£IVING £ARGE ON £E$$

Merry Christmas

2011-12-25T00:37:00.001-08:00

Merry Christmas everyone!

Merry Christmas

2010-12-25T14:52:00.000-08:00

Merry Christmas everyone!

Mutual Fund Experiment

2010-05-25T13:25:00.000-07:00

Based on my research I put together a formula to rank mutual funds based on long-term (5+ years) performance. I excluded mutual funds from my list that require initial investments of more than $5,000. These are my own recommendations, I do not work for any of these funds or any of the companies in their holdings. I have no influence over their gain or loss in value. I'm watching the 1-year performance of these, and other mutual funds to tweak and improve my formula. Here is my ideal $10K investment portfolio if I had invested yesterday:

EKWBX - 14.628 @ $68.36
USAGX - 85.494 @ $35.09
FKRCX - 25.284 @ $39.55
TGLDX - 16.358 @ $61.13
OPGSX - 27.188 @ $36.78
EKWCX - 14.742 @ $67.83
MDLTX - 18.385 @ $54.39
FAGPX - 26.532 @ $37.69

Total value as of May 24, 2010 - $9999.77

I will keep an eye on this and make periodic reports.

Ouch

2010-05-06T11:46:00.000-07:00

The Dow is down almost 800 points this morning on news that Greek government employees are violently rioting at the prospect of taking pay cuts in order to keep the country from going bankrupt.

National Tax Freedom Day

2010-04-08T03:34:00.000-07:00

Happy Tax Freedom Day to everyone. According to the Tax Foundation the average American pays 26.89% of their income in taxes. This naturally means that 26.89% of the year is spent earning money for the government rather than yourself. At 3:34AM this morning 26.89% of the year has passed, so assuming the government took all of your taxes at the beginning of the year, today would be the day that you are able to start keeping your wages for yourself. Those living in Alaska get to celebrate Tax Freedom Day early, as the lower state taxes allow them to celebrate on March 26. Connecticut residents have higher taxes and therefore cannot celebrate until April 27. See information for all 50 states at the TaxFoundation.org site.

Is the Convenience Really Worth It?

2010-03-19T12:56:00.000-07:00

Trent, writing for The Simple Dollar, calculated the price premiums of pre-cut produce at the grocery store compared to buying whole items and cutting them yourself. The conclusion? Unless you earn over $50 per hour, it probably is not worth the extra cost.

Read the full article here.

Bargain Shopping

2010-03-17T17:07:00.000-07:00

A good way to make your money stretch farther is to buy things at significant discounts. Spending less money on something that you were already planning to buy is always a great option. However, some people fall into the trap of buying things they did not plan on buying simply because they were a great deal. When you do this, you are not really saving money.
A great site that lists many short lasting deals is SlickDeals.net. Members are constantly uploading new deals that they have located online and posted them for the rest of us. If you keep your eyes open you can get some great discounts on things you already were shopping for, but make sure to keep that impulse buying in check.

www.slickdeals.net

Many People Don't Want to Retire

2010-03-10T13:59:00.000-08:00

Dave Ramsey mentioned yesterday that a significant portion of Americans have no intention to retire. Twenty-seven percent of Americans have less than $1,000 in savings toward retirement! And 43% of Americans have less than $10,000 saved. A typical social security ckeck barely covers rent in a half-decent apartment these days, so that isn't going to go very far.

I'm a pretty cheap person, but I don't think $10,000 will last me very long when I retire, especially when inflation is factored into the equation. You can read a full article on the topic at CNN Money here.

Book Cooking

2010-03-09T14:12:00.000-08:00

You've heard of corporations cooking books to make their financial position look better to analysts and stockholders, but countries are equally guilty of such deeds. Jim Jubak explains in his article on MSN Money. Click here to read the full article.

Got Gold?

2010-03-03T10:41:00.000-08:00

I just found a random ad from a place called Uncommon Wisdom: Extraordinary Insights For Growing Your Wealth (I'm not endorsing them at all, just naming the source of this information). Basically this is a place wanting me to buy gold. But they don’t want me to buy just any gold, they want me to buy Austrian 100 Corona and Hungarian 100 Korona coins. Having never heard of these particular coins a quick internet search revealed that Corona/Korona were gold coins minted by the Austro-Hungarian empire staring in the late 1800s, composing of 90% gold by mass.

