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Friday, March 26

My Frugal Miser's Next Financial Goal: Paying off the Car Loan

So far 2010 has been a great year for paying debt. Sure, it's been at the sacrifice of any savings. I haven't made a 2010 IRA contribution or set aside funds for capital expenses. For example, I have a tenant moving out at the end of April and will have some costs to rehab the place and get it rented. I'll deal with that when it happens.

The problem is, I am addicted to paying down debt.

Without further ado, let me announce my next financial goal. In addition to reducing credit card debt to $20,000 this year, I would like to pay off my car loan by the end of this year. I took out a loan for $19,314, which included about $7,000 rolled over from the BMW (mistake of my life!). By the end of this month the balance will be down to $17,500.

Wednesday, March 24

Reviewing My 2010 Goals

With the end of the first quarter next week, I think I should assess my progress thus far on my 5 main goals for 2010:

1) Lose 26 pounds. Starting weight: 232 Current (3/13/10): 231.
  • Reflections: I'm not making much progress here. Need to stop eating so much and exercise more.
  • Action Plan: I joined Weight Watchers. With the warmer weather, I should have fewer excuses for being active.
2) Increase net worth by $25,000. Status (3/19/10): Increased $20,546 since 1/1/10.
  • Reflections: I'm way ahead of where I thought I would be. My two retirement accounts have done well this year. Selling the BMW eliminated some interest expenses. I received a significant tax refund.
  • Action Plan: I've already made the major changes that would impact my net worth, so I expect slower growth the remainder of 2010. Still, I will probably raise my goal since I am almost there and it's only March.
3) Budget: $5 per day for food; $125 per month for gas.
  • Reflections: I'm right on track for gas, and now that I'm not commuting 90 miles to work every day, I might do better than this moving forward, depending on the travel I do for mystery shopping. I'm over budget on food. Part of that is gift cards I have purchased in order to earn Hilton and Southwest points. I decided to include those expenses even though I haven't yet redeemed the cards.
  • Action Plan: As I redeem the cards, I should have lower food expenses. However, I am still spending way too much on eating out and need to plan my meals better. This should help me with my weight loss as well.
4) Lose the Bimmer. COMPLETED 12/29/2009.

5) Decide whether I should move.
  • Reflections: It's harder to measure my progress here. I am on track with my timeline and action plan, but that doesn't mean I'll do it for sure.
  • Action Plan: My plan is to have half my credit card debt paid, as well as my car note, before I move. I also will probably sell one of my rental properties to free up some cash while eliminating more debt. I haven't done anything about the rental property because it is occupied and the tenant is now on a month-to-month lease... I kind of like it like that and am hesitant about terminating the lease to sell the house considering the market right now.

I'm really happy with the progress I am making. All of my properties are rented, which throws off a nice bit of cash every month that I use to pay off debt. Our cruise, departing May 22nd, is paid for... I hope that will motivate me more to lose some weight.

Tuesday, March 23

Do I Really Spend 22.6 cents Per Mile to Drive

Do I really spend $0.226/mile on driving?

I'm probably getting too analytical here, but there are some other things to consider.
  • Credit Card Rewards. I usually use my Citibank Professional card to buy gas. I receive 3 Thank You Points per dollar I spend on gas. 1 point is equal to 1 penny if I redeem for a $100 gift card, so for every $100 I spend on gas, I get $3 back.
  • Mystery Shopping Reimbursements. At least half of my mystery shopping has been at gas stations, and nearly all of them include a gas purchase for which I am reimbursed. So often, my fuel cost is close to zero. This is significant since, at 8.9 cents per mile, gas is the highest vehicle expense I have. If I pay regular retail prices, 39.4% of my total vehicle cost is fuel.
  • Tax Benefit. This gets convoluted since I no longer have wage income that I can offset with taxable losses (deducting mileage at $.50/mile lowers my income, thus lowering my tax liability). Still, for every mile that costs me 22.6 cents to drive, the IRS lets me deduct 50 cents from my tax liability. Works for me.
Maybe I'm missing something, but the closer I look at it, the lower my vehicle expense becomes.

Monday, March 22

Vehicles and the True Cost of Ownership: How Much is My Car Really Costing Me?

Mystery shopping gives me a lot of windshield time. Recently I had a couple of uninterrupted hours behind the wheel. The sun was rising behind me, the air was crisp, and traffic on the Interstate was light. That's my ideal setting for doing some serious thinking.

The topic that morning was "How much am I spending on my car per mile?" The IRS lets me deduct $0.50 per mile in 2010 from my income. Surely, I thought, the tax man did a lot of research before coming up with this number. But it's not costing me this much. What am I missing?

