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Wednesday, June 30

My Frugal Miser's Best Advice I've Received - Patience

This week I want to explore more of the advice I learned from Warren Buffett and Charlie Munger. I thought I would start with a very important piece of advice and one that I struggle with:

Be patient and wait for the right opportunities.

Have you ever had a friend who, as soon as they had some money, it was as though it was burning a hole in their pocket? I know a lot of people like this. It doesn't seem so bad at the time - they splurge like the world will end tomorrow. But then comes the hangover. An unexpected bill arrives and they have no money to pay it. How to pay it? Do you get a payday loan? Do you pay it late along with the late fees? Do you borrow from a friend? You know, the friend who always bails you out? They don't mind, do they?

Similarly, I've known a lot of investors who just hate to have cash in their brokerage accounts. I really struggle with this personally. Instead of investing in a mediocre business (or, for me, a "so-so" rental property), keep your cash in a money market account and wait. Wait for that investment or property that SCREAMS AT YOU TO BUY. You'll feel like that opportunity will never arrive - I sure do. But just as you are about to give up, opportunity knocks.

In the spring of 2009 there was a foreclosed condo I had my eyes on. The other units have sold for as much as $75,000 in the past. The most recent sale was for $65,000. All the condos were identical, which made for easier comparison. When I first saw it, the listing on the HUD foreclosure site was for $40,000. I took a look at it, but it was too rich for my blood. After it sat on the market for a while, HUD got aggressive and cut the price to $20,000. I saw opportunity and placed a bid for $18,500. Unfortunately, another potential buyer placed a bid for $30,000 under the assumption the low price would attract several competing bids. Of course, I lost to the higher bidder. At least I thought I did.

A couple months later I got a call from my agent. He asked if I was still interested in the condo. Confused, I asked him what he was talking about. Apparently the high bidder couldn't line up financing and his offer ultimately was rejected. As the second highest bid, HUD was willing to accept my offer.

That condo is my cash cow. It needed very little work. I spent something like $2,000 in repairs and upgrades. After expenses, I net about $350 per month on my $20,500 total investment. That's a 19% annual return on my investment, and it doesn't include any appreciation in the value of the condo.

Opportunities will come around when you least expect it and you have to be prepared when they do. A lot of people get antsy when they have cash sitting around to invest and feel they have to do something with it. Smart investors sit on the cash until they need it for the right investment.

Tuesday, June 29

A Week in the Life of a Mystery Shopper

June 20th - June 26th...

This was one of my slowest weeks in a while. I had a hard time finding shops. Hopefully this is a one-time blip. The good news is that all the free time I had last week was put to good use as I was able to check off many items on my project list. Last week I made $252 in fees and $803 in reimbursements.

  • I visited eight restaurants. One was a casual steakhouse while the others were fast food. It's interesting that usually the nicer restaurants are reimbursement only- no fees are paid.
  • I shopped 4 retail stores, did one gas station audit, and verified the legitimacy of a business.
  • My favorite shop was the high end hotel, which I blogged about yesterday.
This week looks like it will be slow as well, but July is looking much better. I have signed up for 50 gas station mystery shops (the maximum I can select at once) and about 25 mailing centers. I also have a special project on my merchandising route. These jobs will be the foundation for what might be a solid month.

Monday, June 28

High End Mystery Shopping: Mystery Shopping a Luxury Hotel

Ever wanted to live in the lap of luxury and not have to pay for it? Who hasn't!?! Mystery shopping has enabled me to shop - but not purchase - $4,000 watches and $5,000 surround sound systems. I've eaten $200 dinners and gourmet chocolates. But none of those experiences tops the mystery shop I completed last week.

Mystery Shopping the Luxury Hotel

Last week I checked into a high end hotel. When I checked out the next day, my bill + tips was $700. I don't have to pay for any of it. In fact, in addition to all charges being reversed, I am being paid a fee for completing the shop.

