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Apache is functioning normally

If you’ve bought a major appliance in the U.S. during the past decade, you’ve probably noticed the government-issued Energy Star certification. Energy Star is a joint program of the U.S. Environmental Protection Agency and the Department of Energy. Their goal is to “help us all save money and protect the environment through energy efficient products and practices.”

But Energy Star goes beyond simply recommending energy-efficient washers and dryers. The web site offers a number of useful resources. Main sections include:

With tax season in full-swing, it’s probably worthwhile to check the list of Federal tax credits for energy efficiency. Most of these expired at the end of 2007, but were valid for all of last year. Other resources include the news room, which contains information about the program, and — believe it or not — the Energy Star podcast.

Source: getrichslowly.org

Apache is functioning normally

I’ve been gardening for almost fifteen years. I started with flowers, added herbs and vegetables, then a few fruits, then a lot more. I’ve gardened in plots and pots and raised beds. I’ve drooled over bedding plants, spent too much on whatever was my obsession-of-the-moment (bulbs! daylilies! gooseberries! ornamental grasses!), and have certainly read my fair share of plant books and magazines.

By this time, I’m somewhat jaded about most gardening educational materials — I find they are often at one extreme or another: either an all-around reference that is about as exciting to read as The Merck Index, or beautiful but vapid plant-porn packed with color photos of planting schemes and “outdoor rooms” that can only be reproduced in Southern California!

However, I give a rave review — and two green thumbs up — to a recent find on container gardening: The Bountiful Container by Rose Marie Nichols McGee and Maggie Stuckey (2002). This book was suggested last spring by a reader named Beth in J.D.’s overview of square-foot gardening. It will find a permanent place on my gardening reference shelf, despite the fact that I don’t plan to grow anything new in a container in the foreseeable future. (Although this book just may have changed my mind.)

A Great Gardening Book

The Bountiful Container beats most gardening books hands-down in several key areas:

  • It focuses on growing plants that give a beginning gardener the most “bang for the buck”, plants that are both edible and decorative and can be grown with limited space: vegetables, herbs, a small selection of fruits, and edible flowers.
  • It is splendidly organized and easy to read, and has a great index, too. The Bountiful Container is full of practical information that covers the entire life span of the crops: choosing varieties, planting, watering, fertilizing, dealing with potential pests and diseases, tips for success, and the much anticipated harvesting and using/eating. Included are recipes and craft projects to make with your harvest. Bits of historical flora-lore are tucked in here and there for fun.
  • The level of detail is just right for almost any skill level, and the writing is pleasant to read and easy to understand. There are five full pages of instructions on the best ways to grow potatoes, and two full pages on radishes. (Radishes!) The information the authors provide will practically guarantee success compared to the somewhat generic and unhelpful lack of detail on the back of most seed packets.

When J.D. writes about our crop gardening, inevitably there are questions (and some audible moaning) about the possibilities of growing in containers. Container gardening can be much more than a clay jar of strawberries or a cherry tomato in a hanging basket!

Who might need to do their farming in a pot? Anyone without a yard (think apartment with a balcony) or who can’t dig up the yard (some renters). Those who are transitory and want to take their garden with them, or those with really bad growing conditions (such as poor soil).

Containers can also supplement a traditional garden, providing a handy pot of herbs just outside the kitchen door, an experimental area for kids to have their own garden, and allowing tender plants to be moved according to the season. For example, I have a bay laurel tree than lives in the herb garden until October, when I move it to a sheltered porch for the winter. [J.D.’s note: I am the one who moves it, and it’s heavy.] And my mint is in a pot to keep it from taking over!

Sowing the Seeds of Success

The Bountiful Container is specifically tailored for success growing edible crops in containers. The book teaches:

  • How to choose suitable varieties (chosen for compactness, hardiness, etc).
  • About increased watering and fertilizing requirements for container-bound plants. This is the biggest commitment for containers — they must be watered daily and fertilized regularly.
  • How to stake or trellis to help plants grow vertically and guard against wind damage.
  • Why you shouldn’t even try certain plants in containers (corn, melon, cabbage etc).
  • How to combine plants for a pleasing effect, to stagger harvest, and how to choose plants with similar water/sun/soil pH needs.

