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Apache is functioning normally

By Peter Anderson 35 Comments – The content of this website often contains affiliate links and I may be compensated if you buy through those links (at no cost to you!). Learn more about how we make money. Last edited May 6, 2019.

Christmas time is one of the most joyous times of the year at our house, but if you’re not careful it can also be one of the most expensive times of year. If you’re trying to cut down on spending, like we are at our house, it can become a challenge to find creative gifts to give.

Today I thought I would try to put together a list of ideas for some good frugal gifts that you can give this Christmas. (The frugality of the gifts vary from gift to gift, but I’ve linked some possibilities on Amazon.  You can probably find some cheaper ways to put these things together yourself if you try.)

Check out the newly expanded list: 100 Frugal Christmas Gifts

50 Frugal Gifts

  1. Baked goods: I don’t know any guy who wouldn’t love to get a box full of cookies, banana bread and pastries!   (Hint: not good for someone on a diet)
  2. If you’ve got an old laptop, make a frugal digital picture frame out of it!:   At 14-15″ it’ll be bigger than most you buy at the stores, and cheaper since you’ll be using old parts!
  3. Personalized Calendars:  Most photo processing places will have these personalized calendars you can buy, or pick up pre-made ones in Target’s dollar bins.  Get photos of you and the person you’re giving the gift to in each season, and place them in the appropriate month/season of the year!
  4. Themed gift baskets: Give a themed gift basket.  For example, a movie night theme basket with microwave popcorn, a movie or two, and some cheapo popcorn buckets from Target dollar bin.
  5. Custom t-shirts: Create your own custom t-shirt for a family member on Cafepress. It’s cheaper than you might think!
  6. Scrapbooks: Make a scrapbook for a close friend showng moments you’ve shared together. My wife did this for a friend’s wedding.  Very meaningful.
  7. Donation to a local charity:  Give to a local charity in someone’s name.  Make sure it’s a charity that they would actually give to.
  8. Handmade Christmas ornaments: make personalized Christmas ornaments for your friends and family!
  9. Board Games: buy a board game, a gift that gets the family together and keeps on giving all year long! Even better, if you can find some board games at garage sales or on ebay, create a themed game night gift basket (see above)!
  10. Family history DVD:  Put together a family history DVD with photos, writtten family histories, video and anything else you can think of.
  11. Framed family picture:  Take a picture at a family event, frame it, and give it as a gift!
  12. Coupon Books: Make a personalized coupon book with such favorite coupons as “back rub”, “dinner” or “clean the house”.
  13. Make a blanket: make a nice fleece blanket.   Instructions here.
  14. Make some custom painted wine glasses: Make some custom painted wine glasses, and then give them along with a bottle of wine.  Instructions here.
  15. Give a magazine subscription:  My brother loves reading National Geographic and the Economist.  We gave him subscriptions as a gift.
  16. Romantic evening gift set: Candles and fake flower petals! Cheap and fun!
  17. Keeping warm gift set: Give a gift set of hat, scarf and gloves.  Add long underwear as well if you wish!
  18. Leatherbound journal:  buy a nice leatherbound journal at your local Borders or Barnes and Noble.  They make for a nice gift.  Add a nice pen if you want to pay a little more.
  19. Craft Kit:  Put together a crafting kit with things like markers, glitter, scissors, clay, crayons, glue, paper, etc.
  20. Photo Collage: If you’re handy with Photoshop or another image editing software, create a photo collage/montage, print it out and frame it!  Or if you don’t have Photoshop, print separate pictures and create a collage.
  21. Movie Tickets: Buy a pair of movie passes or a movie gift card for someone to go see a movie. Not as cheap as it used to be :).
  22. Buy a single stock:  Buy a family member a single stock to get them started, and give them a copy of a finance book like Dave Ramsey’s Total Money Makeover (although you may want to stress that you’re giving it because it has helped you.  People can get touchy about money related gifts)
  23. Flannel Sheets and PJs:  Buy a keeping comfy gift pack with flannel sheets and pajamas!
  24. Coffee Lovers Gift Pack:  Buy some gourmet coffee and a personalized coffee cup for the coffee lover on your list.
  25. Set of soaps, towels and soap dish: Put together a nice matching set of hand towel and soap dish, and then give some handmade soaps.
  26. Big breakfast gift pack: Put together a gift pack with pancake mix, batter dispenser, syrup and pancake mix-ins.
  27. Puzzle day:  Give a gift pack of a puzzle and snacks to eat while you do the puzzle!
  28. BBQ Kit: Get some BBQ sauce from local source, and add it to a nice BBQ Utensil kit.
  29. Basket of spices and seasonings: Put together a basket of seasonings and spices from a local spice or grocery store.  Make sure to get a good mix for cooking, BBQs, etc.
  30. Netflix subscription: Pay for someone to have netflix for a couple of months.  If they have a connected device, they can even stream movies!
  31. Deck of cards and book of card games: Buy a cheap pack of cards, and a book listing the rules of different card games. Good for hours of fun!
  32. Cheap keychain digital picture viewer: Buy someone a cheap digital picture viewer keychain (around $20?) and fill it with pictures.
  33. Bath time gift pack:  Buy a nice wash clothe, some bath oils/beads and even some lotions at your local bath store.
  34. Mix tape:  Make  a mix CD from Itunes with some of the person’s favorite music on it.
  35. Botanicals:  buy a nice low maintenance plant to brighten up their day, along with a small watering can.
  36. Make a recipe box: If you’re good with wood, make a nice recipe box, and fill it with blank recipe cards.
  37. An appreciation book:  Get a nice journal, and write in it to the person about how much you appreciate them, things you love about them,  shared moments and experiences and general encouragement.  Even add a few photos.
  38. Book gift pack:  Find some books on your own shelf that you’ve already read, and put together a gift pack of books
  39. Chocolate attack!: Put together a gift pack with all kinds of chocolate. Hot chocolate, chocolate bars, truffles, etc.
  40. Car wash kit:  Put together a kit for washing the car.  Can include things like sponge, tire brush, bug remover, car soap, etc.
  41. Regifted items:  Did you get a 2nd crock pot last Christmas that you haven’t used?  Give it away this Christmas (to someone other than who you received it from)
  42. “That’s a spicy meatball” gift pack: Give them a nice italian dinner with a pasta bowl, pasta, strainer, fancy olive oil, pasta utensils and even some sauce.
  43. Give your service:  Good at cooking? Offer to come over and cook a gourment meal.  Are you a designer?  Offer your design services for free.  Good with computers? Offer free tech support. You get the idea.
  44. Wine and cheese gift pack:  Buy a variety of specialty cheeses, crackers and a bottle of wine.  Put it together and you have one gourment evening!
  45. Picnic pack:  Put together a picnic pack with a blanket, a basket, some cheap utensils and plates.
  46. Sewing Kit & lessons: put together all the sewing essentials (thread, needles, pins, etc) and then give the person lessons on how to sew.
  47. Gardening gift pack: Buy the person gardening gloves, gardening tools and some seeds. Put them all in a small bucket or waterging can.
  48. Handmade jewelry:  Make a handmade necklace or bracelet at a local bead or craft store.  Give it as a meaningful gift.
  49. Music lover’s delight: give an itunes gift card, along with a book about their favorite artist or band
  50. Beer afficionado gift pack:  Give a beer mug, snacks and gift card from a local brew pub.
  51. A Birdhouse: Give your loved one of these bluebird houses so they can relax on the porch and watch the colorful avians.

