This weekend I took a group of 24 people to New York City. I charged a commission and got to go for free, NOT. It would have been fair, but I paid along with all my classmates, so our incentives for a cheap trip were aligned. So of course we headed to one of the most expensive cities, but with my skills it wasn’t going to cost a fortune.
We were going for the budget trip, so the cheapest ride was the bus. The ticket to get from Boston to NYC was $35, but the return trip only cost $15. By not buying a roundtrip ticket we were able to save $20. Alternatives were the train or plane, but that probably would have ended up saving an hour or two total.
We stayed at a hostel in Chinatown. The best rooms were the ones with 4 bunks and a bathroom, but I booked all of those so some people had to stay in double beds. The double beds were only $45 a person per night.
I only stayed with the group for one night because one night we used a Ritz-Carlton free night certificate. This was one of three that came as a sign up bonus for the Ritz credit card. The hotel was nice, but I wouldn’t spend $350 for a hotel.
Right now I’m studying at MIT which is a really great experience. When we arrived my program provided us with $750 in TechCash. This currency can be used for food at MIT, at the student store, and a few other places. For one month, a $750 allowance is quite a lot. I felt quite rich and was eating many $10 prepackaged sushi boxes. I was also able to use the money at a coop grocery store. I went kind of crazy there buying all sorts of groceries and totaled around $100. I bought packages of nuts, figs, and even Naked Juice (with a coupon). This put my first week total spend at $150, but at this rate I would still have $150 left over at the end, so I purchased a sweatshirt.
After a week, someone figured out that you can buy gift cards at the student store! I had seen the rack of gift cards at the student store, but my experience in gift cards had taught me that stores don’t accept gift cards to purchase gift cards. However, this person went for it and had success. Furthermore, it was possible to buy a Visa gift card. As soon as I heard this was possible I went to the student store and bought a $500 gift card and paid $504.95 using my TechCash. Then an interesting thing happened. Even though I was better off (having a Visa to spend anywhere) I didn’t feel as rich. I no longer wanted to spend on luxuries like Turkish figs.
I just bought my wife a pair of Nike Cortez shoes for $80! Of course the story doesn’t end there, but as you can imagine I’m not one to shell out a bunch of money for shoes. In fact, my last pair I got for $35 worth of Sears points. So what caused this purchase? Airline miles, it was their fault! It was alright because my wife has been telling me that she was ready for a new pair of these shoes. However, this week is triple miles on British Airways shopping portal. Overstock.com was giving 21 points per dollar, so I’ll get 1,680 which is pretty good. Furthermore, I used 3 $25 gift cards I got using $60 of Discover rewards. So $64.90 with $16.80 worth a points, not terrible for some fancy pants shoes.
I love airline miles and they have enabled me to travel all over for so little cash. I went to Taiwan on miles, came to and will move from Lisbon with them, and just dropped 400,000 miles on a future trip, to be revealed later. Yet, we still have 750,000 of them. I think I need to as good at using them as I am collecting them.
Quick, how many screens do you have? How many things do you own that need charging? Guess, then start to catalog and I bet you guessed a smaller number than what you own. It can be pretty crazy how many devices we end up with. There are wires running everywhere and we have to make sure we have the right charger. Today you can see an inventory of our electronics and I can share the stories of how we acquired them.
S0ny a6000: Purchased the body used for $375 and a used fixed lens for $270 both on eBay.
The camera was a killer deal and only had a shutter count of 373. The camera is for my wife because I’m fine with taking pictures from my phone. In fact, I thought I was cool back when I had a 1.3MP phone.
iPhone 6: Bought this used on eBay for around $400 in late 2015.
Amazon Fire Phone: Brand new $125 including a year of Amazon Prime from eBay.
Galaxy Note 2: New for $99 from Freedompop.
$20 Android Phone: This was an add on in cart option when I was buying the Galaxy Note 2, I went for it.
Four phones for two people may seem excessive, but the total cost was under $650 which you can’t even get a new iPhone for, especially the rumored $1000+ iPhone 8. Each Android phone was several generations behind the current one. In fact, I got the Note 2 when the Note 6 was out. My wife had an iPhone 5C before this but due to an extremely lucrative Discover card deal WE NEEDED an iPhone. It was 20% cashback on purchases with Apple Pay.
The iPhone and Fire phone get used abroad and the other two are maintaining our numbers and collecting voicemails and text messages. Our phone plan in Europe is $4 a week per phone and on Freedompop it is $2.49 a month.
I originally started this article a year ago, but yesterday my classmate who used to market Gillette razors mentioned that some of their marketing efforts were geared toward getting people to trade up to more expensive products. Well, time to share my thoughts on shaving cause if you just listen to commercials you’ll end up with a half-dozen bladed device with sonic pulsing action that has a mirror to see behind you, doubles as a weapon, and triples as a flashlight. But, we don’t need that, or do we?
Disposable, reusable, or subscription
Disposable razors are used and thrown away. They are cheap, but not so cheap that you should buy them. I also don’t like throwing away so much stuff. Instead of managing your purchases, there are subscription services like Dollar Shave Club. I don’t see any use on having someone else dictate how fast you replace your blades. Replace them as you need and stock up when blades are cheap.