The reason to buy these particular coins, according to this ad, is because they are lesser known than more traditional gold coins such as American Eagles, or Maple Leafs, or Pandas and therefore do not command the same price premiums above spot as other bullion coins. While this may be true, it is also the biggest drawback. If you do intend to buy gold as an investment or bartering tool in the event the world goes to pot, you could theoretically purchase more grams of gold in the form of Corona/Korona coins for the same amount of money as Eagles, etc. However, because these coins are lesser known you will never be able to sell them for the same price as an equivalent gold mass of the others. And if the world does indeed go to pot, it would be unlikely that you’ll be able to barter with 100+ year-old gold coins that no one recognizes.

If someone were to buy gold for the sake of owning gold in the form of coins, something like this may be the way to go. However, know that any savings you would get by buying lesser known coins will also result in less profits whenever you decide to sell said coins. But most importantly, I would recommend NEVER buying any sort of investment (or anything else for that matter) from unsolicited ads showing up in your mailbox, either physical or electronic. Talk to a local coin dealer for more information about coins if you intend to buy coins, always shop around for the best prices, and make sure you are dealing with someone reputable.

Being Patient Pays

2010-02-24T06:54:00.000-08:00

I found this video on YouTube and found that it makes some good points about buying cars. There is very little financial sense in purchasing a brand new vehicle. A better idea would be to purchase a slightly used vehicle (around a year old, with under 15K miles) for 20-25% less than the original price. This video below has a similar idea.

The part that is glaring to me is the average car payment of $464, which is slightly more than I pay for rent each month. The video also makes some assumptions, such as getting a 12% return on your money that you've invested in mutual funds. Yes, statistically the stock market has averaged around 12% in the long term, but saving for 10 months, 20 months, or even a few years hardly seems very long term to me so you might be looking at lower returns on your money in the short term. Other than that, it's a solid idea that would do wonders for most long-term budgets.

Cheaper Air Travel

2009-12-13T22:41:00.000-08:00

Personal Financial Advice has a guide on how to get bumped from an overbooked flight. With a little bit of preplanning you can fly for free virtually anywhere. With Christmas travel this time of year, this could be useful to score some free plane tickets.
Read the full article here. The basic summary is to try to get tickets that are overbooked and let the ticketing agents know early that you will volunteer to give up your seat in exchange for a seat on the next flight, and a travel voucher for another flight.

Happy Thanksgiving

2009-11-26T01:00:00.000-08:00

Title sums it all up.

McDonald's Sandwiches

2009-09-26T12:26:00.000-07:00

McDonald’s, my favorite source of fast-food based breakfasts, currently has their Sausage McMuffin on sale for $1. This would be very good for me, except for one problem, I really enjoy the Sausage McMuffin with Egg sandwich much more than its eggless cousin. The Sausage McMuffin with Egg sandwich is still priced at $2.49 (or $2.59 at some locations around here), that’s $1.49 simply for an egg fried into the shape of a patty. That’s roughly half the price of a dozen free-range, organic, large, AA grade eggs from Amazon Fresh.

Being my usual, frugal self I asked how much it cost for the egg patty by itself. Those are 65¢. So I ordered a few of the $1 Sausage McMuffins and an equal number of egg patties. I saved 84¢, plus tax, per sandwich just by adding the egg myself.

McDonald’s would be making 84¢ additional profit by paying an employee to put that egg on my sandwich. Assuming a very slow employee takes 15 seconds to get an egg from the warming box and place it on a sandwich, and that employee has no other job requirements during the breakfast rush, that egg placer would be generating $201.60 in value per hour, minus the cost of the eggs and the local minimum wage as their pay.

Me, with experience working in very high-volume, fast-food production could probably do that egg placement in 3-4 seconds, generating 4-5x the value per hour. If they were to offer me $100 per hour I could probably bring myself to inserting myself in the machine known as the McDonald’s kitchen. Sadly, I do not believe there are any fast-food restaurants in this area that receive the volume of business required to keep me completely busy during the breakfast hours.

This is not an endorsement of McDonald’s as either a healthy meal option, nor as a good value for your money. Their breakfast food merely tastes good to me, and therefore I am writing about my experience.

Who Profits When You Buy Gas?

2009-09-13T13:04:00.000-07:00

How much money does the oil company make per gallon of gas sold? Let’s find out.

