Resist Convenience

I just read an article on convenience.  Basically, convenience is a super powerful force that influences our choices.  Often we will choose something convenient over efficient or even better.

Money Examples

  • Let’s start with the hackneyed example.  It is cheaper to bring your lunch or brew your own coffee than to buy them.  My school in Lisbon had a Nespresso machine which was convenient, but costs 80 cents a cup.  Personally, I don’t drink coffee, I try to stick to water.
  • Fixing things is hard, or at least we assume it is.  Instead of trying to solve a problem with the toilet we may call the plumber.  Outsourcing work can be great cause then you don’t have to deal with the hassle, but if you fix things you will gain skills and save money.  There are certainly things I outsource, such as oil changes, but I wash my own car.
  • A car is one of the ultimate conveniences.  Driving costs much more than you’d think.  Walking and biking do require effort, but it’s better for your body and will save you money.
  • Buying a book for your Kindle is so easy, literally one click.  However, with a little patience you could get it for free.

Environmental Examples

  • Convenience drives us to use disposable everything.  I recently learned that packaging consumes as much energy as heating.  The average American creates 4.3 pounds of trash a day!
  • Driving means we need big roads, drive-thru banks, and creates lots of emissions.  I hope that the future provides more efficient forms of transportation.  I am looking at Hyperloop and autonomous vehicles.
  • Clicking print is so easy, but so often we could print two-sided with a few extra clicks.

I’m not recycling guru and have sure created a lot of landfill in my time.  However with a little preparation it is pretty effortless.

Conclusion

This article wasn’t very long, but to sum it up in an exclamation: Think before you act!

This entry was posted in Living.

How I Saved $170,000 on an MBA and Increased My Salary by 50%

An MBA is a really expensive bet that more than a half million people place each year. Some people go with the top schools to increase their chances of a big payday. That strategy comes at a huge cost and as one who blogs about being frugal I wasn’t willing to take out a huge loan to complete a degree whose value is under ever-increasing scrutiny. What I was willing to do look for a school that offered a good education at a great value. This search led me abroad to Lisbon and even MIT.

I chose to attend The Lisbon MBA, ranked 40th when I applied and currently 80th.  The full-time MBA is a one-year program that includes an one-month expenses-paid trip to study at MIT. The month at MIT was incredible and I’m jealous of the students who get to spend two years there, but everything comes at a cost. There are many positive things I could say about my program, but like gambling it is the experience and outcome that really matter. I will simply say it has been a great experience doing the program with fewer than forty classmates from all over the world while living in one of Europe’s hottest tourist destinations.

Continue reading →

A Long Trip Report

We got back from a 25-day vacation three weeks ago.  We’ve already lived in three places since, so sorry for the delay.  It was great, but it can get tiring living out of a suitcase.  It was quite the luxurious adventure, but it didn’t cost a fortune, because the flights were on points.

Part 1: Japan

We took American Airlines Business Class from Dallas to Tokyo.  It cost 140,000 AA miles and $50 in fees for two.  It was nice to use AA miles because we still have a bunch of them.  I didn’t have high expectations for an American airline, but it was really good, in fact, one of the best on the trip.

Tokyo can be an expensive place if you stay in hotels.  For our last two trips to Japan we used a Marriott 7-night package and SPG Nights & Flights for 5-nights.  However, earlier last year I heard of Roam and wanted to try it out.  With the referral it was $600 for 7-nights.  They describe it as co-living, but it is similar to a apartment with a share space to cook and hang out.  It was nice, but it wasn’t quite as community as it portrays itself to be.  Admittedly it is not an easy thing to do and we weren’t hanging out there all the time.

Continue reading →

Generosity

The new tax plan keeps charitable donations as tax deductible.  As the end of the year went by many causes were asking for funds because donations are tax deductible.  As a frugal wizard, where does generosity and giving fit into your life?  You may think that there is no place for giving as that will delay your early retirement and you are on the journey for yourself.  I can understand if you don’t want to give; as for me, I see many worthy causes worth giving to.  As one who was lucky to be born in America I have had a giant leg up in the rat race and think that helping others less fortunate is something I would like to do.  Giving money will certainly delay your retirement, but life is more than just money.