If you've ever considered shopping at the high-end level, there are definitely some things to take into account:
  • Companies don't refund $700 in charges because they are nice. They are exchanging the value of these charges for detailed information.
  • The level of detail required for this type of shop is unlike any other shop you could do. Gathering names are required, for example. My instructions were to keep repeating a scenario until I had a name, no excuses.
  • It wasn't all fun and games. Much of my time at the hotel really was spent working. When I was not posing a scenario on an employee, I was usually working on my report.
  • Don't get me wrong, I had a great time. But it's all about perspective. By great time, I mean I got a full night's sleep, enjoyed some wonderful food, and even spent a little time at the pool.
Here's a synopsis of what the job required:
  • I had to evaluate valet parking, the doorman, the bellhop, housekeeping, turn down service, the driver of the town car, the front desk, the operator, and several restaurant employees. Many of these evaluations had to be performed more than once: check-in AND check-out, the doorman each time I entered or exited, etc.
  • I had to evaluate dinner, room service, the coffee bar and lunch. These were all in different venues at the hotel.
  • Much of the report was yes/no questions, but each section did require commentary. Fortunately, the commentary was generally only required for negative responses. If the scenario was all positive, one or two sentences summarizing it were adequate.
Mystery shopping hotels, and particularly high-end properties, is not for everyone. If you think you'll have hours to lounge around the pool, sip martinis and get a pedicure, you'll be disappointed. But it can be a relaxing getaway as long as you stay on top of your paperwork. It's much easier to fill in the report after each scenario is performed than to try to do a marathon report at the end - probably impossible to remember enough details to do the latter. Having said that, I have no regrets at all. In fact, I am already signed up to shop another nice hotel in July.

Friday, June 25

Advice from Warren Buffett and Charlie Munger

I finally got around to transcribing my notes from the 2010 annual Berkshire Hathaway meeting. Each year I take away some invaluable advice on living life and on investing. Much of it is common sense, but to hear two of the wealthiest men in the world say this advice works really helps me focus. Here are a few of the highlights. Most of this is advice on investing, but a lot of it helps in day to day life:
  • Be patient and wait for the right opportunities.
  • Good investments only happen from time to time. The good news is, it only take a few to do really well.
  • Follow your passion. Don't let anything get in your way.
  • Spend less than you earn.
  • Be pragmatic. When something works well, keep doing it. Repeat what works.
  • Know your circle of competence and invest only in what you know.
  • Some of the best investments are in companies with low capital requirements. For example, companies where customers pay you in advance of receiving the product or service. You get to use the customer's money to finance your business.
I'll probably expand on some of these later because I really like these nuggets. Spend less than you earn is probably my favorite as that is a major premise of this blog.

Thursday, June 24

My Frugal Miser - Found Another Expense to Cut

I will never, ever cut costs where saving a few dollars today will inevitably cost me more in the long term. Unfortunately, most publicly traded companies don't hold this belief, but I'll have to save that rant for another day.

One example is automobile maintenance. Have you ever had a major repair on your car that probably could have been prevented? Most of us have, whether it's uneven tread wear on tires that weren't properly rotated or having to replace the rotors because you didn't service the brake pads when they needed replacing.

Still, I have found one more way to cut costs, and it was staring right at me all along. I own a second car, a Toyota Corolla, which my partner uses for daily commuting and we also use for road trips and errands. I am responsible for the maintenance on both my vehicles, mainly because my Type A personality flares up when I have to sit back and watch someone not take care of something like I would.

Anyway, the Corolla has always been serviced by the Toyota dealer from whom I bought the car. It was time for the 90,000 mile service so I called my mechanic to find out what all needed to be performed. The price he quoted me was $440. Nothing is wrong with the car - this is the cost for the manufacturer's recommended maintenance.

Needless to say, I started thinking more and more about this expense. I pulled up my records in Quicken to find out how much I've spent for preventive maintenance. I was shocked when I realized I have spent about $4,000 for servicing the Corolla at the dealer.

So, for the first time since I bought the car, Susie (yes, that's her name) won't be heading down to the dealer for her checkup. She'll be seeing a new doctor. I already had the oil changed, which at $23 was about 20% less than I would have paid. From a quick check, I am confident I can get everything done for under $200.

Moral of the story: we often develop wasteful habits. Once something becomes a habit, we often don't question the cost. We just do it. Taking a step back to re-evaluate can yield significant savings.

