Your host posted this on Craiglist's Frugal Forum this morning and received many positive points. That feels good. But, one of the replies was "sweet. got a blog? Should consider it." Thank you, "thebig50"
===========
We live outside the city, no streetlights. I woke up this morning when the sun had just barely started poking up. I could see shadows and nothing more. In this peaceful stillness, I put on a few layers to ward off the chill and padded to the kitchen. Sinkwater from our well, into the small glass carafe. We have a very small butane-powered single-cup heater and I lit it. The butane flame is a dull blue, and just barely added any light to the kitchen. In that gentle lighting, I put the filter in the cone and scooped the right amount of coffee and set it on the cup, ready for the water once heated.
I got the old-fashioned bulb thermometer from the living room, brought it into the kitchen and read it by the light of the butane burner. 58 degrees. It felt a shame to break the perfect darkness and silence, but if my sweetie was going to appreciate me today, I would have to start warming up the house. Still in the dark, I loaded the wood stove with the right amount of kindling and two smaller easy-to-ignite logs. I used a little LED flashlight briefly to make sure no bits were hanging out...that would be a fire hazard. Lit the stove, closed the door, it goes on its own when loaded correctly. Just as I closed that door, the refrigerator came on...amazing how loud a fridge is when you're enjoying still perfection.
We keep fruit in wooden bowls on the counter top. I chose the usual selections and made up my sweetie's morning breakfast, as the sun rose a bit more. The fridge turned off, and now the only sound was the gentle crackle of the wood stove.
In a moment more perfect than anything Hollywood could turn out, my sweetie came out of the bedroom, wrapped her arms around me, and we heard the first chirping of the morning birds. We just stood there, enjoying the perfection of calm and peace, without the jangle of phones, without the background noise of a radio or TV, without any computers turned on, with the birds being the vocal witness to our contentedness.
I poured the water, it drained through the ground coffee and I handed the cup to sweetie. It wasn't for me, after all.
I love mornings. It's my only daily escape from Civilization, which Mark Twain defined as "The limitless multiplication of unnecessary necessities."
Wednesday, March 2, 2011
Tuesday, December 7, 2010
Shrinking the transportation budget - the crasher philosophy
I remember reading about "The Crasher Philosophy". It was what college students did to be able to drive really cheap cars in the 1970s. A posting on Craigslist put some detail into it, and the author provides permission to post his complete story:
First, a Craigslist Frugal Forum over-posting troll claims "It is not frugal to keep a car more than 6 or 7 years and chance it with expensive (sometimes very) repair bills. Instead, just keep a car a year or two and then trade it in and roll whatever you still owe onto the new loan."
To which, our protagonist replies, and then sends a more detailed reply to us, which we post here:
"Oh, maybe, 30-32 years ago, Car and Driver published a halfway humorous article entitled "The Crasher Philosophy".
The idea was this: you picked a car that was so cheap that if it only lasted for a few months, you "got your money's worth". Today's average car loan is $400 a month, so a half year's worth of car is $2400. LOTS of cars on Craigslist cost that much or less, today anyway.
You were supposed to pick a car that had some element of "fun to drive". An old GM thing with a stick-shift and gross V8 engine, perhaps, or maybe one of those little Honda Civics with the 4-wheel wishbone suspension and a 5-speed. This is not the time for an Oldsmobile or Buick!
The new idea (at least for me) was this: since you paid so little for your car, if it ever "needed" a repair, you had a very cool option: Just Say No. That's right. If the car needed a repair, you'd just not do it...throw the car away. A disposable car! Since you did not expect it to last, you also didn't do routine maintenance. You'd put gas in it, you'd make sure it didn't run out of oil (but you never changed the oil!), you might even check other fluids regularly. If the tires got bald or the brake pads too thin to be safe, you had a decision to make - pay the repair or get another crasher.
I thought it was funny, but didn't do anything about it....I was about to get my degree, earn Big Bucks, and I was going to buy a hot rod, probably a few years old, but I was not going to be driving a "crasher" that was for sure!
Fast forward about five years. I'd gotten out of college and screwed up my finances as many recent grads do, then got laid off. I made do by selling things, including my car. I was able to do grocery shopping and whatever on a bicycle.
When I finally did get a job, it had a SEVENTY mile commute...and I was not about to do that on a bicycle. Down to my last grand, I needed a car NOW. No time to fuss around with private owners, I had to find a car and buy it by writing a check. Cycle off to the nearest dealer.
They had a 1980 Honda Civic 2-door hatch with puny 1.3L engine for $1200. Needed a water pump. I didn't even drive it, the only criteria was that it was cheap enough that I could write a check for it. I talked them down to $800, and they made me promise to buy it right now. I said fine, but you also get the service dept to fix it right now, and they did. I wrote the check and drove out. My plan the whole time had been to go in and drive out with my bike in the back anyway, so their "pressure" tactic fed right in with my needs.
The car needed tires too, but I was able to hold off a month so that I had a paycheck in the bank. The odometer had just over 100,000 miles on it.
I did what Car & Driver had said...I never changed the oil, I just checked the level at every fillup. This little car had cheap 12" tires that only cost $90 for four, so I did buy new tires when it needed them. The front brakes started squealing at 130,000 miles. Darn, I only got 30,000 miles out of my $800 car (plus $90 for the first set of tires), and I figured that was going to be it. But just for fun I checked parts prices...$80 for new pads and rotors. Less than one month's car payment. I'd never tried this kind of work myself but a friend said it was easy. So I did it...no special tools required. And off I went.
At 160,000 miles, very suddenly, the car started spewing white smoke out the back and I figured it was a goner. I took it to a mechanic just to confirm that it was dead. They said maybe it's just a head gasket. $180 if that's all it is. $50 to open it up and find out. Well, OK...$180 was a bit over a car payment at the time, but not much. And that turned out to be the problem. So...off I went again.
Those little 12" tires wore out quickly, about every 25,000 miles. But they remained under $100 for all four, and the tire salesman convinced me I didn't need to balance them...and they never vibrated. So I just bought a set of tires before winter set in, so I always had good tread when I needed it. At the rate I was piling on miles, I went through two sets of tires per year.
I'm really fussy about windshield wipers and getting new blades is just something I end up doing every six months, no matter how old the car...I figure it's an ongoing cost like gasoline. So I put a lot of wiper blades on it. And I think I put one battery in, but the prices was laughably cheap like $20.
The car routinely got 50 miles per gallon, and when it started dropping and losing what little power it had (I had to drive in 3rd gear full-throttle up a lot of hills) I would change both the air and fuel filters...maybe $15 for both. I think I did that like 3 times. And I think I changed the spark plugs once because it started misfiring. Also cheap.
A knocking/rattling sound slowly developed in the front...changed with speed. A neighbor said it was a "CV joint" whatever that is and said "get the boots checked". All of the major muffler/brake chains will inspect for free, so I had it inspected. The boots were good, it was a "CV joint" wearing out. But they said the knocking/rattling has to get really loud before the part finally fails...and then it's really ugly when it fails. The repair cost would be $250 when it failed, and at that point, I figured I really would be done with the car. But...I didn't do anything, I just would wait to see how loud it got.
Also, the engine slowly started smoking. I think I noticed it first at 150,000 miles or so. By 200,000 miles, it started with a good-sized cloud and if I coasted downhill a long time, it would generate another cloud when I got on the gas pedal at the bottom of the hill.