Now that I’ve given you some ideas for some frugal Christmas gifts, why don’t you give us your own ideas! Leave a comment with your idea for a good frugal Christmas gift below!

More Ideas

50 ideas not enough?  Here’s some more ideas for a frugal Christmas!

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Source: biblemoneymatters.com

Apache is functioning normally

By Peter Anderson 6 Comments – The content of this website often contains affiliate links and I may be compensated if you buy through those links (at no cost to you!). Learn more about how we make money. Last edited November 20, 2018.

Ok, ok. I know what you’re going to say.

Going on a European vacation is NOT frugal.

Going on a trip like this means that  you’re going to be spending a pretty penny. Traveling to Europe these days isn’t cheap, the Euro is currently worth somewhere in the neighborhood of about $1.28  U.S. dollars. That exchange rate makes the prices of a European vacation sting right of the bat!

But put that aside for a moment, let’s assume that you’re already going on a trip to Europe, what are some good ways to save money?  H

ow can you have a great time, while not spending nearly as much as you could?

Ways To Save Money While Traveling In Europe

Here are a few ways that my wife and I have found to save when we traveled in Spain, France, Italy, Greece and Croatia on a recent trip.

  • Plan ahead:  Even if you’re spending a lot of money on a European vacation or cruise like we have in the past, you can save a ton of money by booking your vacation ahead of time, up to a year or more in advance can really save you a lot of money.  It can be tempting to try and wait and to try and get a last minute deal, but often the best deals are to be had when booking far in advance.  Look the deals up as far ahead of time that you can, and hopefully you’ll find a great deal.
  • Travel during the off season: You might want to consider booking your trip during the slow season for whatever your destination is.  Rates are often far cheaper during the off-peak times of the year.  The crowds will often be smaller too!  We actually did this for one cruise in Europe, and saved a ton. It was also a perk to not have as big of crowds at the sites like the ruins in Athens.
  • Be flexible with travel: Often if you’re flexible with the days that you travel you can save some money. When booking try to see what the rates are if you book mid-week travel instead of the more popular weekend travel.
  • Try alternative lodging options: Instead of staying at an expensive hotel, consider staying at a cheaper lodging alternative like a hostel, or you could even try couchsurfing!
  • Know what you’re spending: When you’re buying something in a Barcelona gift shop or at vendor in a Roman square, it can be easy to forget just how much money you’re spending. Remember you’re buying that souvenir in Euros – not dollars!  That means you’re paying 1.28 times as much.  That $50 item is actually $64!   Take a quick pocket conversion chart or smartphone with you so that you can refer to it when buying things.
  • Set spending limits for yourself, and don’t go over!: Before you go on your trip, set up a spending limit for yourself, and don’t go over it. Once you’ve reached your limit just take more pictures as souvenirs!
  • Use a travel guide:  Using a travel guide for your travel destinations will help you to find cheap places to eat and little seen free events.
  • Some destinations offer discounts for Americans: research your destination as some European cities will offer discount packages for Americans to help offset the weak dollar.  For example, Florence, Italy has a program like this.

With all the planning, preparations and excitement in getting ready for your trip, it can be easy to forget -you’re going on vacation to relax and see the sites.  So don’t forget to have fun!

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Source: biblemoneymatters.com

Apache is functioning normally

I write a lot about saving money. Like many of you, I’ve found frugality an excellent way to widen the gap between what I earn and what I spend. Frugality helped me get out of debt, increase my monthly cash flow, and ultimately begin to build savings. Thrift is a key component to personal finance.

But to be successful, to build wealth, you must also increase your income. You might do this by changing careers, or by obtaining for a promotion, or by asking for a raise. You might invest in real estate. Or you might start your own business.

I recently interviewed Timothy Ferris, author of The 4-Hour Workweek. I’ve already shared parts of our conversation:

In this final excerpt, Ferriss and I briefly discuss the power of entrepreneurship. Entrepreneurial skills are valuable whether you own your own business or you have a traditional job. At Soul Shelter, Tim Clark recently provided an overview of entrepreneurship. “I’m a firm believer that our fortunes in life are closely bound to entrepreneurship skills, whether we’re self-employed or choose to work for someone else,” Clark writes. “Studying entrepreneurship means examining the many ways one can earn a living.”

Here then is the final part of my conversation with Tim Ferris:

J.D.
My father was a serial entrepreneur. When I was a boy, he was always starting businesses. As a result, I have the entrepreneurship bug, as do both of my brothers. In many ways, Get Rich Slowly is a testament to his entrepreneurial spirit. I view it as a business. It seems to me that you are very much about entrepreneurship. Did entrepreneurship run in your family?

Tim
My father has been in various types of construction and development, and also real estate — buying, selling, investing. He’s been an entrepreneur for as long as I can remember, in that respect. He’s always owned his own business. My mother, on the other hand, has worked for Suffolk County, which is part of Long Island, in health services doing physical therapy for geriatrics for the last thirty years.

I feel like I’ve seen the best and worst of both of those worlds — the highly institutionalized employment and then self-employment. There’s certainly dangers and benefits to both, and I think I’ve had a pretty good [chance] to see both up close and personal. But entrepreneurship in the sense of starting businesses really wasn’t something that was recommended to me.