For this calculation I am using ExxonMobil, since I have their 2008 annual report sitting on my desktop at the moment. In 2008, ExxonMobil had total revenues of $477.36 billion. Of that, they paid $36.53 billion in taxes (≈7.65%) and had net profits of $45.22 billion (≈9.47% margin). Using these figures, we’ll calculate the profit on the average gallon of gas sold in Washington State assuming the sale cost is $2.999 per gallon.

Assuming we buy one gallon of gas for $2.999 at an ExxonMobil gas station:

18.4¢ is paid to the Federal government in fuel taxes
37.5¢ is paid to the State of Washington in fuel taxes
I do not believe we pay sales tax on top of the fuel tax (I could be wrong), and I am assuming no additional, local taxes are added to the bill.
After these taxes are subtracted from the original $2.999 sale, ExxonMobil keeps $2.44 per gallon. They then pay an average of $0.187 in state and federal taxes on that revenue, the 7.65% calculated above. ExxonMobil will spend $2.253 per gallon in operating expenses; drilling or buying crude oil, refining the oil into gasoline, transporting to the gas station, operating the gas station, etc. That leaves the 9.47% margin calculated above, or $0.231 per gallon.

When the governments make more than three times as much per gallon of gas as the oil company does, I think we have a problem. The government isn’t doing the work, yet they are receiving the most financial benefit. I see a problem that must be corrected. And the inmates that are currently running the asylum think the "evil" oil companies aren't paying their fair share? What is "their fair share"?

More Cheap Eats

2009-09-10T00:39:00.000-07:00

Although getting good prices on groceries is always rewarding, it doesn't beat getting fresh produce from your own garden. Whether you have a large garden in your yard for growing, or grow plants in pots by the window, anyone can garden. Fresh veggies from your own garden also contain no synthetic fertilizers or pesticide residues, unless of course, you added them yourself.

A quick guide to maximize your garden harvest can be found here.

Cheap Grocery Shopping

2009-08-31T13:08:00.000-07:00

Kathy Spencer, a wife and mother of four, tells how she feeds her family for under $100 per month.

Read articles about it here, here, and here.

Viking Arthur on the Economy

2009-06-15T14:37:00.000-07:00

Arthur, the author of Arthur's Hall of Viking Manliness provides a good overview of what happened to the economy and why. He places blame where it belongs, virtually everyone.

Read the full article here...

Government Motors

2009-06-04T01:26:00.000-07:00

I sold all of my stock in Government Motors today. I had bought a few hundred shares very cheaply a few weeks ago on the gamble that somehow the government wouldn’t %@#* things up. I obviously had too much faith in those people. On a bright note, TiVo stock did well today on news that they won their lawsuit against EchoStar. So it was not a completely dark day where my portfolio is concerned.

Tomorrow may be darker as we learn more about Obama's outright theft of a multi-billion dollar, once great company. Now we get to watch Ford and Toyota fight it out to become that largest car manufacturer in the US.

Taxes 2008

2009-04-15T22:24:00.000-07:00

According to the Seattle Times, people shouldn’t protest their taxes since the vast majority of people are paying less taxes now than in the last 30 years. The paper claims that the vast majority of people pay an average of 9% of their income in federal taxes. I claim BS.

Looking at my figures for the year, working part time while attending school full time earned me $10,577 from all income sources. Of that $10.6K I paid $876 in federal withholdings, $631 in socialist security, $251 in fuel taxes, $147 in Medicare taxes, $126 L&I taxes, $94 in sales tax, and $81 in vehicle registration taxes. Add all of those up and I paid 20.86% of my 2008 income in taxes. This is my second largest expense, the largest being school.

I misplaced many of my receipts from the first part of the year, so I know that the sales tax figure I'm using is actually lower than it should be. The federal government claims that only the wealthy will be getting their taxes increased. I plan to be one of those wealthy people in a few years and I don’t see why I should be penalized for being more productive to society than I am today.

The government is penalizing the most productive part of our economy in order to subsidize the least productive part. The wealthiest individuals and the most profitable businesses pay trillions in taxes, while the government is giving that money away to people who make very little money and to businesses that have been run into the ground as a result of poor management. And some people truly wonder why tens of thousands of people are out protesting today?

Wise Politician?

2009-03-29T12:42:00.000-07:00

Tax Deduction

2009-03-26T15:36:00.000-07:00

As many people start thinking about starting their income taxes, here's a little story I found:

Here's the kind of accountant you've got to admire. Last year he deducted eighty cartons of cigarettes from my income tax. Called it loss by fire!