Although growing in containers will never give you enough produce at one time to can 16 quarts of spaghetti sauce or 30 pints of green beans, it’s just the thing for small-scale pick-and-eat farming.


One actual weekend harvest from August 2006 — not from containers.

I award The Bountiful Container bonus points for a number of reasons. First, most of the information is applicable to traditional in-the-ground gardening, and the thorough treatment of topics will teach even experienced gardeners a thing or two. (Although be sure to adjust watering and reduce fertilizing schedules if not growing in containers.)

Next, the authors don’t care if your containers are simply old 5-gallon buckets! They understand that some container gardens are for looks and others are for sheer practicality, but like most true gardeners, they think any growing, healthy plant is a thing of beauty, no matter what it may be growing in.

The book also covers low-impact pest and disease controls — the authors advocate the least toxic approach possible. The sizeable section on herbs is better than most books I’ve read devoted solely to the same topic. If you are just starting your garden and are considering growing herbs (in pots or the ground), I heartily recommend checking it out.

The Bountiful Container was written by Oregonians, but location-dependent issues are covered in detail, such as choosing the right apple for a warm-winter climate, how to protect your container plants from deep freezes and strong winds, and which plants need to go inside for the winter or be harvested before frost hits.

I love the very specific hints about which plants to begin growing from seeds versus when to buy plant starts. This is a much-misunderstood topic. Seeds are cheap, but they are not always the smartest investment.

Theme Gardens

McGee and Stuckey politely assume you know practically nothing, then explain it clearly and concisely. But they also assume you can decide for yourself which plants you want to grow, so they don’t offer many “paint-by-numbers” gardens. If you want a book that tells you exactly what to plant in what kind of pot so it looks just like the picture, you would be better served with Bob Purnell’s Crops in Pots.

The authors do offer a handful of “Theme Garden” plans. These plans, either in one container or a grouping of smaller pots, list specific plant varieties and how to arrange them. For example, “The Lemonade Party” on page 218 combines a Meyer lemon tree with lemon verbena, lemon-scented geraniums, basil and thyme, with yellow begonias, nasturtiums and violas. (The flowers are all edible.)

For the more serious cook, “Country Kitchen in the Round” (page 98) uses six pots to pack in one precious tomato plant, basil, cucumber, eggplant, lettuce, nasturtiums, parsley, peas, peppers, rosemary, bush beans, a pepper, sage, summer squash, and culinary thyme! Early season and late season crops are rotated to make the most of the space.

Two Small Weeds

This book does have two shortfalls that should be noted:

  • Since it is ostensibly about container gardening, you will not find crops such as corn, watermelon, butternut squash, asparagus, and many more, including most flowers. (Luckily, these authors have produced other books, which I may have to investigate.)
  • This book has no photos, only pen-and-ink sketches. Since I associate these with mail order gardening ripoffs (which never look as good as promised), I was initially put off by the lack of photographs. But the solid information soon won me over. In their defense, it would be difficult to photograph such an arrangement as the “Country Kitchen” described above; by the time the eggplant, pepper and tomato plants are fruiting, the peas and lettuce would be done and gone.

Although J.D. often advocates borrowing books from the library, The Bountiful Container is one I know I will refer to throughout the entire growing season, so I’m glad we found a used copy to purchase (for $11.50). Maybe when I’ve learned its contents by heart, I’ll pass it along to a gardening friend. They’re bound to enjoy it as much as I have.

Further Reading

For more information on growing food in containers (or smalls spaces), check out:

Now’s the time to get your garden space ready. The danger of frost is passing in many parts of the United States. Garden fairs and plant sales have begun to pop up like weeds. Get out there and grow some food!

Source: getrichslowly.org

Apache is functioning normally

Earlier this week, April wrote with a personal finance predicament. She and her husband need to buy a car, but it’s not something they’d budgeted to do any time soon. Fate intervened:

My husband and I are trying to pay down our debt and to save money. This morning he called to tell me that he had been rear-ended in traffic. He’s fine, thankfully, but he thinks they’ll total his car, which was paid for. My best guess is that they’ll give us $4000. I don’t want another car payment, but I’m not sure what to do here.

