Tax time. It’s just around the corner. Yay.
But there’s a bright spot in figuring taxes for most of us: deductions. Those subtractions that pare down the adjusted gross income (AGI) that is the primary benchmark that determines your tax rate, and ultimately your tax. There are a number of kinds of deductions. One kind is a deduction for extensive medical or dental expenses that was first introduced in 1942. People could deduct the portion of their “extraordinary” medical or dental expenses that exceeded 5% of their AGI (subject to a cap).
As of last year, the floor is now double that for people under 65. You’ll need to shell out fully 10% of your AGI in medical and dental expenses before you can deduct a dime of them. (In 2017, everyone, young and old, will be subject to this floor.)
Here are a few ways to increase the chances that you’ll hit that magic 10% figure:
- Indoor parkour. The kitchen area is best, after covering the floor with a thin layer of soapy water.
- Drive fast and take lots of chances. And/Or, follow the white lights on the road at night, rather than the red ones.
- Walk into a biker bar wearing Google Glass and just start recording, man.
- Fix those loose roof shingles before that thunderstorm gets too much worse.
(You know I’m kidding, right? Of course you do.)
People respond to cures a whole lot more than they respond to prevention. This is why the diet supplement industry is huge, and why gyms try so hard to lock you into a three-year contract. That, and the road from health to unhealthiness is so much easier than going the other direction. Only about 5% of people are able to lose 10% of excess weight and keep it off. (I’ve asked people who’ve repeated this figure, and none know where it came from.)
But, the best way to save on medical expenses is not to incur them. Being fat costs money. A lot of money. And now, any more catastrophic illnesses, caused by fatness or otherwise, are less deductible than they were just 15 months ago. It’s like adding insult to … injury.
If you take this federal tax deduction, especially now, you probably wish that you weren’t in a position to take it. So, try not to put yourself in that position!
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I received a review copy of Timothy McCarthy’s The Safe Investor: How to Make Your Money Grow in a Volatile Global Economy a few weeks ago. Any book that can give me at least one good idea is a win. It usually covers the cost of a book, or an e-book, or a membership to a site. This book had many good ideas for me.
There are common threads among finance books, particularly personal finance books and investing books. Few will say, “spend more than you earn,” or “bet it all on red.” What makes books like these different from one another is the wealth of experience that the author brings in. Tim McCarthy certainly has the creds: he was president and chief operating officer of Charles Schwab & Company, and he’s worked in over two dozen countries. This affords him the ability to talk about managing money (he’s managed lots of it) and how to diversify internationally (he’s seen the countries first-hand). Lots of unique insights into international investing.
Major takeaways from the book
Here are a few of the big ideas that I pulled from this book:
- Three pockets; unequal sizes. The savings pocket, the investing pocket, and the trading pocket. The third is substantially smaller than either of the first two. “Don’t risk more than you can afford to lose.” Play with the trading pocket; the others should be safe. (This is The Safe Investor, after all!)
- Avoid single points of failure. They can appear anywhere. Investing in one country, with one brokerage, in one asset class, with one financial advisor, etc., bring in single points of failure.
- Independently verify. Is your financial advisor doing right by you? Ask another one.
- Risk is everywhere. Nothing is a risk-free investment. He points out many areas of risk that I hadn’t considered before.
- Young demographics are good for growth. Because old people don’t spend as much. Some countries’ big growth times have passed. He names names.
- Diversify. A well-diversified portfolio smooths out the rough spots in any particular country, asset class, sector, or maturity time frame. But being well-diversified — and staying well-diversified — isn’t always easy. He explains how the makeup of some investment products can change over time, and hence why their composition needs to be monitored.
- You should plan to live longer than you expect. This will decrease the chance that you’ll run out of money before running out of years. Near the end of the book he outlines a general strategy for broad ranges of age that can be used as a starting point with a financial advisor.
- Know what management tasks you can delegate, and what ones you shouldn’t. You can hire financial managers for many things, but not all. He outlines which tasks to hold close.
I thought The Safe Investor was excellent. It went into detail in important ways that helped me to understand the many facets of investing a bit better overall.
A while back my wife got me a mug that says “Future Millionaire” on it. The statement on the mug for me is as true now as it was then. o_O
Though some people are predisposed to becoming millionaires, and some have greater obstacles in their path to do so, the path to millionare-ity isn’t rocket science:
- Spend less than you bring in.
- Save and invest the difference.
- Start early and behold the magic of compounding.
The mainstay of Thomas Stanley and William Danko, The Millionaire Next Door, reinforced much of this, with loads of statistics from questionnaires and interviews completed by the affluent.
What did millionaires do to become millionaires?
Long-time blogging colleague FMF has sought the answer to this question by posting Millionaire Interviews beginning in August, 2013. To date, he has interviews from 21 millionaires. The latest to date (#21) is here.
These case studies are gold. What better way to learn about becoming financially well-off than by listening to people who already have done it?
Like I mentioned at the beginning of this post, I’m a future millionaire. As in, not a current millionaire. FMF has interviewed current millionaires.
If becoming a millionaire interests you, then read what these guys have to say. It costs only time, and if one good idea gets you over the hump toward becoming a millionaire, then the payoff is enormous.
Where is that one good idea? Who knows. Your one good idea will be different than mine. It could be:
- Something you’ve forgotten and needed to be reminded of. Maybe your assets are too heavy in one area, and you need to diversify, but it’s gotten off of your radar. Well … it just came back on your radar.
- Something you’ve heard before, and now you believe it. People have planted seeds before, but seeds take time to grow. Maybe it’s a bad habit that you know is costing you tons of money, and that last sentence of that post finally gets to you take action.
