Tax-Advantaged Investing

To understand how tax-advantaged plans work and why they're desirable, it's helpful to review the workings of a taxable investment account and its tax consequences.

The Taxable Brokerage Account

The Taxman Cometh

Anyone may open a standard taxable brokerage account with a brokerage firm such as Vanguard, Fidelity, Scottrade, Charles Schwab, T. Rowe Price, E*Trade, TD Ameritrade, etc.   You fund this account just like you would a checking or savings account, by transferring money electronically or by writing a check. Once inside the account, you invest this money by using it to purchase securities, which are financial instruments representing financial value—most commonly debt (‘bonds’) or equity (‘stocks’). You may exchange the securities you own for cash at the going market rate, which you may then reinvest or withdraw.

Taxable brokerage accounts funded with regular income experience double taxation.  The money that you use to fund the account is already ‘post-tax’ - you already paid income tax (and likely payroll tax) on that money when you earned it.  When you exchange a security and that security has increased in value, the resulting ‘capital gains’ earnings are taxed at the current capital gains rate.   If you’ve held the security for less than a year, your earnings are considered ‘short-term capital gains’ and they are taxed at the ordinary income tax rates - 10% to 39.6% in 2013, depending on your tax bracket.  If you’ve held the security for over a year, your earnings are considered ‘long-term capital gains’ and they are taxed at the long-term capital gains rates - 0% to 20% in 2013, depending on your tax bracket.  Additionally, your state will tax your capital gains at the ordinary state income tax rate.  By taxing away some of your earnings, the overall rate of return on your investments is reduced.

Tax-Advantaged Retirement and Education Savings Plans

The government gives you an incentive to save for your own retirement by providing tax breaks for money placed in a qualified retirement plan account.  Sections have been added to the IRS code to create tax-advantaged investment plans that facilitate saving for education and retirement, and these investment plans are often named after the section of the tax code that created them (e.g. 401(k), 403(b), 529 Plan). Essentially, you are accepting a stricter set of rules on contributions and distributions in exchange for a reduction in your taxes.

Contribution and Distribution Restrictions

The following terminology is useful when discussing tax-advantaged investment plans:

Contributions are the transfers of money into the investment account.  While your contributions to a regular taxable brokerage are unlimited, tax-advantaged plans impose annual contribution limits.  These limits may be quite low ($5,500 per year for the Roth IRA) or quite high ($51,000 per year for a Solo 401k).

All tax-advantaged plans share the advantage of avoiding capital gains tax on the growth of the invested money, and many offer an additional choice: pay your income tax now, or pay it later.  If you pay it now, the contributions are 'post-tax' and will not be taxed at all when you make a withdrawal later on; if you'd rather pay later on the withdrawals, contributions are 'pre-tax' and you can deduct them from this year's income taxes.  This can be extremely useful for those who are currently making a lot of money and expect to be in a lower tax bracket when they're in retirement.

Distributions are the transfers of money out of the investment account.  A distribution may consist of a mixture of principal—the money you originally placed into the account—and earnings—the money you've made in the account due to increases in the value of your investments.

A distribution that follows the rules and serves the intended purpose of the plan is called a ‘qualified distribution’; nonqualified distributions may trigger extra taxes and other penalties.   A distribution might be qualified if you're over a certain age or if it's used to pay for education expenses; it all depends on the specific account type.

As already mentioned, there are several different types of tax-advantaged investment plans. These plans differ in terms of who is eligible to participate, whether contributions are pre-tax or post-tax, under what conditions a distribution is qualified, and how distributions are taxed. The type of plan that’s best for you depends on what you’re eligible for, the goals you have for your money, and your current and expected future tax situations.

Due to the extremely broad eligibility requirements, excellent tax advantages, and flexible distribution rules, the Roth IRA is an excellent choice for very many people.  Get the details here here and open that account!


Financial Risk (Or: You Can’t Afford Not To Invest)

Financial risk is the risk that your financial holdings will lose value with time. Everyone is very familiar with the concept of market risk: if you buy an asset, the value of the asset will fluctuate with its perceived market value. If the value decreases, you will lose money if you exchange the asset. Fear of market risk scares many people away from the subject of investment entirely.

But market risk is far from the only form of financial risk, and total financial risk is the sum of all forms. Another important type is inflation risk: if the general price level increases at a rate higher than the economic value of an asset, the real value of the asset decreases and you will lose money if you exchange the asset.

Hidden Dangers

Market risk is scary in a very visceral way: if you purchase a stock, you can open up any web browser and see the value of that stock go up and down in realtime. Rapid swings in value can incite a fight-or-flight response and encourage irrational behaviour. This is amplified by the brain’s (and the news media’s!) tendency to overemphasize the importance of recent changes while ignoring long-term trends. When the market drops 2% in an afternoon, no one ever seems to remember the slow, steady gains of 10% over the past year. Humans have trouble parsing trends when events are happening over multiple timescales.

Inflation risk is not scary - and consequently much more dangerous - for much the same reason. While market values fluctuate over short timescales, general price levels undergo slow, steady changes over much longer periods of time. Over the last hundred years, the inflation rate as measured by the Consumer Price Index - an average of the price of a large collection of consumer goods - has been just above 3% per year:

The average CPI and percentage annual change in average CPI over the last 100 years

If prices rise on average 3% per year, your $20 bill will only have $10 of today’s value in 23.4 years. That’s right: at modern inflation rates, prices double roughly every 20 years(*).