The payments on my car are $240, and we have two years left. We pay $1013 for the lot we own [on which they plan to build a home –j.d.], and $200 for his motorcycle, which we’re trying to sell (keeping the bike isn’t an option). The rest goes toward the normal bills and paying off the credit card, which we have about $8000 left on. We don’t pay rent right now, don’t have cable, and we’re cutting back everywhere possible. Our two luxuries are Netflix and high-speed Internet.

What’s our best option?

  • Should we buy something a little more than the expected $4000 settlement and finance the rest?
  • Should we try to make it on one car and put the money toward the debt?
  • Something in between?

My husband absolutely has to have a car because he makes sales calls all day long. I carpool to work and don’t drive, but on occasion I need to take my own vehicle. Maybe we could make other arrangements on those days, but it’s hard to account for any circumstance that could come up. I want to be really smart about the choice we make, because I don’t want to derail all of our hard work. We really want this to be the year that we get our finances in order.

April adds that because of where they live, biking to work isn’t an option, and neither is public transportation. Her choice seems to be: remain a two-car family for convenience, or make a go with one car while tackling the last of the debt.

Often I don’t have a strong opinion about reader questions, but this time I know exactly what I’d do if I were in April’s situation. I’d defer the decision. I would take the money, place it in savings, and try to get by with just one car for a few weeks. If this worked well, I’d pay down the debt. If there were problems, I’d buy a car.

I actually experienced something similar several years ago. In December 2000, a tractor-trailer rig sideswiped my beloved Geo Storm during the morning commute on the freeway. My car was totaled.

I didn’t have an emergency fund and was already deep in debt. But the car was paid off. The insurance company gave me $2000 for it. Rather than make the smart move — buy a used car — I borrowed $15,000 to purchase a brand new Ford Focus, the car I’m still driving today. That choice prolonged my life in debt.

April’s situation is slightly different, of course. I had to buy a car; she and her husband have the option of using the money to pay off debt instead. But is that the best choice?

Have you had to make the choice between buying a car or paying off debt? Which did you choose and why? (Or, to look at the question from a different angle, have you ever opted not to have a car in order to avoid debt?) What would you do if you were in April’s shoes?

Source: getrichslowly.org

Apache is functioning normally

Since August, I’ve been on a quest to reduce the clutter in my life. Back when I was a spendthrift, I bought a lot of Stuff. Stuff comforted me. When I was buying things (even on credit), I felt wealthy.

Stuff doesn’t make me feel wealthy anymore — it makes me feel cramped. With time, Stuff simply becomes clutter. Slowly but surely, I’m banishing excess belongings from my household. I still sometimes buy more than I ought, but mostly I’ve been guarding the borders of my life against the invasion of Stuff. Here are some of the defenses I’ve been employing:

