Wednesday, November 23

Bahamas or Bust

I've barely been home this month, yet I'm about to head out on a cruise.  We leave early Friday morning.  I'm hoping to avoid most of the Black Friday insanity by hitting the Interstate around 4 AM or so.

Unlike my Vegas vacations, I won't be posting an itemized budget for this trip.  We got an amazing deal on the cruise - 5 nights for $199 per person plus taxes and tips.  I found out I can apply my onboard credit toward tips so the total cost of the cruise should be under $600, and I've already paid for it.

I plan to limit my gambling as well as my other spending.  I think I'll budget around $300 above and beyond the cost of the cruise itself.  We are driving to Port Canaveral.  Friday night I am using my Hilton Honors points for a free room at a Hampton Inn near Orlando.  On the way home I am mystery shopping an Embassy Suites, so that hotel stay will also be free.  That leaves gas and a couple of meals en route to take care of.

This will probably be the last vacation we take for a while.  I need to turn my focus toward debt reduction instead of spending all my extra cash on vacations.  More than likely I will limit our vacations in 2012 to mystery shopping trips as well as my annual pilgrimage in May to Omaha to see Warren Buffett.  If I get some really good comps from my last Vegas trip I might go back out there next year.  I'll just have to be more disciplined.  I've even thought about doing a cross-country mystery shopping marathon.  I've taken several long road trips but never driven around the United States.  It would be neat to plan out a route that lasts several weeks if I could find enough hotels, gas stations and restaurants to shop along the way to make the trip worthwhile.

Tuesday, November 22

Frugal Las Vegas - Actual Spending v. Budget

Well, if you leave out the gambling, I didn't do too bad.


Round Trip airfare : $261 actual (on target)
Conference Fee:  $295 actual (on target)
Parking at Airport : $0 (I'm being dropped off)
Baggage fees : $0 (flying Southwest)
Rental Car for 6 days: $125 actual (on target)
Gasoline : $18 actual (under by $22)
3.5 star Hotel off the Strip : 2 nights for $0 (comp based on the gambling I did in 2010 at the mystery shopping conference)
2.5 star Hotel off the Strip: 2 nights for $52
2.5 star Boutique Hotel in Vegas: 2 nights for $59
Food : $14 actual ($46 under budget.  Can you believe it?  I spent $4 on one meal; the rest are tips on free meals)
Souvenirs : $0 actual ($20 under budget.  I won a couple decent prizes at Binion's so I brought them home instead)
Other uncategorized : $7 ($31 under budget - I went to see the movie Jack and Jill)
Gambling: see below

Total Budget (sans gambling) : $831

Gambling:  Suffice to say I left this out for a reason.  It's really rather embarrassing.  I wanted to try the Martingale Betting System just to find out how I would do.  I was doing alright for a couple of days.  At one point I was ahead by $140 or so.  Then on one night, a statistical anomaly that I just can't figure out... happened.  I lost something like 17 hands in a row.  Granted, at one point I STOPPED doubling my bets and started over at the table minimum.  But then it just kept happening.  I kept losing hand after hand after hand.  I know it isn't so, but the game felt rigged!  In all, I lost $1,924 in gambling.  See, I admitted it.  Probably the stupidest thing I've done with my money since I bought a new BMW in 2009.  

Monday, November 21

50 Bartering Sites to Get What You Want

One of my readers emailed a link to the 50 Best Bartering Sites for the Frugal Student.  It is posted on www.onlinecolleges.net so they refer the article to students, but I'm sure students of Frugal University are eligible to benefit from this collection of bargaining websites.

Some of the offerings are obvious, at least to me.  Who hasn't heard of Craigslist or Freecycle?  But there are some that were new to me and look really interesting.  For example, Skills2Barter lets you trade your skills for someone else's.  I'm imagining how cool it would be to trade my time (maybe cleaning or demo work?) for the time of a plumber or electrician, even if it isn't 1:1.  Another one that looks promising is Favorpals, whose tagline is "Imagine a world where you can get anything you want by simply giving something in return."  That would rock.  Right now it's in beta, and a lot of the favors are spam-like (sign up on a penny auction site in exchange for free bids).