Tax break

First, let me say that I hate it when people say, ‘Of course they are donating money, they get a tax write off.’  Do these people think that rich people get to donate free money or something?  So what does it mean that charitable donations are tax deductible or that they are written off?  Well, it means that if you donate $1000 you can reduce your taxable income by $1000.  Say you made $60,000, you’d be in the 25% tax bracket, so you could save $1000 * .25 = $250 on taxes right?  Well, only if you itemize deductions.  For 2017, you would only do so if your deduction were more than the standard one of $6,350.  Unless you had a lot of other deductions, you probably wouldn’t make it over this limit, so your donation wouldn’t be useful to you.  If you have a mortgage or lots of donations, then it is more likely that donations will help reduce your taxes.  For rich people this can be helpful because the poorer person may have been able to give $1000 for $750 worth of take home pay whereas the rich person get to give $1000 for $606 worth of take home pay.  However, in both cases there is no free money, they both are donating their hard earned money.

There are ways to get an even better deal by donating appreciated stock so the person would not need to pay capital gains on it.  You can also get more advanced with a donor advised fund.

Continue reading →

IRA Rollover and Conversion

I didn’t stop blogging, I’m just on a four-week vacation around the East.  Also, happy 2018 and 2-year blogversary.  My wife an I have had income that put us in the 15% or 25% tax bracket for the past years.  After the MBA our combined income should put us in the 22% bracket for the near future.  Since this year the only income we earned was from my summer internship, it meant we would have to pay nothing after the standard deduction and personal exemptions.  However, that left room in low tax brackets.  If we could find a way to earn more income then it would only be taxed at 10%, which is a pretty good deal.  However, there weren’t any easy ways I could think of to earn income while abroad so we went another route.

IRA Rollover

I had a 401(k) from my old employer which I should have been investing aggressively, but I’m dumb.  I had placed it in very conservative investments yielding 1-2% expecting a stock market correction.  Instead, the market has gone up I decided to rollover my 401(k) into an IRA to give myself more options.  However, it was also necessary in order to do an…

Continue reading →

Points to the Rescue

Yesterday was quite an adventure, but everything ended well.  The story begins in Madeira.  After arriving to the airport at 8AM for our 9:20AM flight we looked at the departure board and noticed our flight to Lisbon was delayed until 1:45PM.  Then my wife checked her email and found that her flight from Lisbon to London got canceled.  The reason she was going to London was to catch a flight to Los Angeles.

The problem

If your flight is delayed and you miss your connection then you get rebooked on a later one.  However, sometimes it is cheaper to buy separate tickets, but in this case since the reservations aren’t connected you will have a problem if you miss your flight.  In this case the problem was she was on EasyJet for Funchal to Lisbon, British Airways to London, and LOT to Los Angeles.  So there were two points where a problem could occur.  To mitigate the chances we booked with at least 7 hour layovers in Lisbon and London.  But the delay from EasyJet coupled with a cancellation was threatening to derail the plan.

Continue reading →

Timeshares

This week’s article is written by a guest, Van from A Word About Wealth, an entertaining financial podcast.  They go over a variety of topics and it is a fun listen, so check them out.  Below is Van shares about his experience with timeshares…

 

I’ve made two major financial mistakes in my life. The first was purchasing a
universal life insurance (which I’ve since cancelled) and the other was purchasing a
timeshare (which I still regrettably own today). Some may see their timeshares as a
blessing, but I do not share that sentiment. Sure, the idea of traveling the world and
visiting new sites will always be appealing. But there are much better ways to go on
your dream vacation (as Mr. Ten Bucks has shown) than to own a timeshare.

What exactly are timeshares?

Simply put, timeshares are a way for you to own a piece of vacation property.
Instead forking out massive funds to buy a vacation home outright, you have the
option to purchase a “share” of the property for a specific amount of “time” within a
year, hence the term “timeshare”. The timeshares are typically held in resort
properties that are located all over the world.
There are several different flavors of timeshares and these are the 3 most common
ones.

  • Fixed – You can purchase a fixed week(s) that will only be reserved for
    you. This exact time period is locked for you every single year, so you
    always know that the timeshare is always available for you.
  • Floating – Instead of being limited to the same week every single year,
    you can make the reservations anytime. The only problem is that you run
    the risk of unavailability especially during peak holiday season.
  • Points – The points plan allows buyers to use points as a currency to
    reserve your vacation needs. With the previous 2 plans, if you don’t use
    your week, you lose it. However, with the points plan, many timeshare
    contracts allow you to roll over unused points, thereby minimizing any
    loss time with the timeshare.