  • I ignore the proverbial Joneses. One of the most dangerous paths to clutter (and to overspending) is the urge to own the same things your friends do. Peer pressure can be powerful. I’ve come to realize that lifestyles are not a competition. What does it matter what others buy? I’m content with what I have — more Stuff is not going to make me more happy.
  • If I don’t need it, I don’t buy it. As I’ve purged my Stuff over the past year, I’ve been shocked by how many things I bought but never used. I would see something in a store — a voice recorder, for example — and convince myself that I needed it. Or I would tell myself, “I might as well buy a jig saw — we’ll need one in the new house.” But I used the jig saw only once in four years (on the day we moved in). I never used the voice recorder at all! These items are clutter, and were a waste of money. I’ve learned not to buy something unless I know I’ll use it.
  • I try to value experiences instead of things. Make no mistake — experiences still cost money. But a trip to England or the entrance fee to a marathon or a nice dinner with friends all share a common characteristic: they don’t take up space in my home. I get value for my money, and there’s no residual Stuff.
  • I’m trying to practice the one-in, one-out rule. I’ll admit up front that I’m not good at this, but Kris is trying to teach me. I’m attempting to keep a steady state of Stuff. If I have, for example, twelve pairs of socks, and then buy another, I must get rid of one pair. Practicing this rule prevents a build-up of Stuff.
  • I focus on quality. It’s been difficult for me to realize that sometimes it makes sense to pay more for the things I buy. My instinct is to buy whatever’s cheapest. (And sometimes that is the best choice.) But I’m learning to base my purchase decisions on the value an item will give me. Often it makes more sense to have one excellent expensive item than to have several lousy cheap ones. The lousy items just become clutter.
  • I borrow and lend. Shakespeare might have advised against it, but I’ve found that by borrowing and lending things among friends, there’s less we each need to own. I’ve loaned out a drill, a rototiller, some golf clubs. I’ve borrowed books, a video camera, a lamp. By sharing these items, we’re each able to have less Stuff in our lives.
  • I’ve reduced my exposure to advertising. Since I stopped watching television a few years ago, I buy much less Stuff. But it’s not just television. I used to enjoy reading the ads in magazines. Now I try to ignore them. The less I pay attention to advertising, the less I buy.

I don’t want to pretend like I have Stuff licked. I don’t. I’m still especially susceptible to free and cheap things. In the past year, for example, I’ve dragged home:

  • A carload of scrap lumber I picked up for free. (Admittedly, this did get used as a border to our garden.)
  • Several pieces of free exercise equipment that have remained unused in our garage.
  • A box of free books — books that I now realize I will never read.

Just because something is free or cheap doesn’t mean it’s a bargain. If I don’t need it, I shouldn’t bring it home. Despite this weakness in my defenses, the tide of the battle has turned. I’m winning the war against Stuff.

There’s nothing wrong with owning Stuff that you use and value. But when you accumulate Stuff that you never use, that’s a problem. Guard your borders. In his excellent The Joy of Simple Living, Jeff Davidson writes, “By keeping watch over what enters your personal kingdom, you end having to initiate possession-purging exercises.” The best way to cope with Stuff is to never let it into your house.

Source: getrichslowly.org

Apache is functioning normally

My short life as a daytrader
In my second year of college, I decided to take out $10,000 in student loans and become a daytrader. I could earn far more than the low 4% rate the loans came with, and I planned to finance my education with the winnings.

Sounds like a great idea, right?

There I was, hanging out in the school library, taking up two or three monitors with stock tickers running across the screen and Excel spreadsheets tracking my trades. A copy of Barron’s would be spread out beside me, and the Wall Street Journal wasn’t far away.

So how did it go? Well, there were a couple of problems.

  1. Real-time trading was hard to do in 1997. Back then, the internet was up and running well, and Datek Online had just launched, but real-time trading was still restricted to people with a lot faster connections than my school library had.
  2. Apparently, the school library was not designed for my exclusive use. For some reason, the library staff grew weary of my hanging out in the library all day, taking up three computers. I tried to play it cool when they asked me about it — “Oh, is there a problem?”— but in the end I was put on library restriction: I could use only one computer at a time, and if others were waiting to do academic work, the stock trading would have to stop. Not wanting to pay for a better computer and connection at home, I finally gave it up.

Fast-forward ten years, and I haven’t done any stock trading since then, but I’ve managed to choose unusual paths most of that time:

  • I lived in West Africa for four years, working as a volunteer for a charity without taking any salary.
  • I’ve worked as an entrepreneur for most of my adult life — ten years and counting without the dreaded “real job”.
  • After spending so much time overseas, I’ve found that I really enjoy traveling to places most North Americans never go to, so I recently set a goal of traveling to every country in the world before my 35th birthday in 2013

Each of these experiences has taught me a lot about personal finance, and in a few important ways, my belief in unconventional living has carried over to how I handle money. I’ve made a lot of mistakes along the way, but I’ve also done a few things right.

With that in mind, I’ve written a two-part summary to explain more about how I handle my finances. While I don’t expect that anyone will adopt my own system in full, I do hope that this summary may help others who see the world similar to the way that I do. My thanks to J.D. for providing a forum for this summary here at Get Rich Slowly.