Wednesday, June 23

My Frugal Miser - Electric Usage for June

Since I set my electric use goal just a few days ago, I already knew that I wouldn't reduce my June electric usage by 20%. My meter was read June 21st. Here are the stats:

  • June 2009: 288 kWh
  • June 2010: 396 kWh
  • Increase of 108 kWh
  • Last June I averaged 9 kWh per day
  • This June I averaged 12 kWh per day
  • Last month I averaged 6.5 kWh per day
So what happened?
  • Temperatures were about 6 degrees higher than average last month
  • Although I'm out mystery shopping a lot, I still am home more than I was this time last year when I had a job. My job required extensive travel, so there were several days last year when I wasn't home at all.
Looking ahead, last July I used 431 kWh, which is 14 kWh per day. I might just be able to reduce this by 20%... time to go check on some clothes on the drying rack outside. Not using my clothes dryer is one way I will reach my goal.

Tuesday, June 22

My Frugal Miser: Air Drying my Laundry

This summer I will reduce my electric usage by 20%. One of the ways I am doing this is by air drying my laundry. Before, my partner and I did about 3 loads of laundry each week. The dryer is usually the second highest energy hogging appliance in the house, after the refrigerator. I imagine mine is even worse. When I moved in 2008 the dryer door came open as I was unloading it from the moving truck, and then it was bent backwards. To get the door to close I had to take a hammer to it, and sense then it hasn't sealed as well. What I'm trying to say is, a load of laundry that used to take 30 minutes to dry now takes about an hour.

Pros and Cons of Air Drying Laundry
  • Pro: lower energy bill
  • Pro: clothes last longer
  • Pro: the fresh smell of clothes dried by the sun
  • Con: Stiff clothes and towels
  • Con: longer drying in humid climates
I bought the drying rack seen above at IKEA last week. The first load of clothes were shirts, and I was satisfied with the results. I imagine towels will be more of a challenge - we shall see. I was also pleasantly surprised at how fast the shirts dried. They would have taken an hour to dry in the dryer. I hung them outside on my patio on the drying rack at 6 PM one evening. It was 92 degrees with 49% humidity. By the next morning, I was satisfied with how dry the shirts were.

Using an online calculator, I estimate it costs $.30 in electricity for one load of laundry. Now, I know this is a conservative figure, but assuming it is close, I was spending about $1 per week to dry my clothes. This single change should make it much easier to reach my goal of reducing electricity usage by 20%.

Monday, June 21

A Week in the Life of a Mystery Shopper

June 13th - June 19th...

Last week I earned $650 in fees and $446 in reimbursements. Over $500 of the fees came in just three days, so it felt like an easy week since there were four days where I didn't do a lot. Here are the highlights:

  • I did my monthly merchandising route one day last week... that alone accounted for $154 in fees. I had 16 stores to visit.
  • Saturday was the longest day. I shopped two clothing stores, one home improvement store, 3 restaurants, 3 gas stations and I did 5 gas station audits.
  • On Thursday/Friday I completed my first hotel shop for a company that is new to me. Previously the hotels I shopped were reimbursement only and included just the cost of the room. I really had a good time with this one, and was paid a fair fee. The shop included a room at a nice hotel, valet parking, Internet access fees, room service and drinks in the lounge. I was especially pleased by the fact there weren't limits on how much I could spend. I was given guidelines, but they were very generous. For example, on room service I was told I could order up to 2 entrees, 1 appetizer, 1 dessert and two drinks. I could order ANY entree I wanted, so I didn't have to stick to the cheap stuff unless that's what I wanted.
At the beginning of last week I wasn't sure if I would make much money, but I was able to cobble together quite a bit of work. I'll have to do the same this week, but since the end of the month is approaching, many of the shops I pick up should have decent bonuses.

I'm most excited about a hotel shop I am doing Thursday. This is the second shop for the new company I shopped for the first time last week. Believe it or not, I expect to spend nearly $500 (maybe more!) at this hotel, all of which is reimbursed. Plus, I am paid a $50 fee. Don't get me wrong - the paperwork is more detailed than I've ever done. Fortunately the privacy of a hotel room allows me to stay on top of it as the shop progresses.

Friday, June 18

Miscellaneous Cost Cutting

I've spent the week looking at ways to cut my electric bill and mobile phone charges. Here are a few other things I am doing:
  • I lowered the thermostat on my water heater. Before I had it set on "A", which was lower than "B" or "C". I didn't realize it could go lower and still be effective, but it can. I turned it way down, almost to "pilot". Still getting heated water; it's just not as hot as it was. I might adjust it back when the weather cools. For now, I don't need a steamy shower to get me going in the morning.
  • Early to bed, early to rise. My partner and I are getting up earlier than we used to. When you stay up late in the summer, you use more lights, A/C and entertainment like TVs. Mornings are cooler and the natural sunrise provides lighting.
  • Unplugging even more stuff: cell phone chargers, seldom-used lamps, the paper shredder - everything is unplugged.
Hopefully by minding the pennies the dollars will take care of themselves. I plan to quantify the savings by comparing my year-over-year utility bills.