I lived in a state with annual emissions tests. At just over 200,000 miles, it failed the test, by a little bit. The emissions guy looked it over and said, "if you give it clean oil and high-octane gas, I'll bet you can pass one more emissions test". So I gave it its FIRST oil change since I'd bought it over 100,000 miles earlier. The oil wasn't as bad as I figured...jet black, but it poured smoothly, no lumps...I had been, after all, adding oil as required, about every 1,000 miles at this age. It passed the emissions test this time, but the guy said it probably wouldn't in a year.
The body had collected a couple door dings while I had it and the paint was faded. The driver's seat fabric was worn and the stuffing just starting to show. The dashboard had cracks in it. The windshield had a crack down low, from one side to the other, but it had been there for years. I'd driven the car from just over 100,000 mile to about 230,000 miles, in a bit more than two years.
I drove this tired old car to a dealer. I looked over their inventory. I selected a VW Quantum 4-cyl 5-speed with 85,000 miles on it and paid the princely sum of $1250 for that car. The VW was the same number of years old as the Honda had been when I bought the Honda. I asked if the Honda had any trade-in value and the dealer said, "truthfully none, of course, but I can offer you a token $100 for it." So I took it.
And the VW became my second "crasher" Parts cost more, but the list of repairs was about the same...front brake pads and tires. No head gasket on this car. It didn't get quite the gas mileage of the Honda, but it was a lot quieter and more comfortable. It, too, experienced its final failure by flunking an emission test, but this one went to 280,000 miles
I have never, since then, purchased a car less than 8 years old, and I have never worn out a car before 200,000 miles, and I have never, ever, paid more than $500 for a single repair.
My most expensive vehicle to date has been $5,000 and that was for a mini-truck. It had 140,000 miles on it when we bought it, and it's a "work truck" used to move stuff needed for our hobby farm. It's now got 225,000 miles on it, and the most expensive repair it's needed in that time frame has been a $180 radiator.
So, the way to deal with expensive car repairs on a used car is "just say no". If they're cheap repairs...do them. If not...don't."
And we follow up with this: Don't forget cost of insurance and registration! Pick any vehicle model that has been around for 30 years...Chevy Malibu, Ford F150, Chrysler, Toyota Corolla, Honda Accord...and ask your insurance agent how much to insure a brand-new one, and how much to insure one that's ten years old. Now multiply by however many years it takes you to drive 150,000 miles. And then call your local DMV and ask the same question about registration.
Your blog host's vehicles are the same as when the blog was started...now 16 years old each and closing in on 480,000 miles total between the two of them. We are on the way to hitting 230,000 miles on one of them with nothing but tires, batteries, and brake pads!!! Cars are built so well these days.
Thanks, CL poster.
First, a Craigslist Frugal Forum over-posting troll claims "It is not frugal to keep a car more than 6 or 7 years and chance it with expensive (sometimes very) repair bills. Instead, just keep a car a year or two and then trade it in and roll whatever you still owe onto the new loan."
To which, our protagonist replies, and then sends a more detailed reply to us, which we post here:
"Oh, maybe, 30-32 years ago, Car and Driver published a halfway humorous article entitled "The Crasher Philosophy".
The idea was this: you picked a car that was so cheap that if it only lasted for a few months, you "got your money's worth". Today's average car loan is $400 a month, so a half year's worth of car is $2400. LOTS of cars on Craigslist cost that much or less, today anyway.
You were supposed to pick a car that had some element of "fun to drive". An old GM thing with a stick-shift and gross V8 engine, perhaps, or maybe one of those little Honda Civics with the 4-wheel wishbone suspension and a 5-speed. This is not the time for an Oldsmobile or Buick!
The new idea (at least for me) was this: since you paid so little for your car, if it ever "needed" a repair, you had a very cool option: Just Say No. That's right. If the car needed a repair, you'd just not do it...throw the car away. A disposable car! Since you did not expect it to last, you also didn't do routine maintenance. You'd put gas in it, you'd make sure it didn't run out of oil (but you never changed the oil!), you might even check other fluids regularly. If the tires got bald or the brake pads too thin to be safe, you had a decision to make - pay the repair or get another crasher.
I thought it was funny, but didn't do anything about it....I was about to get my degree, earn Big Bucks, and I was going to buy a hot rod, probably a few years old, but I was not going to be driving a "crasher" that was for sure!
Fast forward about five years. I'd gotten out of college and screwed up my finances as many recent grads do, then got laid off. I made do by selling things, including my car. I was able to do grocery shopping and whatever on a bicycle.
When I finally did get a job, it had a SEVENTY mile commute...and I was not about to do that on a bicycle. Down to my last grand, I needed a car NOW. No time to fuss around with private owners, I had to find a car and buy it by writing a check. Cycle off to the nearest dealer.
They had a 1980 Honda Civic 2-door hatch with puny 1.3L engine for $1200. Needed a water pump. I didn't even drive it, the only criteria was that it was cheap enough that I could write a check for it. I talked them down to $800, and they made me promise to buy it right now. I said fine, but you also get the service dept to fix it right now, and they did. I wrote the check and drove out. My plan the whole time had been to go in and drive out with my bike in the back anyway, so their "pressure" tactic fed right in with my needs.
The car needed tires too, but I was able to hold off a month so that I had a paycheck in the bank. The odometer had just over 100,000 miles on it.
I did what Car & Driver had said...I never changed the oil, I just checked the level at every fillup. This little car had cheap 12" tires that only cost $90 for four, so I did buy new tires when it needed them. The front brakes started squealing at 130,000 miles. Darn, I only got 30,000 miles out of my $800 car (plus $90 for the first set of tires), and I figured that was going to be it. But just for fun I checked parts prices...$80 for new pads and rotors. Less than one month's car payment. I'd never tried this kind of work myself but a friend said it was easy. So I did it...no special tools required. And off I went.
At 160,000 miles, very suddenly, the car started spewing white smoke out the back and I figured it was a goner. I took it to a mechanic just to confirm that it was dead. They said maybe it's just a head gasket. $180 if that's all it is. $50 to open it up and find out. Well, OK...$180 was a bit over a car payment at the time, but not much. And that turned out to be the problem. So...off I went again.
Those little 12" tires wore out quickly, about every 25,000 miles. But they remained under $100 for all four, and the tire salesman convinced me I didn't need to balance them...and they never vibrated. So I just bought a set of tires before winter set in, so I always had good tread when I needed it. At the rate I was piling on miles, I went through two sets of tires per year.
I'm really fussy about windshield wipers and getting new blades is just something I end up doing every six months, no matter how old the car...I figure it's an ongoing cost like gasoline. So I put a lot of wiper blades on it. And I think I put one battery in, but the prices was laughably cheap like $20.
The car routinely got 50 miles per gallon, and when it started dropping and losing what little power it had (I had to drive in 3rd gear full-throttle up a lot of hills) I would change both the air and fuel filters...maybe $15 for both. I think I did that like 3 times. And I think I changed the spark plugs once because it started misfiring. Also cheap.
A knocking/rattling sound slowly developed in the front...changed with speed. A neighbor said it was a "CV joint" whatever that is and said "get the boots checked". All of the major muffler/brake chains will inspect for free, so I had it inspected. The boots were good, it was a "CV joint" wearing out. But they said the knocking/rattling has to get really loud before the part finally fails...and then it's really ugly when it fails. The repair cost would be $250 when it failed, and at that point, I figured I really would be done with the car. But...I didn't do anything, I just would wait to see how loud it got.