The insidious thing about inflation risk is that, though it will erodes the value of your financial holdings just as readily as market risk, it can do so while the list value of the asset remains unchanged. In twenty years, that $20 bill will still be worth twenty US dollars... but its real value will have decreased.

And this is why ‘safe assets’ - like cold hard cash under the mattress, or a savings account earning 0.01% - are the most dangerous investments of all. While they have little to no market risk, the real value annual rate of return is on the order of -3%.

The Solution?

The only way around this is to accept some level of market risk (or default risk, or currency risk, or...) in exchange for a higher potential rate of return. By investing in the debt and equity of companies, governments, and other institutions in the form of bonds, stocks, and related financial instruments, it is possible to beat inflation and grow the real value of your money.

But what to invest in and how to invest it? If you’re a student or an early-career professional in the United States, the place to start is probably a Roth Individual Retirement Account (‘Roth IRA’). Start with a detailed Roth IRA action plan.

(*) The relationship between inflation and the CPI is actually a lot more complicated. See:
(Then, get an economics degree and tell me how it actually works.)


Reducing Spam, Noise, and Bacn

A surefire way to reduce the time you waste managing email, snail mail, and telephone calls is to reduce the number of low-value communications that you receive.  (The snail male and telephone sections will be United States-centric; Google for your national equivalent, and post it as a comment!)

Junk Mail

Junk mail is still a big problem, and it comes in two main forms: unsolicited commercial mailings, and prescreened offers for credit cards and insurance.  Fortunately, you may reduce or eliminate both types!

Prescreened credit offers are not only annoying spam, they can also be an identify theft risk.  To stop them, visit https://www.optoutprescreen.com.  This site is maintained by the four largest US credit reporting agencies: Equifax, Experian, TransUnion, and Innovis.  These companies collect information on your financial situation - what credit cards and loans you have, whether you pay on time, if you've ever declared bankruptcy - and sell the resulting credit reports to banks so that they can make informed decisions about who they lend money to (5).  By registering on this site, a notice will be placed in your credit report and you will no longer receive prescreened credit card and insurance offers, but it will not negatively affect your access to credit.  The registration process requires your name, street address, social security number, and birth date.  An online registration will stop the prescreened mailings for five years, with the option of mailing in a signed form to stop them permanently.

The Direct Marketing Association runs https://www.dmachoice.org/.  By registering for this site, you can remove your name from lists that companies use to send out unsolicited catalogs, magazines, and other mail offers.  You'll still receive catalogs and magazines from organizations that you have subscribed to.  Registration requires your name, street address, and a valid email address.  The site also offers you the ability to register for 'eMPS', an 'Email Preference Service' that companies can pay to use to clean their direct marketing lists.  It's unclear how many organizations actually use the eMPS list, but the site is verified legitimate by the FTC.

Email: Spam and Bacn

Email, email, email.  If you've already configured Gmail for greater productivity, a series of filters should already by sorting out low-priority mail - advertisements, newsletters, social networking notifications - into separate labels and skipping the inbox entirely.  This stuff isn't technically spam because you did consent to receive it, so a new term has been coined: 'bacn' (1).  From Wikipedia:

"Some examples of common bacn messages are news alerts, periodic messages from e-merchants from whom one has made previous purchases, messages from social networking sites, and wiki watch lists."

Even when it's filtered, low-priority mail still gums up your email management system by increasing your email volume, reducing the speed and effectiveness of mail searches, and making it easier to lose an important message in the flood.  It's time to cut the bacn.
bacn. not delicious.
(Before we get started, it goes without saying that email management is simplified by having as few mailboxes to manage as possible.  Forward redundant addresses to one main address and close old, unused accounts.  Yes: it's time for 'awsumd00d14@hotmail.com' to die.  Sorry bro, I know that address means a lot to you, but you're not reading my blog on Netscape over an AOL Internet free trial, watching Power Rangers and sipping Ecto Cooler.  Transfer your old emails over, let anyone who still uses your old address - and no one does, do they? - know where else they can contact you, check and make sure you've changed the email address on file for password resets, credit card bill reminders, or anything else important, and shut her down.  You only have so many seconds in life, and none of them should be wasted checking up on an old, dead email account.)

Open a text editor and switch your email to the 'All Mail' view to get an idea of the volume of junk you are dealing with.  Start by going through your messages and compiling a list of addresses associated with low-priority mail.  Don't delete or unsubscribe anything yet, just compile.

Once you have your list, start to order it by priority.  Are there messages you definitely want to continue receiving?  Subscriptions you could definitely do without?  Lists you'd like to stay on, but that send way too many messages?

Start with the lowest-priority messages and unsubscribe away!  Daily or weekly advertisements from stores you've never ordered from, updates from forums you never visit, etc - get rid of all of them.  Once you've confirmed that you're off a list, do a search for all of the messages from that address and delete them to reduce total email volume.  Delete old filters and labels that are no longer necessary.  (Note that I do NOT usually advocate deleting anything in Gmail, but this is an exception!)

Log into your social networking sites of choice and turn off all email notifications.  Virtually all sites have their own notification systems built-in, so why flood your inbox with more junk?  Search for and delete these messages too.  If you're a member of Google or Yahoo groups, visit their management pages and turn off email notifications.
RSS/Atom Feed Icon

By now you should be down to the subscriptions that you might consider keeping.  The key here is to move as many subscriptions as possible from email to an RSS/Atom feed reader program like Google Reader Feedly.  If you haven't already, install the feed reader extension for your browser (2,3); once installed, the feed icon will appear in the location bar when you're visiting a site that offers an RSS or Atom feed.  Click on the icon to add the feed to your feed reader's subscription list.  Basically all blogs offer feeds, as do many commercial sites - including Groupon! - and newsletters.  Once in an RSS reader, you receive updates that you can browse when you want to, instead of needlessly cluttering your email.