What I’ve tried
My current razor is a Gillette Mach 3. I would recommend it and see if you can get blades near or under a $1 a piece. Amazon sometimes has good deals, but beware of Costco, despite seeming like a good deal with a large quantity the blades can often be as much as $2 each. Introduced in 1998, the Mach 3 is still a great product and it better be because it cost $750 million in R&D. Someone please tell me how is this possible? Maybe they had to test it on animals first and in order to do so they needed to train monkeys how to shave. However, prior to that they would have needed specialized animal trainers as well as geneticists that could modify monkey DNA so that monkeys could grow facial hair.
I recently rented a car for 3 days to go to the south of Portugal. The price was $8.77 total. That was the second cheapest option because they also had a $6 one. One thing that was additional was the collision damage waiver which reduces or eliminates what you have to pay in the case of an accident. However, there are many credit cards that have this benefit. Two that I have are the SPG card and the Chase Sapphire Preferred (CSP).
Check the fine print and exclusions
Both had similar wording, but the SPG terms said that you have to be a permanent resident of the US. I think I am, but since I am in Lisbon for school at the moment I was not sure. However, I read the CSP terms and they did not include such language so I booked with that card.
The booking conditions said you do not need an international driver’s permit if your license is in the Roman alphabet, but you would need one if you are from USA or Canada. However, I had read information that you wouldn’t need one. So I called to make sure and they said just my license would be fine.
What I did neglect to read was there was a $25 fee for a full gas tank. Fortunately it was only $25. However it brought my rental to $34, not bad, but maybe not as good as I could have got.
A couple years ago I came to the realization that robots will start to displace humans faster than we can create new jobs for humans. In fact, it may already be happening. This is a highly debated topic, so don’t take my word for it. If you remember I spoke of basic income when I said Uber and Lyft are playing for the long run when they can replace all the drivers with automated cars. Well this article is going to be scary because the future often is, but hopefully you will be enlightened. Rise of the Robots is a book about how robots will replace us at such a rate that we will have to rethink our relationship with work. Many manufacturing jobs have been eliminated by robots, but so many other jobs we once considered safe are going away as well.
Articles are already being written by robots. One company, Quill provides services to automate articles. It can easily write articles about sports, take in information to make reports, and likely is writing things we already read, but believe are written by a human. One example would be a report for an earthquake. A human would need to be present to feel the earthquake, wake up, look up details, and then quickly publish something. A computer can always be tracking the earth’s vibrations and once a threshold is passed it can submit an article with graphs and be the first one to report it.
You may have heard that the majority of stock transactions are performed by high frequency traders. These are algorithms programmed to profit by making split second decisions. Fractions of a second are so valuable that the firms have tried to get as close to the exchanges as possible. The algorithms compete with each other and even try to deceive each other to the point where what they are doing is incomprehensible to humans.
Tax day came late this year, April 18th. Fortunately, I have submitted everything. And there was a whole lot to submit this year with earnings from Lyft, internet reselling, and bank bonuses. One new thing this year was that I was able to itemize deductions which was another form but reduced my taxes.
How donations work
People sometimes say ridiculous things like of course she donates, she can write it off on her taxes. Well, what does this mean? If you donate $1 do you save $1? Obviously not, otherwise we could all donate our entire incomes and still have the same amount of money. What the donation does is lower your taxable income. Say your income was $80,000 and your tax bracket is 20%. If you donate $1 then your taxes will go down by 20 cents. Therefore it “costs” you 80 cents to donate a dollar. In some people’s extreme tax situations they may be at a 50% effective rate and therefore donating $1 “costs” 50 cents. Donating is still coming out of your pocket and is not done selfishly.
Tax mechanics of donations
Donations are considered under itemized deductions. The government allows you to take either itemized or a standard deduction. The standard deduction is $6,300 per person. So even if you donated $6,000 you would still take the standard deduction and therefore each $1 is “costing” you $1. However, there are many things also included in the itemized deduction such as mortgage interest. If you have a sizable mortgage then you may be better off with itemized deductions. Either way, calculate both ways and take the larger amount.
Cash is obviously deductible, but so is giving stuff away. Last year we donated so much stuff to the Goodwill because we moved at least twice including to Taiwan and Lisbon. One good thing about moving is you get rid of a ton of stuff, sell some, and then throw out your back moving everything else. Having a Kindle is great because I can stop collecting books.
Donations may not help reduce your taxes, but they will likely help the organization you give to. One such group I support is Compassion which helps poor children. I even get to write to and receive letters from to the child in Peru I sponsor. However, whatever organization you plan to give to please research so you know how your gift will be used. As an American I have so much and feel that sharing the abundance with others much less fortunate is a great use of my money.
Many of my articles have touched on this topic, but I don’t think I have written about it directly. Arbitrage is the action of taking advantage of differences in prices in different marketplaces to make money. I have done so with Sears. However, it need not apply solely to business, but we can use it in our lives. Since most things cost different amounts in different places, it is possible to take advantage of the discrepancies.