Back to basics
First of all, I’d like to think that most of what the GRS site advocates — and what GRS readers consistently practice — represents a great start to a nonconformist approach to personal finance. Sadly, the majority of North Americans are woefully under-informed about financial matters and do not set savings goals.

Simply by planning and taking deliberate action with your finances, you are already in a league of your own.

Further, as different as I may be, I am an advocate of most of the basic financial advice presented here on GRS and in other like-minded publications. Some financial advice is fairly generic, but there really are some good principles that are true for everyone.

For example, I believe in:

I think of these things as The Basics. Simply following The Basics will put most of us far above the curve.

Also, I am generally skeptical about retirement as it’s commonly defined (more on that later), but I am even more skeptical about Social Security. If you’re under 50 years old, I don’t recommend you count on Social Security for anything. Consider those payments you make each month as a parent or grandparent tax.

Where I diverge from the conventional wisdom is over the issues of debt, focused spending, home ownership, traditional employment, retirement, and charitable giving.

Here are a few of my principles — and please, feel free to take them or leave them for yourself as you see fit. I don’t make judgments about the choices of others; I only think it’s reasonable that each of us should carefully consider our own motivations and priorities. As J.D. says, “Do what works for you.”

#1 — There is no such thing as “good debt.”
Finance books and magazines often talk about “good debt,” in the sense that a long-term mortgage is considered a good thing to have. Depending on your perspective, a car loan or education loans may also be “good.”

Well, this is probably the only thing in the world I am conservative and old-fashioned about, but I happen to believe that all debt is something to worry about. While watching many friends accumulate huge levels of debt buying cars and houses, I have lived my entire adult life debt-free.

This has occasionally meant going without something or not buying an expensive car (I don’t own any car at all now), but the real secret is that choosing to live debt-free is no sacrifice at all. Even though I work as an entrepreneur and have never had a stable income, I also don’t have to worry about falling behind on mortgage payments or watching credit card finance charges rise every month.

#2 — Student loans? No thanks!
Aside from the short experience of daytrading with my undergraduate loan money (I actually came out a little ahead, but I wouldn’t recommend trying that), I’ve financed the rest of my education without debt as well.

Two years ago I came to Seattle and began an expensive graduate program, and since that time I have met a lot of students who have gone into debt to finance their undergraduate and graduate education. It’s fair to say that some of them are happy with this choice, and there are certain professions (such as medicine) where it is very difficult to get an education without taking on serious debt.

However, it is also fair to say that I know a lot of people who have truly regretted taking on so much debt to go to school, especially if they enrolled in a program that does not lead to a high-paying job after graduation.

I’m simply not comfortable borrowing large sums of money. I was able to pay for my University of Washington Master’s Degree on my own. But now that I’m writing during the day instead of building businesses, I really can’t afford to continue paying for my education. Earlier this year I was accepted to a competitive Ph.D. program on the east coast, but the offer didn’t come with financial support, so I had to make a tough decision.

I could have started the program by taking loans or using long-term savings, hoping that more financial support would come along later. To be honest, I briefly considered taking the loans. But in the end I made the right choice, at least for me: I’m not going. I don’t value it that much.

#3 — A house is a liability, not an asset
I am currently living in one of the most expensive housing markets in North America (Seattle, Washington), and I have no interest in buying a home here. I am quite happy that my landlords are responsible for maintenance, and that I pay no homeowners’ dues or property taxes. (Yes, I realize that some of those costs are factored in the price of rent, but I think we still come out ahead.)

In the long-term, you do have to live somewhere, and if you’re staying put for the next 30 years and want a home of your own, ownership can make sense. But for many of the rest of us, renting is becoming less of a stigma now that people have begun to realize that taking out huge mortgages isn’t usually a good idea.

Invest in yourself
My wife Jolie and I made a decision several years ago that guides most of our spending choices. We try not to spend money on “stuff” — physical items that all of us end up accumulating over time — and instead focus our spending on life experiences that we value.

