It's Just Money

Car vs. House, good perspective

It's no secret that real estate is generally a good investment, while cars are almost certainly not.  I say "generally" for real estate because it is very possible to turn real estate into a terrible investment.  Flippers, sub-prime buyers who can't handle the payment reset, and someone who overpays in a hot market are cases where real estate could end up a poor investment.  When is a car a good investment?  Well, almost never.  I knew a guy in high school whose dad was a mechanic.  They used to buy used cars, fix them up and sell them for a profit.  In that rare instance, or perhaps selective collectibles, a car might be a worthwhile investment.

Otherwise, while they are both "use assets," a house is likely to make you better off in the long run, and a car is not.  Again, no big surprise.

I was listening to Dave Ramsey today, as I often do if I am in my car during the afternoon.  A 25 year old woman called in.  I don't remember her name, but we'll call her Kathy.  Kathy asks Dave if she should get an apartment or build a small starter house.  Naturally, Dave asks her two questions, "do you have any debt?" and "how much do you make?"

Not long ago she was debt free, but just recently purchased a new car, and financed the whole thing.  Also, she bought a small piece of land on which to build a small starter house.  The car was $31,000 and the land was $20,000.  She owes $31,000 on the car, and $16,000 on the land (she put $4,000 down).  Her income is $43,000.

You can imagine what came next.  "Sell the car," Dave instructed in no uncertain terms.  "Today."

"Well," she kind of pleaded, "does it matter what kind of car?"  Of course, we all know the answer.  It's really not difficult.  Spending 72% of your annual income on a car is just silly.

With the car payments, she would have a difficult time financing the construction loan for the house.  Essentially, she was sacrificing a house for a car.  Dave put her situation into perspective very effectively.

"You're 25 years old today, right?  Let's say you wake up tomorrow and you're 35.  Let's pretend that you're still single for the sake of simplicity.  You may be married with a bunch of kids, but that doesn't matter.  At 35, would you rather have a house that you are ten years into payments on, or a ten year old car?"

Well done, Dave.  We don't even need to wait for the answer.

Nice Dinner for two at McCormick and Schmick for under $15

Here's a great deal that I found on Slickdeals.net.  You print the coupon here, and make your reservation online here.  They're trying to promote their online reservation system.  So, all you have to do is print the coupon, make your reservations online and write the reservation confirmation number on the coupon.  The coupon is good for $25 with no minimum purchase.  It's not good for alcohol, and you can only use one per table.  But for two people, it was an incredible deal!

We went to the one in Pasadena.  I had their Seafood Etouffee, which is like a jambalaya.  It has andouille sausage, chicken, shrimp and crawfish.  It's served with a nummy sauce and rice.  My Fiancee had the blackened catfish with mashed potatoes and steamed vegetables.  We enjoyed the bread, and drank water.

Before the coupon, our bill came to $35 after tax.  After the coupon it was $8.55!  They only charged tax on the after discount amount.  We left a $6 tip (appropriate for the pre-coupon total), and finished our very nice meal, with leftovers for less than $15.  What a great find.

The deal is good until the end of March, and you can go as often as you like.  We may just go again.  But next time we may just get one entree and an appetizer.  See if we can spend tip only.

By the way, if you're not familiar with McCormick and Schmick's, it is a fantastic seafood restaurant with fresh daily menus.

Inspired by our $50 a day success, we're implementing a $20 a day food budget!

Recently, I posted about our success in keeping our food expenditures in Orlando under $50 per day.  Bolstered by the success of that little project, we have embarked on a $20 a day food budget for the two of us. 

When you think about it, $600 per month for food for two people should be very easy.  And most days, we'll be well under the twenty bucks.  But the idea is to accumulate the excess, so that when there's an occasion to go out, or we just feel like it, we can go for it.  This way we will never feel bad about going out, but will also never allow food to overwhelm our budget.

We started it yesterday, March 1.  So far, in a day and a half, we have spent about six bucks.  I love it!

Eating in Orlando for $50 a day

Well, I didn't think we could do it.  My Fiancee suggested before our trip to Orlando, "Let's set a food budget of fifty bucks a day."  I agreed, but inside I was skeptical.  After all, we were planning on spending several days in Disney and Universal theme parks.  Aren't the burgers like nine bucks there?

Well, I'm happy to report that we not only kept our total combined food budget under fifty dollars a day, but we almost made forty dollars a day!  Not only that, but we didn't hold back.  We ate out, I had beers at EPCOT's World Pavilion, wine or beer with a few other meals.  So, how the heck did we do it?  I'm still not sure I know, but basically, it's like this...

Timeshares: Should we buy one?

During our trip to Orlando, we stayed at a Hilton Grand Vacation Club Resort.  The price was right:  $330 for four nights.  It was the sort of resort that you would expect to pay at least $150 per night.  The catch?  Sit through a 90 minute timeshare presentation, of course.

If you haven't been through one of these, I'll try to recount the experience with as much detail as I can remember.  It's a remarkable sales presentation, with answers for every question/objection.  So, here's how it goes.

Did you get any gift cards this year?