A Frugal Miser Adds Up His Expected Vehicle Expenses

  • First, I made a couple assumptions. I rounded the purchase price of my 2009 Pontiac G5 up to $13,000. I also decided that if I didn't drive a car, I could earn 6% by investing the $13K instead (conveniently, my car loan has an interest rate of 5.9%).
  • Second, I decided my car will be worthless at 150,000 miles.
Fuel: assuming gas averages $2.75/gallon year round and I continue getting 31 mpg, I spend 8.9 cents per mile on fuel.

Purchase Price: spreading the cost of the car over its expected life, I spend 8.7 cents per mile on depreciating the cost of the car.

Maintenance/Repairs: it's hard to predict what I will spend to maintain my vehicle, but I figure I'll spend $2,500 over 150,000 miles to keep this car running. That's 1.7 cents per mile for maintenance and repairs.

Insurance: So far I have averaged 5,000 miles per month, and I pay about $100/mo. for insurance. I spent about 2 cents per mile for insurance.

Interest/Opportunity Cost: For this calculation, I simplified things. How much interest would I earn on $13,000 at 6%? I would spend $780/year, or $65/month. Since I average 5,000 miles per month, I spend about 1.3 cents per mile on interest.

Adding each of these five areas gives me a per mile cost of 22.6 cents.

Saturday, March 20

Making Money Mystery Shopping: Know your Schedulers

When I got started with mystery shopping, the allure of doing everything online was enticing. I could search for jobs, select the ones I wanted to perform, and assign them to myself (or in a few cases, request that I be assigned and await a confirmation email).

The more I thought about ways to make more money, the more I was reminded of what worked in my sales career. My mentor taught me to not become over-reliant on email. If a prospect emails me with questions, it is tempting to just email them back my answers. But by doing so, I would miss so much by not picking up the phone and talking with them. I might misunderstand what they were really trying to ask, or might miss an objection they were raising.

Similarly, by relying just on the Internet for self-assigning shops, I have no idea if the stated fee is really the best payment the company is willing to make. There might be a shop in a community 20 miles away that has a listed fee of $8.00. Unless I'm going to be in the area, that's not justifiable. Often if I call my scheduler and tell them I would be willing to complete the job if it is worth my while, they will negotiate.

A recent example: two weeks ago I saw four shops from two different companies in a town about 25 miles from my home. It's an isolated community - you really don't "pass through" this town for anything. One of the two companies does not negotiate fees, but they had already added a juicy bonus to the shop. Still, I needed more before I'd travel there. The other company had three shops in that town, so I called my scheduler and told her I was working to pay off some debt this month and willing to pick them up if she'd help me out.

Two of the shops paid a total of $12.50, and the other was paying $15.00. I managed to get the two for $12.50 increased to a total fee of $50.00, and agreed to do the third for the stated fee of $15.00. I completed a total of four shops for a fee just south of $75... plus reimbursements. I was gone a total of three hours and put 55 miles on my car.

Friday, March 19

Making Money Mystery Shopping: Streamlining

Mystery shopping means you get to be your own boss. I'm not a loner, but I'm not a social butterfly, either. I have no problem working autonomously. I'm not the best team player: In high school when I was assigned to a group project, I was the kid that always ended up doing the majority of the work... I'm sure some of you can relate. With mystery shopping, my success is completely in my hands.

To be successful you have to avoid burnout. I do this by streamlining as many of the mundane things as I can. For example, if I simply followed the instructions I was given, I would print about 400 pages of paper every week for forms and instructions. Instead I have created templates for the shops I do regularly. For my gas stations (I shop or audit nearly all the major brands) , I created Excel templates that enable me to jot down notes for 8 shops on a single sheet of paper (16 by using both sides of the paper). I labeled my rows with all the pertinent information so that I forget nothing.

I also have found that having duplicate (or even triplicate) directions is worth the cost. I have a GPS unit in my car, another on my phone, and often I will print directions from the Internet. Getting lost is always a possibility for me, especially since some of the more lucrative jobs I do tend to be in isolated areas. In this line of work, time is money and losing 30 minutes to a wrong turn will kill my productivity.

I continue to look for ways to be more efficient. For example, I tried using a broadband card in my laptop so that I could enter shops from my car wherever I am. Unfortunately, I wasn't happy with the connection speed and found that actually took longer than just entering everything at the end of the day. Another issue is finding a really good portable scanner (for receipts and other paperwork that has to be uploaded). I've tried a couple that just plug into the laptop via a USB cord, but was disappointed by the quality.

Wednesday, March 17

Making Money Mystery Shopping: Can it be a Full Time Job?