And there you have it: much, much less distracting email to deal with.


Telemarketing is much less common than it was in the past, but it's now easier than ever to opt out entirely.  The Federal Trade Commission, the United States consumer protection agency, maintains https://www.donotcall.gov/ (4).  By registering on this website, most telemarketing organizations will be prohibited from calling you beginning one month after you register.  If a telemarketer breaks the rule and you report them on the website, they may be fined up to $16,000.  There are some caveats: political organizations, charities, telephone surveyors, and companies with which you already have a business relationship may still call you.  Nevertheless, your junk call volume should decrease significantly.  Registration is completely free, and the only information you need to provide is the telephone number you wish to register and a valid email address.
Having trouble implementing some of these recommendations, or have other ideas for reducing spam, clutter, and garbage in your life?  Add it in the comments!

This post researched and prepared by Brandon Curtis; follow him on Google+
(1) http://en.wikipedia.org/wiki/Bacn
(2) https://chrome.google.com/webstore/detail/rss-subscription-extensio/nlbjncdgjeocebhnmkbbbdekmmmcbfjd?hl=en
(3) https://addons.mozilla.org/en-us/firefox/addon/rss-icon-in-awesombar/?src=search
(4) http://www.consumer.ftc.gov/articles/0262-stopping-unsolicited-mail-phone-calls-and-email
(5) http://en.wikipedia.org/wiki/Credit_bureau


Space Rocks and You

Space is mostly... empty space.  You might remember the scene in Star Wars where Han Solo and friends are navigating the asteroid field near Hoth, where C-3PO famously exclaims:

"Sir, the possibility of successfully navigating an asteroid field is approximately 3,720 to 1!"
Harrowing!  Awesome John Williams soundtrack here.
Turns out, the real asteroid belt in our own solar system is much less exciting.  About half of the total mass in the belt is held in four very large asteroids, the largest of which, Ceres, holds a third of the total mass all to itself.  At 950km in diameter, Ceres technically classifies as a 'dwarf planet' (1); for comparison, our Moon is 3500km in diameter (2).
Ceres, the largest member of the asteroid belt.  Is this seriously the best photo we have?  NASA needs a raise!
Most of the rest of the asteroid belt is very, very empty - as described on Wikipedia, "Collisions between main-belt bodies with a mean radius of 10 km are expected to occur about once every 10 million years." (3).  We've sent a number of unmanned satellites right through the asteroid belt with no problems.  Contrast that with the asteroids bouncing off of eachother every twenty seconds in every movie and video game ever made.

In the space in between planets and stars, things get even emptier.  More than 90% of the interstellar space in our galaxy, the Milky Way, contains only thousands to hundreds of thousands of atoms per cubic meter, 90% of which are lone hydrogen atoms (4).

Emptiness aside, things do very occasionally crash into Earth.  Today, a meteor entered Earth's atmosphere and exploded over the Ural Mountains in Russia, injuring on the order of 1,000 people in the Chelyabinsk Oblast district.  Eyewitnesses captured incredible video of the event:

This was not the first time Russia has been struck by space stuff in recorded history.  In 1908, a meteor or comet exploded over the Tunguska region in central Russia, releasing 1,000 Hiroshima atomic bombs' worth of energy and flattening 2,000 square kilometers of forest (5).  Fortunately this 'Tunguska Event' occurred in a remote area; an urban area would have been completely destroyed.  The airburst left no crater and there were no eyewitnesses.

It's not the first record of injuries by falling space debris, either: in 1954, Ann Hodges, age 31 of Oak Grove, Alabama, received some very nasty bruises when a 4kg space rock smashed through her roof, bashed up her console radio, and hit her in the hip while she was napping on the couch (6).  In 1992, a tiny 3g piece of the Mbale meteorite is claimed to have hit a Ugandan boy in the head (7).  There are other stories on the Internet of meteorites killing an Italian friar and an Egyptian dog.

And this wasn't the only space rock in the news this week: Asteroid 2012 DA14 passed within 27,700 km of Earth's surface earlier this morning (8).  That's over 10 times closer than the moon (385,000 km) and even our geosynchronous satellites (36,000 km).  That's right - this asteroid was between Earth and our satellites.  It's a pretty big rock too - on the order of 50m in diameter - and would have caused a Tunguska Event-sized explosion had it impacted.  Perhaps this will jump-start the debate about astronomy funding!

I wonder if it's technically feasible - and what it would cost - to detect an incoming object the size of the one that crashed into Russia today?

(There are, by the way, not one but two astronomical object impact hazard rating scales - the Palermo Scale and the Torino Scale (9,10) - that attempt to assign a threat value by quantifying an object's impact probability and damage potential.)

This post researched and prepared by Brandon Curtis; follow him on Google+
(3) Backman, D. E. (March 6, 1998). "Fluctuations in the General Zodiacal Cloud Density".
      Backman Report. NASA Ames Research Center.  (via Wikipedia)


Configuring Gmail for Productivity

Gmail has a lot of settings  - from a user interface design perspective, probably too many settings.  But don't let that scare you off!  A few small changes can help you regain control of your email stream.  I'll describe the settings that work well for me, and you can make additional changes to customize the interface to your preferences.

Click the gear icon in the top right-hand corner of the page to get started.

