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Archive for March, 2006

Hunt results & new ideas

March 27th, 2006 at 08:15 pm

Just a quickie follow up to the weekend. It was cold, but I did find a few yard sales. Nothing much that I wanted, I ended up spending $3 on minor tools and like new toys. Buying the stuff new would have cost around $25. The toys will be for kids when they are older. (Motto: Plan ahead!)

I have been reading up tonight on the concept of credit card bank transfer arbitrage (on the site www.fatwallet.com). Basically you use the 0% offers cards give you to have access to large amount of money to invest it (safe investments preferrably!), and then pay it off before it costs you. You keep the investment proceeds. My biggest quandry is how to get the money from the CCs, as they only want to do balance transfers. Having a CC balance sorta defeats the purpose of this. I think I know how to handle this, but I need to read more on this before I try this type of "investing".

If nothing else, its interesting reading.

Treasure hunt tomorrow?

March 24th, 2006 at 07:52 pm

OK, so its not a treasure hunt, but maybe, just maybe, the weather will be warm enough that yard sales will be starting tomorrow. After doing this for 4 years a big downside is that its become hard for me to get things that are truly useful. I have most everything (small) that I need. Its a waste to get the same things over again, so now I look for things like unique toys (toy trains anyone? Smile ), tools, maybe a work shirt or belt.

Some weekends I get nothing, other times I hit the jackpot. One of the best from last year was when I found a lady selling her deceased husbands tools, filling a good portion of her basement. I spent maybe $100 and got power tools and lots of hand tools - retail would have been maybe $1000.

Thankfully I live in a decent suburb (not too dense but plenty dense enough) where I donít have to travel far to get to yard sales to keep me amused for about 5 hours on a Saturday morning. Usually this can be done for me on less than a gallon of gas.

One thing to end this note on: if you have a child less than 5 years old, and you have yard sales available to you, you have gotta go. I see sooooooooo much of kids clothes and toys selling at pennies on the dollar. Not everywhere, but more than enough to never need to take kids to a retail store.

As always - YMMV.

High impact savings my way.

March 23rd, 2006 at 06:35 pm

Although I have had ideas that have saved money, one of the best (that is - highest impact) and easiest has been to work on my health.

Youíve probably heard that exercising is good for you, but you
havenít really considered all the benefits (health and money wise) you can get from it.

Here is how I save with exercise. Of course my situation may be a little unique, your savings may not be nearly what mine are, and many people will not want to do everything I do, but still, this is just something to consider (read: your milage may vary).

My work place has a small gym that can be used at a rate of $8.00 / month. (Ok, I know this good rate isnít available for everyone, so youíll have to change the numbers to fit your situation.) I can use the shower at the gym and not shower at home. I can turn the water heater level down for days at a time (As I am by myself, I need only wash dishes once or twice a week.)

Here are my estimates in savings:

Fuel (natural gas for the water heater) $10/mo. (That was over a year ago, with higher prices today that might be $15 now.)
Water - This doesnít save much, maybe $2.50 / mo. Still, it is a help.
Clothes - I have gotten my weight back down to where I can wear clothes that were good but I quickly out grew before I started in the gym. My clothing expenses last year were less than $100. Ok, this year my clothing expenses will probably go up, but not that much, maybe to $300? Still, for last year, if you say I was able to save about $360 for the year by using older (but still like new) clothes, that would be a savings of $30 / mo., although longer term this savings may be less. Also going to yard sales, smaller clothes are often sold as people gain weight, so losing weight gives you an
advantage in buying clothes really inexpensively that way.
Food - Once you lose some weight, and do those ab crunches, you feel full sooner than you used to. Its so hard to come up with a savings per month on the lower amount spent on food, but I will estimate a low $10 / mo. I think $2.50 less on food expenses a week is likely. Also this forces me to bring in my lunch every day. I would normally do this anyway, so no savings - it just enforces this to my mind to have my lunches ready each day.
Health - The past year my health expenses (other than insurance premiums) was one trip to the doctor ($15 co-pay) and a $20 co-pay for one prescription. Another one that is hard to estimate, but my health had to improve somewhat due to the exercise. If I guess one doctor visit and one prescription co-pay was avoided, I can estimate $3 / mo. savings.
One thing to note here - if you are doing any type of hard exercise (sports, weight lifting, or other intense exercise) there is always the chance of injury and a boat load of expenses that could follow.
This could mean the health savings are illusionary if you are not careful. So take that for what its worth.
Other savings - Not going out for expensive lunches with co-workers. This gives me an excuse to skip these outings if I desire, as I am now known for working out every day. I will do this occasionally, but can skip these. Savings of maybe 6 over a year, $20 per time, gives $10 / mo. on average.