You probably already practice geographic arbitrage without even realizing it. If you choose the commute to work then you are probably living outside the city center. Maybe you want more space or to pay less rent, but it is clear that the closer to the city center the more expensive it will be.
The cost of living is extremely different if you live in London versus Tainan. However, moving just to save money will not make sense unless you can keep the other factors of your life the same. If you work remotely, great, you could live anywhere! Another type of person this would work for is a retiree. Even with very little savings and a $1,000 a month Social Security check, a retiree could live in many places and have a good quality of life.
I am doing a 1-year MBA in Europe for less than half the price of doing of a comparable program in the US. I perceive the benefits to be even greater because I get to improve my foreign language skills and it is eight months shorter than US programs.
Why would I give you such a message? Well, the cost of living in the Bay area is much too high to save a large portion of your income. As you may know it is not how much you make that counts, it is how much you save. I wrote last time how it was frugality that mattered. Earning $500,000 can still feel like you are barely scraping by. So let’s use a scenario where you are working in Houston and are offered a promotion to headquarters in San Francisco with a nice $15,000 raise (25%) to $75,000. Should you take it?
One of the biggest expenses for a household will be income taxes. In Texas, with a $60,000 income you were paying $8,145 in federal taxes and $0 in state income taxes. However, moving to California with your new salary puts you at $11,895 for federal taxes and around $4,000 in state income taxes. So your $15,000 raise is reduced by $7,750 in additional taxes, but it’s OK because you are still up $7,250 right?
Excited by all the extra money you are going to make you move out of your $1,245 a month place in Houston and show up in SF after two days of driving. You are shocked when you go on a tour of a place similar to the one you had and the rent is $3,590. You obviously can’t afford that, so you decide to rent a bedroom in with a friend who has a two bedroom. He is a nice guy and gives you a discount, only $2,000 a month. So instead of paying around $15,000 a year for rent you are up to $24,000 and you are sharing a place. You were $7,250 ahead after taxes, but with $9,000 more in rent you are now $2,750 behind after rent. But it is fine because you are living in such a cool place?
I recently purchased a Kindle because my wife was reading so many books on her phone that she was borrowing from the library. I used $80 of Staples credits I got from ink recycling and then spent $20 of my Discover rewards to get a $25 gift card. The Kindle was on sale for $100, so now I have a sweet $20 Kindle. Many months ago I started the Millionaire Next Door, but this weekend I went to Morocco, started an Instagram, and finished the book. Here are some of the lessons I learned.
Lifestyles of the wealthy
When you think wealthy you may think of fancy cars and a big house. However, this lifestyle is very expensive to maintain and is often financed. Many of these people do not have much wealth, but have a high income and spend all of it. Wealthy people often live in neighborhoods with middle class people and don’t show off their wealth.
It’s about frugality
What being wealthy comes down to is frugality. There are people who make $500,000 a year and struggle to make payments on their cars because they have so many expenses like country clubs, private schools, and timeshares. Being frugal allows you to have a higher savings rate and retire earlier. If you make $50,000 after taxes, spent $45,000, and save $5,000 (10%) then you need to work 9 years to save enough for one year of expenses. However, if you can trim a bit and only spend $40,000 then you only have to work 4 years to save enough for one year of expenses. Taken it even further if you could save 50%, each year you are saving enough to pay for another year. Combine this with investments and you can see how growing your wealth and early retirement works.
Little did I know that women use a lot of skincare products until I got married. There are “routines” to be followed with products like toners, cleansers, serums, and moisturizers. But you’re likely a woman and know this, so let’s move on to how we can get the best deal possible.
What I got
My wife wanted the pictured product, a serum that costs 122 bucks for 3.4 fluid ounces. A gallon of this stuff would cost $4,600! There are two smaller sizes, such as a 1 ounce which is $46 but that is even more pricey per ounce. So why did I give in? Well, I’ll explain. I’m taking a course in Marketing and know the Kiehl’s is a premium product and likely has an 80% margin. This means that they will try not to do discounts, however, they may try other promotions. This week was such a promotion with a full-sized cleanser and 4 larger samples (yes samples are valuable too) with purchases over $100. Then I checked the shopping portals and noticed that British Airways had double points meaning I could get 24 points per dollar, almost 3,000 total ($45 value in my book).
How you could do better
I was almost able to get an addition $16 off by purchasing a Kiehl’s gift card from SaveYa. However, they flagged my account as suspicious, probably since I was trying to buy dollar-denominated gift cards from Europe, and I was unable to make the purchase. I also joined the Kiehl’s Rewards program which will give me $10 in credit at some point for this purchase. I don’t know what my wife will need by then because 3.4 fl oz should last 10 years right?
I love to be frugal and could probably use Boraxo to clean myself. However, I’m not going to mandate that my wife can’t have any beauty products. Life is more than just money. We don’t have to spend it all to be happy, nor do we need to save it all. Find a healthy balance that works for you and hopefully your money will be working for you rather than you chasing after the money.