Thursday, June 17

How I'm Reducing Electricity Over the Summer

Okay, so I've set a goal to reduce electric usage by 20% over the next 6 months. Since I already know I have increased usage in June, it's going to be a tough goal to achieve. Last night I did some brainstorming and researching.

  • Thermostat: it's been set at 78 degrees while I'm home and turned completely off when I'm not. I will adjust the thermostat first to 79 degrees and then see if I can handle 80 degrees.
  • Energy Vampires: I'm already diligent about unplugging most things when not in use (what's known as vampire energy can suck electricity even when something, such as the TV, is turned off). I'll be even more mindful, especially with the computer.
  • Appliances: I'm going to try air-drying my clothes again. I did this once before but I got lazy. I will air dry most of my clothes instead of using the dryer.
  • I'll research other ways to save. For example, I only use mini-blinds on all but one of the windows in my house. I'll look into whether adding curtains to the other windows will keep the house cooler and, therefore, reduce my A/C usage.

Wednesday, June 16

Cutting the Electric Bill

I'm obsessed with saving money on electricity.

Maybe I'm a little too obsessed with my electric usage. Last week on one of my morning walks I compared the reading on my electric meter to several of my neighbors. The power company replaced our old meters on the same day last year with digital ones, so I knew the measurement I was taking would be an accurate comparison.

The good news is that my electric usage was less than half that of any of my neighbors. I'm still not satisfied. And, inevitably, the summer heat will mean I am using my air conditioning more often, which is the most energy intensive appliance I have.

New Summer Goal
  • My goal is to keep my usage (as opposed to the "budget bill" amount since that isn't entirely representative) at least 20% below last year. I will track this from June through November.
  • In May 2009 I used 196 kWh; in May 2010 I used 188.
  • Here are the 2009 monthly usages I will be working against:
    June: 288 July: 431 August: 314 September: 290 October: 264 November: 189
  • For June, I have already used 329 kWh and there are about 5 days left in the billing cycle. This means I will have to reduce usage even more in the coming months to compensate.
  • I will observe any factors which influence usage such as weather or extended periods away from home, but won't use these as excuses.
  • If I achieve my goal, I will have reduced electricity usage by 355.2 kWh. I think I pay 9.88 cents per kWh, so I will save $35.09 over 6 months.

Note: I'm tracking bills, not calendar months. Therefore, I'll know before the end of each month how I did. For example, my May 2010 service period was 4/20-5/19.

Tuesday, June 15

Tweaking my Phone Plan ($15/mo. savings)

My partner and I have a Family Plan with AT&T. Lately, AT&T has been quietly lowering prices on both phone and data plans. But, you have to ask for the lower price or you won't get it.

  • The biggest change is that now with the iPhone you can opt for less than the $30/month unlimited data plan. I switched to $25/month for 2 GB but am hopeful I can switch to the $15/month plan, which includes 200 MB of data. I think that would be enough if I start using the wireless feature instead of always using the 3G network by default. Savings now: $5/month; additional potential savings of $10/month.
  • I also removed the unlimited text messaging feature, which was $30 per month. I switched to 200 messages per month for $5 for me and 1500 messages per month for $15 for my partner. He texts a lot more than he talks. Savings: $10/month.
I expect to see no difference in my service but am saving $15 per month on my phone bill. Still, the phone bill is the highest bill I have each month, so I have some work to do. My bet is that all this competition will keep driving rates lower and lower. I am a heavy user of the iPhone since I work out of my car so much, and lower rates would be a blessing.

Monday, June 14

A Week in the Life of a Mystery Shopper

June 6th - June 12th...

Things picked up a bit last week, but it still felt like I should have done more. I think the summer heat is slowing me down. Last week I made $610 in fees and $300 in reimbursements.