"A bird in the hand is worth two in the bush" is a philosophy I have found useful in the world of mystery shopping. As long as I can justify the effort to the pay, I accept just about every mystery shop I am offered. There seems to be a lot of lazy people in the world. As long as there are lazy people in the world I can make money by mystery shopping.

I expect to earn well over $2,000 in March from shopping. In addition to the fees, some of the reimbursements are pretty valuable, too. Most of my gas is free, as is a lot of my food. I'm not getting rich doing this, but I'm covering my mortgage, car payment and utilities just by mystery shopping.

For those of you interested in pursuing this, I offer this tip: be open minded, and jump on every opportunity. Your shopping will start out slow as you figure out where the good shops are and learn some shortcuts to be more efficient. But persistence will pay off. This week I am traveling through 2-3 states just to perform mystery shops.

Monday, March 15

Assessing my Credit Card Debt

At the end of 2009 my credit card balances were the highest they have ever been, exceeding $40,000. I would like to end 2010 under $20,000.

Total Credit Card Debt as of 3/15/2010: $31,932

By the end of the month I'd like to reduce this to $31,000, and by the end of April I'm hoping to get it down to $29,000. If I can stay on track, I will have reduced my credit card debt by half in 2010.

I should note that approximately $21,000 of my credit card debt is at a 4% rate. A couple years ago I used a balance transfer check at this "rate for life" and invested the funds in rental properties. Another $7,000 is at 0% until the end of June. The remainder includes balances on cards I pay off month-to-month.

Thursday, March 11

Debt Update

Last month I set a goal of paying off my AMEX and Citi Pro Card by the end of March. Thanks to a fat income tax refund, I am happy to say they are paid in full.

I continue to focus on debt reduction as my primary financial goal. Next I will turn to my Citi Driver's Edge card and then on paying my car loan. I'm not ready to set target dates on paying those off. I've got a little project in the works that might suck up some of my cash. More on that soon.

Wednesday, March 10

Some of the More Interesting Mystery Shops I have Done

I'm an equal-opportunity mystery shopper: if the money is right, I'll do anything. Yes, I'm a mystery shopping whore. I was thinking last night about some of the more interesting things I have done in the name of shopping:

  • A friend and I had to spend two hours drinking at a bar. The purpose was to observe a bartender who was suspected of theft. So that she would let her guard down, my assignment was to drink, drink, drink, but to make frequent trips to the restroom to take notes since I probably wouldn't remember the details the next day when I was entering my report. In case you were curious, I found compelling evidence the bartender put several cash payments in her tip jar instead of the register.
  • I applied for a home loan using a false SSN that was tied to a person with a certain credit scenario. I was coached extensively on my "story" to the extent I felt like an actor in a movie who had "learned my lines." That shop, which was actually a series of visits and phone calls, paid over $200. The premise here was to see if I was discriminated against because of whatever was on the credit report and from what I was told to say in my story.
  • I posed as a truck driver getting a physical exam as part of his CDL licensing requirements.
  • I became a hearing-impaired traveler to spend the night at a hotel.
  • I've eaten breakfast at 3 o'clock in the morning a few times.
  • I enjoyed a $300 dinner with my mom for free.
  • Several times I had to order a pizza by phone, and then at the end tell the order taker: "By the way, please cancel this order. You have just been mystery shopped. Goodbye."
Most of my shopping is fairly mundane, and I like it that way. Repetition = efficiency. If I can do 15 gas stations (same brand) in one day, I don't have to worry about different scenarios or with constantly switching gears. But, I'm more than happy to embark on a role-playing adventure if I am adequately compensated.

Monday, March 8

A Week in the Life of a Mystery Shopper

Last week was the first week of unemployment for me this time around. But I kept really busy with mystery shopping.

$792.75 Earnings for the week ending Saturday, March 6th
$174.29 Reimbursements for the week

So what did I do? Well, first, I drove.

A lot.

As in, 1,886 miles... but that includes a trip I needed to take for other reasons in which I combined shopping.

  • 41 gas stations
  • 10 retailers/banks
  • and 8 restaurants
Yesterday my earnings were decent but I only worked about 4 hours. Today I am traveling out of state. I will be home this evening, but it will be a long day. If I can keep the pace up, I'll handily beat my March mystery shopping goal of $1,500 and could even pass $2,000. Imagine that... earning $2,000 in one month from mystery shopping.

Have a super fantastic week! I'm working really hard, but I'm loving every minute of it.

Saturday, March 6

March Goals

During February I achieved three of my four monthly goals. March is a transitional month since I am unemployed.