- Something you’ve heard before, and it was put in a way that finally makes sense. I was never a smoker, but when I read one of Larry Winget’s book (I think it was this one) he put it in a way that was better than any other way I’d heard before: Each cigarette shortens your life by 11 minutes. Why did that make such good sense to me? Maybe it’s because I’m a numbers guy and I steel-trap phrases with numbers in them. Maybe it was the clear cause and effect (statistically speaking). Maybe it was the simplicity. Maybe it was all of the above. Who knows. But no doubt you’ll have one of these moments, too, with some completely different phrase.
- Something you’ve never heard before. These are probably the most effective good ideas of all, especially if it’s been in front of your nose the whole time. Jay Abraham hit the nail with one of his observations about sales. If you sell to 30% more people, 30% more often, for 30% more money, you’ve more than doubled your revenue. The math had been staring me in the face since, maybe, fifth grade, but there it is.
So, please head over to Free Money Finance and look for some good ideas on becoming a millionaire.
The post Millionaire case studies: study and learn; find that one good idea appeared first on Mighty Bargain Hunter.
A few weeks ago we had lunch with some good friends. During the festivities, I saw a wooden piggybank-like thing on a shelf above the kitchen sink, part of which was a lucite window that showed the contents.
I asked, “So who was the cool person that gave you guys $2 bills?”
Later in the afternoon they let me go through the contents of the bank. It was a collection of interesting coins that they had gotten as gifts over the years.
A lot of conversations pieces … and a few reasonably valuable ones
The US Mint has put a nice twist on our coinage recently. The cent had four designs in 2009 to celebrate Lincoln’s 200th birthday. The nickel’s obverse was reworked in 2004, along with four designs on the reverse. The state quarter series was a lot of fun. And, frankly, I liked the Presidential $1 coins until they stopped it.
As neat as designs like these are, though, they don’t make the coins particularly valuable by themselves. The populations of the coins are too big. They’re not rare.
The majority of the coins our friends had fell into this category: cool coins that were worth their face value. In other words: pocket money to spend. But they were pleasantly surprised that some of them had a bit more value, even in obviously circulated condition.
Here are a few examples of each kind:
- Franklin half dollar. These coins were produced from 1948-1963. They are 90% silver coins. One dollar face value of silver coins at this time contained 0.71 troy ounces of silver. At today’s silver price, that makes this single half-dollar worth a bit over 14 times its face value. So, I suggested that they save this.
- Mercury dime. No, not Freddie Mercury, but Mercury the god. These were produced from 1916-1945. The Roosevelt dime replaced it following FDR’s death that year. These are also 90% silver coins, so they should save this one.
- Bicentennial quarter. These quarters were produced in 1976 in large numbers. The silver had been removed from new quarters in 1965, so these quarters contain no precious metal. So, they should feel free to spend these if the need.
- Wheat cents. The cent had the portrait of Abraham Lincoln beginning in 1909, the year of his 100th birthday. The Lincoln memorial was the design on most years 1959 and after, but prior to that the reverse design had wheat stalks. Aside from being 95% copper, they’re at least 65 years old now, so I suggested that they save these even if it wouldn’t send them on a cruise.
- Sacagawea and Susan B. Anthony dollars. I’m probably in the minority, but I like dollar coins. I think they’re fun. The Sacagaweas were produced beginning in 2000, and the Susan B. Anthonys were minted for a few years beginning in 1979. The circulated coins contained no precious metals, and demand for even mint condition coins hasn’t kept up with inflation. Spend ‘em.
- Kennedy half dollars, 1971 and on. The Kennedy half dollar began circulation in 1964, following JFK’s assassination. The coins in 1971 and later contained only base metals. The 1976 coin had a different design on the reverse for the bicentennial. Still though, these coins can be spent.
- Kennedy half dollars, 1965-1969. Same design but much different composition. These coins are 40% silver. About seven of them contain an ounce of silver, so they’re worth about $3 apiece. Save these!
You never know what might be in your pocket. Check your change!
I very much like my rewards credit card. One of the dumber things I’ve done is not getting one sooner. I mean, it’s downright silly not to have one if you use the credit card for convenience only, and not for spending beyond your means. The only thing better than free float is to be paid for it!
Frugal Toad had a post that caught my attention: Is it time to trade in your cash back credit card? Before I read the post, I had an idea what the punchline was, but it didn’t turn out to be what I thought it was.
His take: Ditch the cash back credit card when you can do better. I certainly agree that it is fairly easy to do better than a cash back rewards card, especially if you travel regularly. The effective reward rate for airline reward cards is higher than the best cash back reward cards. If a card is going to lock me in to using my rewards with a particular merchant, airline, etc., I’m going to expect more reward.
For me personally, I like the cash. I’ll accept somewhere between 1% and 2% cash back if I can apply it directly to my bill. I get the benefit almost immediately, and I’m not forced to fly when I don’t really want to.
It’s not all about the rewards
Getting a higher percentage back if you are in a position to take advantage of it is as good a reason as any to trade in your cash back credit card.
But there is another reason, and it has nothing to do with the rewards.
It’s a good idea to get rid of a cash-back card if you start carrying a balance on it. Cash-back cards cost the issuer more — they’re paying the rewards, right? — so the cost must be made up somewhere else. Part of that can be in the interest rate charged on the balances. It stands to reason that non-reward cards will have a lower interest rate.
Actually, it’s a good idea to get rid of any credit card if you start carrying a balance, but this applies especially for cash-back cards.
I know that I’ve mentioned before that my wife knows how to do many things well. She’s very handy. And today, she managed to put something together that not only got rid of some dried beans that were a bit past their use-by date — OK, over three years past — but made some money in the process!
A friend of ours had had these corn warmers for years. They were flannel strips a bit under two feet long that were filled with dried corn and sewn together. Pop them in the microwave, zap them for a bit, and the corn inside gets warm and holds the heat for quite a while. They had finally become so threadbare that they broke and spilled the corn all over the place.
So, our friend had a proposition. She had priced them already on Etsy ($15 each), and asked my wife if she could make three of them for that price each. She’d rather pay someone she knows than someone she doesn’t.