Also, the engine slowly started smoking. I think I noticed it first at 150,000 miles or so. By 200,000 miles, it started with a good-sized cloud and if I coasted downhill a long time, it would generate another cloud when I got on the gas pedal at the bottom of the hill.
I lived in a state with annual emissions tests. At just over 200,000 miles, it failed the test, by a little bit. The emissions guy looked it over and said, "if you give it clean oil and high-octane gas, I'll bet you can pass one more emissions test". So I gave it its FIRST oil change since I'd bought it over 100,000 miles earlier. The oil wasn't as bad as I figured...jet black, but it poured smoothly, no lumps...I had been, after all, adding oil as required, about every 1,000 miles at this age. It passed the emissions test this time, but the guy said it probably wouldn't in a year.
The body had collected a couple door dings while I had it and the paint was faded. The driver's seat fabric was worn and the stuffing just starting to show. The dashboard had cracks in it. The windshield had a crack down low, from one side to the other, but it had been there for years. I'd driven the car from just over 100,000 mile to about 230,000 miles, in a bit more than two years.
I drove this tired old car to a dealer. I looked over their inventory. I selected a VW Quantum 4-cyl 5-speed with 85,000 miles on it and paid the princely sum of $1250 for that car. The VW was the same number of years old as the Honda had been when I bought the Honda. I asked if the Honda had any trade-in value and the dealer said, "truthfully none, of course, but I can offer you a token $100 for it." So I took it.
And the VW became my second "crasher" Parts cost more, but the list of repairs was about the same...front brake pads and tires. No head gasket on this car. It didn't get quite the gas mileage of the Honda, but it was a lot quieter and more comfortable. It, too, experienced its final failure by flunking an emission test, but this one went to 280,000 miles
I have never, since then, purchased a car less than 8 years old, and I have never worn out a car before 200,000 miles, and I have never, ever, paid more than $500 for a single repair.
My most expensive vehicle to date has been $5,000 and that was for a mini-truck. It had 140,000 miles on it when we bought it, and it's a "work truck" used to move stuff needed for our hobby farm. It's now got 225,000 miles on it, and the most expensive repair it's needed in that time frame has been a $180 radiator.
So, the way to deal with expensive car repairs on a used car is "just say no". If they're cheap repairs...do them. If not...don't."
And we follow up with this: Don't forget cost of insurance and registration! Pick any vehicle model that has been around for 30 years...Chevy Malibu, Ford F150, Chrysler, Toyota Corolla, Honda Accord...and ask your insurance agent how much to insure a brand-new one, and how much to insure one that's ten years old. Now multiply by however many years it takes you to drive 150,000 miles. And then call your local DMV and ask the same question about registration.
Your blog host's vehicles are the same as when the blog was started...now 16 years old each and closing in on 480,000 miles total between the two of them. We are on the way to hitting 230,000 miles on one of them with nothing but tires, batteries, and brake pads!!! Cars are built so well these days.
Thanks, CL poster.
Friday, April 23, 2010
Some experiences are not worth the cost
Being frugal isn't about what you "do", so much as what you don't do. And most of what you "don't do" is exactly what all the advertising WANTS you to do.
Consider our correspondent Frank, who pointed us to a posting he made on Craigslist. Frank advises us that he doesn't mention this list simply to prove a point, but because he believes this list is part of why he's such a happy guy. He does not actively avoid these activities...he's simply never been drawn to them. If you never buy a car without a scratch, then you'll never suffer the emotional trauma of getting that first scratch.
Here's his posting, as he forwarded it to us:
"I have never:
"- Paid to watch anything on TV. No cable, no rented movies. Strictly over-the-air or movies borrowed from the library for free.
"- Bought a car new
"- Bought a TV new
"- Bought a computer new
"- Had any service on my phone beyond basic - no call waiting, no caller ID, etc.
"- Used dryer sheets or fabric softener
"- Had more than one house cleaner in the house at a time (just water and vinegar does all my cleaning)
"- Paid for a night at a hotel for recreation. Yes, on business trips, but for recreation (family vacations), it's either camping or staying with friends.
"- Eaten all my meals for the day at restaurants. Even when on a trip, I'll hit up grocery stores and make sandwiches, because then I know what I'm eating, which is NEVER true at a restaurant
"- Purchased bottled water. Ever.
"- Purchased pre-mixed fruit juice
"I'm pretty sure that 99% of people have done that entire list...and I have not, ever. Is that odd? I don't think so. But others might.
So, are you going to be one of the crowed? A sheep, drawn by the persistent advertising? Or will you be your own person? A one-percenter like Frank?
One thing is clear - if you're going to live gently, simply, and without requiring an executive income - you can't do what 99% of all people do. You have to figure out what aspect of the Jones' life you don't need to keep up with.
Consider our correspondent Frank, who pointed us to a posting he made on Craigslist. Frank advises us that he doesn't mention this list simply to prove a point, but because he believes this list is part of why he's such a happy guy. He does not actively avoid these activities...he's simply never been drawn to them. If you never buy a car without a scratch, then you'll never suffer the emotional trauma of getting that first scratch.
Here's his posting, as he forwarded it to us:
"I have never:
"- Paid to watch anything on TV. No cable, no rented movies. Strictly over-the-air or movies borrowed from the library for free.
"- Bought a car new
"- Bought a TV new
"- Bought a computer new
"- Had any service on my phone beyond basic - no call waiting, no caller ID, etc.
"- Used dryer sheets or fabric softener
"- Had more than one house cleaner in the house at a time (just water and vinegar does all my cleaning)
"- Paid for a night at a hotel for recreation. Yes, on business trips, but for recreation (family vacations), it's either camping or staying with friends.
"- Eaten all my meals for the day at restaurants. Even when on a trip, I'll hit up grocery stores and make sandwiches, because then I know what I'm eating, which is NEVER true at a restaurant
"- Purchased bottled water. Ever.
"- Purchased pre-mixed fruit juice
"I'm pretty sure that 99% of people have done that entire list...and I have not, ever. Is that odd? I don't think so. But others might.
So, are you going to be one of the crowed? A sheep, drawn by the persistent advertising? Or will you be your own person? A one-percenter like Frank?
One thing is clear - if you're going to live gently, simply, and without requiring an executive income - you can't do what 99% of all people do. You have to figure out what aspect of the Jones' life you don't need to keep up with.
Sunday, March 14, 2010
Profit in a Bottle - do you really need to buy that?
"The Beverage Industry". Those words should make you stop and think before you spend any money on their products.
Have you ever thought what the difference is between a mere "business" and an "industry"? A business makes its customers happy and by doing so, reaps enough financial reward to pay employees, pay the owner, keep the regulators at bay, and hopefully, have enough profit left after all that to develop a new and better product or service to make customers happier.
When the business morphs into an industry, it now has to satisfy an entire panoply of others - more regulators, of course, more taxing authorities, the Equal Employment Opportunity commission (small businesses have to obey the rules - when you're over 50 employees you need to hire a manager to handle the paperwork to prove you are obeying the rules). And stockholders. Oh, that's the final problem - satisfying customers and satisfying stockholders require very different behaviors. And, if you plan to be a well-served customer, you want to to business with businesses that don't have stockholders. And that means spend your money on the small guy.