Part of what sparked my interest was Donald Trump’s The Art of the Deal. I think most of his books are a waste of time, but that book is extremely good. It’s all about the art of the deal and negotiating and so forth. There’s a lot of really good material, especially the dissection of his schedule. He basically walks through a typical day. Very, very interesting stuff.

When I was doing my undergrad and working in the library for $8 an hour — with no air conditioning and no ventilation in the middle of late spring — I really began to question just how scalable that approach was, even if it were $20, $30, $40, $50 an hour.

I was dyslexic at a young age, and developed coping mechanisms. I ended up being able to read extremely quickly, and to prepare for tests in some unique ways. I had friends saying, “Dude, when do you study?” There was a lot of classroom reading, and I did it, but very few people ever saw me spending more than a half hour on any given day, whereas a lot of students are spending three or four hours.

After a few people asked me this, I put together a seminar. I did the first seminar with guarantees and so forth. I had very low expectations for it, but I ended up walking out three hours later with $20 bills and checks spilling out of my pockets. When I ran the numbers, I realized that this was definitely a better model, but it was still not scalable because I had to be there teaching the seminars. I became very bored of it. After that, I started fantasizing about the different formats that a scalable business could take.

There’s a book by Entrepreneur Press called The Young Millionaires. It’s a really good book. Some of the business models are outdated now, but it basically has two to three page profiles of dozens of late twenty-something and thirty-something millionaires. It really inspired me to brainstorm different options.

J.D.
So how do you come up with money-making ideas — or “muses” — that can supply supplemental income and be easy to maintain and sustainable in the four-hour workweek lifestyle? It seems to me there’s no one right answer. It depends on the individual. The Young Millionaires book sounds like it might be a sort of cookbook, or an idea factory.

Tim
[I recently had the chance to ask Warren Buffet a question about investing.] If I had asked, “How should I invest my money?” I wouldn’t have received [a good answer]. I had to be very specific: “no dependents, thirtysoemthing, I can cover my expenses with other income or savings, etc.” There were a lot of qualifiers. Just like when somebody asks “How should I invest my money?”, there’s no way you can answer that in a meaningful way. The same is true with muses.

But in general, I would say studying case studies that you’ll find like mine, or The Young Millionaires would be another example, and then reading books like eBoys. I see my book as a valuable starting point so that you don’t focus on the wrong types of businesses, but it requires an analysis of your risk tolerance.

J.D.
Do you have any recommendations for people who aren’t entrepreneurial, who don’t have the ability or the interest in creating “muses”? These people might prefer to save and invest instead, but are still interested in the four-hour workweek lifestyle. They’re interested in lifestyle design.

Tim
I think one of the misconceptions with the book is that you have to use everything in the book. It’s really designed to be more of a menu of options for people to pick and choose from. I may go to a restaurant that I love, but I may hate half of their dishes. The fact of the matter is there’s no requirement to use “muses” whatsoever to apply the principles in the book. They’re principle-based and not tactical.

The rules in the book are really for increasing output and optimizing results regardless of whether you’re in someone else’s office or your own. That also applies to stocks. If you study The Intelligent Investor, you’ll find that the principles and concepts and the rational deconstruction of things that are made complex — because the croupiers and other people can make money by making it complex — it reads very similarly to The 4-Hour Workweek.

By focusing within an organization on using the proper metrics to measure your own performance, improving those metrics, doing 80-20 analysis, then you can increase your value within the company, and document it in such a way that you can then have more leverage to do things like take mini-retirements or work remotely one or two days a week or have a four-day work week (which many people have done) or simply to eliminate work on the evenings and weekends.

Then [one can] apply the same rational framework to investment. They’re completely applicable and adaptable to someone who has no interest whatsoever in starting a business. I’d say that the vast majority of the people who have used the book work within organizations.

Timothy Ferriss, nominated as one of Fast Company’s “Most Innovative Business People of 2007,” is author of the #1 New York Times, Wall Street Journal, and BusinessWeek bestseller, The 4-Hour Workweek.

Source: getrichslowly.org

Apache is functioning normally

Save more, spend smarter, and make your money go further

Aaron Hahn vividly remembers the moment he decided to crush his debt.

It happened in March, while visiting his retired aunt and uncle in Arizona.

Their home, with a lush, sprawling golf course as its backdrop, symbolized to him the power of hard work and consistent savings. Not to mention, this was their vacation home, a place where his “snowbird” aunt and uncle enjoyed visiting during the winter months.

“It was my ‘aha’ moment,” says Hahn, who, at the time, had about $42,000 in debt spread across student loans, a car loan and credit cards.  “I was like, ‘O.M.G. I want this life.’ I want to do what they’re doing. I want to be financially independent.”

Hahn had also just celebrated his 34th birthday, which served as another wake-up call. “It was a confluence of events…I realized that I just wasn’t taking care of money like I should be, like a grown-ass man,” says Hahn. “I feel like there’s an awakening when you’re in your 30’s.”

His first plan of attack: Obliterate his $11,000 in credit card debt. For Hahn, credit was just a tool to for buying stuff when you didn’t have the cash. “The credit card debt was just something I was misusing,” he admits. “It became another part of my spending arsenal. I used credit for more spending power.”

Since March Hahn, who works in the Navy, has embarked on a diligent plan to reach debt zero across his four credit cards. Using a free personal loan calculator, he’s given himself 12 months to eliminate all balances and has, for the first time ever, begun budgeting.  He’s using Mint to stay on track.

Will Hahn cross the finish line in time? I thought it would be interesting (and fun?) to check in from time to time to report on his progress and setbacks. He says he likes having me as an accountability partner.

Here’s how Hahn’s staying focused and handling some setbacks in the first few months.

“Budgeting is Like Yoga”

Hahn’s Mint budget is his first true budget. “It is a behavioral modification. It’s like doing yoga for the first time. There’s pain and discomfort,” he laughs.

To make room for the roughly $900 a month debt payments, he’s had to make some big trade-offs. The greatest challenge has been cutting back on restaurant meals and outings with his girlfriend. “I though you needed to go out and have dates in order for there to be a connection,” Hahn says. “Instead, we’re spending more time at home and realizing that it’s ok. I have her support in that.”

His girlfriend is also helpful in planning and cooking their meals at home. “She makes enough so I have lunch the next day.” This alone, saves him $70 per week, Hahn estimates.