All in all this is a nice list of resources for the frugal minded.

Monday, November 14

Last Day In Vegas

I'm surprised how quickly this trip is coming to an end.  Tomorrow morning I head home.  Then, early Wednesday morning, we are heading to the Tampa Bay/Orlando area for a mystery shopping trip.

I've given up on this Martingale strategy.  It hasn't worked for me.  In fact, I gambled away more than I budgeted by trying to follow it.  The good news is I am under budget on some of the other categories.

Every time I've visited Las Vegas over the last few years I have had this frugal idea that I have been too scared to consummate.  I read a lot of blogs about vandwelling/RV living and there is something about the nomad lifestyle that appeals to me.   The reason visiting Las Vegas reminds me of this is because there are so many inexpensive hotel rooms.  It almost seems possible to live solely in hotel rooms in this area for under $700 per month, which obviously would include all utilities and a bonus - something I don't have at home - cable TV.

My rental properties have become my golden handcuffs.

Saturday, November 12

Frugal Las Vegas - Betting Strategies

Even though I arrived in Vegas on Thursday night, I haven't really been on the playing floor yet because my attention has been focused on this conference.  Since the conference ends at noon today, I expect to spend some time gambling during the rest of my trip.

My goal is to lose less than $300 while I am here.  I don't think anyone will disagree that they come to Vegas hoping to take home a jackpot.  But, I am realistic and I acknowledge that gambling is a form of entertainment.  Therefore, the overwhelming odds are that I will lose money the longer I play.

Still, one can be smart about it.  One of the most annoying things I see in the casino is people making dumb betting decisions.  How entertaining can it be to double down on a hard twelve at Blackjack?  You just don't do that.

When I gamble you will usually find me in one of two places:  either video poker or blackjack.  I do enjoy live poker but I've never played in Vegas because there are too many professional players and I am just not good enough.  Whether I'm on a video poker machine or a blackjack table, I'm using strategy cards.  Sure, some people think it takes the fun out of the game.  On the contrary, I enjoy the challenge of memorizing a set of rules that will help me make the most advantageous decisions.

Alas, I do like the adrenaline rush of taking chances, which is why I've decided on this trip to try the Martingale Betting System.  This strategy increases your chances of winning, but if you do lose, you tend to lose big.

Here's how the Martingale Betting System works:  Say my starting bet is $5.  

  • If I win a hand, I've won $5.  My next bet is the same amount, $5.
  • If I lose the hand, I increase my bet to $10.  If I win the second hand, I am ahead by $5 (lost $5 on the first hand, won $10 on the second hand).
  • Every time I win a hand, I net $5, regardless of the amount wagered, and my bet reverts back to the original bet, in this case $5.
  • Every time I lose a hand, I double my last bet.
In most cases, this strategy will significantly improve my chances of winning.  I read on another website that in a one hour period, the statistical odds are that I will win 82% of the time using the Martingale Betting System.  But in the rare case that it doesn't work, I will lose a lot of money.  The reason:  if I lose too many consecutive hands, I run out of money to bet or I reach the maximum bet limit for the table.  Let me illustrate:
  • First bet:  $5
  • Second bet (if I did not win the previous bet):  $10
  • Third bet:  $20
  • Fourth bet:  $40
  • Fifth bet:  $80
  • Sixth bet:  $160
  • Seventh bet  $320
  • Eighth bet:  $640
  • Ninth bet:  $1,280
  • Tenth bet:  $2,560
Many blackjack tables cap your bet at $1,000, so after I've lost eight hands in a row I am screwed.  It's important to note the Martingale Strategy can be used on other games, such as roulette.  For roulette, you pick a color, red or black, and start with your base bet and keep doubling until you win.

