Omaha Trip Winding Down

All it takes is a week away from home to make you want to be back!  Lucky for me I will be home later today.  I arrived in Kansas City on Sunday evening after completing several gas station audits.  I settled into the only hotel stay that wasn't either free by redeeming Hilton Honors points or free due to mystery shopping.  Since I was paying and I'm tight with my money I stayed at a Days Inn, which was $37 with tax.  It wasn't worth a penny more!  I'm a stickler for cleanliness so the hairs in the bathroom were kind of gross and the stains on the walls were mysterious.  Fortunately the sheets looked clean although I did wake up in the middle of the night feeling like something had bitten me.

Monday morning was a real treat.  Andy from Tight Fisted Miser was in town to pick up a friend from the airport.  I had a great time meeting him and sharing tales of frugality and mystery shopping bloopers.  Our visit was too short due to the fact that I was driving 600 miles on Monday.

The drive wasn't as bad as I thought it would be.  I stopped in St. Louis at a hole in the wall BBQ restaurant and had some fabulous BBQ for lunch.  I made two additional stops to break up the monotony and arrived at my hotel at 7 PM.  I was pleasantly surprised by the hotel.  It was a newer Hampton Inn on a golf course and pond in one of the most remote locations I've ever seen a Hampton... I'm surprised people find it but I was told it is a popular spot for Civil War buffs and those seeking outdoors activities.

This morning I am auditing four gas stations on my drive home.  I also lucked out and found four gas stations to mystery shop (not audit) that are on the same route I will be taking.  I have a new store merchandising setup job that is supposed to take several hours so I will probably be home by sunset.  Fortunately the new store is only 3 miles from my house.

All in all it's been a great trip.  I am under budget and made some decent money by mystery shopping.  I'm not worn out like I thought I would be... I'm refreshed and energized.  Hopefully later this week I can put together a post about the total cost of my trip along with how much I made by combining mystery shopping.

Pilgrimage to Warren Buffett's Omaha (an Update)

It's been a busy week!  I'm really glad that I planned my annual trip to see Warren Buffett with mystery shopping in mind.  Sure, I'm on the road a bit more, but that means the long drive each way is spread out over three days of driving AND I am paying the costs of this trip by mystery shopping.

I kicked off the trip by doing 4 gas station audits.  I found a restaurant to shop for lunch at the last minute.  Then, I spent the night Wednesday night in Dyersburg, TN, where I mystery shopped a hotel.  I found a restaurant to shop in the mall across the street from the hotel.  I love being able to do multiple shops without getting in the car.  Total out of pocket:  $0

Thursday was an easy day.  I drove from Dyersburg, TN to Keokuk, IA.  I redeemed 7,500 Hilton Honors points to stay at the Hampton Inn in Keokuk.  Along the way I shopped two restaurants.  I saved the food from the second restaurant and ate it for dinner.  I did need to stop for gas before I reached Keokuk.  Total out of pocket:  $15


On Friday I drove from Keokuk to Omaha.  I started the day doing a gas station shop in Fort Madison, IA as well as a last minute breakfast drive-thru shop there.  That covered lunch since breakfast at the hotel was free.  I was running low on gas so I put $13.50 in the tank, which was not part of a mystery shop.  When I arrived in Omaha I had six additional gas stations to audit.  I also found a casual dining restaurant to shop Friday night.  It was a sit-at-the-bar shop with minimal narrative; one of the easiest casual dining shop reports I've seen.  In prior years I have attended a cocktail party at Borsheim's, but I opted out this year because last year it was so crowded that I didn't enjoy myself (imagine that:  free booze and food and I passed on it!).  For my hotel in Omaha I redeemed 25,000 Hilton Honors points for two nights at a Hampton Inn.    Total out of pocket:  $13.50


Today (Saturday) was the big day:  the annual Berkshire Hathaway shareholder's meeting.  This was the whole purpose of my trip, so there was no way I was missing that.  I was up at 4:30 AM and arrived at the CenturyLink Center before 6 AM.  In prior years this has been early enough to ensure a seat on the main floor in front of the stage, but unseasonably mild temperatures (lows in the mid 60s versus high 30s last year) meant I didn't arrive early enough.  Still, I had second row seats in a reasonable area of the arena.  I I left just before the lunch break to shop four gas stations.  I ate lunch at a Chinese place not too far from the arena (under $10).  I was back in time for the meeting to resume but spent a few minutes in the exhibit hall before heading back to the arena.  There were several viewing areas in the exhibit hall so I did not miss much.  I only purchased a three pack of t-shirts from the Fruit of the Loom station ($5).  After the meeting (I left 10 minutes early to beat traffic), I took the trusty Corolla to get an oil change.  The oil change, of course, was a mystery shop.  This was in Council Bluffs and I had a bit of an itch to gamble, even though Charlie Munger detests gambling and got on his soap box about it today.  I stopped at Harrah's for about an hour.  I was lucky:  I left with $10 more than I came.  Total out of pocket:  $5


I'm having a blast and hate that the remainder of the trip is the ride home.  Driving home is never as fun as heading there to begin with.  I do have 6 shops to do tomorrow on my way to Kansas City.  I will definitely have to come out of pocket some time Monday for gas, but with a tank that's nearly full now I expect that it won't be too expensive.  Hopefully on Monday morning I will be meeting a fellow frugal miser, Andy from Tight Fisted Miser.  We are planning to meet for breakfast if we can work out the logistics.