Right from the icon itself, you can choose the Display Density.  This is totally a matter of personal preference.  I like to maximize the amount of information on the screen at one time, so I choose 'Compact'.

Next, click on the icon again and select your Theme.  Google has many cute options, but for getting work done I prefer 'High Contrast' - it's very similar to the default 'Light' theme, but darkens some lines and background colors to give a more solid, cleaner look.  Boring... but functional!

Next, click on the 'Web Clips' tab.  This one's easy: turn it off completely.  It's distracting.

Before I talk about Inbox, Labels, and Filters, I should explain my email workflow:
  1. Emails come in throughout the day.
  2. All low-priority email is filtered, skipping the inbox entirely and landing in a label.
    low-priority email includes: organization newsletters; commercial offers; social network junk.
    (essentially, anything I don't need to act on)
  3. All other mail lands in the inbox.
  4. I open my inbox, and open the newest message.  I make a judgment and do one of three things:
    • no reply required: attach a Label if relevant; Archive it, move on.
    • reply required, short: answer the message; attach a Label if relevant; Archive it, move on.
    • reply required, long: Star the message; attach a Label if relevant; move on.
  5. I repeat the process until every new message has been read
  6. I look through the Starred messages and update my to-do list accordingly.
    If I reply to a Starred message, I un-star it and Archive it.
  7. Email time is over - do something actually productive!
In this workflow, the inbox is truly an inbox - it only holds items that you need to act on ('Starred') or that require your review ('Everything Else').  Keep in mind that Gmail offers a ton of storage space, so there is not much incentive to deleting an email unless it is truly junk.  Archive it instead, and it will disappear from the inbox but will still be available in search results.

Now, head to the 'Inbox' tab.  The inbox type that enables the above workflow is called Starred First in the dropdown menu.  To the right of Starred, click Options and select Show up to 10 items and Hide section when empty; this prevents a huge number of starred messages from preventing you from seeing your newest mail, and hides the Starred section entirely when it doesn't need to be there.  For Everything Else, adjust the number of items shown so that the message list fills your screen but doesn't require scrolling.  Why show more messages if you need to scroll to see them?  For a modern desktop monitor (21-24", widescreen), I select Show up to 25 items.  Priority Inbox, Importance Markers, and the Override Filters settings can be helpful if your email is completely out of control and you haven't made time yet to set up some filters, but otherwise they unnecessarily complicate the interface.  I turn them all off.

Labels and Filters are a personal matter - they take some time to set up, but they lend order to a chaotic email world.  Labels are basically folders that you can store your mail in; Google calls them 'labels' instead of 'folders' because you can attach multiple labels to a single conversation.  Filters sort out mail by criteria you specify, such as the sender or words in the subject, then do things like automatically apply labels, forward to another email address, or skip the inbox and archive it.  Try setting up some Labels and Filters!

One Filter trick: when specifying the search terms for your filter, you can use Boolean.
For instance, the search term:

walmart.com OR ikea-usa.com OR bestbuy.com

will sort out emails from any of those three addresses.  This is especially helpful if you want to create one filter that takes emails from a large number of recipients and puts them all under one label.

Next, on to the Chat tab.  If you don't use Chat in Gmail, because you prefer to use Chat in Google+, in an external instant messaging program, or in another social networking site, you can turn chat off completely.  I use it frequently for quick communication, so I turn Chat on.  I also enable Chat History to make previous chats searchable, and Automatically allow people I communicate with often to chat with me.  I use Google Voice for texts and calls, so I also Enable outbound voice calling.  I find Sounds and Emoticons distracting, so I turn them off.

Next click on the 'Forwarding and POP/IMAP' tab.  Forwarding should be disabled unless you have a specific reason for using it.  IMAP and POP are protocols for accessing your Gmail emails from an external email program, like Outlook, Eudora, or your iPhone.  IMAP is more advanced and was designed to replace POP, so make sure IMAP is enabled if you use an external email program.  I do not, so I disable Forwarding, POP, and IMAP.

The 'Accounts and Import' tab is useful for managing Gmail's connections to your other email accounts.  It includes a tool for importing your mail and contacts from other webmail providers, and for checking your mail from other providers using POP.  If you have other email addresses that forward to your Gmail account, you can configure Gmail to reply using the same address the message was sent to by configuring 'Send mail as'.  Configuration details vary depending on what kind of address you're trying to send from, so see Google's guide on the subject.  You can also allow others to read and send mail on your behalf with Grant access to your account - this could be useful if, for instance, you have an administrative aid who helps manage your email.

The 'Labs' tab is a collection of optional features that you can turn on or off at will.
Everyone should turn on the following, which add useful, passive functionality to Gmail:
  • Yelp previews in mail
  • Picasa previews in mail
  • Google Voice player in mail
  • Google Maps previews in mail
  • Google Docs previews in mail
  • Flickr previews in mail
  • Apps Search
  • Authentication icon for verified senders
  • Green Robot
  • Inserting images
  • Mark as Read Button
  • Quote selected text
  • Undo Send
If you find yourself sending a lot of very similar emails for some reason, check out Canned Responses - it allows you to save a message as a template and access it again from a simple drop-down menu.  If you're addicted to keyboard shortcuts, also see Custom keyboard shortcuts.

Finally, we can make some finishing touches in the 'General' tab.
Most are just a matter of personal preference.  You can variously:
  • choose a wider selection of Stars to use
  • turn on Desktop Notification pop-ups
  • activate Keyboard shortcuts
  • change your Profile picture
  • create an email Signature
  • set a Vacation responder
To clean up the interface and make my workflow easier, I set the Button labels to Text - it always takes me a second to remember what the icons mean.  I also turn off Personal level indicators, since my Filters do a good job of sorting out newsletters and email lists and other bulk junk.