Jolie is an artist, so we invest a lot in her art education and supplies. For me, world travel is my highest personal expense category. On a train ride from Hungary to the Czech Republic a few years back, I worked out the cost of visiting 100 countries. I had already been to a lot of countries, and I figured that to get to the remaining 60 or so and stay for a few days in each would cost roughly $30,000, or the cost of a large SUV.

I prefer to use public transport and don’t own a car in Seattle, so I thought, wow, that’s cheap. I could have a large vehicle and complain to everyone about the cost of fuel, or I could have the world. For me, it was an easy choice.

Some people would say that world travel is a frivolous luxury, and not something that should be such a prominent item in a graduate student’s budget. I’ll try to consider that point the next time I’m flying off to Hong Kong or Johannesburg.

Because travel is so important to me, my working budget includes funds for at least one Round-the-World trip each year. I realize that I don’t need this trip in the same way that I need to buy groceries, but I do need it in the sense that it is one of my highest priorities, and I would rather eliminate other expenses before cutting into it.

A lot of GRS readers may not be as interested in travel as I am, but that’s OK — it’s more important to find your own “life experience” priorities. What do you get excited about? What are you truly passionate about? I believe these items should be your spending priorities, right after groceries, savings, and investing in others — the next area in this short guide to unconventional personal finance.

Invest in others
For many affluent people, charitable giving is an afterthought. It’s something we do once in a while to feel better, or at the end of the year for a tax write-off.

I have a problem with that mindset. Done well, charitable giving is essentially an investment in those less fortunate than us. I don’t view investing in others as a luxury or an afterthought; I consider it as essential as taking care of our own savings.

Money doesn’t solve all the problems of the world, and it’s important to give to the right causes. For example, because far more people give to short-term relief than to long-term development, the money spent on disaster relief is often highly inefficient and poorly used.

But when you create a strategy for your investment in others, you can have a positive impact on far more people, and the quality of that impact will be greatly optimized.

If you’re not sure where to start and are looking for good causes to increase your own giving, consider the following organizations. I personally know the people who run each of these groups and give them my highest recommendations:

  • Kiva.org — This great organization has the objective of democratizing microlending by matching small donors (like you and me) with promising entrepreneurs in the developing world who need small loans to improve their businesses.
  • CharityIs — My friend Scott Harrison started this project to bypass government foreign aid (most of which does not go to the poorest people in poor countries) and directly provide access to clean water and sanitation throughout Africa and Asia.
  • Care — One of the larger, more traditional charities, Care has managed to keep administrative expenses down even as they have expanded to projects in 71 countries

What I’m Doing
Right now I’m beginning a writing career while my wife works as an artist, so we have definitely had to cut back on both giving and savings, but I still try to pay attention to the overall percentages. I also believe that if you don’t “miss” the money you give — if there is no real sense of sacrifice — you’re not really being challenged by the giving.

Therefore, I have a stated goal of investing at least 15% of our income every year in charitable giving. I feel a little strange about writing that here for 50,000 people to read, because this is something that is very personal, and I have previously shared the number with only a few people.

To those who say that it’s hard to give to others when you don’t have much money yourself, part of me wants to sympathize, but another part remembers that we chose to adopt this principle when we were living on about $12,000 a year. In the end, all I can say is that every year we have given more money away, and we have rarely lacked for anything.

To be continued…
By getting the basics under control, rejecting conventional beliefs about debt, choosing to spend freely on life experiences instead of “stuff,” and creating a giving plan to invest in others, I’ve built a personal finance system that is aligned with my values.

There are just a few important parts left, including where the income comes from. I’ll discuss that in the next update, which will be published at Get Rich Slowly next week. In that article, I’ll discuss alternative forms of work, the financial independence goal, and a few mistakes I’ve made on my nonconformist finance journey.

Thanks for reading this far! I welcome feedback, questions, or disagreements in the comments below.

Source: getrichslowly.org

Apache is functioning normally

“Look at this,” Kris said yesterday when she returned from grocery shopping. She held up two yogurt containers for me to see.

“So what?” I said. “Black cherry yogurt.”

“Look closer,” she said.