The “Wall of Shame”

While Hahn has a total of $42,000 in debt, he’s zeroing in on the credit card balances first using the snowball method and attacking the card with the greatest interest rate first. All the while, he’s stopped using plastic and sticking to a cash-only diet.

For motivation, he uses visual reminders. “I’ve printed a list of all the individual balances on my fridge. It’s my ‘wall of shame’ and I’m looking forward to crossing them off,” says Hahn.

Simultaneously Saving

It’s been a slow process, but Hahn is also working towards a three to six-month emergency reserve. “That was what my credit cards had been.” So far he’s managed to tuck away $1,000. “I just love the idea that, for the first time in my adult life, I saved $1,000 and didn’t spend it. It’s such a good feeling.” Once the debt’s paid off, he plans to make savings a higher priority and add more to the account.

An “Actual” Emergency

It’s a good thing that he started saving because in May, Hahn emailed me to say that his debt payoff plan had suffered a minor setback. But it was for an important cause: healing his cat.

He wrote: “One of our emergency funds just came in handy. The day after I (quite literally) cut up my credit cards, our cat, Yasmin, became very sick over the weekend, requiring a visit to an emergency veterinary clinic. Between buying a new pet carrier and the vet expenses, this was $550 that neither of us had planned. 

Fortunately, Andrea (my partner) has an emergency stash of her own, and between the two of us, we were able to handle this curveball with relative ease. Yasmin is okay (we have a follow-up appointment in two weeks), and we’ve used this event to reinforce just how crucial it is for both of us to set aside significant, liquid savings.

As for my debt repayment plan, this will weaken my attack for the month of May, as I want to stash an additional $500 into an emergency fund for when we run into another inevitable hurdle.”

Following that email, Hahn wrote about another surprise: A bigger car maintenance bill than anticipated.

All said, between the vet and car maintenance costs, he had to fork over $800 in unplanned expenses.

“This is definitely going to slow my debt repayment down by a month. Not very thrilled about this. Feel a bit defeated, honestly,” Hahn wrote.

Still, none of that $800 got charged to a credit card. So, in my book that’s #progress.

How will Hahn fare over the summer months? Will he find a way to get back on track?

Stay tuned to the Mint Blog for more updates on his debt payoff plan.

Have a question for Farnoosh? You can submit your questions via Twitter @Farnoosh, Facebook or email at [email protected] (please note “Mint Blog” in the subject line).

Farnoosh Torabi is America’s leading personal finance authority hooked on helping Americans live their richest, happiest lives. From her early days reporting for Money Magazine to now hosting a primetime series on CNBC and writing monthly for O, The Oprah Magazine, she’s become our favorite go-to money expert and friend.

 

Save more, spend smarter, and make your money go further

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Apache is functioning normally

Last Updated on August 23, 2022 by Mark Ferguson

My wife and I just got back from Turks and Caicos, which is an incredibly beautiful island in the Caribbean. While there, we were tempted to buy a vacation rental. It seems like every time we go on vacation we think about buying a vacation house, but this time we gave it more thought. Turks and Caicos was the favorite place we have ever been too and the prices were relatively affordable.

We thought about buying a vacation house because we loved the island and plan to go back again and again. At first, buying a vacation rental appears to be a wise decision if you visit the same destination enough. The plan would be to buy a house or condo on the beach, stay there a few times a year and rent out the place when we are not staying there. But when you look at the pros and cons of vacation homes from an investing perspective, we were reminded why it is not always a wise financial decision. The expenses are extraordinarily high on vacation rentals and are you really saving money when you stay there on vacation?

Why was Turks and Caicos so amazing?

Before I get started with an analysis of vacation houses, I want to discuss Turk’s and Caicos. TCI, as it is called locally, is a chain of islands in the Caribbean between the Bahamas and the Dominican Republic. We choose to vacation there, because the water looked crystal clear and had that amazing blue-green color my wife and I love. We have been to Mexico, St Martin, Dominican Republic, and taken a cruise to a few more destinations in the Caribbean. We enjoyed those destinations, but we heard TCI was better, had fewer people and was worth the extra money (it is expensive). We were not disappointed in Turks and Caicos as the water was gorgeous, the beaches were soft white sand and there was a reef right outside our resort that we snorkeled at every day. We saw a giant ray, sea turtles, many tropical fish, a large barracuda, corals and much more.

The island is not as busy as many other places we have visited and everyone was very friendly. My wife also has many food allergies including gluten, soy, dairy, eggs, and the grocery stores were extremely well stocked in allergy-friendly and organic food. There are 40 islands in the country, most of them uninhabited with the same perfect water and beaches. The main island, Providenciales was expensive as most are but was well worth it.

What are the pros and cons of vacation homes?

We enjoyed the island so much, that we looked at buying a vacation house or condo there. The prices actually seemed somewhat affordable for oceanfront property compared to other places we have been like Florida. We stayed at the Coral Gardens and although there is a rather ugly half-finished resort next to it, it was a lovely resort.

The resort next door (The Toscana) was supposed to be a high-end Italian style resort that was started in 2008. The island was hit very hard economically in 2008 thanks to two hurricanes and the global economic meltdown. The building of the Toscana stopped dead in 2008 and the site has been an eyesore ever since, although I found it fascinating. It turns out the original company that started construction ran out of money and went under after taking many deposits for the complex from future owners. The bank that took it over tried to auction the property off multiple times without success, but recently the owners of the penthouses got together and have agreed to finish the project themselves.

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Staying on the island is very expensive and our one-bedroom condo goes for $400 to $500 a night. It had direct ocean views, a balcony, two baths, and a full kitchen. You can buy similar condos in the same building we were in for under $400,000. On the surface that looks like a great return on your money. Buy a place for $400,000 and rent it for $12,000 a month. That blows the 2 percent rule out of the water and is a lot higher rent to value ratio than I get on my 13 rental properties. The properties I buy in Colorado rent for $1,200 to $1,500 and I bought them from $80,000 to $135,000.

Can you make money?

One reason I was intrigued by Turks and Caicos real estate is the rent to value ratios. We stayed in Florida on the gulf coast a couple of times in the last few years. On our last trip, we paid $2,400 for a week in a three-bedroom, oceanfront house. That house was recently for sale for 1.6 million dollars and I guessed it was worth $1.5 million. The rent was less on the beach house in Florida, but the value was over three times as much as the Turks and Caicos condo.