OK, so what is the total:
Fuel: $15
Water: 2.50
Clothes $30
Food: $2.50
Health: $3
Other: $10
Cost: $8
Total benefits per month: ($55 savings + better health)

This is just food (or exercise in this case) for thought.

Financial milestones anyone?

March 21st, 2006 at 06:36 pm

I had an idea typed up for today, but left it at work today - bleech. So for something completely different .....

As I have saved money I always like to have milestones. You know, like "Today I completely paid off my credit cards", "Next month I should have 100K saved up", "By 2008 I will have my mortgage paid off". Those type of things (note that none of those are true for me, they are just examples). Anywho... I was talking with a co-worker today, and I mentioned how one milestone I passed last year was that I had more money in my savings, stocks, retirement, and bonds combined than I owed in liabilities (my only liability was my mortgage). To me it was like the point where you can say "even if the worst happens, I have money to pay my house and not get kicked out".

OK, I know that statement wasn't exactly true. If I were to pull out my retirement funds I would lose 10% plus taxes. And of course there are living expenses and taxes, and so on. But the point was it was sort of a liberating point where I felt more in control. Does anyone have this type of esoteric milestones they use (or have used)?

Renting out the right way (and the wrong way)

March 15th, 2006 at 07:06 pm

I was reading various blogs, and a few discussed the stress of getting a renter for their (house, apartment, basement, ...). As I have a renter in my home now, I thought I should put my two cents in on the subject.

Since I have moved back to the US from living overseas (13 years ago) I have had renters in my house for 3 of those years, plus I have had renters living next to me often.

I have not had problems with renters in my home yet. One of the things I do is consider do I want to restrict the number of people renting from me (that is, charge a high amount) and take a chance, or charge less and and be picky on who I rent out to. So far I have gone the conservative route (charge less) and it has worked for me.

When I lived in my old townhome the neighboring home was rented out by this immigrant car salesman. When I saw him, which was seldom, he would always be friendly, and talk like he knew what he was doing. Well he would charge a high rent, and could only get people in that place that couldn't rent elsewhere (ie. had issues). They would cause a ruckus all the time, get visits from the police, and finally trash the house after living there for a year and move out. Mr. Brilliance would come in, fix up the house, and look at me like "Why are you upset with me?", and do the same thing over again. He wouldn't make any money because all his profits went into fixing the place after each set of renters left. I tried to explain it to the wife, but she thought her husband knew best.

About a year after I moved out I heard that the guy finally sold the place after losing so much money on it. I know people here wouldn't be as stupid as that, but it is painful when you have to live next to that nonsense.

As for my current renter, I advertised for less up front, and picked who I wanted, not who I could get. He likes the lower rent and decent location, and make a point to pay on time and even helps on any projects around the house (which has been rare).

I guess my point is, like investing, going the slow and steady way is the way to earn the most in renting out your real estate.

A very good grocery week

March 13th, 2006 at 06:34 pm

Normally I wouldn't care to write about the amount of groceries I spend each week. I don't really have a budget, instead I just observe what I am spending on, and make sure not to waste money (or at least not often).