Apparently word has gotten around that she can do these kinds of things. This is definitely a Very Good Thing.
Beans work as well, or better, than other alternatives
It turns out that dried corn is just one thing that can be put into the fabric tube. Rice works, and beans work, too. Rice can get a bit “pokey” after a while because of the form factor. Bean foot warmers don’t suffer from this problem.
We had a few bags of pinto beans and some other smaller beans that were well past their use-by date. But, since these wouldn’t be eaten, no problem! She put the beans into a bowl and mixed in a small amount of lavender essential oil. (It doesn’t take much!) She had already triple-stitched the tubes from remnant pieces of flannel first with a serger, and then with a sewing machine. (The goal: Make sure that the fabric wears out before the stitching!)
Each one of the tubes held eight cups of beans, which was about $5 worth or so. After filling the tubes up, she hand-sewed the open ends shut for prettiness. It was easy, and quick, enough for next-day delivery!
My wife used remnant fabric. She has a lot around because she loves to sew. But an old winter shirt sleeve or a pair of tube socks would do the same thing — and would use yet another item that might otherwise get discarded.
There’s probably a use for something that you’d throw away. Finding that use can be fun, practical, and even profitable!
The post Bean foot warmers: A great use for out-of-date dried beans appeared first on Mighty Bargain Hunter.
A bit ago Alan Corey was kind enough to send me a copy of his newest book, The Subversive Job Search: How to Overcome a Lousy Job, Sluggish Economy, and Useless Degree to Create a Six-Figure Career. (Now, that’s a subtitle!) I was glad to receive it because I enjoyed his first book, A Million Bucks by 30.
The one thing I noticed about this book is that he seemed so much happier in his author photo on this book than he did on the first one. He agreed, and credited it to having a little bit more notice of needing one on the second book. I guess that the first one, um, caught him unawares.
Starting over is painful
Alan ended his first book on a high note: he hit a net worth of $1 million by the time he was 30. In the introduction of his first book, he writes: “Read the book any way you want. Read it from start to finish; read just the lessons, tips, and box scores; or, if you don’t really like me yet, read it from back to front and watch me go from a millionaire to being broke.”
That was funny at the time when I read it. It’s ironic that following his risk to a net worth of $1 million, he almost did go broke. The first chapters talk about this fall and the painful process of getting himself back into the job market after being a landlord and a business owner.
What follows is a great success story. No wonder he’s smiling!
Punching through the noise
At the onset of his job search, people weren’t busting down his door by any stretch. Two hundred fifty-five resumes led to zero offers during his first three months (page 47). At some point along the way, he put himself in the shoes of the poor human resources person who had to fill the positions he was looking at, and figured out the two characteristics of his resume that would make that decision easier for the HR person (page 53).
From there, things begin to go his way, and he continues to find more ways to develop himself so that he’s worth the $100,000/year goal that he set for himself.
Lots of tips and lots of hard-earned insights
For me, if I can get one good idea or observation out of a book or a presentation, it’s been worth it. There were quite a few in here. These are the ones that spoke to me, and I’m sure there will be others that speak to you:
- On depression: If you’re affected by it, accept it sooner rather than later. Don’t ignore it (p. 35).
- On goal-setting: It keeps you moving (p. 35). (I can see the times in my life when this was crystal clear.)
- On getting raises: Come to the table with a dollar figure on increased responsibility (p. 37).
- On resume searchibility: Don’t ignore the appropriate keywords (p. 59).
- On career satisfaction: Finding out what you don’t like moves you closer to what you do like (p. 83).
- On skeleton crews: They get worked to the bone (p. 98). (I do enjoy his sense of humor!)
- On steering your career: There’s only one person who should be doing it (p. 120).
- On mentoring: Get some (p. 144).
- On expertise in a narrow area: It can pay off if the narrow area is right (p. 181).
I enjoyed the book. The Subversive Job Search has enough fresh ideas for anyone who’s either looking for a job, or who’s looking for something better.
We’ve saved a bit of money on some of our staple grocery items by not buying them in the store. Services like Amazon’s Subscribe and Save and Walmart’s Home Free™ Shipping let us get a number of items we use regularly at quite a bit of savings.
The problem with bargains
Buying from here works great … except when it doesn’t. Apparently we’re not the only ones that have found these great deals, and sometimes there isn’t enough deal for everyone who wants one. The problem with bargains is that they don’t remain secret for long.
Amazon sometimes needs to cancel our Subscribe and Save orders because the item is back-ordered. If we find out about the short supply quickly enough, then we can get a small amount of what we were going to get to fill the gap, but if not, we might have to — gasp! — do without. (I know: first-world problems.)
The same thing has happened with the powdered milk that we order from Walmart.com. Sometimes even though it’s available in our nearest store, it’s not available for ordering online. The price in the store is noticeably higher than it is online as well: somewhere in the neighborhood of 30-40%. (This makes sense: it costs more to distribute the products than it does to leave them in the warehouse.)
Just-in-time isn’t always-there
You may have heard of “just-in-time inventory” or “just-in-time manufacturing.” Things are delivered, or made, just in time — no later than needed, no earlier than necessary. It can mean much-reduced warehousing costs for businesses.
But one offshoot of just-in-time inventory is the opportunity to time and optimize the delivery of products in order to increase profits. Fairly often I’ll go to Walmart and find that the best deals are gone. For example, a couple of the items on our shopping list were oyster crackers and frozen broccoli. The Walmart store brand, Great Value, was the best price for these items. Occasionally I can find a couple bags of the oyster crackers, but I have to jump and reach to the back of the top shelf to get them. The Great Value 32-ounce bags of frozen broccoli are a much better price than either the 16-ounce Great Value bag, or the five pound name brand bag. But the last time I was there, all I could find were the 16-ounce bags.
I’m pretty sure this is by design. If people had as much of the good deals as they wanted, they wouldn’t ever buy the second-best deals. So they supply-limit the best deals to move the other products.