Continue reading →

Cryptocurrencies

Everyone is going wild as Bitcoin (BTC) approaches $10,000.  Some people are calling it a fraud, others a bubble, and tons are jumping in to grab some.  So is this an opportunity of a lifetime or a waste of money?  Only time will tell, but let’s be as informed as possible.

My experience

When I first heard of BTC it was the beginning 2013 and I thought I should get some, it was around $50 and by the time I was able to buy some it was at $100.  The process was tedious involving going to the store for money orders and sending through some processors I’d never heard of, but it worked out.  It was still the wild west and new coins were being made left and right like Dogecoin and Feathercoin.  I noticed that there were price differences among exchanges and wanted to set up an arbitrage business, but it was so difficult to transfer cash between exchanges and transferring BTC took 10 minutes which was enough for the volatile currency to change in the interim.

Continue reading →

This entry was posted in Invest.

Let’s Talk Retirement

It seems like almost every week there is an article saying how American’s don’t have enough for retirement.  Here is a nice graph from the Economic Policy Institute.  It looks like people at the top may be alright with $163,000, but really that is simply less than $1,000 a month over twenty years.  Coupled with Social Security you’re not going to have the same quality of life you had previously, unless you were making around $24,000 a year.  Yet, the news gets worse.  The first graph is just the average which is driven up by people who have saved a ton.  The typical person in that category has only $17,000!  I think we all know that’s not going to make for a lovely retirement.

Continue reading →

Experiences on Points

Previously I said that our cash expenses on vacations are primarily food and the occasional experience because you can’t use points for those.  Well I figured out you sure can!  I was hoping this article would be one where I could say look what I won, but unfortunately I was outbid.

Introduction to Auctions

Instead of using your hotel points or airline miles for hotels and airlines, it is possible to get something unique.  Some items are fancy meals while others are trips around the world or tickets for a sports match.  You can even meet Mariah Carey.  This can work out great because you may have a pile of points and would prefer an experience to a hotel stay.  Don’t get carried away, it can be tough to win, but if you do there can be some great value.  Let’s look at some examples.

My case

First, there was a trip for two to Japan with 7 nights at a 5-star hotel and a 4-day guided tour with business class flights.  The price for the tour alone was $4,000 per person.  All together I estimated the trip was around $12,000.  It ended up going for 651,000 United miles.  Close to 2 cents a point is not a bad use of miles.

Next, there was a trip to Telluride that included two pairs of custom skis.  The skis were worth $3,500 and the lift tickets another $1,000.  Add in hotel, flights, and car and this package was around $8,000.  That sold a bit higher than all the miles we have at 400,000 United miles.  Again, they are getting around 2 cents a point.  That’s not to say there aren’t even better deals.

Continue reading →

Negotiation Class

I’m back in school and I’m taking a negotiation class because who doesn’t want to be a better negotiator?  I sure do because then I can get better deals on everything and hopefully find creative value-creating solutions.

Getting to No

One of our assignments is to make requests and get rejected ten times.  I think this is a great idea!  It has made me try more extreme asks.  I challenge you to go ask for things because only good things can happen.  I asked my kitesurf instructor to make a package of lessons and got €5/hour discount.  Same thing happened for my Portuguese lessons.  If they say yes, then maybe next time you should try a larger discount.

Continue reading →

This entry was posted in Earn.

Budget Airlines

Europe is full of budget airlines and yet I’ve managed to avoid them, until this week.  I bought a roundtrip on TAP, but I decided it would be easier to fly back earlier, so I bought a ticket on EasyJet.  Still no plans to use RyanAir though.

Decline of service

I find it funny how much people complain about flying.  I see it as more of situation of you get what you pay for.  If you would like to pay $19 for a two hour flight, then you may have to be cramped, forego a check in bag, and go without a snack.  If you want better service you are free to fly other airlines or pay for another class.  Airlines have simply been taking our actions of getting the cheapest fares and acting accordingly to try to reduce their costs.  Simply, you get what you pay for, but there are deals and there are always airline miles.

Continue reading →