My plan is to visit the El Cortez, an old casino near Fremont Street that features $3 minimums on blackjack.  Once I am ahead by $100 I will take a break and find something else to do.  

Thursday, November 10

Too Frugal?

In general I don't like to pay others to perform services I can do myself.  For example, I would never pay $40 for someone to cut my grass.  It takes me 20 minutes and I enjoy the exercise.

One of the services I've never been able to do myself is cutting my own hair.  This is something I just can't stand paying to have someone else do.  Most of my life I've used one of the chain stores (in Birmingham the big chain is Head Start, a Regis brand).  They raise their prices just about every year and now it costs something like $17.95 for a haircut.  I just don't see the value.  Most of the time, the stylist's hands wreak of cigarettes, so I have to smell that the entire time, plus I have to wash the smell from my hair afterwards.  The quality of the cut is hit or miss, and the fact that it takes between 5-10 minutes to cut my hair is probably a reason.

I experimented with a hair school but the nearest one is 13 miles from the house.  Head Start offered some great coupons for about 3 months this summer ($8 cuts), but now the price has gone back up.

So, just before heading out to my conference in Las Vegas, I had my partner cut my hair.  Unfortunately, due to inexperience, things got messy, and I ended up with a military cut.  I suppose it doesn't look bad, but this is the first time I've been mostly without hair.

But, hey, it was free.  That's $20 (after tip) that I can use to pay down some debt.

Wednesday, November 9

$19 for Unlimited Phone, Text and Data - Republic Wireless

Wow!  This morning I read about Republic Wireless, which apparently opened its doors to customers yesterday.  This isn't some scam or gimmick - they really are offering unlimited, no-contract plans for $19 + tax.  You have to order a phone through them - the LG Optimus - which is $199, but if you use the promo code "welcome 19" they will knock $100 off the cost of the phone.  When I signed up I was advised that it may be 30-60 days before the phone ships.

Join Now  (Note: This isn't a referral and I am not being paid to tell you about this)

How can they afford this?  I'm no technophile, but apparently they use wifi networks whenever available to mitigate network costs.  The rest of the time they are part of the Sprint network.  You have to agree to connect at least one wireless network to the phone, which for me is not a problem as even my current phone with AT&T is connected to my home wireless network.  They also reserve the right to cancel your account if you are too heavy a user, but I read that you can use up to 550 minutes, send 150 texts and transmit 300 mg of data (all while being OFF the wireless networks) before you cross the line, and even when you cross the line you are given ample warnings.  I don't use that now so no problems there.

Visit the Yahoo News Page Where I Discovered This Deal

I'll keep everyone posted on when I receive my phone and how easy it is to get started.

Frugal Las Vegas, the Sequel

I love days like today.  That's because this afternoon I am flying out to Vegas for six days.  Just two months ago I vacationed there with my partner; this trip it's just me, as I am attending the AAII Investor Conference.  The keynote speaker is Joel Greenblatt, author of The Little Book that Beats the Market among other titles.  I'm excited because that was one of the few books I actually bought new when it came out.

Our last trip I budgeted $2,000, but the actual amount was only $1,350. That was for two of us for 9 days.  My goal is to spend less than $1,250 on this trip.  That might not sound like a frugal goal until you consider nearly half of that was for my flight and registration fee for the conference.


Here is how I am budgeting my spending:

Round Trip airfare : $261
Conference Fee:  $295
Parking at Airport : $0 (I'm being dropped off)
Baggage fees : $0 (flying Southwest)
Rental Car for 6 days: $125
Gasoline : $40
3.5 star Hotel off the Strip : 2 nights for $0 (comp based on the gambling I did in 2010 at the mystery shopping conference)
2.5 star Hotel off the Strip: 2 nights for $52
2.5 star Boutique Hotel in Vegas: 2 nights for $59
Food : $60 (budgeting $10 per day for 6 days)
Souvenirs : $20 (just in case)
Other uncategorized : $38 (this is my "cushion" for unexpected expenses)
Gambling: $300

Total Budget : $1,250

Most people would stay at the same hotel, but I jump around to save money.  I really don't mind that because it makes the vacation seem longer for some reason. 