“That one’s smaller,” I said. “Did they change the container size?”

“Yes,” she said. “But they didn’t change the price.”

The Incredible Shrinking Yogurt

I’ve received several e-mails lately from readers noting the same thing. They go to buy a product they’ve been using for years, only to discover that the container has shrunk. The price hasn’t changed — only the packaging. Reader David Cox, for example, wrote with the following anecdote that mirrors our own:

We went to the grocery last night and one of the items I wanted to get was yogurt. The store always seems to have their brand of yogurt on sale @ 10/$5.00. I was about to scoop up a bunch, when I noticed that they had redesigned the packaging with pretty new colors, but the package seemed a bit smaller. On closer examination, it was.

The new size was 6 oz. of yogurt, while the old style had been 8 oz. The price per package hadn’t changed, but the package now contained 25% less product. I thought it was very tricky of them to leave the big sales sticker on the shelf (10/$5.00!!!) just like we were used to seeing, without any thing to warn you of the repackaging. I guess they would claim it was obvious, but it still seems a bit tricky to me.

Is it tricky? I don’t know. I understand that manufacturers need to make a profit, but when they reduce the container size instead of raising the price, it does seem a little sneaky. It’s as if they’re unwilling to raise prices directly, so they take a circuitous route.

Standard Operating Procedure

I recently had a conversation with a friend who knows a great deal about this subject.

“You see marketing stories like this over and over,” Freeman told me. “Fabric softeners cut the sheets from 40 to 36 — same size box and same price. Ketchup switches from a glass bottle to a smaller plastic bottle and the price stays the same. Some companies mess with cap and lid sizes as a way to increase consumption. Want a bottle of laundry detergent to run out faster? Then increase the cap size slightly. (Many people use a capful per load.)”

Freeman then pointed out other ways companies subtly manipulate spending. “Think of the famous lather, rinse, repeat instructions on shampoo. Like you really need to do that. Same things happen with chips, cereal, and on and on. Just consider: maybe a box of cereal hasn’t gone up in price much in the past decade, but I guarantee you that the average box size has certainly decreased.”

Another friend, Jeffrey, chimed in: “I always wondered why, if the cost of packaging is so expensive, do cereal companies reduce the amount inside the box but the leave the size of the box alone?”

“They also do this with cereal bars,” Jeffrey said. “A while back, General Mills came out with Fiber One bars. The box is the same size as all the other boxes but there’s only five bars in the box, not the standard six bars that are in every other box. Nature Valley does the same thing with their family size box of granola bars. You open the box and only half of the box has product. It’s the same thing as lying but it’s disguised as ‘marketing’ so it’s okay.“

Savvy Shoppers

Again, I’m not sure it’s lying, but it’s obvious that shoppers don’t like to be duped this way. But both David’s e-mail and Jeffrey’s comments reveal they don’t appreciate being tricked. They’d rather have the same package size but see the price increase. I would, too.

Food inflation is a hot topic in the United States right now. I think we’re all beginning to realize that the things we love cost more. But some of us would rather pay the increased price than have manufacturers try to hide the inflation with packaging.

For more on this subject, take a look at Nickel’s thoughts on product packaging. He observes that suggested portion sizes are increasing even as package sizes are decreasing. You may also be interested to read about unit pricing in the GRS archives.

Source: getrichslowly.org

Apache is functioning normally

How fuel efficient is your vehicle? Do you ever get the suspicion, as I do, that your car’s gas mileage is getting worse? Have you ever wondered how your mileage compares to other drivers? And what about the estimated mileage touted by the car companies? Does a Mini Cooper really get 37 miles per gallon?

Matt Haughey and Paul Bausch have launched a new site called Fuelly, which allows users to track their vehicles’ fuel economy and to compare data with other drivers. As you enter data for each fuel up, Fuelly tracks your average number of miles per tank, your average cost per tank, your fuel efficiency, and more.

If you’d like to compare information with other users, you may:

Fuelly is brand new, so data is scarce. Over the next few weeks, however, users will fill their tanks, and then people will then be able to compare mileage and track their own vehicles’ performance. (For a preview of extended data, check out dredpyrate’s 2004 Mini Cooper, which has data all the way back to the first of the year! It gets 32.8 miles per gallon.)