Industries pay money for political action committees, they pay lobbyists, they have their own trade associations. A trade association? This is where a bunch of big busiensses in the same industry get together to trade tips and tricks on how to grow their businesses...and nary a single customer is present. Succeeding in business, once you're large and in an "industry" is no longer about simply making customers happy. Customers fall way down on the list!
So, do you WANT to support "The Beverage Industry"?
Look at the products that have come out of "The Beverage Industry".
First, coffee. Oh, I love the smell as it brews. My favorite is dark roasted and full-bodied, the kind you can only get with very fresh, oily beans, recently-ground and made one cup at a time through a cone filter with 180 degree (not boiling) water. For years, it was hard to get this kind of brew, as the canned pre-ground coffee industry surged ahead with lots of names advertised on television. Oh, there's another clue - if they have nationwide TV ads, they're not the kind of business you really want to do business with.
And, as always happens with an industry, they forgot the customer. The most famous of all big-chain coffee shops is Starbucks, of course. They're not about coffee at all! The corporate charter is "to become a household name", not "to offer the best tasting coffee". Serious coffee drinkers don't go to Starbucks. Not just because they're big, but because their coffee is terrible. They don't make money on coffee. They have ruined coffee, by up-trending it with Italian words. Instead of "small, medium and large" you have words I don't remeber including Vente and Grande, whatever they mean. "I want eight ounces of strong black coffee" is usually responded to by a lecture on what to call it. Look, you want my money, you sell me what I asked for, you don't instruct me on how to do businesss. Instead, Starbucks is trying to create a new culture where people pride themselves on being able to say things like "Mocha carmelatto, full whip, no room, grande" as if it's a household word. You see their patrons reciting corporate product names quickly, with enthusiam, and then handing over cash - lots of cash. The "beverage" they receive in return has a smidgeon of coffee in it, and an ingredient list more akin to a candy bar than a beverage.
That's a "business model" which is good for industry but not the consumer.
Nutrionally, such "beverages" are junk food. If you really wanted a shot of carbs, keeping a jar of sugar with a teaspoon around might be more satisfying and is most certainly more cost-effective.
I find the best coffee is made when I purchase beans roasted near where I live. None are grown in my state - the climate is not suitable. I buy them by the pound and then grind just prior to usage. No sugar, no cream, no caramel, no high fructose corn syrup, just a heavenly, thick, strong brew.
David Bach made famous the phrase "The Latte Factor". It refers to the notion that you ruin yourself financially not by purchasing a too-large car, but by the daily seemingly small expenses that, over a year, add up to a lot. A $5 latte, once per workin day, totals up to $1250 by the end of the year. In addition to lattes, many are duped by ads claiming "for only a few dollars a day, you can enjoy..." and we see all manner of high monthly expenses for things that, ten years ago, most people would have considered extravagant. Face it - call waiting has not yet saved anybody's life.
Ah, but coffee...it's not the start of it, is it? Exactly what nutritional value is there in a can of cola? And you spend how much for it?
In my capacity as a personal financial consultant, I've been able to look at the "food" expenses of many families. If a family is routinely spending more than $200 per person per month on food, and not going out to eat frequently, I will always find a "bottled beverage" habit. I'll find that they're buying bottled fruit juice (fruit juice is fruit with most of the good parts removed, and the cost per calorie tripled), bottled water (why anybody would consider paying that much for something that the earth provides for free is beyond me), and usually, lots and lots of carbonated, sweetened beverages.
Americans are really weird
Did you know that sweet beverages are uncommon all over the world except for North America and Europe? The rest of the world satisifes itself with water (usually heated) and tea for the most part. Bits of Scandanavia have discovered coffee, but it is thick, almost goopy stuff, not at all like the sugar-infused "candy bar in a cup" beverages that popular American coffee shops dish up.
For most families with a "food expense" problem, when I counsel them to purchase no pre-made beverages, the "food expense" problem generally goes away. If the family has small children, they'll still need milk - whole milk please, the child's brain literally needs saturated fat for normal development. But past adolescence, milk is no longer a good source of protein. The blend of amino acides is intended to bulk up the fat cells in the body, which is "just right" for a newborn. It is not a coincidence that breast milk is loaded with fat and cholesterol...and you wean a child from it after a while. The calcium in milk is not partiularly absorbable, so women seeking a good calcium source should look elsewhere. Yes, I know, the USDA says otherwise, but they've been paid to do so by the dairy industry. Oh no, another industry - see the things they do? You really want to support them?
An indulgence, not an addiction
Now, a certain amount of indulgence isn't a bad thing. I indulge. In addition to my coffee habit, I enjoy beers and wines. As with coffee, I find the best beverages come not from the larger provides in the "industry" but rather the smaller family-run places. This is more true of beer than wine. But, these are things one consumes in moderation, therefore by that fact alone, they won't become a large part of a reasonable budget. Certainly, purchasing reasonable quanties of the most expensive micro-brewed beer I know if, costs less than a $5 latte per day. And is ever so much more satisfying.
Just say no to the beverage industry. You do not need them.
Have you ever thought what the difference is between a mere "business" and an "industry"? A business makes its customers happy and by doing so, reaps enough financial reward to pay employees, pay the owner, keep the regulators at bay, and hopefully, have enough profit left after all that to develop a new and better product or service to make customers happier.
When the business morphs into an industry, it now has to satisfy an entire panoply of others - more regulators, of course, more taxing authorities, the Equal Employment Opportunity commission (small businesses have to obey the rules - when you're over 50 employees you need to hire a manager to handle the paperwork to prove you are obeying the rules). And stockholders. Oh, that's the final problem - satisfying customers and satisfying stockholders require very different behaviors. And, if you plan to be a well-served customer, you want to to business with businesses that don't have stockholders. And that means spend your money on the small guy.
Industries pay money for political action committees, they pay lobbyists, they have their own trade associations. A trade association? This is where a bunch of big busiensses in the same industry get together to trade tips and tricks on how to grow their businesses...and nary a single customer is present. Succeeding in business, once you're large and in an "industry" is no longer about simply making customers happy. Customers fall way down on the list!
So, do you WANT to support "The Beverage Industry"?
Look at the products that have come out of "The Beverage Industry".
First, coffee. Oh, I love the smell as it brews. My favorite is dark roasted and full-bodied, the kind you can only get with very fresh, oily beans, recently-ground and made one cup at a time through a cone filter with 180 degree (not boiling) water. For years, it was hard to get this kind of brew, as the canned pre-ground coffee industry surged ahead with lots of names advertised on television. Oh, there's another clue - if they have nationwide TV ads, they're not the kind of business you really want to do business with.
And, as always happens with an industry, they forgot the customer. The most famous of all big-chain coffee shops is Starbucks, of course. They're not about coffee at all! The corporate charter is "to become a household name", not "to offer the best tasting coffee". Serious coffee drinkers don't go to Starbucks. Not just because they're big, but because their coffee is terrible. They don't make money on coffee. They have ruined coffee, by up-trending it with Italian words. Instead of "small, medium and large" you have words I don't remeber including Vente and Grande, whatever they mean. "I want eight ounces of strong black coffee" is usually responded to by a lecture on what to call it. Look, you want my money, you sell me what I asked for, you don't instruct me on how to do businesss. Instead, Starbucks is trying to create a new culture where people pride themselves on being able to say things like "Mocha carmelatto, full whip, no room, grande" as if it's a household word. You see their patrons reciting corporate product names quickly, with enthusiam, and then handing over cash - lots of cash. The "beverage" they receive in return has a smidgeon of coffee in it, and an ingredient list more akin to a candy bar than a beverage.