  • As usual the majority of my work was either mystery shopping or auditing gas stations. I visited 34 last week. The difference in mystery shopping versus auditing is that the audits involve more detail. I announce myself to the attendant, take a series of photos, and leave an evaluation worksheet with the station to review their scores.
  • I shopped 11 retail stores, including a shoe store where my $5 reimbursement covered the cost of some new socks, and a clothing retailer where I bought some new underwear. For the first time, I completed three ADA (disability) shops. I've never completed a mystery shop from the perspective of a handicapped person and at first passed on the opportunity. But, the pay was generous (the shops had been carried over from May so there was a nice bonus on each). I learned two things: 1) employees tend to ignore people in wheelchairs and 2) clothes aisles are hard to navigate through. No telling how many shirts I knocked onto the floor trying to navigate the wheelchair around.
  • I shopped eight fast food restaurants and 2 truck stop restaurants.
  • I ended the week by doing a car count at a drive-in theater. That was a nice way to end the week. I got paid to see the new Shrek movie.
Fortunately I have burned through some of the gas I was worried about last week. I now have 5 five gallon gas containers and a one gallon container in the garage. All but one are completely full, and the tanks on both cars are close to full. Today I do my monthly merchandising route, which will burn up more than half a tank of gas... which is welcome news right now!

I'm not sure how busy this week will be. After today, my schedule is mostly uncertain. Last week I had most of the 34 gas stations already scheduled, so I didn't have to spend a lot of time looking for work. This week I have my merchandising route, 5 gas station audits and a couple of restaurants scheduled, but that's it. Oh... I am traveling to complete a hotel shop on Thursday. It's my first shop with a new company and I am pumped about it. Most of the hotels I've done in the past have been reimbursement only. This one includes the hotel, 3 meals at the hotel, and pays a $50 fee.

Friday, June 11

My Frugal Miser - Funding my Retirement (Investment Performance Update)

I am a value investor. My investing philosophy is simple:
  • Minimize trading costs and taxes by sticking to a "buy and hold" program.
  • Buy when everyone else is scared to buy.
  • Focus on smaller companies that are growing at a reasonable rate.
  • Preference goes to dividend paying stocks.
So far in 2010, I have sold two stocks. Both times I felt they had risen too far too fast: I held one for 15 months and returned about 150%; the other I held for 2 months and returned more than 50%. I have already repurchased shares of one of the two stocks and am eyeing the second one for repurchase.

How am I doing?

S&P 500: down 2.3%
Roth IRA: up 13.05%
Rollover IRA: up 6.2%

S&P 500: up 23.45%
Brokerage Account: up 64.29%
Roth IRA: up 12.04%
Rollover IRA: up .13%

I opened the Rollover IRA toward the end of 2009 which is why it was up just .13%. I cashed out my Brokerage Account in October 2009 to purchase a rental property. The account is still open but I have not been able to fund it yet.

Thursday, June 10

Where a Frugal Miser is Investing Right Now

In day to day life I look for bargains. For example, I've been looking at GPS units the last few months. I bought my current GPS unit in 2006 and about once a week I get this dreadful black screen with nothing but red text on it telling me there is an internal memory failure. It always "fixes" itself a few hours later, but still... I won't buy on impulse. When the right opportunity comes, I'll pounce.

Like a cheetah on the prowl, waiting in the underbrush for his next catch, I'm always on the hunt. This is particularly true with investing since I don't buy a lot of material things. I mean, I'll probably use the GPS unit until smoke starts coming out of it.

What does this have to do with investing? Probably not much, except I think a successful investor shops for bargains in the same way a frugal shopper heads straight for the Clearance aisle at K-Mart. Why pay full price if you can buy for 50% off?

This week I bought shares of Diamond Offshore (DO). The company has been brutalized the last couple of months because of the BP oil spill. Diamond leases offshore drilling rigs. It has been on my list for the last few weeks. In January the stock reached a high around $107 per share, but by the end of February it was down to $87. On April 20th, the day Transocean's (a direct competitor of Diamond, by the way) Deepwater Horizon exploded, Diamond closed at $91.20.