The next post on email management will be a short one - strategies for simplifying your email life and cutting down on the amount of email you get in the first place.

If you have questions or encounter any issues configuring things, leave a comment or drop me a line!

This post researched and prepared by Brandon Curtis; follow him on Google+


The Moon

Last night was the New Moon, and it got me thinking: forty-two years ago, some guys got in a rocket ship and visited the Moon.  They landed on the surface, hung out for three days, then blasted off again and made it back to Earth - alive!

This is the same Moon, 385,000 kilometers away - that's over thirty Earth diameters - that you can look up and see!  And that's crazy.

Apollo missions 15, 16, and 17 are the ones you probably picture when you think 'Moon tourism' - instead of the short walks on the surface in earlier visits, these missions used an enhanced lunar lander module to stay longer and bring more toys, including the iconic lunar rover:
The Lunar Rover and Apollo 15 astronaut James Irwin, being AWESOME on the ACTUAL MOON
Wikipedia has a description of the astronauts' activities while they were on the Moon:

I dare you to read these and not feel a sense of amazement.  This isn't a novel, this isn't a movie, this isn't science fiction.  They didn't just come up with an idea to do something so audacious as walking on the surface of the Moon - they actually went up there and did it.

Kids are inundated with overmarketed cultural garbage, but THIS is the sort of stuff they need to hear about.  All of the number-crunching, fill-in-the-blanks education in the world is completely worthless without a sufficiently well-developed sense of wonder.

(an aside: there were supposed to be three more moon landings - Apollos 18, 19, and 20 - but priorities shifted and the money ran out.  President Richard Nixon also wanted to cancel Apollos 16 and 17, but the Office of Management and Budget's deputy director convinced him to let them go forward.  Oh Nixon, if only you had never existed...)

Apollo 15 Commander David Scott, upon stepping onto the Moon's surface:

"As I stand out here in the wonders of the unknown at Hadley, I sort of realize there's a fundamental truth to our nature. Man must explore. And this is exploration at its greatest."

This post researched and prepared by Brandon Curtis; follow him on Google+


Fermentation - The Ginger Beer Plant

Traditional ginger beer can be fermented three different ways:
  1. with regular brewer’s yeast
  2. with a ‘ginger bug’ starter
  3. with a ‘ginger beer plant’ culture
The first option is self-explanatory - regular brewer’s yeast will ferment a mixture of ginger and sugar just like it will ferment any solution containing metabolizable sugars.

A ‘ginger bug’ is a wild fermentation. To make a ginger bug, fresh ginger is ground and mixed with sugar and a little water. Every day, more ginger and sugar are added until the mixture bubbles furiously.  The wild yeasts and bacteria in this starter culture are then used to ferment a larger batch of ginger beer. The 'ginger bug' method is described in Sandor Katz' book, 'Wild Fermentation' and Sally Fallon's book, 'Nourishing Traditions'; both methods are discussed in Sandor Katz' book, 'The Art of Fermentation'.

But what is a ‘ginger beer plant’?  Once referred to as ‘Bees’ or ‘Yeast Barnacles’, the ginger beer plant is a symbiotic microbial consortium of yeasts and bacteria that grow together as irregular, translucent, gelatinous grains up to half an inch across. No one knows how the first ginger beer plant came about, but it formed the basis of an international food sensation in the 18th, 19th, and early 20th century. During this time, home fermentation of a wide variety of fruits, vegetables, and beverages was commonplace. But as the world embraced industrially-produced soft drinks, canned foods, and refrigeration, home fermentation fell out of favor.

Ginger Beer History

This post in the rec.crafts.winemaking newsgroup is the first online mention of the topic.
It was relatively vague and received no replies:

Nancy Jenner, 1995.03.11 (bpsb13c@prodigy.com)

We've been going through some family papers and have found a recipe for something titled "Bee Wine or Champagne." It comes from my great-great-grandfather, who was a baker in Victorian-era England. The recipe calls for copious amounts of molasses, crushed raisins, and "bees" (yeast barnacles). It also indicates that, according to tradition, the bees cannot be bought or sold, they have to be given, or they won't work....

Just a few questions, then. Has anyone heard of this particular beverage and/or recipe? If yes, what's it like? It seems that it would produce something very goopy and treacly. Lastly, what's this bit about the yeast barnacles? Are they a regularly occuring phenomenon? A usual part of fermentation? Has anyone heard this sort of folklore about them? And (of course) does anyone have any they might send on to me so that I can try out this family recipe?

Thanks for any insight--
Nancy Jenner

A year and a half later, a follow-up post by the same author drew some speculation from the crowd. The included recipe was very confusing to an audience that had never heard of a ‘ginger beer plant’:

Nancy Jenner, 1996.08.03 (bpsb13c@prodigy.com)

Some time last year I posted a note asking for some input on a recipe I’d found in with some family papers. A couple of people expressed interest and asked for copies of the recipe. Naturally, the day after I made the initial inquiry the sheaf of papers got misplaced, and I never did get back to anyone. The papers have resurfaced, and I’d like to start over.

Anyway, for a little provenance, this recipe was tucked in a cookbook that belonged to my great-grandmother. She had worked in a her father’s bakery in Victorian England, and the handwritten recipes in the book are for confections such as hot-cross buns and wedding cakes. The recipe itself seems to be of a later vintage, as it is a type-written carbon copy. 