That's a "business model" which is good for industry but not the consumer.
Nutrionally, such "beverages" are junk food. If you really wanted a shot of carbs, keeping a jar of sugar with a teaspoon around might be more satisfying and is most certainly more cost-effective.
I find the best coffee is made when I purchase beans roasted near where I live. None are grown in my state - the climate is not suitable. I buy them by the pound and then grind just prior to usage. No sugar, no cream, no caramel, no high fructose corn syrup, just a heavenly, thick, strong brew.
David Bach made famous the phrase "The Latte Factor". It refers to the notion that you ruin yourself financially not by purchasing a too-large car, but by the daily seemingly small expenses that, over a year, add up to a lot. A $5 latte, once per workin day, totals up to $1250 by the end of the year. In addition to lattes, many are duped by ads claiming "for only a few dollars a day, you can enjoy..." and we see all manner of high monthly expenses for things that, ten years ago, most people would have considered extravagant. Face it - call waiting has not yet saved anybody's life.
Ah, but coffee...it's not the start of it, is it? Exactly what nutritional value is there in a can of cola? And you spend how much for it?
In my capacity as a personal financial consultant, I've been able to look at the "food" expenses of many families. If a family is routinely spending more than $200 per person per month on food, and not going out to eat frequently, I will always find a "bottled beverage" habit. I'll find that they're buying bottled fruit juice (fruit juice is fruit with most of the good parts removed, and the cost per calorie tripled), bottled water (why anybody would consider paying that much for something that the earth provides for free is beyond me), and usually, lots and lots of carbonated, sweetened beverages.
Americans are really weird
Did you know that sweet beverages are uncommon all over the world except for North America and Europe? The rest of the world satisifes itself with water (usually heated) and tea for the most part. Bits of Scandanavia have discovered coffee, but it is thick, almost goopy stuff, not at all like the sugar-infused "candy bar in a cup" beverages that popular American coffee shops dish up.
For most families with a "food expense" problem, when I counsel them to purchase no pre-made beverages, the "food expense" problem generally goes away. If the family has small children, they'll still need milk - whole milk please, the child's brain literally needs saturated fat for normal development. But past adolescence, milk is no longer a good source of protein. The blend of amino acides is intended to bulk up the fat cells in the body, which is "just right" for a newborn. It is not a coincidence that breast milk is loaded with fat and cholesterol...and you wean a child from it after a while. The calcium in milk is not partiularly absorbable, so women seeking a good calcium source should look elsewhere. Yes, I know, the USDA says otherwise, but they've been paid to do so by the dairy industry. Oh no, another industry - see the things they do? You really want to support them?
An indulgence, not an addiction
Now, a certain amount of indulgence isn't a bad thing. I indulge. In addition to my coffee habit, I enjoy beers and wines. As with coffee, I find the best beverages come not from the larger provides in the "industry" but rather the smaller family-run places. This is more true of beer than wine. But, these are things one consumes in moderation, therefore by that fact alone, they won't become a large part of a reasonable budget. Certainly, purchasing reasonable quanties of the most expensive micro-brewed beer I know if, costs less than a $5 latte per day. And is ever so much more satisfying.
Just say no to the beverage industry. You do not need them.
Small is good. Smaller is usually better
Here in early 2010, the country still has the economy on its mind. A little bit of history on this.
Over the years of 1995 to 2005, the American consumer collectively started to take a breather. They had tired, it seems, of the perpetual struggle for bigger newer houses, SUVs and LCD televisions. Housing sales sagged first, with a distinct shift toward older homes and a resurgence in DIY home remodeling. The housing industry was alarmed and asked the government to "do something". The sitting president began, in his speeches, to encourage the mortgage industry to make mortgages available to lower income families so that they "can participate in The American Dream, which is Home Ownership". To emphasize this point, he sternly jabbed the lectern with his right index finger while he said the last two words.
Banks and mortgage companies, worried that if they took no action, the government would somehow force them through new legislation, complied, and the sub-prime loan was born.
Other industries took a cue and qualification requirements for car loans and credit cards were softened.
The beginning of the downfall-easy credit:
Sales of consumer goods of all sorts thereby were sustained...not because the consuming public wanted more, but because the easing of credit lured lower-income consumers, who still could not afford this lifestyle, to "try it on for size" before the payments got out of their control.
And out of control it got. A flimsy house of cards on its best day, the risks taken by the banking and mortgage industries finally came home to roost. The first that the public heard about it was the stunning news that one of the oldest and most stable financial institutions in the world, Lehmann Brothers, had gone bankrupt. Kaput. Following that were a series of collapses and then the now legendary Federal Bailout. Word on the street was that people were shocked and stunned, how could this happen?
This has happened before
But surprise should not have been the emotion of the day. A confident and assured awareness that this has happened before, and it will happen again, would have been more appropriate.
An entire sector of the finance industry figuratively died, over the years 1985 through 1996. That's less than 20 years ago - most adults remember the "Savings and Loan Debacle". That, too, had been caused by making easy credit available.
The underlying cause is obvious - we just have to pay attention
There's an underlying theme - when something gets big enough, it cannot be managed. Ultimately, the financial success of any endeavor is based on a solid and sound nearly intimate linkage between the organization and its customers. This cannot be held intact when an organization gets too large. It is the reason why large organizations are difficult to deal with, bureaucratic and cumbersome. It is why, during any time of economic change, it is the larger companies that fail, and the smaller ones who survive. A statistic not often told, but always true is that after an economic upheaval, a greater percentage of the workforce finds itself employed by businesses with fewer than 50 employees. As of 2010, 92% of US citizens who are emloyed, work for such small businesses. Such small businesses are nimble, they can offer one-on-one service to every single customer, and if the market segment they serve goes soft, they can quickly transition to another market segment.
Smaller is better
Smaller is better. Across the board. While the pundits suggest that there's somehow safety in numbers or that you "want the financial resources of a large institution" to back you up, history shows that it is the smaller organizations that survive, not the larger ones.
Smaller material suppliers give better service
I'm involved in consulting on the development of a small hobby product. I'm not an engineer, but I've become decent at writing simple software and designing little electronic circuits. I'm not at all good at designing metal boxes, which this thing has to go into. So I've literally shown hand-scratched drawings of my idea for the box to various vendors. The larger companies (thousands of employees) recommended mechanical design consultants for $500 an hour to help me out. They also quoted $50 to $90 each for the housings, if I purchased 500 at a time. I didn't know what to expect, but I wasn't ready to dip this deep for something that's just a test case to see if something I designed would really hit well with customers.
I Googled for "sheet metal fabricators" in the larger cities near me and did more talking. In the end, the company I chose to go with has 18 employees and has been family-run for five generations. They work on BIG projects - they built all the railway cars, for instance, for a tourist train inside a zoo the next state over. Mine is small - a few inches - but they were happy to engage with it. They took my hand-scratches, translated them to the language their machines understood, delivered to me 5 prototype housings for just the cost of the aluminum and a quote for only $12 each in the future, with a minimum order of only 25 units. I can handle that!