Quote from Jacob Braude's Complete Speaker's & Toastmaster's Library: Business and Professional Pointmakers. Published in 1965.

Please consult a tax attorney before attempting such a write-off. Also, consuming cigarettes in any quantity is unhealthy, both physically and financially.

Perspective

2009-03-25T12:49:00.000-07:00

Image from XKCD.

How to live comfortably on $1,000 per month

2008-06-21T16:34:00.000-07:00

The secret? Find roommates, people have been doing this for generations. It isn’t limited merely to those moving out for the first time or in college either. The pure economics of sharing rent and other major expenses allows living costs to be cut significantly. If you can manage to share food as well you can save more money by buying more bulk items from random wholesale places instead of normal grocery stores.
Read the full article on cheaper living here.

Affordable Healthcare in Rhode Island

2008-01-30T21:53:00.000-08:00

A group of Rhode Island doctors have decided to combat the rising costs of primary healthcare with their HealthAccessRI plan. HealthAccessRI is a monthly subscription service to a primary care physician for “‘less than the cost of a cell phone, less than the cost of cable TV, less than the cost of high-speed Internet,’” according to founding doctor Michael Fine. Fine and a group of likeminded doctors have setup a system that allows for affordable doctor visits without insurance or government involvement.

HealthAccessRI solely covers access to primary care physicians and does not cover other things such as hospital stays, x-rays, or other more serious procedures. Arguing that these are the things that should be covered by the insurance companies Dr. James M. Schwartz contends:

Today’s health-care financing perverts the original concept of insurance, which was supposed to pay for catastrophes, he says. “No auto insurance sells you a plan that covers oil changes and tune-ups,” he says. The current system has also harmed primary care, Schwartz argues, by paying doctors per visit, making it financially difficult to give patients the attention they need. HealthAccessRI gives doctors a steady, predictable income to cover predictable costs.

I think that HealthAccessRI is an interesting experiment that requires further investigation. I would love to have the option to pay for such a service while holding a significantly cheaper health insurance policy which would be reserved primarily for catastrophes and things other than primary care.
You can read the full article here.
Also posted on Ethereal Madness.
& Marketing College: Essential Marketing Knowledge

Americans Can’t Pick Fruit?

2007-10-10T22:05:00.001-07:00

Or at least that’s what this article claims. Farmers in southern California might be forced to let their crops rot rather than have them picked. Why? Because tighter border security is shrinking the pool of sub-minimum wage laborers. And since there aren’t as many laborers from Mexico coming to pick fruit the fruit won’t get picked. It may be time to invest some serious time and money into research for mechanical or robotic fruit pickers.

I still don’t understand the problem the farmers are having. Is there truly no one in southern California who is willing to pick fruit? Or is no one there willing to pick fruit for a few dollars per hour? I’d have no problem picking fruit all day, but I’d expect at least $12 an hour to do it. Really I think the farmers are just whining about nothing right now. It's probably not the difference of paying someone $50 to pick a few a thousand dollars worth of fruit a day or having it rot; the difference is paying someone $50 or $150 to pick the fruit. If that is truly not the case, I’m willing to fly down Thursday nights and fly home Sunday nights to anyone hiring and willing to buy plane tickets. If there really is such a crisis, then paying for
people like me to work for you is still more profitable than letting your crops rot.

Alternative Fuels

2007-07-28T21:22:00.001-07:00

If you go to extreme measures to use less gas in your vehicle you will probably get a visit from people who are very unhappy with you. They will be very displeased that their employer isn’t making money off of your driving and will use legal power to force you to pay them. They get this legal power because of the money and influence their organizations possess. Not buying gas decreases the revenues of these organizations and they aren’t pleased from this. Which company do these people represent? Exxon Mobile? Shell? British Petroleum? Nope, think bigger.

Try the government.

Here’s a story about what happens when you try to fuel your car yourself.

And the moral of the story is: If you try to do something for your wallet the environment that isn’t forced on you by the government, they will bite you.

Gas Saving Tips

2007-04-23T23:29:00.000-07:00

With gas in Seattle above $3 a gallon people are more concerned with fuel economy. The easiest way to improve your car’s gas mileage is to replace it. The Volkswagen Lupo TDI has one of the best MPG ratings in the world (over 80mpg), yet is not a hybrid, nor is sold in the US. However, replacing your car solely to save a few cents per mile is neither practical nor economical.