My thoughts are that either this is some sort of sickly-sweet English "folk" beverage, or that it is from later, when the family moved to California, which means it could possibly be a Prohibition era home-brew. 

I could probably try to track down the brand name "Brer Rabbit Molasses" to see when and where it came from.

In any case, it looks like it would produce a rather thick, vile concoction. Nevertheless, I’d like to give it a try for curiosity's sake.

My questions are:

1)Does it look like it would work?
2)Has anyone seen this type of recipe, with the dried fruit and molasses, before?
3)Where in the world am I going to find these "Yeast barnacles," or "Bees" particularly since the folk wisdom is that I’m not supposed to buy them?
4)Is anyone familiar with the term "bee" applied to this sort of yeast formation? Is it an obsolete term? Is it regional?

The hard part, obviously, will be identifying and locating some "bees." I wonder if the term refers to a now extinct strain of yeast?

I’ve typed up the recipe. Aside from correcting a couple of obvious typing errors, I haven’t changed anything, as I rather like the style.
I think the title is supposed to be "Champagne" but on the off-chance that "Champagene" is a real term, I left it in.

I welcome any advice or general musings-- or donations of bees.

--Nancy Jenner (bpsb13c@prodigy.com)
Bee Wine Or Champagene (sic.)

The Bees or wine barrel barnacles should be given to you after being thoroughly washed by several changes of water until they are a white mass, i.e., they should have no odor of the preceding fermentation. They should be pure white and smell yeasty.

Two quarts of Bees makes four gallons and at the end of fermentation the growing of these strange multiplying joys will be nearly doubled. So: hand them (those you do not need) to some poor guy with his tongue hanging out of his mouth and make him do the work himself.

Tradition says: Never sell or buy or the strange work of nature will cease.

After bees are thoroughly cleansed, put in glass, earthen or porcelain receptacle and cover with water (cold) and add one half cup of cane sugar.

In twenty four hours pour off water and repeat. This is called resting and the required time is supposed to be 48 hours. 

Now gently put bees in a 5 or 6 gallon jar and pour in with them a two pound and four ounce can of yellow label light brown Brer Rabbit Molasses.

Now gently stir (the hand is best) until it all becomes one or thoroughly mixed. Let this stand 24 hours.
Now add four gallons of water (cold), also two pounds of small seedless raisins washed, stemmed, ground and put in a loose woven bag and three cups of cane sugar stirring gently; Repeat the three cups of sugar every day for seven days after which let it stand 48 hours. 

Filter through a cloth (the slime accumulated during fermentation makes this a tedious proposition). If the weather isn’t too warm it can stand in a five gallon bottle loosely corked until clear, bottle and cap or tie down corks, ready in three or four weeks.

Press the raisins in bag gently daily during fermentation.

The liquid must be removed from jar with dipper or something and poured through a strainer into the cloth filter to catch the bees.

The bees must then be washed by going through several changes of water, bulks of it at a time, then rested or sugared as described above before used again, or they can be dried; however if you dry them they must not be sugared after washing.

To dry them spread them out on a large towel or cloth placed in the hot sun with paper over them to keep flies etc. off. When dry they are very small and brown in color, put in a fruit can (glass) and screw down air tight. Be sure they are thoroughly dry or they will blow up. To use again soak and proceed as above.

Over the next few years, other people with recipes or memories of a ‘ginger beer plant’ would come forward. But no one knew what it was, or how it could be made or acquired. The ginger beer plant was lost to history.

Interest in the origin and disposition of this historical food artifact continued to grow online.
This article, rediscovering 19th century scientific interest in the ginger beer plant, was published in 2002:

“Marriage of Equals” - 2002.09.28 - NewScientist.com (Gail Vines)
full article: http://www.newscientist.com/article/mg17523625.800-marriage-of-equals.html

Summer was once the time to quaff ginger beer, served up in brown stone bottles. All over the British Isles people relished its frothy, fizzy gingery tang, enhanced by an alcohol content that temperance campaigners warned could rival that of strong London stout. Best of all it was virtually free: you could make it at home with just a bit of sugar, ginger, water and a ginger-beer “plant”.

No wonder, then, that this plant was a family heirloom, passed from mother to daughter and father to son. But it wasn't your typical green, leafy kind of plant. This was a sloppy mess of whitish, gelatinous lumps that typically lived in a jam jar. Exactly what this stuff was, nobody had a clue. It worked, and that was enough.

But in 1887, a 33-year-old botanist called Harry Marshall Ward became curious. When a famous friend at the Royal Botanic Gardens in Kew, London, gave him a specimen, he was hooked. Unwittingly, he had embarked on a Herculean labour. “Had I known how long and difficult a task I had set myself,” he later remarked, “the attempt would possibly have been abandoned at an early date.”

The conclusive proof came when Ward made perfect ginger beer in his laboratory, using his own plant, reconstituted from his pure cultures of the right yeast and bacterium.

So the ginger-beer plant was a bona fide “dual organism”, rather like lichens. Everything pointed to a true symbiosis. For instance, when Ward tried to feed the bacteria with dead or feeble yeast cells, the experiments failed. The plant emerged only from a marriage of equals, which needed time: it took several days for the partners to find and embrace one another. No one could have predicted that the crude home brew of country folk would reveal a phenomenon new to science — what Ward called “symbiotic fermentation”.
Today's commercial ginger beer is also much altered, purged of both its alcohol and its symbiotic liaisons. It is possible that Ward's own lovingly reconstituted ginger-beer plant survived into the 1940s. Max Walters, now 82, says he made and drank the stuff in the Botany School at Cambridge just after the Second World War. But no one knows what happened to it after that.
The internet had not given up on the hunt. Members of fermentation forums tried everything to generate their own ginger beer plants from scratch, but with no verified successes.