Smaller is better in banks
It's across the board. Our family switched from a large bank to a smaller bank recently and wow, is the service better. When we call the bank for any reason, we can talk to the same person, and it's the woman who handles our business when we go in person. When we were with the larger bank, we got shuttled off to a call center. We even got that treatment if we went in-person to the branch! Yes, one day we went to the branch to open a different kind of account, and the branch manager sat us in a cubicle, dialed a phone number and handed us the phone...we were talking to someone in India, to set up an account at the local branch!
Big car dealerships fail to diagnose; the day is saved by the little guy
It's across the board. Our car started misbehaving. The occasional buck and wheeze and some snapping sounds from under the hood. It was old...152,000 miles, so we were prepared for some kind of nominal repair. We took it to the dealer. We should have known better. The dealer said "nothing is wrong with it, stop being a complainer". Their diagnostic procedure was straightforward: they plugged their computer into a connector under the dashboard and "read the codes". "It's not throwing any codes, so nothing is wrong with it." They charged us a $90 diagnostic fee for this service.
Since the car was still misbehaving, I decided to try a different dealership. The service department manager gave me hope. "There are certainly things that can cause that behavior that won't show up on the computer. Bring it to us and we'll do better diagnostics." Well...I did and they didn't. This dealer didn't even connect a computer. They drove the car around the parking lot and said, "Many things happen as a car ages. At this age, we recommend you do..." and there was a long list and a cost of $600.00. I said if I do all that, will these symptoms go away? They said probably...but would not guarantee it. At least this time, there was no "diagnostics fee".
I mentioned this frustration to a neighbor who said "take it to my mechanic, Jake. He'll either fix it or tell you he doesn't know how, he won't lead you on and then do nothing." On that recommendation, I took it to Jake. "Have a seat over there, let me do a little inspecting and see if anything's obvious" he said. In just ten minutes, Jake poked his head through the door into the waiting room and said, "come look at this". He showed me parts...parts that were on the car. A "cap and rotor" it was, and there was this black part in the middle, with lots of crumbs around it. "The center electrode has worn away into powder. Here's what a new one looks like" and he showed me a much newer looking version of the same part. "It's $25 plus $37.50 for my labor, and I think this will fix the car." I said that would be great. He put on the parts, I paid and drove away - and the car's been doing great ever since.
I called both dealers back to tell them what happened. Not to "expose" them for frauds, but to give them a tip they might be able to use later. The first dealer got angry and said, "We have to follow the rules. The manufacturer tells us that step one is to plug in the computer, so we do that. It's not our fault if your car develops a weird problem." The second dealer said, "Well, your car is over five years old, you can't expect us to keep on top of the technology of something that old." Evidently the current models don't have "cap and rotor" parts.
It's not just businesses
As with most Americans, we have moved a few times when employment prospects dimmed where we were, and brightened elsewhere. For a while, we strove to find larger and larger homes...it's what everbody does, right? After a while, though, it seemed we were always cleaning, dusting and otherwise maintaining them. So, on one move, we downsized. From 2400 square feet to 1800. At first it felt cramped, but we started selling furniture that we really didn't need. End tables? For what? Out they went. Our large dining room table went away and we bought one at a garage sale with "leafs" to insert to make it larger for when we have dinner guests. After a time, we felt very comfortable.
We've moved once more since then and are now in 1100 square feet. It's wonderful! We can do a complete house cleaning in just two hours...end to end, every single fixture polished, every surface dusted, even over the doorways and windows. We have more time available for friends and fun.
That car story? The car with 152,000 miles on it is a small econo sedan. When we downsized from the larger luxury car, we worried that we would not be comfortable. Ah, but we are...the seats are more firm and our family member with "the bad back" can last many more hours without having a sore back. The smaller car is most definitely saving us on gasoline. And, as of this writing, the odometer reads 217,000 miles, and that "cap and rotor" was the first non-scheduled repair in the car's entire life. And we REALLY like driving this thing, it is nimble - it's fun!
We've even downsized the dog. After our Golden Lab breathed his final breath, we were eseentially given a stray Chihuahua mix. What a difference. You have to like frenzy - he's frenzied. But he's easy to travel with. Nobody is bothered when we ask "is it OK if we bring the dog when we visit" so we never have to make him suffer in a kennel. If he escapes...hardly a problem, we can out-run him. And, on days of bad weather when he doesn't want to walk outside, he can get his daily ration of exercise by running from one end to the other of our downsized house.
Small and local is the best
We've found local farmers from whom we get our produce. It tastes the best and really isn't very expensive. My sheet metal shop is relatively local, we bank at a bank whose HQ is less than 50 miles away. We find the best restaurant food is not at national chains, but at the family-run restaurant who's part of the local sustainable food chain.
All of this is best. All of it.
I would sure love to see the government understand this principle - you cannot properly serve the varied needs of disparate individuals by passing legislation in Washington that affects the entire country. For those of us who want to live life in the most healthy and successful way, we'll just have to do our level and local best, and basically avoid needing anything doled out by the government.
I'm convinced it's still possible in the US.
Not only more frugal, money-saving, but more enjoyable and probably better for the planet, although I'll leave that argument for someone else.
Over the years of 1995 to 2005, the American consumer collectively started to take a breather. They had tired, it seems, of the perpetual struggle for bigger newer houses, SUVs and LCD televisions. Housing sales sagged first, with a distinct shift toward older homes and a resurgence in DIY home remodeling. The housing industry was alarmed and asked the government to "do something". The sitting president began, in his speeches, to encourage the mortgage industry to make mortgages available to lower income families so that they "can participate in The American Dream, which is Home Ownership". To emphasize this point, he sternly jabbed the lectern with his right index finger while he said the last two words.
Banks and mortgage companies, worried that if they took no action, the government would somehow force them through new legislation, complied, and the sub-prime loan was born.
Other industries took a cue and qualification requirements for car loans and credit cards were softened.
The beginning of the downfall-easy credit:
Sales of consumer goods of all sorts thereby were sustained...not because the consuming public wanted more, but because the easing of credit lured lower-income consumers, who still could not afford this lifestyle, to "try it on for size" before the payments got out of their control.
And out of control it got. A flimsy house of cards on its best day, the risks taken by the banking and mortgage industries finally came home to roost. The first that the public heard about it was the stunning news that one of the oldest and most stable financial institutions in the world, Lehmann Brothers, had gone bankrupt. Kaput. Following that were a series of collapses and then the now legendary Federal Bailout. Word on the street was that people were shocked and stunned, how could this happen?
This has happened before
But surprise should not have been the emotion of the day. A confident and assured awareness that this has happened before, and it will happen again, would have been more appropriate.
An entire sector of the finance industry figuratively died, over the years 1985 through 1996. That's less than 20 years ago - most adults remember the "Savings and Loan Debacle". That, too, had been caused by making easy credit available.
The underlying cause is obvious - we just have to pay attention
There's an underlying theme - when something gets big enough, it cannot be managed. Ultimately, the financial success of any endeavor is based on a solid and sound nearly intimate linkage between the organization and its customers. This cannot be held intact when an organization gets too large. It is the reason why large organizations are difficult to deal with, bureaucratic and cumbersome. It is why, during any time of economic change, it is the larger companies that fail, and the smaller ones who survive. A statistic not often told, but always true is that after an economic upheaval, a greater percentage of the workforce finds itself employed by businesses with fewer than 50 employees. As of 2010, 92% of US citizens who are emloyed, work for such small businesses. Such small businesses are nimble, they can offer one-on-one service to every single customer, and if the market segment they serve goes soft, they can quickly transition to another market segment.