I think this is a great idea. Fuelly taps the power of the masses to compile real fuel efficiency data so that users can find ways to save money. Brilliant. Because Fuelly is new, it is not without bugs. Haughey and Bausch promise to squelch these soon, and to add new features, such as metric units and support for additional vehicles (like scooters and uncommon cars).

Source: getrichslowly.org

Apache is functioning normally

Yesterday a reader named Dave Black left a long comment on an old article about how to buy a new car without getting screwed. This is his glimpse into the inner workings of a car dealership. I’ve edited Black’s comment to make it a little more readable, but the advice is all his.

I sell cars, and believe me, there are lots of opportunities for a car dealership to make money.

Front of the house profit is derived from the MSRP less the invoice price (the price the dealer actually pays for the car). Each deal has a “pack charge” or “lot fee” of $200-600 or more that goes in as part of the dealer cost, so when a dealer tells you for example, our invoice is $22145, you can subtract $200 to $600 for the lot fee. There are also dealer rebates and consumer rebates to factor in.

On the sales contract there is always a “doc fee” of again several hundred, and a fee for title processing and sales tax. All but the sales tax can be negotiated.

Never trade your car in unless it has major problems and you just need to dump it. You don’t really know how much you are getting off the new car for the value of your trade. Most dealers I have worked for use “rough black book”, which is a number that they can start with before they do an appraisal on your car.

The back of the house profit comes from the finance office. Let’s say you have great credit. They could qualify you for 5.5% loan or less, but the finance manager may hit you at 7.5% and tell you that’s the best he could get. This can be negotiated, too. There is a lot of money being made on raising your interest a couple of points.

Do not buy any add-on service contracts and warranties. The profit on those is 50-100%, and the finance manager is a commissioned salesman. Remember that!

Do not try to bluff or BS anyone in the dealership — they are a lot better at it than you are, and they do it far more often.

Most salespeople do not make a lot of money. I have made as little as $300 a week and as much as $3500 in a week. My average is around $40,000 a year working five days and 55 hours a week. It’s a difficult job. The salesman is trying to negotiate between you and his sales manager. He is more on your side than you might think. He wants referrals, and he will work you hard after the sale, so he wants you to understand that he is going to get you the best deal he can and still make a profit.

Most deals on new cars pay minimum commission — $100 to $150 — because the profit margin on new cars is lower and the competition is higher. You can easily compare prices on new cars because every dealer sells the same car. Used cars have more profit built in, and there is no simple way to price shop because condition and mileage on each car varies so much.

Do not offer a price that is way too low. Be realistic. We are there to make a profit, and we must not sell cars at a loss. Give us a break. Don’t lie or steal from us, and we will treat you right.

The best time to buy a car is end of the month and before the new model year comes out. Monthly bonuses for volume can be very good, so they might be more willing to do a loser sometimes and make up for it on bonus.

Most dealers and salespeople are good honest hard-working people with families and lives like yours. Treat them with respect — they deserve it.

Driving through a lot drives us crazy. If you are really interested in looking at cars, stop and get out and let one of us open the car up and give you a demonstration. If you aren’t really ready to buy, go to the lot after hours so you’re not wasting anyone’s time but your own.

Once I had a customer came in and tell that me he and his wife would like to check out a couple of cars. He said he would give me $20 to work with them for a while even if they did not buy. I liked this. Now the salesman is motivated to work for the customer as well as the dealer — he can’t lose either way.

J.D.’s note: Black’s comments about financing made something clear for me. The last time I bought a car, I thought I got a good deal — $500 over invoice. But I was surprised at the relatively high interest rate. “Are interest rates really that high?” I asked. “Yes,” the salesman said. I didn’t know enough then to argue the point. I just took the high interest rate. Now I know it was a way for the dealership to make back the money they’d given up on the sales price. Chevy sign photo by rjs1322. Negotiation photo by Tony Lanciabeta.

Source: getrichslowly.org