Enter Raj Apte, a 1987 UC Berkeley graduate working at a tech company in the South Bay:.

full article: http://alumni.berkeley.edu/news/california-magazine/spring-2012-piracy/strange-brew

The first thing to understand about the ginger beer plant is that it is not a plant. The second thing is that it is not, nor does it contain, ginger. Given those two facts, it’s difficult to imagine how the “plant” got its name. And yet it is this combination of words that first caught the eye of Raj Apte ‘87.

“I wondered what plant meant in that context,” he says. “I knew all about sourdough cultures, and I knew I could ferment a simple version of ginger beer without the plant, but the description of it was intriguing.” He came across the term while searching for a way to re-create the ginger beer he’d drunk as a child, stuff so spicy it would make him cry.

For reasons unknown, the ginger beer plant all but vanished. Posts dating to the online group’s founding in 2004 reveal that none of the members knew how to get GBP. In fact, they barely knew what it was. A few remembered jars of the stuff from their childhood. Others had read enough to know that it wasn’t just yeast. The attempts to grow it yielded either a yeast-based brew (unacceptable), or a concoction of something that might or might not have been the real stuff. “The Ginger Beer Plant MUST be found!” wrote one member.

The group had identified a biological culture bank in Germany that was “hoarding the last known samples of the Ginger Beer Plant.” But attempts to obtain it failed; the company would only release its products to a research or educational institution. It seemed, then, that the group had hit a dead end—at least until August 2005, when Apte stumbled onto the scene.

Apte, who majored in electrical engineering and computer science at Berkeley, is now a mechanical engineer and inventor at Xerox’s Palo Alto Research Center. Using official company letterhead, Apte crafted a letter to the microorganism collection Leibniz Institute DSMZ in Braunschweig, Germany. “The excitement in the air is killing me!” wrote one group member. “I cannot wait to hear about the real thing!”

A month later, Apte received two test tubes filled with brown liquid containing about eight grains the size of pinheads. “I had no idea what to do with it,” he says. He’d promised members of the board that he would mail them samples if he could make it grow.

“Our DSMZ culture is now bubbling slowly,” Apte wrote on the message board. “At the same time, some slime is forming at the bottom of a second, nonsterile culture I started…. It’s rather membranous, not gelatinous, but we’ll see.” He had several containers going, each with a different recipe and technique. He autoclaved everything at the start to ensure sterility, prepared special laboratory-quality media and broths, and used hotplates with computer-controlled temperatures to grow and nurture the GBP. He took copious notes of everything he tried and used a microscope to see what was going on.

Within a short time, his efforts paid off. “I was growing thumb-sized chunks overnight,” he says. He mailed off samples to fulfill the requests on the message board.

One of the appeals of the ginger beer plant is its simplicity, Apte says. Upstairs in the kitchen, he pulls out of the refrigerator a canning jar of translucent, yellowish lumps, the results of his culturing experiments. When he unscrews the lid, the contents give off a sweet, gingery smell. The way you can tell it’s real is because of the gelatinous coating, he explains. The yeast creates a starchy covering to protect itself from the bacterial action. Sugar feeds the yeast, which in turn creates alcohol. The bacteria use that alcohol and secrete lactic acid, which could kill the yeast if not for the protective coating. By changing the temperature during fermentation, the brewer can alter the balance of sweetness and alcohol. The lactic acid adds a unique flavor, much like in the Flemish-style sour ales. And the starchy byproduct of the yeast gives the beverage a silky quality and a frothy head.

But whether his final product is the “real stuff” or not remains a mystery. Despite his inquiries, he never learned where the sample in Germany originated. His jar of ginger beer plant came from the original culture, but it’s unlikely to have remained pure. Ward, the 19th-century microbiologist, identified hundreds of species in his samples, probably free-living microbes that fell into the pot and took hold. There can never be a truly authentic ginger beer plant because it changes with its environment.

“And in my mind,” Apte said, “that’s a good thing.”

Three months before I discovered the articles and posts above, knowing nothing about ‘ginger beer plant’ except that I absolutely needed to have one, I came across Raj’s contact information on the GingerBeerPlant group site. Following his instructions, I mailed him a self-addressed-stamped-envelope containing a small plastic bag. Just before sealing the envelope, I hesitated: “If I show my appreciation for his time, maybe he’ll be more likely to get back to me,” I thought. I included $2 and a tiny thank-you notecard.

On January 7th, the day after returning to Berkeley after holiday break at home, I found an envelope in my mailbox addressed to me in my own handwriting. Confused, I tore the envelope in half to find a plastic bag containing a little handful of hard, irregular, translucent, amber-colored crystals: my very own ginger beer plant. Raj kept his promise.

When the culture arrived, I began doing my research to figure out how best to hydrate and  revive it. That’s when I came upon the original ‘Bees Wine’ newsgroup post:

"Tradition says: Never sell or buy or the strange work of nature will cease."

For a brief, irrational moment, I panicked. Had I inadvertently paid for it and ruined the whole thing? Would ‘the strange work of nature’ commence despite my unworthiness? What, exactly, was I thinking when I sealed that envelope?