The problem with vacation rentals is the cost to manage and maintain them. I pay 8 percent of my rents to have my rental properties managed by a property manager. The cost for a property manager on vacation rentals is 30 to 50 percent of the rents! The management fees on the Coral Gardens units that we looked at were 40 percent.

There will also be many more vacancies on short-term rentals than on long-term rentals. There are also high and low seasons for vacation rentals and you can’t expect to see peak income year-round. The total income for 2014 on one unit in TCI was $72,000 and another $62,000. These units were identical and right next to each other, but these income differences show the volatility with vacation rentals. It also shows that you can’t count on $400 a night every night. Weekly rates will be lower, many nights will be vacant and rates will be much lower in the off-season.

The actual income is not $12,000 a month, but closer to $6,000 a month once you factor in the vacancies and off-season rates. Now we are getting closer to the returns we see on my rental properties in Colorado. However, we have not considered the management fees.

Why are management fees so high on vacation rentals?

I pay 8 percent for someone on my team to manage my rental properties. I used to manage them myself, but once I got to seven rentals I started to run out of time to manage my properties, flip houses, run a real estate team and write this blog! With a property manager, my properties have become almost completely passive, except when I first buy them.

I own single-family rentals that take very little management. The tenants tend to stay for long periods of time, the houses are repaired after I buy them so little maintenance is needed. We occasionally have problems, but for the most part, our tenants pay on time and take good care of the properties. The tenants pay all the utilities and are on long-term leases.

When you manage a vacation rental, it is an entirely different situation. Vacation rentals take much more marketing, much more active management, have more inquiries from renters, need more cleaning and are more like a hotel. Managers need to be able to check people in at all times of the day and night and even be a concierge in some cases. More responsibilities and work means you have to pay much higher fees as sometimes the manager will need to hire from services like Tidy TN due to time restraints of their duties.

Just the property management fees on the Turks and Caicos condos are $20,000 to $30,000 per year! We have not even talked about the other expenses that come with a vacation house.

What expenses will you have?

When you invest in condos you also have to consider HOA or maintenance fees. On beach front condos the HOA fees can be very expensive. There is a pool, maid service, parking lot, towels and properties close to the beach that have extra expenses. The beach has to be maintained and buildings weather faster due to salt and winds. The occasional hurricane can really cause problems. HOA fees on beachfront condos can easily run $1,000 a month or more.

Vacation rentals must be furnished, have plates, silverware, linens, televisions and everything someone would need while staying there. Over time these items would have to be replaced and upgraded to keep the rental unit desirable. If you are charging $400 a night, it better be very nice.

Vacation rental owners will have to pay for all the utilities as well. The electric, gas, cable, water, internet all are added expenses and will most likely cost more in exotic places like the Caribbean islands. Fresh water comes from rain and desalinization, not wells or rivers. Internet, cable, electric all cost more.

If you want an oceanfront property it is almost guaranteed to be in a flood zone. You will have to get flood insurance, which is much more expensive than regular insurance.

Here are the total costs per month of a vacation rental on the beach compared to a regular single-family rental (assuming they rent for the same amount, or you have multiple single-family rentals that rent for the same as one vacation rental):

Vacation House                      Single-family Rental

Rents received                       $5,833                                              $5,833

HOA fees                                  $1,000                                                  0

Management                           $2,333                                                $467

Utilities                                     $60                                                        0

Credit card fees                       $200                                                     0

Travel agent fees                    $300                                                      0

Maintenance                           $600                                                   $600

Taxes                                        $0                                                        $416

Insurance                                $500                                                   $400

Total Costs             $4,993                         $1,883

These are not all the costs but are meant to show the huge differences between a long-term rental and a short-term vacation rental. I did not include vacancies, because the rents I used for the vacation rental are actual returns. Keep in mind with a single-family rental property you will have much fewer vacancies than a vacation rental. There are also a few more costs I did not discuss yet on the vacation rental.

  • If you are renting vacation rentals most people will book with a credit card and you have to pay credit card fees to accept credit cards.
  • Travel agents also get paid a commission if they book a vacation rental for you.
  • The insurance number could vary greatly. I am assuming 5 single-family rentals were needed to create that income, but its insurance could be higher or lower based on the number of properties. Flood insurance is much higher per property.
  • Taxes are very skewed in this scenario on the vacation rental. In TCI there are no property taxes, but there is a 15 percent tax on all property purchases. You would have to add $60,000 to the purchase price of $400,000 for taxes when you bought the condo. Over five years that would average out to $1,000 a month.

The utilities on the condos we looked at were not very high, because the HOA took care of the water, electric and cable. The HOA takes care of the exterior maintenance, but not the interior maintenance. You can see that almost all of the income is used up by the expenses on the vacation rental. If you consider the huge initial tax bill all the income is used up on the vacation rental and you don’t have any loan costs!

Do you save money?

The reason most people consider a vacation rental is they think buying a vacation house will save them money. Even though you are actually losing money on this particular vacation condo, maybe it makes sense to buy it if you stay there enough. You will save thousands on every vacation, right? The problem is every time you stay at your vacation rental you are taking it off the rental market. You could be renting the property to someone else and you are losing rental income.

Is it really an advantage to own a vacation house if you are staying there a week or two every year? Will you also feel obligated to go on vacation every year to the same spot? What if you have a wedding, graduation, a family reunion, a funeral or another occasion you have to use your vacation time on? Most people do not use their vacation properties as much as they think. This is one reason timeshares are such a horrible investment, but that deserves another article.

Loans on vacation houses

All of the numbers I have used so far have assumed you are paying cash for a vacation rental and you are still losing money! If you get a loan it will lose even more money and do you want to tie up $400,000 plus in a vacation rental that you use a couple of times a year? That much money would make me over $7,000 a month in rental income because I can use that money with financing and still make money each month. That $7,000 a month would more than pay for a couple of vacations a year in some really nice places! Not to mention it is not easy to get financing in another country or even another state.

When would it make sense to buy a vacation rental?

There are a few instances when it would make sense to buy a vacation rental, but they can still be very risky.

  • If you wanted to invest strictly for appreciation it might make sense to buy a vacation rental. I never invest for appreciation, because I cannot predict the market. Prices can go down on vacation properties just like other houses.
  • If you were going to live in a vacation house for months out of the year, it might make sense.
  • If you were going to manage the property yourself you could make money with vacation rentals. However, you have to spend a lot of time on marketing and management.

