly one year ago to the minute, I nearly died when a car hit me while bicycling.  I was lucky — my injuries were minor and the geometry was fortunate — just 6 inches to the left and I would have been far worse.

During the same week last year, in an accident very similar to mine, Joy Covey, founding CFO of Amazon.com, friend of many in Silicon Valley, had less fortunate geometry.  While on a lunchtime ride, she was hit, and she died.  At the end of the school day, her son waited for her on the curb as he always did.  And waited.  And waited.  Just imagine that waiting.  Mom always comes.  But not that day.  In the confusion and grief, no one told the school or went to console her son.

So I was given a bonus year, to do something more.  Today I went on a bike ride as my secular prayer, and to reflect on how I have used the year.  I find myself lacking.  I didn’t laugh enough.  I didn’t make other laugh enough.  I didn’t accomplish enough.  I have work to do on me and in the world.

What have you done in the last year?  And what are you going to do in the next?  Today could be the beginning of your bonus year.  We could celebrate it together.  It will be a year we won’t waste.  One we value, savor, build.  And next year, on April 10th, we could get together and judge our performance, and urge ourselves towards more.

You owe your parents’ debts from 30 years ago. Plus puppy photos

This blows my mind. If your parents were (maybe) overpaid by the government for things like social security or welfare, you will have to repay it, even if it was 30 years ago. This from the Washington Post (April 10):

A few weeks ago, with no notice, the U.S. government intercepted Mary Grice’s tax refunds from both the IRS and the state of Maryland. Grice had no idea that Uncle Sam had seized her money until some days later, when she got a letter saying that her refund had gone to satisfy an old debt to the government — a very old debt.

When Grice was 4, back in 1960, her father died, leaving her mother with five children to raise. Until the kids turned 18, Sadie Grice got survivor benefits from Social Security to help feed and clothe them.

Now, Social Security claims it overpaid someone in the Grice family — it’s not sure who — in 1977. After 37 years of silence, four years after Sadie Grice died, the government is coming after her daughter. Why the feds chose to take Mary’s money, rather than her surviving siblings’, is a mystery.

We all know our government is the world’s best accountant, so their record must be right.  Right?  Who’s with me?  No one?  Hello?  I guess you’re right, it turns out that even though the Social Security Administration was sending Grice’s SS checks to her current address, they were sending notices of this debt to her old address from 1977.  OK, maybe their record-keeping is pretty shoddy.  But you still owe them whatever they say.  It’s like the old child’s game — “I’m thinking of a number between $100 and $100,000…”

Debts belong to adult individuals or adult married couples.  They do not pass down through generations, or else Bernie Madoff’s great grandkids are going to be bumming.  We do not have debtor’s prisons.  Oh, wait, we are trying to bring them back.

This feels like the freedom pendulum swinging towards business and government rather than having laws which protect individuals from those with more power.  Because of this, you are going to have to start keeping your parents old tax returns for 50 years in a vain attempt to save yourself from retroactive penalty.  Because there is no recourse here.  Also from the Washington Post:

Grice was also told there was little point in seeking a waiver of her debt. Collections can only be halted if the person passes two tests, Clark said: The taxpayer must prove that he “is without fault, and [that] repayment of the overpayment would deprive the person of income needed for ordinary living expenses.”

More than 1,200 appeals have been filed on the old cases, Clark said; taxpayers have won about 10 percent of those appeals.

Now if the Social Security Administration can just combine this with the NSA snooping databases, they can start demanding money from you if you say bad things about the government.  Uh, um, right.  About that.  I’m not saying bad things.  This isn’t critique.  Really, sir.  This is just a light-hearted reflection on Labradoodles, this year’s designer dog:

Who makes money in Facebook’s $2B Oculus Rift Purchase?

Facebook bought Oculus Rift, a bit of geeky, Borg-like headgear, for $2B.  Never mind that the company has yet to ship a product.  Their venture backers made more than 50x their initial investments.  The true initial investors, individuals, invested in the company via Kickstarter, which helps companies raise money.  They received T-shirts or discounted pre-release headgear.

And that’s all the initial investors made.  The trouble with Kickstarter is that initial investors aren’t equity owners – they don’t participate in the upside like a venture fund.  And the original Kickstarter investors are fuming over Oculus Rift!

But the real trouble is with the JOBS act, which in theory allows individuals that have no demonstrated financial acumen to invest in start-up companies.  Previously, accredited investor laws limited certain types of investments for those that had sufficient personal financial assets as a proxy for their level of financial sophistication.

Proponents of the act claim that start-ups create jobs and generate financial success, and every American should be able to participate in that.

But this forgets one important, historical lesson.  The laws were created originally because hucksters, shysters, and con-men would take advantage of individuals, sucking their money into “fly by night” schemes.  Start-ups are pretty darn risky.  Full time VC investors see thousands of deals, invest in half a dozen, and still get it wrong 50% of the time.

Kickstarter is not a huckster.  They clearly state that you are not investing in the company, merely giving it money.  The fact that those initial Kickstarter supporters are now up in arms underlines the problem with the JOBS act — these early supporters were not appropriately qualified for this type of investment.

We’ll hear more over the coming years of individuals that are bilked by start-up companies or their fund-raisers.  At some point, when the Bernie Madoff moment arrives, we’ll reinstate the protections lost in the JOBS act.  In the meantime, remember the old adage “if you can’t spot the sucker in the room, it’s you.”