Get them while you can
The way to overcome this is to do some of your own just-in-time inventory:
- Plan for what you need. A lot of planning and coordination go into Walmart’s and Amazon’s buying strategy. A little extra planning is needed for a household to hit the sweet spot of cost and storage needs.
- Don’t buy too much. Buying too much incurs extra storage costs and could result in wasted items due to spoilage.
- Don’t buy too far in advance. Things can spoil.
- Don’t buy too little, too late, either! That wastes money and time.
- Know the best backup suppliers. If Amazon is out of your favorite item, where else can you get it? How much should you get before you can buy again from your primary supplier?
- Monitor your levels. This is something we personally have to work on, because I haven’t found a good system yet for inventorying our supplies that isn’t a huge time burden. But getting a clear “buy signal” at the right time for something you need is key to best take advantage of deals while balancing storage costs.
Have any tricks or tips for keeping on top of your supplies? Share them in the comments!
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I’ll start off this post with a couple of questions: What comes easy to you? What comes hard to you?
Hopefully you have a good answer to these questions. Or several good answers to these questions. Pretty much everyone has things they do well, and things that they screw up royally when they try them. Usually they know what these things are.
This may be a harder question, though: Have you admitted to yourself what comes hard to you?
This is a different question entirely. Knowing what you’re not that good at is one thing. Fully embracing that fact and writing it off is another. Doing that takes more time and more soul-searching, and is a bit more painful perhaps, but it can freeing to do this.
Math always will be hard for some people
I recently tutored someone in a college math course. (I’m good at math. I actually like setting up solids of revolution with the shell method, and pulling colored balls out of urns, if you can believe that. And if you don’t get it, no problem.) This is this guy’s third time taking the course, and there were still some big holes from previous courses. Nice guy and all that, so no problem.
I thought, OK, they’re giving it a good shot and hiring a tutor, and I thought sure we had scheduled again for this week. Well, I arrive up there, and the father is a bit surprised to see me. Well, no, there wasn’t a session tonight, he thought he had made that clear. (Not clear enough, apparently!) He went down to ask his son if there was anything else he needed help with, and no, there wasn’t. They were playing it by ear, and they’d let me know when they needed me again.
Maybe he’ll get it this time. But if not, when will he learn?
So, on the way back home — and over a $6 toll bridge — I thought a lot.
First, I thought about how to make sure that this kind of miscommunication never happened again. I don’t have time and money to burn like that.
But secondly, I thought about how foreign this kind of mindset is to me. The guy’s on his third time through this class, and the father is incredibly ambivalent about the whole thing. I know my parents would have been pitching a fit well before this point. It’s probably the reason I assumed that they wanted regular tutoring, and why I was practically dumbfounded when they didn’t.
It could be that he will actually get it this time with the current level of effort he’s putting into it. But it could just as easily be the case that they’re not admitting to themselves that he isn’t really cut out to do this kind of stuff.
“You’re just not scary.”
Mike Wazowski, the eye-conic main character of the animated films Monsters, Inc. and Monsters University is voiced by real-life comedic icon Billy Crystal. Wazowski plays the coach for elite scarer James P. Sullivan (voiced by John Goodman) in the first movie, but Wazowski himself is much better suited for other tasks than scaring.
Just about anything except scaring. Because, just like some people just aren’t athletic, some monsters just aren’t scary. Wazowski comes to terms with this in the second movie, but not before going through a lot of disappointment and frustration. And a full semester plus at MU.
It’s a bit like this guy I tutored. If he ends up not passing, will he take it again? Pay another round of tuition and spend another term trying to pound it into his head instead of doing something he actually is good at?
Those are the costs of fighting a clearly losing battle:
- Time cost. This is the most important cost. It’s irreplaceable. Time spent on one thing can’t be spent on another. Time spent in fruitless pursuits can’t be re-spent in fruitful ones.
- Money cost. A big consideration. It’s more replaceable than money, but for most it takes time to replace the money. Far better to spend money on something that has a positive return.
- Opportunity cost. By doing one thing, you sacrifice the opportunity to do another. Choose opportunities wisely.
Frankly, I hope he gets it this time. But if not, I hope that he gets that he won’t get it, and moves on.
Perhaps you’ve experienced this. You’re going about a typical day at home. You’re catching up on some homework (or housework), playing with the kids, or spending time with your roommates or significant other.
Then, you hear this banging in the next room that is enough to wake the dead. Your clothes washer is in rebellion, it’s mad as all get-out, and it’s not going to take it anymore. So you give it some attention: You push on it a bunch of different ways during the spin cycle to try to calm it down. But over time, this gets harder to do, and you’re getting a sinking feeling that it could fail any day now.
It would just have been a matter of time
Our clothes washer — which we got used from a guy whose wife wanted an upgrade — had been getting noisier and noisier on the spin cycle for a couple of months. Fortunately, my wife is a very handy person, and her father, from whom she received much of her handiness, was available to help. (If it were me, I would have gotten in quickly over my head.)
I’ll point out here, though: Taking apart a working appliance does involve the risk that it won’t work again. The washer was still functional at this point. It still worked. We just got a feeling that it wouldn’t work for much longer. Nonetheless, taking something apart that’s working turns it into a bunch of pieces that no longer function the way they did. There’s always a chance that taking the thing apart will damage something beyond repair.
There are good reasons for fixing rather than buying new
The (relatively small) risk of being without a working washing machine was worth it for us. Among them:
- We bought the machine used in the first place. We bought the set for $400 a few years ago. We would have been hard-pressed today to find any washing machine for that little, and ours was name-brand. Basically, we still had a lot of “wiggle room” in repair allowance before it started to get silly to repair it.
- For major appliances, older usually means better. Federal mandates take their toll on performance. It’s a bit like taking a Ford Mustang and making it run with one spark plug. Or putting a brick under the accelerator pedal so that you can only push it down a quarter inch. They’re forced to be so energy-efficient that they don’t work. Older models had fewer restrictions, so they tended to work better.