Even in these scenarios, there are other risks like beach erosion, natural disasters, political changes in other countries, insurance changes and giant half-finished resorts next to your condo!

Conclusion

On the surface, vacation house may seem like a great investment. They aren’t making any more ocean and there is only so much beachfront property. However, if you have to tie up huge sums of cash to buy the property and you still lose money every month is it worth it? For me, it is not worth the risk, the money it would take and I would lose flexibility with my vacation choices. I love Turks and Caicos, but that does not mean I want to spend every vacation for the rest of my life there.

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Categories Rental Properties

Source: investfourmore.com

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Hotel credit cards can pack a punch when staying with a related brand. They can add bonus points, potential elite status and even free hotel nights to a member’s loyalty account.

But, which one is better?

When it comes down to the World of Hyatt versus the IHG credit card, the answer will vary. It depends on which brand you stay with most often and where your future travel plans take you (especially if you’re saving up for a big redemption).

This analysis will help you decide which card works best for you.

Comparing earning rates and annual fees

Both have similar annual fees, which evens the playing field in that regard. Hyatt’s card costs $95 each year, while the IHG card carries a $99 fee. Neither is too daunting in exchange for the benefits that come with them.

Here’s what to expect when it comes to how many points you will earn from each card:

Each card offers bonus points when staying at its own hotels and within specific spending categories.

It’s time to drill down further to discover the other perks that can help tip the scales.

When to choose the World of Hyatt Credit Card

You travel where Hyatt has a presence

It is important to actually benefit from the perks and opportunities that come with a credit card. World of Hyatt has a smaller global footprint than IHG, so where you go matters.

This card will make sense for you if you can take advantage of perks like the free Category 1-4 anniversary night certificate and earn higher status through stays from your travels.

Since the card comes with Discoverist status plus five elite qualifying nights, you also have a head start on earning the next elite status level if you can find World of Hyatt hotels in your destinations.

These are the perks that come with the card — and come in handy when staying at a Hyatt property:

  • An anniversary free-night certificate to use at a World of Hyatt Category 1-4 property after the account anniversary each year.

  • Another free night certificate for a Category 1-4 property after spending $15,000 within a calendar year.

  • World of Hyatt Discoverist status.

  • Five elite qualifying nights toward achieving the next status tier.

  • Another two elite qualifying nights each time you spend $5,000 with the card.

You spend a lot on travel, food and working out

The bonus spending on the World of Hyatt Credit Card can be quite lucrative, especially on travel, dining and gym memberships. For many, these may be common purchases that yield extra points, and the more you spend, the more you can earn.

It goes beyond points with this card, as you can earn additional elite qualifying nights resulting in a higher elite status and an additional free night certificate.

These added perks provide extra incentive to keep spending on the card, especially since its points tend to extract greater value.

When to choose the IHG® Rewards Premier Credit Card

You stay often with IHG

Compared to World of Hyatt, IHG has a much larger global presence. This means you have more opportunities to earn bonus points and take advantage of perks like the free night certificate at IHG properties.

Receiving the fourth night free on award redemptions of at least four consecutive nights can represent major value if you make several award stays. And the more points you earn, the more redemptions you can make. You even receive a bonus if you pay for points.

When you stay at IHG properties, you also benefit from the perks of Platinum status. The benefits of this credit card can be generous if you spend a lot. They include:

  • Free night certificate on your account anniversary each year, valid for a stay worth up to 40,000 IHG One Rewards points per night (additional points from one’s account can supplement the certificate to book a more expensive property).

  • Receive the fourth night free on award reservations of four consecutive nights.

  • 20% off the purchase of IHG One Rewards points.

  • $50 in United flight credits.

  • A credit for the TSA PreCheck or Global Entry fee once every four years.

  • IHG One Rewards Platinum status.

You spend a lot on the card, especially on gas

While the World of Hyatt Credit Card does provide perks for spending more than $15,000 as well as for every $5,000, the IHG® Rewards Premier Credit Card offers even more bonuses.

Cardmembers receive a $100 statement credit and 10,000 bonus points after spending $20,000. An even bigger bonus is in store for spending at least $40,000: IHG One Rewards top-tier Diamond status.

This can be useful if you put a lot of business or other expenses on a credit card (like gas, which earns 5x bonus points) and travel frequently to IHG family hotels.

Which card is right for you?

It depends on which brand you prefer for hotel stays and makes the most sense for your travel patterns.

If all things are equal, the World of Hyatt card offers more value for the points earned and comes with the potential for two free anniversary night certificates. But, if you tend toward IHG stays, the credit card can catapult you to top-tier status if you spend a lot and lots of points along the way.

They’re both packed with value for a small annual fee.

How to maximize your rewards

You want a travel credit card that prioritizes what’s important to you. Here are our picks for the best travel credit cards of 2023, including those best for:

Source: nerdwallet.com

Apache is functioning normally

Getting ahead of holiday shopping can be a little overwhelming. The lists get long. The stores get crowded. Time gets short. And does Dad really need another pair of socks or a men’s nail trimming kit yet again? I don’t think so. So this year, I’m taking a more creative approach. Now that I’ve got a little one, he’s the gift-for-grandparents jackpot. Never being one to do much in the DIY department, when it comes to creating personal gifts, it can be hard to know where to start. Thankfully, the internet has given rise to professionals who can figure these things out for you.

Enter Mpix. Having just returned from our Hawaiian vacation, what better way to capture those memories than to get them off my phone and turned into something tangible? Mpix is a professional photography lab that’s been family owned and operated in the heart of the mid-west for 75 years. Now they offer their photography printing services to the masses in the form of cards, home decor, gifts and photobooks.

This is a DIY novice’s dream come true. I could quickly upload images to the Mpix secure photo gallery, select from a variety of pre-designed book layouts, et voila; grandparent holiday gift gold. It didn’t take me long to figure out their online editing tools. There were a couple of images that printed across the fold so you’ll want to triple check your placements. But with easy zoom and cropping, you can find the perfect spot for each image.

The best part? The books ship to you in 24-48 hours. I’ve never gotten a photo print product back that quickly. Perfect for my last-second tendencies.

With most of our lives being captured electronically these days, it’s interesting to think about our kids growing up without having pictures to flip through. But it’s by looking through photos and telling (and retelling and retelling) stories that help children cement their memories. Now that I know it’s so easy to create keepsakes like this, I think I might start my own photo album collection. No glue sticks necessary.