Anyway, last week was a little different. I have found I usually spend about $25/week, and the past week was certainly very close, at $25.90 (Aldi's plus some loss leaders at another store). However, as I do mystery shop dining at a local restaurant from time to time, and did one this past week, my weekly expenses on food was a net of $0.90 due to my work on a shop this past week. They pay well ($25), but the work is hard (a few hours of typing). I thought it was cool to have a very inexpensive week.

Making the best of a bad situation

March 11th, 2006 at 10:16 pm

This is just a little thought for the day.

One thing I haven't seen discussed often in the blogs is making the best of a bad situation. Usually it is on the lines of how to save, where/what to invest, how to get a better paying job, and so on. All excellent things to know or do. And some of them have helped me in the past year.

But what do you do when something bad happens? For me that happened a few years ago when I was laid off one day. Of course the first thing I did was apply for unemployment benefits. Next was start scouring the papers, employment centers, etc... looking for a job. But its not like you can be out trying to get a job every day 9 to 5. After a while there isn't that much you can do, but plug along and keep trying.

After a month or so I got to the point of asking "now what"? I looked at what I had available (extra time) and thought how could I make the best use of that. While different answers can come up for different people (classes, research, projects,...), I noticed my house needed a new roof. For the next four months I took my time and re-roofed my house by myself. Thankfully I had some money saved up for a rainy day, and while I would have liked to have kept the money in case something really bad happened, I looked at this as making an investment. Even if I needed to sell the house and move, I knew the ability to sell a house with a new roof would give a excellent return on the cost. It turned out to cost about $700 versus many thousands from various contracts. And by the next year I was able to get a new job (lower pay, but thankfully only a ~15% pay cut)

I guess this is just a little reminder to step back when you think something is bad and say "OK, now how can I make this work for me?"

Is saving 10% enough?

March 9th, 2006 at 06:33 pm

That title question probably has a million different answers depending on the situation. I guess in this case what I am asking is, if you have a daily expense, and with not too much effort you can save 10%, wouldn't you do it?

For me that question comes up as I have been trying to car pool to work. Most people don't want to do it, or only if the amounts saved are really extreme. I now have someone I carpool with, but due to his schedule its only twice a week. And since he is half the way to work, the one day he drives I still have to go half way. So my savings are 10%, which is about 2/3 of a gallon of gas. Some people behave like its just not worth it, but I'm ok with it. Its not like I have to do it every day, and it is a saving.

I dunno, just a thought on my part. Saving 10% is worth it, isn't it? Right ... right?

Central AC - all its cracked up to be?

March 8th, 2006 at 07:36 pm

This is just a quick thought, thinking ahead to summer. And by the way, this info is my take on things, your situation may vary.

For those of you owning a home, you know (or will some day) that one of the biggest costs you can have is getting a central a/c unit. The darn things are super expensive. Yet, what are you to do?

Years ago people did without a/c. In fact I grew up without it, though I lived in the mountains of PA, and it was always cool at night, so the most that would be needed to sleep at night might be a fan on occassion.

Well now I live near DC, and summer nights can be brutal, and certainly the days can be. So when I bought my house 8 years ago, and looked into a central a/c unit (yes, the system in this house was dead - that's why I got it so cheap!) the prices were more than I felt comfortable with. I had yet to build up any savings to handle a bad stretch, so I decided to do what everyone did where I grew up, look into a window a/c unit.

The cost of an a/c unit then was (I think) about $175. This could handle two rooms. I figured two of these could handle 2/3 of the house, and since there was only me and my wife, I didn't need more horsepower. Comparing this with the cost of a new central system ($3k to $5k) was a no brainer for me. And as I have come to understand, an even better decision than I realized.

I have co-workers that have new systems that have had them brake down within 3 years of installation, having to spend hundreds of dollars to fix. Then since they have a central system, they have to cool the whole house. Their bills, even with slightly higher SEER ratings on their central system (SEER is a rating for how efficient the unit is) have usually been 50% higher than my bills, and with houses my size or smaller.