I have a question.  How do you spend your gift cards?  Obviously, it will depend on which store the card is from, and whether or not it is a store at which you normally shop.  I got a couple of gift cards this year, down a bit from last year.  Gift cards have become an extremely popular gift.  The Federal Trade Commission estimated that consumers will spend $25 billion in gift cards this holiday season versus $18 billion last year.  Does your local grocery store have gift cards for all the popular retailers?  Mine does.  You can go to Von's to stock up on milk, eggs, frozen peas, a $50 Pottery Barn gift card, and a two day Disney Park Hopper pass.  Dinner, check.  Christmas shopping, check.  All in one trip.

So, how do you spend your gift cards?  The way I see it, most people fall into one of a few categories.

Did you participate in Black Friday?

First of all, I'm surprised that the retail industry has not come up with a more catchy name for the day after Thanksgiving.  Coming from an investment perspective, Black Friday sounds somewhat ominous.  Much like Black Monday, which generally refers to October 19, 1987, the largest single day percent decline in U.S. stock market history.  The history of the name seems to stem from one of two origins.  One theory is that this is the day that drives retailer's income statements from red to black.  I know this is an important shopping day and begins the holiday shopping season, but I doubt this is true.  The second theory comes from the stress of the heavy traffic and large crowds.

At any rate, the origin of the term is not that important.  This is a day that, from a personal finance perspective, is somewhat conflicted.  I have not gone shopping on "Black Friday" in years.  I am of the understanding that there really are some tremendous deals that can be found.  In that sense, it sounds like anyone interested in personal finance should wish to take advantage of this.  On the other hand, it is another examle of hyper-consummerism allowing the retailers to create another artificial day specifically for people to go shopping.

Needless to say, I avoided the malls this weekend.  Instead, I spent time with family, my Fiancee, and watched plenty of great college football.  If you did participate, or plan to participate in cyber Monday (today), I would like to hear about the deals that you scored, or the crowds you fought.

Happy Shopping!

How much would you spend for tickets to the Big Game?

Ohio State and Michigan.  It's right up there with Yankees-Red Sox, Lakers-Celtics, USC-Notre Dame.  One of the oldest rivalries in sports, dating back to 1897.  Two of the most storied college football programs in the country.  When they meet this Saturday it will be the first ever meeting of #1 vs #2 in this series.  Winner goes to the BCS championship game for a shot at history.

So, it's no surprise that tickets are in serious demand.  But do you have any idea how much they are going for?  I found this one on Ebay going for about $900 per ticket.  Well, they must be 50 yard line seats, right?  Wrong.  They're somewhere around the 10 yard line, maybe closer to the endzone.

A buddy of mine had Rose Bowl tickets last year for the "game of the century" (as about two or three games every year are dubbed).  He sold them and took his girlfriend on a trip to Rome with the proceeds.  He's a USC fan, so he made the right choice.  But what if he was a die hard Longhorn fan?  Missing that classic would be a tough pill to swallow.

This question isn't for non-sports fans.  There's just no way non-sports fans can understand the value that hard core sports fans place on being at the biggest games.  Every year we see Super Bowl tickets going for thousands of dollars.  Same for the NBA finals.  Rose Bowl, Sugar Bowl, Orange Bowl all fetch hundreds, if not thousands of dollars per ticket.

But it's a gamble.  You may spend a thousand bucks, travel halfway across the country, only to see your team blown out of the game before halftime.  Or you might just witness an epic finish like 2005 USC-Notre Dame, Kirk Gibson's home run in game 1 of the 1988 World Series or Stanford-Cal "The band is on the field!"

Those are moments and memories that will last a lifetime, and others will talk about forever.  Will we ever stop talking about Ali-Frazier, Miracle on Ice, Wilt Chamberlain's 100 point game?  If you knew that was about to happen, how much would you have paid to be there?  If you are a fan of Rutgers football and they make it to the championship game, this may literally be a once in a lifetime opportunity.

So, what is it worth to you?  How much would you pay to see your team in the big game?

Frozen Food is your Friend

No, not the Stouffer's Salisbury Steak TV Dinner with the hot cherry cobbler.  Nor the Lean Cuisine, it's good for you, but I gotta add salt, and one just isn't enough.  I'm talking about frozen veggies and frozen meats.

I cooked last night.  Not entirely unusual, I actually enjoy cooking.  But the meal I made was not only yummy, but oh so cheap!  I had to share.  If you read my Bachelor's Vegetable Soup post you'll see that most of the things I know how to cook, I learned in college or shortly thereafter.  This one is in the same vein, but even easier.  It's a simple chicken stir fry (or beef or pork or fish or vegetarian, whatever).

Do you own a Timeshare? Do you like it?

I'm asking because I have several friends who own timeshares, and they all seem happy with it.  I have always had a negative impression of timeshares.  Filled with images of pushy salespeople, unredeemable weeks in bad locations and hidden fees.  But given the satisfied experiences of the few people I know who own timeshares, it decided to give it a second chance.

My Fiancee and I have been to numerous timeshare presentations, and here are our experiences so far.