- Free online tutorials have gotten really good. The Internet has everything. My wife and father-in-law found YouTube videos from RepairClinic and ApplianceAssistant that had great tear-down and build-up videos for our model of washing machine. They even had warnings throughout when the parts were heavy! After watching parts of these videos, even I felt like I might have had a sporting chance getting the thing apart and back together.
The final bonus to all of this was that the cause of the rattling we were seeing was easily, and inexpensively, fixed. The mounting frame for the leveling legs had gotten bent, and this was almost torquing one of the legs off. The replacements were $6. SCORE!
Have you battled your appliances and won? Share your victories in the comments!
Our primary credit card was compromised. Again.
We noticed a spurious $9.84 charge when looking over our Chase Sapphire statement. A quick visit to the website and a bit of Googling revealed the bad news.
So we called up Chase, reported the transaction, and they credited it back to us, no questions asked (they’re good like that). They canceled our current card, and rushed us a new one for free, which came promptly (they’re good like that, too).
Following that, we looked over our recurring charges on that card, and saw only one that was due to be posted soon. A couple of days later, when my wife went to the business to change the credit card number on file, and to pay if needed. she was informed that the charge had bee posted that morning, and that the system was reporting that our account was paid up. So, she left without paying anything.
“But the account number is wrong!”
After my wife relayed this to me, I called up the business. It didn’t make any sense. I knew that the credit card was canceled immediately when I called, and the charge was posted to that account after the card was canceled. The charge should have bounced. The person behind the desk couldn’t give me a concrete answer as to how long it took their system to report back that a charge had failed. Was it minutes, hours, or days? They didn’t know. I wasn’t convinced that the charge had gone through, even though their system said it had.
A pleasant surprise
They told me to call the credit card issuer, which I did.
At that point, the Chase representative gave me a pleasant surprise. They did approve the charge, even though the card had been canceled. Their system determined — correctly — that the charge was a recurring charge, and in essence gave me some time to call up the merchants to change over the credit card information. In the meantime, though, they let the charges through.
In fact, they said that they usually approve these kinds of charges for thirty to sixty days! That’s a huge amount of time to fix things. I had always been rushing to change over the payment arrangements because I thought that they could bounce at any moment after the card was canceled.
Not so, apparently.
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A friend recently took her family to Walt Disney World over the holiday break, as many families do. (She gave me permission to write about this, by the way.) Hurricane season is over, and, well, it’s cold in a lot of the country. It’s usually not cold in Florida this time of year.
And a Walt Disney World vacation isn’t known for being on the inexpensive side. Everyone who’s gone down there that I’ve talked to has enjoyed themselves, and forged a lot of good memories with their children, though.
A vacation at Disney … but cheaper?
My friend is also quite the bargain hunter. She’ll save money when it makes sense, and by all accounts she did save quite a bit on the hotel. A six-person Disney room would have set her back $430/night. That’s a chunk of change. But she managed to get a ten-person room for less than a quarter that at a hotel a bit from the park: $105/night. Only three nights saves nearly a grand, and they were down there over a week.
The posts began two days before Christmas. As we were going up to my parents’ house, my wife gets a Facebook update that the hotel didn’t have them coming down. They said that they had come down a couple of months earlier. Not the way to start a vacation.
Eventually they got into their hotel — with elevated blood pressure, no doubt.
For the first week they were in the park, they got on one ride. Part of this was that it was Christmastime and the park was ridiculously overcrowded. But in the same comment, she also talked about sentence, she also talked about changing cabs, riding badly, and charter buses “that go to odd places.”
But an important moment of clarity came when she had another friend coming down to meet them. Her friend (also a friend of ours) is legally blind. Prior to her arrival, our friend alerted customer service that she would be arriving, and asked them to help her get to her room.
Customer service’s response? “Ma’am, we can’t make any promises.”
I imagine the customer service at the Disney hotel would have been far more accommodating than this.
At this point she said: “I will NEVER again cheapen a vacation.”
You pay one way or the other
I think our friend was a little too hard on herself. She’s not cheap. She’s frugal. Frugality is wise use of resources, while cheapness indicates saving money at the expense of everything else. I have no doubt that she carefully considered where to stay. I don’t believe that she set out to get through this with the smallest outlay possible.
But there are always trade-offs. We might not spend as much money, but we pay for this in other ways. We are virtually guaranteed to pay for it in other ways. Sometimes we may hit a good deal with the trade-off, or we may just get a raw deal. If I were in the same situation, I would have considered the trade-off as well. And it might have gone bad for me as well. It’s hard to know.
Some things that are traded off for money in these kinds of situations are below:
- Money for time. This is the most important one, because time is not money. Getting to/from the park took longer. This means less time in the park.
- Money for comfort. For the extra $300+ per night there likely would have been more comfort. More amenities. More five-star treatment. Fewer back-breaking cab rides.
- Money for frustration. The extra $300+ per night almost certainly would have reduced stress levels. People go to Disney World for the experience. They don’t want that experience to be stressful.
After all was said and done, though, she did say that the best part was being with her children. And no amount of mishaps can take that away.
Letting the window of opportunity for memories like these to pass wouldn’t have been frugal. It would have been cheap.
Last night we rang in 2014. This article on Cracked (fair warning: strong language and not really safe for work) talked about six harsh truths that will make you a better person.
And harsh, it is. I don’t necessarily agree that we are nothing more than our value to other people. But as far as learning new skills, it’s spot on.
One of the video clips is Alec Baldwin’s “ABC” speech in Glengarry Glen Ross. He’s addressing real estate agents — in a way that, once heard, cannot be unheard — that they should ABC: Always Be Closing. They should always be getting people closer to signing on the dashed line, because nothing good happens financially until that happens. And the more often it happens, the better.