“Relax,” I said to myself, “it was symbolic - you didn't pay for it.” There are several sites online that purport to sell cultures of the ginger beer plant; I’m glad, at least, I didn’t get mine there. As I prepared a growth medium of cane sugar, brown sugar, dried ginger, a pinch of cream of tartar, and a few drops of lemon juice and molasses - “this thing must have a serious sweet tooth,” I thought - I was still nervous. In went the little bag of crystals.

Several online sources suggested that ginger beer was traditionally fermented in containers left on the windowsill, heated in the sunlight as high as 32C (90F). Berkeley is in California and all, but February is not warm here - highs have been closer to 15C (59F), and the poorly-insulated apartments get downright cold at night. Fortunately, my previous fermentation adventures suggested a solution: place the culture in the oven, with just the incandescent oven light on. Provided no one accidentally turns the oven itself on (ouch), this works great for maintaining a stable, moderately elevated temperature. Within an hour, it stabilized at 29.5C (85F). In went the mason jar full of sugar and sleeping microbeasties, and off I went to bed.

It’s been three days now. Fortunately, it appears I’ve avoided the Curse of Capitalism and my ginger beer plant is bubbling like mad in its mason jar:
The ginger beer plant culture, in a pint mason jar
Close-up of the ginger beer plant 'grains' in the culture medium

Incubating at 30C, the culture is bubbling intensely (and smells delicious)
Not only is it clearly fermenting, it’s also clearly growing: to start, I was filling the jar to total volume of 100mL and the culture was totally submerged; as of this afternoon, the culture itself is above the 200mL line. Once I have cultured enough for my own use and I have verified a drying procedure and established my own backups, I would be happy to distribute small samples of the ginger beer plant to anyone who is interested  - when I have culture available for shipping, I will post about it.

Each night, I drain off the liquid with a strainer funnel and add fresh media. Though I haven't made a full batch of ginger beer with it yet, I have very much enjoyed the taste of the liquid I’ve poured off: the sweetness is highly attenuated, and there is a mild but very noticeable tartness. I can’t wait to experiment.  (Now I just need to find a good source of sassafras, sarsaparilla, licorice...)

Ginger Beer Recipe

The following ‘culture medium’ has worked extremely well for reviving and growing the culture, and the resulting liquid doesn’t taste half bad:
  • 1 TBsp sugar, white
  • 1 TBsp sugar, brown
  • 1 tsp ginger, dried
  • 1 drizzle molasses, blackstrap
  • 2 pinches tartaric acid (aka cream of tartar)
  • Add ginger beer plant, bring up to 200mL with tap water
The molasses provides micronutrient minerals such as iron and calcium. Dried ginger provides micronutrients and a source of nitrogen. Sugars provide, well, sugar - fermentation is much less efficient (10-20x) at extracting energy from sugar than aerobic metabolism, so anaerobic organisms like those in the ginger beer plant need to consume a very large amount of sugar to live and grow.

Once I've settled on a full-scale ginger beer recipe that I really like, I'll post it here.

Ginger Beer Biochemistry

Ward’s original paper on the ginger-beer plant: http://www.jstor.org/stable/10.2307/91748
Ward’s additional notes on the original paper: http://aob.oxfordjournals.org/content/os-11/2/341.full.pdf

An article by the American Pharmaceutical Association on “California Bees”:

Studies on the polysaccharide produced by Betabacterium vermiforme:

The Moral of The Story

The next time you're considering buying some plastic-wrapped microwavable crap meal, or you're thinking of stopping by Taco Bell and blowing your money on fake meat and cheese sauce in an overbleached toilet paper tortilla, don't.

Ask your relatives for a favorite family recipe.  Google a traditional dish from your ethnic background.  Get in the kitchen and give it a shot.

The foods we eat aren't just a means to an end - they are important cultural artifacts, a tangible reminder of our heritages and histories, culturally and personally.  If we don't make use of our food roots - ginger and otherwise - we just might lose them.

This article researched and prepared by Brandon Curtis; follow him on Google+
The National Yeast Culture Collection has a note on 'Bees Wine': http://www.ncyc.co.uk/beeswine.html


Alternative Energy

In 2010, the world generated on the order of 21 petawatt-hours of electricity (1).  Of this, 4.3 petawatt-hours (20%) was generated by the United States:

In 2012, Apple sold 125 million phones and 58 million tablets, yielding sales of $150 billion dollars (2).

The current cost of solar power is around $125 per megawatt-hour (3).

If the world had chosen to invest in solar cells instead of smartphones, 5.6% of the world's electrical generation capacity - 28% of the United State's capacity - could have been converted.  This is a single year of a single company's sales.

The direct financial cost of the wars in Iraq and Afghanistan are subject to some debate (4,5), but it definitely comes to at least one trillion dollars: $1,000,000,000,000.  At 6.5x Apple's 2012 sales, that's over a third of global generation - enough electricity for the United States and the close-second consumer, China.

I have also heard (references please, energy people?) that current-generation offshore wind power is as little as one-half the cost of solar.

On the bright side, these numbers at least make me feel like sustainable power generation on a grand scale is within reach.  The technologies will keep improving and costs will continue to drop.

But man... priorities.

This post researched and prepared by Brandon Curtis; follow him on Google+
(1) http://en.wikipedia.org/wiki/List_of_countries_by_electricity_production
(2) http://news.cnet.com/8301-13579_3-57540705-37/apples-fiscal-2012-in-numbers-125m-iphones-58.31m-ipads/
(3) http://www.economist.com/node/21532279
(4) http://www.usnews.com/news/articles/2011/12/15/what-did-the-iraq-war-cost-more-than-you-think
(5) http://costofwar.com/