Free Premium Passes to Sea World and Busch Gardens Parks

A couple years ago, shares of Carnival Cruise Lines were pounded after the deadly sinking of the Costa Concordia and a major fire on the Carnival Triumph.  While other investors sold their shares and ran in the other direction, I sniffed opportunity.

We are always looking at ways to save money on vacations and entertainment.  Who pays full price, anyway?  Recently I discovered a low-risk method to "pay" for two premium passes to all 10 Sea World/Busch Gardens parks - for two full years.

These premium passes weren't cheap:  I paid $1,085 all-in for two passes valid for 24 months.  As an investment in our entertainment, this has the potential to be a great value.  If we visit once a month (we live near Busch Gardens Tampa Bay, so this is not unrealistic), admission will cost us about $23 per ticket.  The premium passes also include parking, which saves us at least $15 each time we visit.

However, $23 per ticket to visit a premiere theme park isn't good enough for a Frugal Miser.  Before pulling the trigger on this purchase, I found an attractive investment in Sea World (NYSE:  SEAS).  Truth be told, I was first attracted to the company's stock, which then lead me to investigate the most cost-effective way to get tickets for the parks.  What made the stock appealing was the healthy dividend and the fact the company's shares have been negatively affected by what I think is a temporary problem (similar to Carnival two years ago).  At today's price, each share of SEAS yields 4.8%.  Compare that to a bank CD:  a 24 month CD pays less than 1% interest.  Assuming the dividend is safe, buying 645 shares of Sea World (an $11,000 investment) earns enough in cash dividends to pay for our passes.  At the end of two years, I still own the 645 shares, which I could sell, likely at the same price or better than the stock trades today.

As a value investor, I never pay "full price" for stock in a company.  Two years ago, Carnival stock fell following a series of misfortunes.  Just as I suspected, that company has completely rebounded.  I think Sea World is experiencing a similar situation.  A documentary (Blackfish) hurt attendance, which is down by the low single digits.  However, shares of the company have fallen 52% in the last two years.  Risks are primarily that attendance figures continue to decline, either due to internal problems or another economic recession.  The company has a lot of debt and the dividend is currently higher than earnings.  Both of these issues need to be addressed.  My thesis is that the debt is easily serviceable and the dividend can be covered by improved attendance at the parks. This Frugal Miser smells opportunity.  On Monday I purchased 650 shares of SEAS at $17.67/share.

Looking Back at my Free Cruises for Life Idea

In May of 2013, I posted my plan  to receive free cruises for the rest of our lives.  More than two years have passed and I thought I would evaluate whether this plan was successful.

The idea was to purchase enough shares in Carnival Cruise Lines (NYSE:  CCL) so that the dividend paid for a free cruise every time we take one.  At the time I posted the article, shares were trading in the $34 range and paid a $.25 quarterly dividend.

How have I done?  In a word:  Outstanding.  Stock in Carnival is now at $53/share, and the quarterly dividend was recently increased to $.30.  I have a paper gain of $19 per share, and have collected $2/share in dividends.  I ended up buying just 200 shares, not the 1,000 that I originally intended.  The $3,800 paper gain, along with $400 in dividends, could pay for seven 7-day cruises for two at the price I paid for the cruise we are taking in December.

Did you get that?  In exchange for investing $6,800, over two years I have received the equivalent of 7 week-long cruises.  I could cash out today, receiving 100% of my money back, plus my gains.

My Frugal Miser - July Expenses: $9,925

I spent more than I brought in last month.  We paid for the IKEA cabinets (over $2,500) and I paid off my dental implant.  I also put a $500 deposit down on a December cruise and bought Platinum 2 Year Passes to Sea World and Busch Gardens.  Those passes work out to $23/month each, which is a big gamble on my part that we will divert our future entertainment spending towards theme parks.  The passes cover all 10 parks across the country as well as free parking.  We've already visited Sea World in Orlando last week and will spend some time at Busch Gardens in Williamsburg, VA this week.

I began driving for Uber last month.  I earned $1,302.  Since I bought a car just for Uber, I will be able to track depreciation and other vehicle expenses.  I don't plan to break out my spending on fuel though - too complicated.

July Expenses:  $9,925

$1,276 Auto ($79 for gas, $148 for depreciation, $687 for Uber Car depreciation, $362 for service)

$38 Bank Fees

$47 Clothing

$0 Computer

($2) Entertainment (movies, gambling, alcohol) - income this month

$185 Food

$0 Gifts Given

$3,378 Household/Housing/Home Repair

$141 Health and Dental Insurance

$0 Investment Expenses

$2,470 Medical/Dental

$20 Miscellaneous

$0 Personal Care

$0 Subscriptions

$0 Taxes
$83 Uber Expenses (excluding fuel and depreciation)

$228 Utilities

$1,920 Vacation and Recreation

July Expenses, Excluding Vacation and Home Repairs:  $4,637

My Frugal Miser - July Income: $7,461

The house I listed in March remains unsold, but I do have an offer on it.  My agent is working to improve the offer, as it was too low for me to accept as-is.  The empty townhouse was rented in record time.  This is a new management company and they did an outstanding job finding a new tenant.  My handyman also did excellent work getting the property in rent-ready condition.  I will receive rent from this one starting in August.

The incompetent management company for two of my townhouses is holding the rent to pay to have trees trimmed.  The trees do not belong to me but are hanging onto my property.  Lastly, my tenants at the condo only paid $500 ($150 short) as one of them lost his job.  Bottom line:  I received NO rent on 4 properties, and a reduced amount on a 5th.  It was a tough month.

July was my first month driving for Uber.  I grossed $1,302.  On Monday I will go over the expenses I had.

July Income $7,461

$1,795 Mystery Shopping
$1,302 Uber
$4,346 Rental Income

$18 Other Sources

Notes:.  

• I don't include transactions in my retirement accounts.  This includes rental income, dividends and capital gains and losses.
• I don't include changes in investments from capital gains/losses or dividends.  Most of my investments are in retirement accounts anyway, but this category will grow as I start selling my rental properties and I will probably change this policy.
• I include merchandising and hospitality work in the mystery shopping category since the companies that I shop for provide this extra side work.