Smaller is better
Smaller is better. Across the board. While the pundits suggest that there's somehow safety in numbers or that you "want the financial resources of a large institution" to back you up, history shows that it is the smaller organizations that survive, not the larger ones.
Smaller material suppliers give better service
I'm involved in consulting on the development of a small hobby product. I'm not an engineer, but I've become decent at writing simple software and designing little electronic circuits. I'm not at all good at designing metal boxes, which this thing has to go into. So I've literally shown hand-scratched drawings of my idea for the box to various vendors. The larger companies (thousands of employees) recommended mechanical design consultants for $500 an hour to help me out. They also quoted $50 to $90 each for the housings, if I purchased 500 at a time. I didn't know what to expect, but I wasn't ready to dip this deep for something that's just a test case to see if something I designed would really hit well with customers.
I Googled for "sheet metal fabricators" in the larger cities near me and did more talking. In the end, the company I chose to go with has 18 employees and has been family-run for five generations. They work on BIG projects - they built all the railway cars, for instance, for a tourist train inside a zoo the next state over. Mine is small - a few inches - but they were happy to engage with it. They took my hand-scratches, translated them to the language their machines understood, delivered to me 5 prototype housings for just the cost of the aluminum and a quote for only $12 each in the future, with a minimum order of only 25 units. I can handle that!
Smaller is better in banks
It's across the board. Our family switched from a large bank to a smaller bank recently and wow, is the service better. When we call the bank for any reason, we can talk to the same person, and it's the woman who handles our business when we go in person. When we were with the larger bank, we got shuttled off to a call center. We even got that treatment if we went in-person to the branch! Yes, one day we went to the branch to open a different kind of account, and the branch manager sat us in a cubicle, dialed a phone number and handed us the phone...we were talking to someone in India, to set up an account at the local branch!
Big car dealerships fail to diagnose; the day is saved by the little guy
It's across the board. Our car started misbehaving. The occasional buck and wheeze and some snapping sounds from under the hood. It was old...152,000 miles, so we were prepared for some kind of nominal repair. We took it to the dealer. We should have known better. The dealer said "nothing is wrong with it, stop being a complainer". Their diagnostic procedure was straightforward: they plugged their computer into a connector under the dashboard and "read the codes". "It's not throwing any codes, so nothing is wrong with it." They charged us a $90 diagnostic fee for this service.
Since the car was still misbehaving, I decided to try a different dealership. The service department manager gave me hope. "There are certainly things that can cause that behavior that won't show up on the computer. Bring it to us and we'll do better diagnostics." Well...I did and they didn't. This dealer didn't even connect a computer. They drove the car around the parking lot and said, "Many things happen as a car ages. At this age, we recommend you do..." and there was a long list and a cost of $600.00. I said if I do all that, will these symptoms go away? They said probably...but would not guarantee it. At least this time, there was no "diagnostics fee".
I mentioned this frustration to a neighbor who said "take it to my mechanic, Jake. He'll either fix it or tell you he doesn't know how, he won't lead you on and then do nothing." On that recommendation, I took it to Jake. "Have a seat over there, let me do a little inspecting and see if anything's obvious" he said. In just ten minutes, Jake poked his head through the door into the waiting room and said, "come look at this". He showed me parts...parts that were on the car. A "cap and rotor" it was, and there was this black part in the middle, with lots of crumbs around it. "The center electrode has worn away into powder. Here's what a new one looks like" and he showed me a much newer looking version of the same part. "It's $25 plus $37.50 for my labor, and I think this will fix the car." I said that would be great. He put on the parts, I paid and drove away - and the car's been doing great ever since.
I called both dealers back to tell them what happened. Not to "expose" them for frauds, but to give them a tip they might be able to use later. The first dealer got angry and said, "We have to follow the rules. The manufacturer tells us that step one is to plug in the computer, so we do that. It's not our fault if your car develops a weird problem." The second dealer said, "Well, your car is over five years old, you can't expect us to keep on top of the technology of something that old." Evidently the current models don't have "cap and rotor" parts.
It's not just businesses
As with most Americans, we have moved a few times when employment prospects dimmed where we were, and brightened elsewhere. For a while, we strove to find larger and larger homes...it's what everbody does, right? After a while, though, it seemed we were always cleaning, dusting and otherwise maintaining them. So, on one move, we downsized. From 2400 square feet to 1800. At first it felt cramped, but we started selling furniture that we really didn't need. End tables? For what? Out they went. Our large dining room table went away and we bought one at a garage sale with "leafs" to insert to make it larger for when we have dinner guests. After a time, we felt very comfortable.
We've moved once more since then and are now in 1100 square feet. It's wonderful! We can do a complete house cleaning in just two hours...end to end, every single fixture polished, every surface dusted, even over the doorways and windows. We have more time available for friends and fun.
That car story? The car with 152,000 miles on it is a small econo sedan. When we downsized from the larger luxury car, we worried that we would not be comfortable. Ah, but we are...the seats are more firm and our family member with "the bad back" can last many more hours without having a sore back. The smaller car is most definitely saving us on gasoline. And, as of this writing, the odometer reads 217,000 miles, and that "cap and rotor" was the first non-scheduled repair in the car's entire life. And we REALLY like driving this thing, it is nimble - it's fun!
We've even downsized the dog. After our Golden Lab breathed his final breath, we were eseentially given a stray Chihuahua mix. What a difference. You have to like frenzy - he's frenzied. But he's easy to travel with. Nobody is bothered when we ask "is it OK if we bring the dog when we visit" so we never have to make him suffer in a kennel. If he escapes...hardly a problem, we can out-run him. And, on days of bad weather when he doesn't want to walk outside, he can get his daily ration of exercise by running from one end to the other of our downsized house.
Small and local is the best
We've found local farmers from whom we get our produce. It tastes the best and really isn't very expensive. My sheet metal shop is relatively local, we bank at a bank whose HQ is less than 50 miles away. We find the best restaurant food is not at national chains, but at the family-run restaurant who's part of the local sustainable food chain.
All of this is best. All of it.
I would sure love to see the government understand this principle - you cannot properly serve the varied needs of disparate individuals by passing legislation in Washington that affects the entire country. For those of us who want to live life in the most healthy and successful way, we'll just have to do our level and local best, and basically avoid needing anything doled out by the government.
I'm convinced it's still possible in the US.
Not only more frugal, money-saving, but more enjoyable and probably better for the planet, although I'll leave that argument for someone else.
Friday, March 12, 2010
The Cost of Living - it's not that high!
Most of us have heard of the consumer price index. It makes assumptions. If those assumptions are not true for you, then the index has no validity for you!
For instance, the CPI assumes that you replace your house periodically. And that you replace your car periodically - with a brand-new one. Recent statistics show that 80% of cars purchased in the US are purchased used, not new. The CPI is very clearly slanted toward those who chose to make their purchasing decisions in a fairly expensive manner...i.e. new everything.
So, just what is the cost of living if you choose to be careful? If you choose to only purchase that which is necessary to stay alive and remain employed?