One nice thing about my window units is I never worry about the cost of repair. I have yet have one break down on me, but if I do, I only need to go to the store and buy another, and they are cheaper and more efficient than they were 8 years ago!

The downsides have been few for me. Of course the window is now used by an AC unit, so you can't look out it. There is more noise from these units, though I don't feel its that bad. And to make them last longer and work better, I take them out each fall, open them and clean them out with a hose, put them back together and store them in the house.

And lastly I live by myself now (with a renter), and before with my wife. If you have a large family, this technique might not be as efficient for you.

I guess the moral of the story is to look at all the costs (a/c units - or anything else for that matter) when deciding on something expensive (or even cheap). I went the way that I was told wasn't the best, yet over that time I have saved thousands (unit costs + power bills).

Gawd, I hope my money will be there

March 6th, 2006 at 06:41 pm

(Warning: long story)

People here on the financial blogs talk about how to make the best retirement investments all the time. And one assumption is that the companies will be competent and get your money to you when the time comes. While that's probably true, let me pass along what I went through last year with these financial companies, and you can draw your own conclusions.

This started about a year ago when my prior employer contacted me indicating that I didn't have enough money in my money pension plan to keep it there on its own, and I would have to roll it over to a new account (to my current employer account or a custodial IRA - that may be the wrong term, but I think you know what I mean) The money had been there for 2 years with no problem, why it was an issue now I didn't know, but ok, I'll transfer the money.

Once I get the paperwork from the manager of my account I find I have well over the required amount to keep my funds where they are, and ask my employer about this.
I'm told the amount vested is not really that amount, actually less than the $5K required. So ok, I'll get what I can, roll it over, and life will go on. My larger current employer has 401ks available with three different fund companies, of which I am investing in two of them. I decide to roll over into funds controlled by company "A".

After getting help with the paperwork from the on site assistant from "A", I send the paperwork off to my old employer for them to write a check. About two weeks later a check arrives, for the whole amount of my money pension, not just the vested amount.
I wonder if this will actually fly, so I cross my fingers, give the check to the on site guy, and off the check goes (with a photo copy for me - and I needed it).

Being patient I wait, and wait, and wait (and almost forget about it). I was told this should take 2 weeks at most. After 6 weeks I contact the on site guy and ask him what is going on. He doesn't know and will check, and a day later contacts me indicating that the check was sent to the wrong department, but now will be going to the right location. Just give it another week. I give it two, and the money is still not showing up. I contact the guy again, and he indicates they have the money, but there is some problem, and it will be in my account in a day or two. Again, after a week no money. This time I contact my company's HR person for retirement funds. (Yeah, I know, I was too patient). This time I get the answer that they have lost the check, and can I get a new check from the other fund company?

Ugh, ok, so I call the prior company, give them the SOB story about what heppened. "Sure no problem, what was the account number?" I give them the number. I'm then asked for the amount of the prior check. At this point I wonder if they don't know and I could say anything and would they accept it???, but I decide not to test my luck. Sure enough a week later the check arrives (with the same amount as previously!). I give it to "on-site guy", and a week later the money shows up correctly in my accounts.

All's well that end's well, right? True... but I decide a month later to tempt fate. I have a small roll - over custodial IRA, and I decide I would like to have one less statement to look at.
After the fun with company "A", I try to roll this over into my funds with company "B", the other company I have a reitrement fund with at my current employer. As I start this, I find no better luck. Now company "B" insists I get papers from the original company I invested the funds with, so they can know it was a true 401k and is a proper roll over. Sounds good except my old company from 8 years earlier is no more. I try to have them get the information from the company holding the IRA currently. I mean, if this is so important, they should have the information, right? Well this company holding my roller over, call this one company "C", can't help them. This wouldn't be so absurd, except for the fact that company "B" *IS* company "C"!!!
If they think this information is needed, why the **** don't they have it themselves???