Tuesday, November 8

My Frugal Miser - October Expenses: $3,611


In October I spent a bit more than I made.  I did really well in the fuel category because I mystery shopped over 75 gas stations, but those savings were offset by some proactive repair work I had completed on my car.  I did poorly in the food category but know I'll do better in November.  Finally, I had an unexpected household expense.  My home refrigerator, which was only three years old, stopped working.  The repair would have been more than $600 so I opted for a much smaller $412 refrigerator.  It's instances like this when you realize they really don't make things like they used to.


October Expenses
$470 Auto ($449 service, $21 fuel )
$0 Bank Fees
$0 Clothing
$415 Food
$118 Entertainment (movies, gambling, alcohol)
$121 Gifts Given
$440 Household
$100 Health Insurance
$0 Medical
$372 Interest on Debt (not including Mortgage Interest)
$0 Miscellaneous
$400 Mortgage Interest (primary residence)
$772 Mortgage Interest (rental properties)
$7 Personal Care
$0 Subscriptions
$188 Utilities
$208 Vacation

Total October Expenses : $3,611


Notes
  • Nearly all of the Vacation category ($183 of the $208) was spent on two round-trip tickets I purchased to New Orleans for next year.  Southwest had a really good sale so I anticipated that by February of next year I will be itching to travel.  If I change my mind I can save the credit for a different flight.
  • My food budget was for two people. I averaged $13.39 per day for two people in October. This is higher than normal because we ate out way too much.  
  • Interest on debt is deceptive because nearly all of that debt was taken on to purchase income-producing real estate.  Six of my nine properties don't have mortgages because I used alternative financing such as a HELOC, a personal loan, or credit card advances.  Only $21 of the $372 was NOT for real estate, which is the interest on my student loans.

Monday, November 7

My Frugal Miser - October Income: $3,472


In October I finished rehabbing House #9 and got it rented out.  I think the tenant is going to be low maintenance as long as he pays his rent without fuss and on time. My rental income took a serious hit since some of the major purchases (flooring, appliances, etc.) for that property are reflected in this month's number.



October Income
$668 Mystery Shopping
$2,531 Rental Income
$272 Other Sources
$3,472 Total Income for October


Notes:
  • I deduct rental expenses, including rehabbing new properties, from rental income.  Otherwise this amount would have been higher.
  • I did more mystery shopping than I was paid for.  Those payments will be reflected in November.

    Friday, November 4

    Frugal vs. Always Broke, Part 2

    I was recently asked by Social Security to be the Representative Payee for an acquaintance of mine who is also a tenant.  We've known each other going on 15 years and I was seen as a trustworthy option.  I agreed to do it but now I’m regretting that choice because it puts me in a moral dilemma:  how he wants to spend his money versus how I think it should be spent.  It’s important to realize that a Representative Payee is appointed when the recipient of Social Security funds is deemed unfit to manage his own money.  I was given a booklet with guidelines for how to manage this money, including a guide to prioritizing how the money is spent.  It’s essentially a Maslow's Hierarchy of Needs, government-style.

    The problem is that my friend has made some really bad decisions over the last couple of years.  Instead of saving up and paying cash for new bedroom furniture, he is leasing furniture from Aaron’s.  Aaron’s is a loan shark fronting as a furniture store.  The interest rate he pays on his lease-to-own furniture is 20% per month, or the equivalent of 242% per year.  He didn’t stop there.  When he and his girlfriend needed money for cigarettes one month, she convinced him to pawn the TV that he was leasing.  They received $200 in proceeds but have to pay $40 per month in interest.  In other words, they still owe $200 after eight months of paying $40 in interest.  So they’ve paid $320 and still owe the $200.