Rather than a quote from a book, here's a summary from a reader of this blog.
"I can't believe how much people spend on simply living that's way out of proportion to reasonable. In 2009, our family of two adults and two dogs spend only $19,000. It helps that our has has been paid off for years. Otherwise, we don't think of ourselves as cheap.
"We cook most of our own meals, because we prefer the flavor and we like to know what's in our food. We buy whole, healthy, locally-grown, natural products, not the cheapest. We grow a little bit of our own food, but not much of it...we're not very good at gardening.
"We refuse to tolerate an unreliable car. But today's cars, as long as you get the lower-cost simple ones, are amazingly reliable. Ours are both over 15 years old, and between them, have over 450,000 miles and neither has ever required a repair over $300. One of them, in fact, has never had a single repair, the other one only two repairs. If either one needs a major repair, we will throw it away and buy another ten year old car for $4,000 to $6,000 and enjoy it for most of a decade.
"We enjoy life a lot. In addition to the usual hiking, biking kinds of things, we attend a lot of concerts and shows. For free, because if we like an art form, we find a way to volunteer to help. This is not just less expensive, but more entertaining. You can meet the actual performers and it's a lot more fun when you get to see some of the behind-the-scenes actions. Our choice to be volunteers is not from a sense of cheapness, but it's more fun.
"The only conscious decision we make that is specifically for money savings is to subscribe to nothing. No Cable TV, no NetFlix, nothing. We do have a small business that's internet-based, so we have a high speed internet connection. We call it our $45 per month indulgence, but it's a deduction anyway. No cell phones, either.
"We go on a lot of vacations, twice a year we fly somewhere, and stay with friends. We do house-sharing with people in Europe or Asia once a year, so our only expense is the airfare. We have not stayed in a hotel room, except for business trips, in decades.
"All of this is 99% done because we find it a lot more fun to enjoy what exists, instead of spending more and more for fleeting things.
"That $19,000 is almost everything. It's fuel and maintenance for the cars, utility bills (small because we dress for the season and use very little heat and no A/C), all food including going out to eat about once a month, most insurance. It does not include our 401ks, which are fully funded, our Roth IRAs, which are fully funded, or health insurance, which comes out of one of our paychecks.
"We could, if we wished, live exactly like this on two minimum wage jobs. And we don't really try very hard to do so."
Congrats to our readers. We get stories like this from many, but this one had more detail than most, so I posted it.
Another reader reports that his two nieces share an apartment and are going to college, and without any form of student loan, are able to survive happily on $12,000 per year between the two of them, which they earn doing waitress jobs.
What is your actual annual expense? We'd like to hear from more readers about what they really spend on what.
For instance, the CPI assumes that you replace your house periodically. And that you replace your car periodically - with a brand-new one. Recent statistics show that 80% of cars purchased in the US are purchased used, not new. The CPI is very clearly slanted toward those who chose to make their purchasing decisions in a fairly expensive manner...i.e. new everything.
So, just what is the cost of living if you choose to be careful? If you choose to only purchase that which is necessary to stay alive and remain employed?
Rather than a quote from a book, here's a summary from a reader of this blog.
"I can't believe how much people spend on simply living that's way out of proportion to reasonable. In 2009, our family of two adults and two dogs spend only $19,000. It helps that our has has been paid off for years. Otherwise, we don't think of ourselves as cheap.
"We cook most of our own meals, because we prefer the flavor and we like to know what's in our food. We buy whole, healthy, locally-grown, natural products, not the cheapest. We grow a little bit of our own food, but not much of it...we're not very good at gardening.
"We refuse to tolerate an unreliable car. But today's cars, as long as you get the lower-cost simple ones, are amazingly reliable. Ours are both over 15 years old, and between them, have over 450,000 miles and neither has ever required a repair over $300. One of them, in fact, has never had a single repair, the other one only two repairs. If either one needs a major repair, we will throw it away and buy another ten year old car for $4,000 to $6,000 and enjoy it for most of a decade.
"We enjoy life a lot. In addition to the usual hiking, biking kinds of things, we attend a lot of concerts and shows. For free, because if we like an art form, we find a way to volunteer to help. This is not just less expensive, but more entertaining. You can meet the actual performers and it's a lot more fun when you get to see some of the behind-the-scenes actions. Our choice to be volunteers is not from a sense of cheapness, but it's more fun.
"The only conscious decision we make that is specifically for money savings is to subscribe to nothing. No Cable TV, no NetFlix, nothing. We do have a small business that's internet-based, so we have a high speed internet connection. We call it our $45 per month indulgence, but it's a deduction anyway. No cell phones, either.
"We go on a lot of vacations, twice a year we fly somewhere, and stay with friends. We do house-sharing with people in Europe or Asia once a year, so our only expense is the airfare. We have not stayed in a hotel room, except for business trips, in decades.
"All of this is 99% done because we find it a lot more fun to enjoy what exists, instead of spending more and more for fleeting things.
"That $19,000 is almost everything. It's fuel and maintenance for the cars, utility bills (small because we dress for the season and use very little heat and no A/C), all food including going out to eat about once a month, most insurance. It does not include our 401ks, which are fully funded, our Roth IRAs, which are fully funded, or health insurance, which comes out of one of our paychecks.
"We could, if we wished, live exactly like this on two minimum wage jobs. And we don't really try very hard to do so."
Congrats to our readers. We get stories like this from many, but this one had more detail than most, so I posted it.
Another reader reports that his two nieces share an apartment and are going to college, and without any form of student loan, are able to survive happily on $12,000 per year between the two of them, which they earn doing waitress jobs.
What is your actual annual expense? We'd like to hear from more readers about what they really spend on what.
Thursday, December 17, 2009
Getting more out of life without spending it all
That's what the blog is about. Way past simply looking for discounts, this is about living a fuller life by having restraint on shallow stuff - so that the deeper stuff can be approached with gusto.
Study after study has shown that anger, depression, and an empty feeling are the result of owning too much stuff, and living "for the next thing to buy", whether it's tangible or just an experience.
Give a nine year old child his first teddy bear and his eyes light up with glee. Give him his fifth one and he wonders why you'd have thought he wanted it. And adults are no different. The joy of our first car can't ever be felt again. That being the case, why bother ever buying a new one? Buy transportation first, and let the drama queens buy images.
We'll back up our suggestions with concrete examples, actual money values, real people's actual spending.
But for now, I'll tantalize you with this - your senior editor lives on the west coast - in a nice, if not large house, on a significant piece of land almost in a forest - and in 2007, spent barely over minimum wage to do so. We'll get into the details later.
Study after study has shown that anger, depression, and an empty feeling are the result of owning too much stuff, and living "for the next thing to buy", whether it's tangible or just an experience.
Give a nine year old child his first teddy bear and his eyes light up with glee. Give him his fifth one and he wonders why you'd have thought he wanted it. And adults are no different. The joy of our first car can't ever be felt again. That being the case, why bother ever buying a new one? Buy transportation first, and let the drama queens buy images.
We'll back up our suggestions with concrete examples, actual money values, real people's actual spending.
But for now, I'll tantalize you with this - your senior editor lives on the west coast - in a nice, if not large house, on a significant piece of land almost in a forest - and in 2007, spent barely over minimum wage to do so. We'll get into the details later.
Subscribe to:
Posts (Atom)