April 20th: $91.20/share
June 8th: $56.94/share (I bought mid-day at $55.23/share)

So What's Going On?
  • Uncertainty, mainly. There's a 6 month ban on new drilling, ordered by President Obama.
  • Throw in a dash of falling oil prices. Diamond leases their rigs to oil companies, and while the day rates may be locked in during the term of the lease, those leases expire at some point. When they do, if oil prices remain lower, the value of drilling for oil falls. It's typical supply and demand. Diamond won't be able to command the same rates for their rigs if oil companies can't make as much from drilling as before.
  • New rigs coming online could pressure prices even more.
So What do I like?
  • The dividend. This company makes a lot of cash. Since January 2006 the company has issued $23.88/share in dividends. They pay a special dividend each quarter that varies with profitability. That dividend was lowered in 1Q2010... from $2 a share to $1.50 a share. Still, that's $6 a share annually. Maybe it will be lowered again, but that's not the point. The point is, the company is doing the shareholder-friendly thing with its cash. I believe owners of a company should be paid for their ownership stake, and Diamond certainly agrees.
  • The valuation. The trailing P/E ratio is just over 6. In other words, I am buying $1 in annual profits for $6. Meanwhile, the historical P/E for the S&P 500 is about 11. So, for the "average" company, investors have historically been willing to pay $11 for $1 in annual profits. Note: the P/E ratio will likely be higher for Diamond in the next 12 months (might go to 7 or so) if profits are lower, which I expect will be the case.
I'm somewhat skeptical of our economic recovery and think it will take some time for the global economy to recover. But I'm absolutely certain it will recover. When it does, demand for energy will increase. That has to happen until we figure out a way to get all our energy from the sun or the wind or some other way. As long as oil is a major part of our energy infrastructure, supply and demand will take care of prices. In other words, my long term opinion is that oil prices will go up, not down.

Higher oil prices should help Diamond Offshore, while the threat of offshore drilling bans should scare away potential competitors.

If you're interested in Diamond Offshore, here's a homework assignment: read their first quarter earnings call transcript here. Then decide if the company is worth further investigation.

Wednesday, June 9

June Goals

I'm going to tread water in June: my expenses will be up markedly and my income will be down some. On the expense side, my annual property insurance is due in June. I pay for all 8 properties at the same time, and since I don't amortize a monthly expense (this would make more sense, but is more complicated than I want my personal finances to be), I'll be taking a $4,000+ hit in June just for this one line item. Second, my tenant for the vacant townhouse backed out on me at the last minute so I had to re-market it. Another property is also becoming vacant later in the month. This is my most expensive property so the loss of income will be significant (more than $1,000/month).

June Goals:
  • earn $3,000 from mystery shopping (last month I earned $2,136)
  • keep credit card debt and car loan under $42,000 (5/31/2010: $41,716)
  • start process of purchasing my next rental property
In 2009 I purchased 3 rental properties. That was more aggressive than I am comfortable doing now, especially since I don't have wage income. If I purchase just one property in 2010 I will be happy. One of my tenants has expressed an interest in a lease-purchase option. They are a young married couple and have always paid their rent on time. Rather than risk losing such a great tenant, I probed them to find out what their plans were. Since they want to be homeowners, I told them I could help. In June, I plan to find financing for the property and hopefully identify a few potential purchases. Financing is hard because my income is derived from self-employment and I take a lot of deductions, which makes it look like I earn a lot less than my bank account would suggest.

Tuesday, June 8

Reviewing my May Goals

May was a decent month.

May Goals:
  • I earned $2,136 from mystery shopping. My goal was to earn $2,500.
  • I reduced credit card debt and the car loan to $41,716. My goal was $43,000.
  • I had a great time on the cruise.
I achieved 2 of my 3 goals and consider it a great month.

Monday, June 7

A Week in the Life of a Mystery Shopper

May 30th - June 5th...

I was having a lot of issues getting motivated last week. My earnings were okay but not stellar. Last week I made $466 in fees and $393 in reimbursements.

  • I signed up with a new company that handles gas stations for a convenience store company. The company doesn't pay a fee but does reimburse $10 gas and $3 inside. I did six of these shops.
  • I did a few other gas stations and restaurants. Nothing special.
  • I completed 10 merchandising shops: 4 as part of my regular monthly route and 6 one-time assignments. They were all super easy but the pay was just $62.
  • Some of the more interesting shops included a pool supply retailer, a gourmet chocolate store and a shop where I had to take the GMAT. The GMAT was an interesting experience. I always wondered what that test would be like and now I know. After this experience I think I'll just settle for the education I've got!
My biggest challenge now is storing all this gas. My tank and my partner's tank are full. I have a one gallon and 2 five gallon containers which are all full. The lawnmower's tank - full. This week I've already signed up for shops that will require me to purchase $99 in gas. This is an issue I have to figure out. Do I invest in a few additional 5 gallon tanks, take a trip to the casino to burn some fuel, or sign up for some out of town shops that I normally wouldn't consider?