    Why do people inflict pain on themselves?  I’ve decided that it must be a chemical imbalance.  Those who can delay gratification versus those who are “pleasure seekers” and have to have something NOW.  Pleasure seekers don’t consider the long term pain associated with the momentary and fleeting pleasure derived from their actions.  They wind up in this endless cycle of greater and greater debt.  Then they file for bankruptcy and make the rest of us pay for their mistakes… but I’ll save that for another day!

    Thursday, November 3

    Frugal vs. Always Broke, Part 1

    My partner’s sister moved in with us this week.  She and her boyfriend had been living together in his parent’s rental property for more than two years.  They didn't break up; it’s just that the power and water were cut off due to nonpayment.  He moved back in with his parents but she wasn't allowed to since they are not married.  Let’s call her “K” and we’ll call him “W”.  This is their story.

    When K approached me about staying here for a while, and then admitted it would be more than a couple of weeks, I didn’t hesitate to say yes with the stipulation that she contribute a nominal amount to cover the increased costs (higher utility bills) of having her here.  Don’t get me wrong; I don’t try to profit from other’s misery.  She’s stayed with us before for a few days, no charge, and we even invited her and W over to take a hot shower when their water was first turned off.

    Why do some people struggle every month to make ends meet while the rest of us do not?  It’s especially interesting when one’s income isn’t a factor.  The young couple I am talking about both have jobs.  They don’t make a lot of money, but their hardship wasn’t a result of a job loss or medical emergency.  Their struggle is a result of their attitude.  Let me explain.

    Last night K mentioned to my partner how excited she was that the new Twilight movie was being released November 18.  She added the suggestion they should go see it.  My partner, whom I’ve trained well, automatically responded, “Yeah, as soon as it hits the dollar theatre, let’s go.”

    That momentary big smile quickly faded from my face when K replied, “That’s too long;  I can’t wait that long to see it.”  Then something happened that I can’t explain.  Let’s just say Frugal Miser spoke up.  It was a reaction, really; I wasn’t trying to piss her off or hurt her feelings.  As soon as she said that, I replied, “That’s why you and your boyfriend lost that house.”

    Ouch.  As soon as I said it I felt bad.  But the thing is, I meant it.  Being frugal isn’t a sacrifice; it’s a lifestyle.  We will still see that movie.  In the theatre.  In digital surround sound.  It isn’t stadium seating, but the seats at the dollar theatre are new and they are quite comfortable.  The difference is, the two of us will pay $3, and we will skip the concessions line.  K and her boyfriend will spend $18 for the movie and there’s a good chance they’ll spend another $10 on concessions.  $28 versus $3 might not seem like a lot… if you aren’t of the frugal mindset.  To me, that $25 difference is almost a tank of gas.  It’s 2 1/2 weeks of electricity.  Two months of hot water.  It’s a lot of freaking money!

    Wednesday, November 2

    Do It Yourself versus Do It For Me

    I learned a good lesson yesterday about needing to know my limitations.  I am so stubborn sometimes that I take on repair jobs that are bigger than I can handle.  I guess knowing what those limitations are is my problem.

    My new tenant called a few days ago to let me know the shower faucet had a slow leak.  I figured I would try to tackle it myself and save the $100 or so a plumber would charge.  I spent a couple of hours on Youtube and other handyman websites watching people repair these things.  I felt confident that I could tackle the job.

    The first problem was that once I disassembled the obvious parts and got down to the guts of the shower, I didn't recognize a thing.  I thought I would try to unscrew the valve and take it with me to find a replacement since replacing the "seats and springs" and steel ball didn't stop the leak.  Unfortunately, in trying to unscrew the valve, I made the leak worse.  In fact, I broke one of the pipes in the faucet, sending water through the floor behind the tub, penetrating through the sheetrock ceiling and down to a utility closet on the ground floor.

    Now, $653 later, what started off as a small leak has been repaired.  Assuming my $100 estimate is close, my attempt to fix this myself cost me more than $500.