For more holiday gift ideas CLICK HERE

This is post is in partnership with Mpix. all thoughts and opinions are 100% my own. thanks for supporting collaborations we’re excited about and that have kept apartment34’s doors open. 

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Source: apartment34.com

Apache is functioning normally

My son is seven and three quarters years old. Having reached second grade, he is having a nice time defining himself in the little society of the public school system. He likes being the creative one who invents the games that his classmates play at recess. Defines himself as a good reader, a respectful class clown, and the guy who always gets his homework done.

Last week, when finishing up a writing assignment on the kitchen table, he asked for my help and I could tell he was frustrated.

“Dad, I just finished this big story and I thought I was done. But it says I have to write the whole thing out in my notebook now.”

I looked at the sheet where he had meticulously written out his story about a journey to the center of the Earth. At the top were the instructions: “Write a story in your notebook about travel.” Then the whole page below was filled with blank lines, implying that you were supposed to write the story right here on that worksheet, which is what he had done. The instructions were conflicting.

“Ahh”, I told him. “It looks like the instructions were not clear. But since you already wrote your story on this worksheet, you can just hand the page in instead of the notebook. Or if you want to get really fancy, we can cut out the story and glue it into your book!”

This suggestion seemed to bring him great unease. The instructions were telling him to write his story in the notebook, and he had clearly written his on the paper instead. He was in violation of The Rules, and this was scaring him.

I suddenly realized I had some teaching to do. It was time to share a deeper explanation of what The Rules really are, and I thought you might want to join in for the session as well. Because if you look around carefully, you will see that most of the problems of our society are based upon an incorrect understanding of these rules.

Let’s dig into the Money Mustache Mailbox for a recent example. When I first announced that I had bought a new 1950s house and was planning to renovate it, a complainypants comment came in with the juicy content:

This renovation you describe is no small feat and getting a structural engineer to “sign off” on the installation of new roofing system upon a foundation and walls (with 7 foot 8 inch ceilings no less) set over 50 years ago could be challenging as well. I can’t count the number of times I have seen plans similiar to these go haywire because of the unforeseen. And I question the reward by selling the old place and moving…in this neck of the woods “docs and transfers” are significant and sometimes exceed 6% of the selling price and those are historically paid/split buying and selling. And lastly ….am I missing something…this house seems small… very simple…a basic dwelling…80 by 80 lot….not a fan. I spend a lot of time working from and around my home…give me some space…

“Wow“, I thought, “Is this person completely unfamiliar with the principles of this blog?” I went through the usual cycle of one raised eyebrow, two raised eyebrows, a clenched fist, a finger poised over the “delete” button, and then at last I calmed down and saved the text to share with you instead. For while the complainy can’t-do-attitude of this comment is inappropriate for my comments section, the underlying assumptions about rules are worth studying:

“You can’t get a structural engineer to sign off on renovating an older-than-50 house” – Here our friend has assumed that there is a rule that old houses can never be restored. The idea is silly, of course, because people renovate much older houses in the same neighborhood every day. In fact, a friend and I just finished a major addition on a 103-year-old one earlier this year. But if I had started the project with an imaginary fear of such a rule, I would be dead in the water. And at this point I can report that the structural design is just about done and will be “signed off” this week.

“Transaction Fees make house moving too expensive to be worthwhile” – the imagined rule here is that house transactions are always very expensive, so we should shy away from them to avoid this cost. But I have done eleven of these transactions since moving to this country, and some of them were done for only the $50 county recording fee. To tilt the scale further, my wife deliberately earned a real estate license seven years ago to cut the cost of most other transactions in half. Again, the imagined rule proves false and we are all free to move to a new house whenever we like.

“A small and simple house is not desirable” – Hmm, I wonder which society dreamed up this rule? First of all, a 1532 square foot soon-to-be-luxury home on an 80 x 80 foot lot adjoining a 1.3 acre public park overlooking the Rocky Mountains in the walkable central district of one of the most desirable cities in the world’s richest country is probably good enough for plain old Mr. Money Mustache. But if there is anyone who thinks that even a quarter of this standard of living is a key to happiness, you might want to check to see if your brain tissue is sparkly and white, because you have received a near-fatal dose of brainwashing, derived from a book of rules that helps nobody.

But I can’t win this battle with just a list of single-issue defenses. To cure the disease of Rules Excusitis, you need to elevate yourself to the next level and understand exactly what The Rules are. And a nice way to illustrate this is to turn to one of my favorite concepts from Dungeons and Dragons:

In D&D, your imaginary characters come with personalities defined along two different scales:

  • How Good or Evil they are, and
  • How much respect they have for The Rules

So you end up with descriptions like Chaotic Evil, Chaotic Good, Lawful Evil, and Lawful Good. If we put these into a colorful table with some insightful examples, it would look like this:

At this point, you may see the connection between The Rules, and becoming wealthy. I propose that the biggest advantage you can give to yourself and your society is to be as high on the Good Scale as you can be, but pay less regard to your score on the Lawful Scale.

Now, before the police officers among you pack up some handcuffs and begin a stakeout of Longmont, let’s explain that with a few examples.

  • US society has literally adopted the phrase “standard of living” to be synonymous with “amount of money you spend on yourself”. If you follow this rule, you permanently lock yourself into needing more money to feel happy, which dooms most of us to 20-40 more years of office work than we really needed to achieve it.
  • Far too recently, laws existed that made it illegal for African Americans and women to vote. But not long before that, it was legal to own human slaves. Somewhere in there, beer and wine became illegal for 13 years. We had philosophy, steam power, advanced astronomy and physics at the time, and yet these were the rules a lawful person would have to follow. Knowing this, is it logical to assume that our current laws on Marijuana plants, the rights of people who are not heterosexual, or what level of the natural environment we share it is acceptable to destroy are automatically correct? Of course not. In some cases, Goodness requires you to fuck the idea of Lawfulness and do what is right, working to change the laws in the process.
  • Religions impose their own laws, which were often designed with the most noble of intentions but now cause bizarre and impractical side effects. A historical famine or disease made it sensible to ration certain crops or meats at the time, yet the rules were set in stone and are followed blindly to this day. Political alliances or wars generated hate between people, and now their descendants continue to bomb each other’s vegetable markets even centuries after the original sins were buried. Some leaders were opposed to gay people a thousand years ago, and now their descendants still work to write the discrimination into their country’s constitution. Although these may be The Rules today, a quick questioning of their origins should reveal that there is great advantage to all if you are bold enough to break them.