Omaha or Bust

Later this morning I'll be heading toward Omaha for the 2012 Berkshire Hathaway Shareholders meeting featuring The Man, Warren Buffett.

Since my update last week I've managed to pick up even more mystery shops, and unless I lose it in one of the casinos over in Council Bluffs, my shop fees will just about cover the cost of this trip.

Imagine that:  7 days, 6 nights and 2,000 miles.  All expenses paid (including the requisite Buffett souvenirs I usually purchase), thanks to mystery shopping.

Mystery Shopping My Way to Omaha for the Berkshire Hathaway Meeting

Here's my budget for my week-long vacation to Omaha for the Berkshire Hathaway meeting:

• Lodging:  $40
• Gas:  $60
• Meals:  $60
• Souvenirs:  $100
• Miscellaneous:  $40

Total for Six Days:  $300

It's time for my annual dose of Warren Buffett.  My journey will begin on Wednesday, May 2nd.  Forever searching for the frugal-ist way to see my idol, I've put together a nice mystery shopping trip along the way.

The weekend kicks off with a cocktail party Friday evening, so I'm giving myself plenty of time to travel the roughly 1,000 miles to Omaha.  I'll shop some gas stations Wednesday afternoon before arriving at a Hampton Inn in rural northwest Tennessee, which I'll be shopping.  On Thursday I plan to play it by ear as far as picking up shops along the way.  In previous years there's been some good stuff in Iowa, which is where I'm staying Thursday night.  I didn't find a hotel to shop so I am staying at one of Hilton Honors' "opportunity" hotels.  These properties give you a free night for 7,500 points.  I've earned more points than that in a single night shopping a high end Hilton property.  Onward Friday morning to O-town.  I found out years ago that the only way to get a room in Omaha during the Berkshire Hathaway weekend is to book about one year in advance.  Fortunately I was able to use my Hilton Honors points when I reserved my room, so those two nights are free as well.  While I'm in Omaha I have 6 gas stations lined up (12 gallons of gas, or almost a tankful for the Corolla).  I'm sure I can find more work in that city if there's any down time.

The return trip is equally eventful.  I stop over in Kansas City on Sunday night.  Since I couldn't find a hotel to shop I am staying at the cheapest motel in the city.  I've got several gas stations to shop there.  Then Monday evening I shop a Hampton Inn in southern Tennessee.  I expect to arrive home late Tuesday morning.

So there you have it:  a frugal guide to seeing the Oracle of Omaha, Warren Buffett.  Out of six nights, I'm paying for a hotel just one night.  Breakfast every morning will be included with my hotel stay.  That leaves two meals per day and I'm sure I'll find some restaurants to shop along the way.   I'm driving about 2,000 miles, which I estimate will take 57 gallons of fuel.  I'll be starting with a full tank (13 gallons) thanks to shops I'll be doing the day before I leave.    I also will be reimbursed for 30 gallons of gas for the 15 gas station shops I'm already assigned.  That accounts for 43 of the 57 gallons I need.  Maybe I'll get lucky and find enough shops along the way to cover the other 14 gallons.

I wonder how many other Buffett fans look for the most frugal means possible with which to see The Man.  Buffett himself is famous for some of his frugal mannerisms, so it makes sense that at least some of his followers would practice frugality along their journeys.

Taking Some Time Off

I've been terrible about keeping up the blog lately because I've been a little burned out with the restaurant. I've not taken a single day off. That's about to change. Tomorrow after work my partner and I will travel to Omaha for the Berkshire Hathaway shareholder meeting. I need my annual dose of Warren Buffett to keep me focused. Surprisingly it wasn't too hard to make these arrangements at work - our investor, who usually works a few hours a week, has agreed to fill my shoes.

We will probably close the restaurant anyway. I hate to do this so soon (we've only been open 100 days or so) but we are nowhere near where we need to be in terms of sales. Last week I told my business partner that if all we needed to do was grow sales by 20-30%, I would look at this as a challenge we could tackle. Instead, we need to triple our sales just to break even and pay ourselves a very modest salary. There's no way we can triple our sales, and even if we did I would still only be earning $500 a week.

In more positive news I am making steady progress at paying down my debt. All my tenants have stayed current on their rent for several months which really stabilizes my cash flow. More on this when I post my monthly financial update.