I'm about ready to give up on this, but on a lark I check with on-site guy from company "A", and he tells me the other company doesn't know the rules, and sure, they can put the money into my account. And this time he is going to double check what is happening for me. No problems from this point forward, and the money moves just fine.

If you've read this long winded story to this point, I hope you understand my "concerns" when it comes to actually getting my money when I retire. Intellectually I'm sure I'll get the money. Emotionally... thats another story.

Think ahead to save money

March 4th, 2006 at 08:14 pm

Just a quick thought for tonight. If you don't think of things ahead of time, you may miss out on simple ways to save a few extra bucks.

What brought this to mind was a few months ago I had to replace two tires to have my car pass inspection. I tried to get a low price / decent quality tire. As I'm not Mr. Auto Fanatic, I'm not sure how I did, though I know I didn't do too bad. In any case, I remembered last time there was a tire disposal fee. I checked with my county disposal service before the tire change and found you could dump off tires for $1 each. So when the paperwork was being written up I paid attention for that, and saw they would charge $3/tire. I asked to have the tires left in my car, and then dropped them off at the dump myself for $1. Ok, not a large payoff ($4), but considering the cost (10 minutes of time & 3 extra miles of wear on car), I think it was a smart decision.

Moral of story: just think ahead to situations where you can save a few bucks easily.

Property Tax Hell

March 3rd, 2006 at 05:48 pm

Today I received in the mail evil twin of that sweet gal Ms. Housing Appreciation.

No, Ms. Tax Bill didn't arrive, but her friend Mrs. Real Estate Appraisal came. It seems my previous appraisal was a little low (actually I knew that, but I thought the system was jiggered that way). Well it came roaring back with about a 40% increase from last year. Yeah, the tax rates here are being lowered, but that ain't nearly going to compensate for this number. Live by the sword, and die by the sword I suppose.

Hopefully next time I will write something more interesting, I have too much to do tonight.

High return ideas

March 2nd, 2006 at 06:48 pm

Everyone out there has ideas on how to make your money work better for you. And I have to admit some of them are good ideas, a few of which I've taken to heart. One thing is rarely mentioned, and for me, I think thats a real shame. That is learning to do things for yourself.

If you are a home owner, you live in dread of having someone come in and give you an estimate on installing windows, doors, carpeting, roof (and the list goes on). Paying handymen to do basic work is the way to the poorhouse (provided you have the time to do the work yourself). You know, doing this type of work doesn't take a genius to do. Come'on think about it, do you recall the guys that you have had come in to do the work? Were they smarter than you?

Since I've owned my house I have replaced my whole roof for $700 (Corning brand shingles, it was hard work and it is a medium sized roof), replaced my 1960 era windows with double pane / low E / argon filled windows (about $2,000 for 11 large sized windows), and replaced the front door and storm door (less than $200 for the pair on sale at Lowes - but I then went and spent $100 on a top of the line door handle!). Oh, and when I bought the house I had a handyman resquare the walls in my kitchen (after I removed the original junk cabinets), and I went and installed top of the line kitchen cabnetry myself (from Home Depot - solid hickory - about $4,000, and that included the counter top).

I didn't grow up Mr. Handyman, I was just determined to be able to do things myself. I read books on the subjects, went to demonstrations at the hardware stores, started on smaller projects to get the hang of the various tools, and just did it. The work has not always been perfect, but usuaully people can't see the mistakes unless I point them out to them.
In each case the cost of paying someone to do the work would have been multiples of what it cost me to do it.

One last piece of advice on this. If you don't have much money, start small. When I replaced the windows I did them one or two at a time. I would custom order them, pay for them at pick up two weeks later, and install them on a weekend or a holiday. Then a month or two later, another two windows would be ordered, and so it went. I finished my house in 6 months using that technique. Same for the roof. I did that over a summer, doing it in small sections as I had the energy, and the sun wasn't beating down too bad. I wasn't into killing myself, so I did what I could (usually early in the morning), then quit for the day. There's no sin to have a roof half new and half old. As long as you are going to finish it soon, it will live.