As I was reading the article, my wife came in. I was a bit embarrassed that I was reading it because of all of the language, but she ended up looking it up herself. As a creative person, it was edifying to her. She does many things well, and after reading it she realized that this allowed her to be useful and serve others in many different ways.
Just for fun, I dug up thirty more ABC’s with the help of Google’s auto-complete. Here they are.
- Always be calm. Being slow to anger and weathering through challenging situations with demeanor is an asset. Harsh words cannot be taken back.
- Always be careful. Especially when driving, or using power tools, or working with electricity or fire. I’ve learned this the hard way.
- Always be cautious. Analyze big decisions. Things are usually harder than they appear.
- Always be certified. This is the mark of some level of skill. Certifications are useful.
- Always be charging. Moving forward takes work, but it’s the only way to create something of value.
- Always be charming. I’ve learned this the hard way, too. Social graces open more doors.
- Always be chasing. Chasing higher skill. Chasing for thing you believe in.
- Always be cheerful. “Laugh, and the world laughs with you …”
- Always be chic. A little intrigue adds spice.
- Always be civil. “Blessed are the peacemakers …”
- Always be classy. (See Always be charming.)
- Always be cleaving. A gemologist cleaves. Take something raw and make it pretty.
- Always be clean. Clean in manner, clean in mind.
- Always be coaching. Have you built someone up today?
- Always be cobbling. (This was a skit on Saturday Night Live with Alec Baldwin spoofing himself.) Stanley and Danko, authors of The Millionaire Next Door found that millionaires were more likely than non-millionaires to re-sole their shoes. What can you do to decrease your cost of ownership for your stuff?
- Always be coding. Applies to programmers, but by extension applies to anyone honing a craft.
- Always be confident. A friend told me to keep nay-sayers far away because they can erode confidence. If you think you can’t do something, you’ll do your best to live up to your expectations.
- Always be connecting. It’s probably more who you know than what you know.
- Always be content. You can chase and charge, but also be content. Not being content leads to unhappiness.
- Always be converting. (Similar to Always be closing.)
- Always be cool. And calm. And collected.
- Always be cooking. Cooking something up. Or literally, cooking. Hey, folks have got to eat!
- Always be courteous. It’s a skill to disagree without being disagreeable.
- Always be covering. Whatever (or whoever) needs to be covered.
- Always be creating. This is the one that spoke to my wife. Do you consume, or do you create?
- Always be crisping. (Hey, it showed up. I guess avoid soggy potato chips?)
- Always be curious. Asking questions helps to make new connections in your mind.
- Always be cute. For me, this is far easier said than done!
- Always be cunning. Like the fox. (What was it that he said?)
- Always be cycling. Or doing some other form of exercise.
Any others? Which ones speak to you?
Happy new year! Thanks for reading, and best wishes for a great 2014!
While some people think that it’s crass to give gift cards or cash as presents, I’m just fine with it. A gift card can show thought just as much as any other gift, especially if you know what the person likes and can give a gift card to a store that they like.
And if you’re of the opinion that gift cards are good, then cash is even better. It’s the most fungible of gifts. There’s very little that’s locked in about what you can buy with cash (except the country or countries that accept that particular form of cash, of course).
Any money burning in your pocket is self-ignited
Along with the ability to spend gift money on whatever you choose, is the ability to not spend it. That’s what we do with our paychecks, right? We budget (or not!), and we decide to spend or save.
We don’t have to spend gift money. We can decide that we don’t need to buy something with gift money. In some ways, a bit of extra cushion in a savings account is a gift: we can sleep a little easier because a future doctor’s visit or a future car repair is paid for.
In the end, a gift of money is a windfall, and it pays to be wise with it. Windfall money tends to burn a little hotter in the pocket, but only because we let it.
Here are a few things to consider when deciding what to do with a cash gift:
- If you were to buy something, what would you buy? Will these things be covered by the gift, or will there be additional, ongoing costs associated with the purchase? Go through the same process that you would if you were spending money that you had earned.
- If you decide not to buy anything now, what would the money do in the meantime? Will it add to a savings account, or will it go towards a debt?
- What would the giver want you to do with it? In the end, of course, the money was a gift, so the money is literally (and figuratively) out of the giver’s hands. But it also is wise to consider at least a little what the giver would think of what you bought (or didn’t buy). There’s a good chance that they’ll ask, or would want to know. Would you be comfortable telling them?
Any other things to consider? Leave them in the comments!
There’s no good time for a company to have a financial security breach, but it’s hard to find a worse time to have one than the start of the holiday shopping season. Target confirmed that as many as 40 million credit and debit card holders may have been affected for purchases made between November 27th and December 15th of this year.
Members of my family had made purchases at Target over the past few weeks, and have had their cards replaced. It’s an inconvenience to need to reset subscription payments and update credit card information in numerous places.
Though over the years I’ve found credit card issuers to have more of a hair trigger than they used to when they detected potential fraudulent activity on the card (which is also an inconvenience) I’ve also found them to be very accommodating when resolving issues with such activity. They send replacement cards promptly and generally take me at my word when I report the activity.
I credit part of this to the fact that we report things promptly, and know which transactions we did or did not make. We don’t always catch them immediately after they were made, but it’s not more than a couple of weeks afterwards.
Looking at every transaction is important. The main reason is that thieves aren’t going to charge a 55″ TV to a stolen card — if they’re smart, that is. They’ll charge a shirt, or some food, or some small purchase because it likely blends in with the rest of the purchases a lot better.
Stolen credit card information isn’t worth a whole lot on the black market: anywhere from $4 to $25 or $30. The credentials on these cards “pay for themselves” with a single modest purchase. It’s “better” to go slow and steady and not go for the brass ring.
Though the algorithms that credit card issuers use to catch fraudulent activity are pretty good, the only foolproof way is to verify every transaction on your statement against your records. Only you know what you bought. Otherwise, this low-level drain on your account could go on for a long time.