My Frugal Miser's Best Advice I've Received - Go With Your Gut and Selective Procrastination

This advice is something I've learned from listening to mentors like Buffett but not necessarily something I've heard them come out and say.

One of the traits my friends are always surprised by is how quickly I make decisions. I'll never forget when I went into the D.R. Horton design center to choose the customization options for my house. The design consultant told me I was the fastest appointment she ever had. It's not that I didn't care about what color my walls were or the design of my cabinet handles. It's just that I learned to go with my gut.

95% of the time, when you go with the first decision that comes to mind, you'll be making the best decision. I've spent too much time - agonizing time, mind you - watching acquaintances, business associates and family fill out spreadsheets, seek expert advice, etc. to make a decision about something.

The question I ask myself when making a decision is "What's the worst that will happen if this decision isn't the best one?" Often, the consequences are minimal. If I have to choose between six neutral paint colors for the walls in my house, why spend half an hour debating the merits of one versus the other - that's 30 minutes of my life I don't get back. Instead, my gut tells me what to pick. Go with it and don't look back.

Now, there is a time and place for procrastination. This is especially true with large purchases where I need to do something but don't have to rush. In this case, I want to get a great deal and I want to buy a quality product. For example, one of my rental properties has a dishwasher with a very small leak. The door gasket is bad. First, I found out how much it would cost to simply replace the gasket. Since the dishwasher is several years old, I had to consider how long it would last if all I did was replace the gasket. And, since the tenant is okay with it in its current condition, I can take my time. Instead of running to Lowe's and buying a replacement, I first found out how much it would cost to replace the gasket. Then, once I decided it was not worth replacing just that part, I decided to start looking at replacements. I have a base price for what it will cost, but now I can take my time to find a better deal, whether it be a cheaper dishwasher, a special discount on delivery, or an energy-efficient rebate.

In the case of the dishwasher, I am deferring a purchase where the cost of deferral is zero - the existing unit isn't damaging my property and isn't causing too much pain to my tenant. But in the case where there is a cost to procrastinating - wasted time, effort or risk of higher costs - I will go with my gut and do what comes to me first.

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

The best way to define pragmatism is to be practical. When you find something that works, keep doing it. If it ain't broke, don't fix it!

I have a theory that CEO's often try to justify their extravagant compensation by thinking up the next "new and improved" idea. At my J-O-B, one of the few complaints I had was that as soon as we got good at something, one of the team leaders, usually the CEO or VP of Marketing, would decide we needed to change things. Don't get me wrong - I am always looking for ways to improve. What I mean here is, you should find what you are passionate about and become an expert at that. Keep doing it, over and over again, until you are the absolute best at whatever it is you do. In other words, don't strive for being adequate and then move on to the next challenge. FOCUS. Be the absolute best you can be.

One of the goals I set for 2010 was to reduce the amount of stock trades I placed. Warren Buffett talks about having "20 punches" - look at every investment as though you can only make 20 investments over the course of your lifetime. By thinking this way, you spend more time making sure the investment you are about to make is the right one.

This is such an important trait, one that is lacking everywhere. Remember New Coke? Coca-Cola made the fatal decision to replace its classic formula with a new and improved one, only to drop the new formula after many consumers protested. Manufacturers of disposable razors invest hundreds of millions of dollars in rolling out new razors with more and more blades. Does a five blade razor with a special soothing moisturizer strip and hydro-power really make that much of a difference? Is it that much better than its four blade, or three blade, or TWO blade predecessor?

For me, I want to constantly improve on something I know works. For example, I know I can earn a living by mystery shopping. Instead of searching for other forms of income, I am working on ways to make more money by shopping. I am creating data entry templates for shops I do in quantity to cut down on paperwork time, and I am networking with my schedulers to make sure they think of me when deadline shops are being bonused. Similarly, instead of searching for my next brilliant stock investment, I study the stocks I already own and allocate my money to the companies I feel best about.

I think we as consumers are often trained to think "new and improved" is always better than "old and works". In fact, this emphasis on change is often brought about by companies looking to one-up their competition on a vicious cycle of mediocre improvement, or worse, is a quality encouraged by the companies that are compensated by change. E*Trade only makes money off me when I place a trade, so naturally they would love for me to be a day trader. Fortunately, I know this is a get-poor-quick scheme, something I can live without.

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.

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.

Photos of Warren Buffett from the 2010 Berkshire Hathaway Meeting

Thought I would share a few photos I took at the 2010 Berkshire Hathaway annual meeting. One is of Buffett eating ice cream from the Dairy Queen booth.






This next one is a crowd shot of Buffett walking through the exhibit hall.










The last one I am especially proud of, even though it's just the back of some heads: for the annual movie before the meeting, Buffett always sits in the same place in the coliseum. Betting he'd do the same this year, I planted myself right behind those seats. Those heads include Warren Buffett along with his kids.











I also took a photo of Bill Gates on my camera phone. It isn't the same quality so I don't know if I'll share that one.