Friday, June 4

My Frugal Miser - May Expenses: $3,393

This is only the second month I have highlighted my expenses, so expect some tweaking for the next few months. My total expenses in May were close to my April expenses.

May Expenses

$653 Auto ($3 for service, $132 for fuel, $370 Depreciation, $148 for speeding ticket
$13 Clothing
$118 Food (both groceries and eating out)
$74 Entertainment (movies, gambling, alcohol)
$2 Home Repair
$94 Household (pest control, fire dues, cleaning supplies, etc.)
$107 Health Insurance
$0 Medical
$579 Vacation (cruise, weekend in Atlanta, $100 deposit toward next cruise)
$145 Interest on Debt (not including Mortgage Interest)
$0 Miscellaneous
$447 Mortgage Interest (primary residence)
$834 Mortgage Interest (rental properties)
$20 Personal Care (hair cut)
$308 Utilities

Total May Expenses : $3,393


  • Thanks to mystery shopping, I only spent $132 for fuel even though I drove more than 4,000 miles.
  • I separate my mortgage interest by personal residence versus rental properties. I think this is an important distinction: the personal residence interest is an expense I should exercise control over moving forward when looking at ways to be frugal; the other is an expense that generates income.
  • I had two outstanding speeding tickets this month. I paid a fine on one and will take driving school on the other. The cost of driving school will be included in my June expenses.

Thursday, June 3

My Frugal Miser - May Income: $9,258

May was another decent month. I have to give a shout out to Hilton: I received a $458 refund for a prepaid hotel reservation I had to cancel. It was for a conference for my job, which I lost a few weeks before the conference started last September. While the rate was supposed to be non-refundable, I made a plea with Hilton for the refund and explained my situation. I had given up on getting it, and then without so much as an email notice, the refund just appeared on my credit card - nearly 9 months after the fact!

May Income
$2,837 Mystery Shopping*
$4,937 Rental Income
$1,484 Other Sources
$9,258 Total Income for May
*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 in my monthly mystery shopping update I report the amount I earned for that month.


  • There was a little drama with the vacant townhouse. In mid-May I found a tenant who placed a small, non-refundable deposit. She was to pay the first month's rent the day before moving in. Instead she emailed me to apologize and explain she had run into some financial issues. I wasn't surprised - nothing tenants do surprises me anymore. Still, I had to scramble to find a new tenant. Fortunately, an acquaintance asked to sign a lease and should be moving in this weekend. Later this month my most expensive property will become vacant.
  • The category "Other Sources" includes non-recurring (or semi-recurring) income since I always seem to have a little something that doesn't fall into the other buckets. For example, I included the $458 refund from Hilton in this bucket.
  • In June I will be paying property insurance for all my properties. Since I don't accrue this expense, I will likely have negative income in the Rental Income category in June. I really should recognize this expense on a monthly basis, but that makes things too complicated for personal finances.

Wednesday, June 2

Vehicles and the True Cost of Ownership: Depreciation Expense for May

Last month I started tracking vehicle depreciation in my monthly expenses. At the end of April my odometer showed 18,860 miles. I ended May with 23,129 miles.

Each mile costs $.0867 in depreciation, and I drove 4,269 miles. For May, my vehicle depreciation expense was $370.12.

Depreciation is a significant expense for mystery shoppers. I drive thousands of miles every month and more than 90% (and probably very close to 100%) of my driving is for shopping. One side advantage to mystery shopping is that a lot of the errands most people have become "jobs" for me: grocery shopping, getting gas, buying household supplies, etc. The few errands I do have can usually be done along my daily shopping route.

Tuesday, June 1

A Week in the Life of a Mystery Shopper

May 23rd - May 29th...

Last week was slow because I was on a cruise. This left just two days to go shopping. Still, I managed to earn $228 in fees and $160 in reimbursements in those two days.

Sunday - Thursday

10 gas stations and one fast food restaurant.

A busy day. I shopped three fast food restaurants, 3 gas stations, 4 mailing centers and a truck stop. This was a reasonable number of shops but they were spread out so I did a lot of driving. I've mentioned before that the last few days of the month can be lucrative because companies are trying to meet deadlines and are willing to offer nice bonuses.