JC Penney’s will be luring customers into its stores with pants priced at under two bucks this holiday season. I do give them quite a bit of credit on that one. Among discounted Blu-Ray players, large screen TVs, and laptops, pants at better than thrift store prices is so … ordinary. But so practical! If I were to try for one (or a dozen) of these, I might have a shot. I wouldn’t have had to start lining up a week before Black Friday.
“We’re all hurting. Let’s make sure everyone else hurts more.”
I have no clue what each pair of Izod pants costs JC Penney’s. It could be that they’re not losing a whole lot of money on those items. But in general, loss leaders are called that for a reason: they sell for less than cost. The store is counting on the loss leader to result in offsetting, profitable sales.
The best line of the whole article above was from Brian Sozzi, CEO and chief equities strategist at Belus Capital Advisors: “In off-peak periods no one is going to J.C. Penney—despite the markdowns … Traffic should be up if you’re giving the store away.” So, yeah, people will gladly buy your dollar bills from you if you’re selling them for 75 cents apiece.
It’s a tactic, for sure. You can strengthen your relative position in a market by siphoning sales from your competitors. But this doesn’t imply that you can’t also be losing in the process. You could be going down, but it’s just that your competitors are going down faster.
Do we live on loss leaders now?
For serious bargain hunters, though, the loss leaders are the only products that get bought. And there are more choices than ever to catch wind of deals: Black Friday sites, Twitter, Facebook — and of course good old-fashioned TV. If you’re interested in catching deals that are almost guaranteed to be costing the retailer dearly, then head to Groupon or LivingSocial. Not only are the deals crazy to begin with, the merchants pay around half of that to the social deal site as a commission. (But, that’s on the merchant, so why should shoppers care?)
Well, on the whole, shoppers don’t care. Shopping is all about them, not about the store. In a way they’re a bit like the aliens out of Independence Day: heading from planet to planet, consuming whatever they can and moving on to the next one. Give them a great deal, and it’s “You’re the best!” Stop having sales, and it’s “Well, nice knowing you!”
Odds are, though, that retailers will catch up to our tricks and not let us walk away with the store. But they do have to work harder than they did twenty or even ten years ago.
The post Nice pants (price) – racing to the bottom with loss leaders appeared first on Mighty Bargain Hunter.
The least expensive route to taking care of your teeth is routine care. If you keep your teeth clean, floss regularly, and don’t let a lot of sugar (or any!) stay on them for any length of time, decay won’t get the chance to take hold of your teeth.
As I’ve written about before, I didn’t do this. At times in my life I didn’t take care of my teeth, and now I’m paying the price. I will for the rest of my life. The problems just get more expensive, and the solutions are never as good as the teeth that God gave you.
Dental work is a luxury
This past week I finally got a new crown to replace one I broke two and a half months ago. Getting the crown replaced was expensive, both in time and money:
- A visit to my primary dentist (a 40-minute drive one way) who referred me to an endodontist because the x-rays of the area were concerning.
- A visits to an endodontist (a 75-minute drive one way), to retreat the root canal on that tooth. (My dentist’s concerns were valid.) This involved checking the tooth and putting in a paste that got rid of the infection.
- A second visit to the endodontist to complete the retreatment. This appointment and the other ate up about 10 hours, nearly a tank of gas, and $600 after insurance.
- Another visit to my primary dentist to prepare the tooth again for another crown. Since the mill they had might not get this tooth right, they put a temporary crown on and sent the impressions away to another service that would make the crown.
- A third visit to my primary dentist — five appointments total! — to fit and install the crown. Another 6 hours between these two appointments, and another $300 after insurance.
And after that last appointment, my dentist said this:
“Enjoy your new crown!”
That was the first time I’ve had a dentist tell me to enjoy my dental work. But that got me thinking about all of this work I’ve had. Yes, it’s my fault for getting to this point, but getting the dental work to fix up my mistakes is a luxury. I’m sure that there are many people that do not have the means to get this kind of work done.
So, having sophisticated dental work done isn’t fun, quick, or cheap, but once it’s done, it’s something to be thankful for. Enjoy it.
(And, of course, do what you can to minimize future work.)
The post If you have expensive dental work, be sure to do this appeared first on Mighty Bargain Hunter.
One of the surest ways to lose money in the long run is to play the lottery every week. The more you play them, the more likely you are to meet the overall probability of the game you’re playing. The odds are never in your favor.
Regardless of where the money raised from the lottery actually goes, it boils down to a tax. A tax on people who don’t understand, or who willfully ignore, statistics.
One of my teachers in high school played a pick-three game. He had a number of theories he relied on to pick his numbers. Some of them were based on whether or not the previous few days had any repeating digits. He told me about this, and I said that what the number were yesterday has no bearing on what they are today. (Even as a high school student, I got this.)
Well, to this day I’m sure he thinks I’m full of baloney. The next day, that good ol’ boy won over $400 on the pick-three game. (“See? I TOLD YA!”)
Another guy (a laundromat attendant) was absolutely convinced that people who live in New York City have a lottery advantage over the rest of the state … because more people live there. I wish I were joking.
But if you play the lottery anyway, at least do it right
But, I will concede that people should be free to spend their money as they see fit, and if you’ve calculated that buying a $1 lottery ticket gives you at least $1 worth of entertainment, there would likely be nothing I could say that would convince you otherwise.
So, here’s a tip for maximizing your moonshot. I can’t offer any advice on picking winning numbers. But I will share some advice on how to pick numbers that, if they are the winning numbers, will be more likely to net you the entire jackpot.
Don’t choose numbers in any kind of simple pattern.