March Goals:
  • earn $1,500 from mystery shopping
  • spend less than $50 on fuel
  • spend less than $150 on food
  • reduce credit card debt to $31,000
Those are my financial goals. I am also going to try to really start shedding some pounds.

Friday, March 5

Reviewing my February Goals

During February I did okay with my goals. I've said before, this blog keeps me accountable.

February Goals vs. Actual:
  • Last month I earned $1,046 in mystery shopping income; my goal was $500. SURPASSED!
  • Last month I spent $198 (updated 3/21/10 and lowered from $150. I mistakenly categorized some prescriptions I bought at the grocery store as food) on food; my goal was to spend $5 per day ($140). BUT, $100 of this was spent on a gift card I have not used. I bought the gift card in response to a bonus offer at Rapid Rewards Dining. I earned 1/2 credit towards a free flight (still trying to snatch a free flight for our cruise). FAILED.
  • Last month I spent $130 on fuel; my goal was $140. Even better, my employer reimbursed me just over $52 for mileage. SURPASSED!
  • I reduced credit card debt to $33,901 (over $4,000 reduction!). My goal was $36,000. SURPASSED!
I achieved 3 out of 4 of my February goals! I am especially happy with my spending on fuel. I drove 90 miles round trip to work each day. I cut this expense drastically through mystery shopping. I am equally satisfied with my credit card debt reduction, but the biggest contributor to this was applying my income tax refund toward debt.

Wednesday, March 3

My February Income: $9,740

February was a decent month. After three months, I am unemployed again. Truthfully, I hated the new job, so I am glad I'm no longer there. Needless to say, my income will be lower moving forward.

February Income
$2,000 Full-Time Day Job
$1,046 Mystery Shopping*
$1,993 Change in Value of Retirement Accounts (Roth IRA and Rollover IRA)
$4,701 Rental Income*
$9,740 Total Income for February
*note that the mystery shopping income will always vary from the monthly summary amounts I post. Here I report actual payments received (cash basis accounting) whereas my monthly mystery shopping update I report the amount I earned for that month.

My retirement accounts had a nice bounce in February, increasing by just under 5%. Currently all 7 of my rental properties are occupied. I don't expect to have to deal with any vacancies at least until April. Since I won't have the benefit of employment, I need to increase my mystery shopping/merchandising income.

Tuesday, March 2

A Day in the Life of a Frugal Miser

Yesterday serves as a great example of my typical day so I thought I would detail how I try to have a good time while spending as little as possible.

I started the day by searching for mystery shops. I already was assigned to one gas station and one bank, and I found 4 more gas stations in the area. Total earned: $71.12 in fees and $13 in reimbursements.

Heading out, I needed to return three books to the library. I also checked out two books about home repair. I am trying to learn to do as much repair as I can myself so I don't have to hire people to repair my rental properties. My first focus will be on plumbing since one of the properties has a small leak and I am looking at replacing all the PVC pipe under the sink there.

For lunch, I stopped at Jersey Mike's Subs. I had a card for a free sub that I was given at the Chamber of Commerce luncheon (the last one I attended for my old job). Since I already had bought drinks from the gas station mystery shops, I redeemed the card for my free sandwich and did not order anything.

Once I had finished my shops, I stopped by the Redbox on the way home. If you haven't done it already, you should go to their website and sign up for their text message. I get a text on the first Monday of each month good for a free movie. I rented The Hurt Locker. I really enjoyed the movie.

I spent yesterday afternoon/evening planning a mystery shopping trip. Today and tomorrow I am traveling out of state to shop several gas stations. Right now I am signed up for 17 shops that will earn me $368.38 in fees. This is atypical: since it is the first of the month I was able to pick up some bonuses on shops that weren't done in February. I have an offer for a free night at the casino so my hotel is free tonight.

Monday, March 1

A Month in the Life of a Mystery Shopper

I exceeded my February goal of earning $500 in mystery shopping income by a HUGE margin. In fact, I earned $1,40.71 in fees and $567.06 in reimbursements last month. This is on top of income from my full-time job (which ended Friday), so I'm really happy with this.

I did quite a few gas station audits, which I constantly question whether they are worth the trouble. The editors always ask questions and since this is a photo audit, if I don't have a photo to answer their question, I may have to return to take more photos. I've only had to return to the station once, but it was 60 miles from home. Fortunately I found some other shops along the route so that the entire trip wasn't for the one photo.

I also did a couple of late night shops that had hefty bonuses attached. One night I left my house at 11:45 PM and returned home just before 3 AM. But for three hours work I earned $80. I also did more merchandising than I have in the past. One day I drove 246 miles to work 10 stores.