Many sites give you tips on maximizing your gas mileage in your existing vehicles that have been around for many years. Things such as proper engine maintenance and tire pressure are a given and are important in maintaining maximum mileage. Here’s a few that aren’t normally listed (some for good reason).

1) Kill your engine. Your engine is burning gas whenever it’s running. There are times when you don’t actually need your engine. When you’re waiting at a long red light, turn the engine off. This is not recommended if your battery or starter motor are bad as you could get stuck in the middle of the road.

2) Extreme drafting. One of the biggest factors that reduce your gas mileage at high speeds is air resistance. You can eliminate much of this air resistance by tailgating larger vehicles such as semi trucks. As ninjawords defines tailgating as driving “dangerously close behind another vehicle,” do so at your own risk.

3.) Shed extra weight. I’m not talking about emptying the random junk out of your trunk or the garbage out of your back seat, although that can help too; I’m talking about your waistline. That extra Big Mac may add a few cents you your gas bill. If you weigh less, your car weighs less on the road which means less gas is burned. You might also end up a little healthier and you’ll save a few bucks a year on your gas bill too.

Thus concludes my first addition to this blog. Enjoy.

Loss Leaders

2007-04-16T22:13:00.000-07:00

One of the best deals you can find from any store is their loss leader items. These are the items that they generally advertise below cost in order to get customers like you through their doors. The hope is that you will then buy other items, offsetting their losses and increasing the stores’ overall sales dollars.

You can use this to your advantage by buying only the loss leader items. These are usually marked as “limit x per customer” so they are easy to spot. If you need the item(s) on sale you’re in luck. If you really don’t need those items, you’re not really saving yourself any money by buying them, even if they are below cost.

Textbooks

2007-04-04T23:02:00.000-07:00

One of the biggest shams in the educational world is the cost of college textbooks. Professors expect students to pay around $100 for a book that they probably have no interest in reading and most likely won’t use a few months after it was purchased. Text books are expensive because they are generally large, hardcover books that have many full color pages in them. On top of the expense of printing a single book these books generally don’t sell many copies so the huge publication cost is spread across a relatively small number of books.

The real fraud in this business is the publication of new editions every year or every few years. The differences between editions can be as insignificant as a new cover. Often the introduction is the only change. Sometimes the only differences are the homework questions found at the end of the chapters.

I used the 7th edition of an engineering book almost 5 years ago when I took a drafting class. Last year I took the next class in the series which required the 9th edition of the same book. I checked with the teacher during the first week of the class to compare the two books. They were virtually identical. The only changes were the cover, the introduction, and the side-bar examples scattered throughout the chapters. Of the hundreds of diagrams and problems found throughout the book, every single one matched between the two books. Thus I saved $80 by recycling my old book.

On the other end of that scale was my Calculus book from three years ago. I needed a particular edition for my 1st quarter calculus class. For the following quarter I needed the next edition which had come out during the fall. I could not reuse the book because the problems were different. Honestly, how much of the theories behind calculus changed in my lifetime? Never mind three months!

Most of my teachers have encouraged the students to buy used books from the campus bookstore to save money. I have a better solution: check the library first. Many of the books I’ve needed for classes were available at the public library. I could put them on reserve so that I would be able to check out the next available copy. I can also talk a few friends of mine to also put that book on reserve so that when it is due, I turn it in and they then check it out for me. This allows for the use of a textbook during the entire quarter at no cost.

The second option is to buy the book used, but not from the campus bookstore. The few books that I cannot get from the library are always available from Amazon, usually for less than the bookstore. This quarter I needed three textbooks, two I was able to check out from the library, and I bought the third off Amazon for $18 with shipping. A friend needed an Anthropology book; it was $106 + tax at the bookstore new or $80 + tax used; Amazon had the book new for $106 with free shipping and no sales tax, or used for $48 + $4 shipping with no sales tax either. Buying online can save you almost half on your textbook purchases.

Welcome

2007-04-02T13:04:00.000-07:00

Welcome to our new blog “Living Large on Le$$.” This blog is dedicated to saving time and money without compromising your standard of living; containing original tips and articles, as well as links and summaries of other tips and articles published elsewhere. Stay tuned for regular content.