You should never bet on that kind of sequence … the odds of any sequence from 000000000 through 999999999 has an equal probability. And if the prize is the same for all winners, it’s fine. But, for shared prizes, you will find that you just beat 10 million to 1 odds only to split the pot with dozens of people. To be clear, the odds are the same, no argument. But people’s bets will not be 100% random. They will bet your number as well as a pattern of 2′s or other single digits. They will bet 1234567. I can’t comment whether pi’s digits are a common pattern, but the bottom line is to avoid obvious patterns for shared prizes.
Here are a few ways to do this:
- Use a random number generator. A real one. Don’t ask your buddies at work. Random.org is a good one.
- Use numbers from a variety of sources that are significant to you. The numbers can have significance to you. (Why not? They’re as likely to win as numbers that you hate.) Just make sure they don’t paint any pretty patterns on the card when you fill them in.
- And please … PLEASE! … don’t choose the same numbers as your friend for the same lottery. Sorry. You didn’t need me to say that.
Happy picking, if that’s your thing.
The post There actually IS a good way to pick lottery numbers appeared first on Mighty Bargain Hunter.
Happy Veterans Day! I thank all of the men and women who serve, or who have served, in the United States Armed Forces — especially our veterans. I deeply appreciate your service to our country.
Jeff Rose served in the Army National Guard, and is an Iraq combat veteran. He’s now a Certified Financial Planner™ and blogger. He talks about both in the context of personal finance through his book, Soldier of Finance, a book which I enjoyed thoroughly.
Jeff put a lot of his life and being into this book. He talks about the financial struggles his family had as he was growing up. He candidly speaks about the financial mistakes he made prior to joining the military, and the lessons they taught him. And of course the book is chock-full of well-thought-out examples from his time in the military, all the way from the entrance procedures and the medical examinations, to boot camp, to the war zone in the Middle East, to the flight home on a C-130.
I’ve seen Jeff’s YouTube videos, and that guy has a sense of humor! His book is in a different style. Because I’d seen his videos, I perhaps was predisposed to expecting more humor in the book, but given the subject matter, that was a silly thing for me to expect. Military life, especially with combat in the picture, is serious business. (I’ve never been in the military, but I work with current and retired military all the time.)
The financial lessons in the book are in principle no different than the lessons from any other good personal finance book. If someone comes out and says that you can retire a millionaire by charging your credit cards to the maximum, paying only the minimum balance, and constantly spending more than you earn, then you know immediately to put that book back on the shelf. Check your credit score, get an emergency fund, pay off your debt, start investing — no secrets of the state revealed here.
What differentiates personal finance books is the manner in which this basic material is presented. I mentioned before that his military examples were well-thought-out. They were simple, and easy to understand. Without giving away too much, here are a few. You’ll need the book for the full picture, though:
- Go through your credit report in the same way you’d clear a minefield.
- Why being a P/X Ranger is like Keeping Up with the Joneses.
- Debt is an enemy that must be destroyed. What kind of ammunition do you use?
- The importance of a financial Battle Buddy, and how they keep you away from financial Blue Falcons.
Also in military style, there are checklists, acronyms, and templates throughout. The checklists boil down to yes/no questions (“Go or No Go”). Can’t get much simpler than that, but the number of Gos vs. the number of No Gos that you give when you run down the checklist paints a pretty good picture of where you are in your financial life. There are also several mnenomics in the book that distill several topics down to only the most important parts. SIT and SALUTE are two of them. A number of templates related to goal planning are provided as well.
Even without military training, I got a lot out of Soldier of Finance and recommend it highly.
Thanks, Jeff, for writing this book. But more importantly: thank you for your service.
A Facebook friend snapped a picture from his local Walmart. The sign read “Days Until Christmas: 47.”
When I was young, I made an advent chain out of red and green construction paper. I hung it on one of the lights in my room, and tore off one link of the chain each day until Christmas. If I did my math correctly, that last link would be Christmas Day.
I’m pretty sure the earliest that I started this chain was Thanksgiving, though. We haven’t even hit Veterans’ Day and the stores are counting already. And although the picture was from Walmart, I’m positive that Walmart isn’t the only store that is trying to get its customers into the holiday shopping season as early as possible. Costco had some Christmas decorations for sale in late summer.
Pushing harder than ever
I’m continually amazed by the early line-ups for Black Friday. A quick search didn’t turn up anyone lining up now but the day after Thanksgiving is nearly three weeks away. Last year some customers started lining up in front of some stores over a week in advance.
Some retailers are pushing the envelope: Black Thursday. As in Thanksgiving Day. Best Buy is starting its “Black Friday” sale at 6 PM on Thanksgiving. Macy’s, Kohl’s, Toys ‘R’ Us, and others will be opening Thursday evening as well.
Perhaps retailers are seeing the crunch on people’s wallets, especially in light of steep increases that are likely in health insurance. The holidays come before that. Better push really hard while people still actually have a bit of disposable income.
There are always bargains
Bargains don’t suddenly appear Thanksgiving and disappear after the holidays. And I’m sure that if I tell myself that enough, eventually it will sink in! It makes good sense on paper, but everywhere we go, there’s always a reminder that there are only X shopping days until Christmas.
Bargains are always a matter of context. We’re approaching the holiday shopping season. Retailers, especially now, want you to believe that everything is a bargain. Everything isn’t a bargain. Things are bargains only when you see them as such, in your best judgment. Don’t let the person selling you something convince you that it’s a bargain. Of course it’s a bargain if they’re selling it to you!
Some questions that might help with context:
- Can I afford this Pickle-Me Lemo?
- Will I be able to get the Pickle-Me Lemo without carrying a balance on my card?
- Will it take me fighting in line for 4 hours to get a chance at a Pickle-Me Lemo?
- Will my child be shunned for life if s/he doesn’t get a Pickle-Me Lemo?
- Wait — the Pickle-Me Lemo is kind of a stupid, brain-dead toy, isn’t it?
- Are the holidays even about the Pickle-Me Lemo, or are they about something a lot bigger and more important than the gifts?
It’s past midnight where I am. Now there are only 46 days left until Christmas. But who’s counting?