And to collect all of this badass rule-breaking philosophy and apply it to making yourself richer today, just look around you and try stirring up some of your own shit. A few examples to get you started:

  • The Christmas Holidays are coming, and the crap has already arrived in the stores. You’ve been questioning whether you have to participate in the giant blizzard of plastic packaging and trinkets imported from China. You do not. You can go an entire holiday season without buying anything, and apply the spirit to sharing your skills and wealth with others who need it instead.
  • You’re getting married, and your family thinks you need the giant ceremony with the flower designer, the experience consultant, and the limousines. The amazing news is that you do not! You can get married for ten bucks at the county office and then bring 100 friends, some slacklines, fiddles, banjos, boxed wine and a stand-up bass down to the local park and make everyone shed tears of joy when they realize how much fun they are having.
  • You feel oppressed by the rules of your own city, family, or country. The cost of living is too high or the laws are restrictive, and you cannot achieve what you see the Mustachians here around you are doing because you are bound by different rules. You are not. You can move to a different city or country. You can earn a leadership position in your own family, or your own country.  You can work within your own system, or move to any other system, to get whatever advantages you like. With sufficient disregard for The Rules, you will find new avenues of freedom opening in your life wherever you live.
  • Everyone has told you that your kid will only prosper in the expensive school district where nobody speaks Spanish and the horseback lessons 20 miles out in the country are essential to round out the character to qualify for the eventual Ivy League school. Such well-meaning but tragic bullshit! Little MM’s officially-measured reading level is just about to hit the high-school level, and he can beat me at chess. And he shares a classroom with kids who don’t get enough for breakfast. He gets his advantage from parents who keep books instead of televisions in the house, and who sacrificed Mercedes SUVs and private schools in favor of having time to bike to school with him and help both him and his not-quite-as-lucky friends in the classroom when they get there.
  • Junior Money Mustache will have the grades and the financial resources to get into the university of his choice, but also knowledge that there is no requirement to get a college education at all, for either a happy life or for financial success. For this old rule of society is another one to disregard.

I describe these happy examples not as an attempt to boast or to criticize others, but hopefully as an inspiring example of what happens when you question and break the goddamned rules.

So I hope that as my son grows up, he will cultivate his own healthy skepticism for The Rules, and call bullshit whenever something smells foul. Because as it turns out, the people who have the balls to question the rules, find that they are suddenly in the position of making them instead.

—

* This is just me poking a little fun at Mrs. MM. In reality she is a truly badass woman who proudly defies most social conventions, and I love her for it. She can also bench press almost her bodyweight and squat 150% of it. But occasionally we debate on the issue of taking long and educational family vacations because The Rules say that you shouldn’t miss too much school. When interviewed in person, the teacher and principal admitted they thought travel was a great idea for our son and they would gladly bend the rules for us. Yet another example of how to approach things: if you don’t like the rules, talk to, or become, the boss.

Source: mrmoneymustache.com

Apache is functioning normally

There are people in the world who are best known for being famous for being famous.

Think Kim Kardashian and Paris Hilton.

Warren Buffett is not in this crowd (thank goodness!).

He is widely considered to be the most successful investor of all time. He is one of the very wealthiest people in the world – often THE wealthiest, depending on stock market valuations.

He has gotten to where he is by being a brilliant and insightful investor.

Like me, he wasn’t born into money, and he didn’t sign a fat contract for a book, a movie, a TV show or a record deal.  (Note:  I did sign a contract for my book deal, but I assure it wasn’t fat.  Far from it.  Haha…)

He did it the old fashioned way, which in today’s world seems almost radical.

In fact, there is nothing fancy or unusual at all about Warren Buffett – other than his phenomenal success.

That, and his overwhelming common sense, are the reason why so many people study his life and follow his lessons. And that’s why you should to.

Though he came from humble beginnings, Buffett is today the chairman, chief executive officer, and the largest shareholder of the multinational conglomerate holding company, Berkshire Hathaway.

His advice and pronouncements have become legendary, earning him the nickname “The Oracle of Omaha.”

What are some of the lessons that we can learn from this “oracle“?

1. Never Lose Money

“Rule No. 1: Never lose money. Rule No. 2: Never forget rule No. 1.“ – Warren Buffet

What makes it impossible to say that you are never going to lose money, is that it would mean that you would never take the calculated risks that are necessary to make money in the first place. But that’s the whole point – taking calculated risks.

Buffett doesn’t take wild chances. He has specific criteria in regard to any business that he will invest in, and this method keeps him from entering blind speculations.

If you use the never lose money mantra as a foundational strategy, it will have a positive effect on everything you will do, whether it has to do with a business or with investing. Many of the lessons that will follow will outline exactly how Buffett avoids losing money in the first place.

2. Buy Businesses – Not Stocks

“I never attempt to make money on the stock market. I buy on the assumption that they could close the market the next day and not reopen it for five years.“ – Warren Buffet

Despite being perhaps the most successful investor in stock market history, Warren Buffett never actually bets on stocks, at least not the way that most investors and even fund managers do.

Buffett looks not at the performance of a given stock, but at the performance of the underlying business. This is critical, because a strong underlying business means that an investment will almost always payoff, at least sooner or later.

The reason why most investors fail to follow Buffett’s advice in this regard is because it requires a lot more work. You actually have to research the individual companies, and have a keen understanding of their business and how well they are faring against the competition. Market sentiment of the company’s stock has little to do with it.

3. Be in the Game For the Long Haul

“Someone is sitting in the shade today because someone planted a tree a long time ago.“ – Warren Buffet

When you look at the companies that Buffett either owns individually, or through Berkshire Hathaway, they’re all long-term investments. Buffett will buy stocks and hold onto them – not for years – but for decades. As long as the business is strong, the investment will payoff. Buffett’s track record, and the size of his portfolios, are testaments to the success of this strategy.

4. You Are Ultimately Responsible For Your Success or Failure

There are a lot more people in the financial markets then there is understanding of those markets. For this reason, people hold their investments through mutual funds, or pay for the services of investment advisers. Buffett holds that there is no substitute for getting involved in your investments.

Whether your investments succeed or fail will be completely on your shoulders, and not on those of your investment advisor. He maintains a policy of learning all about an investment and taking complete charge of how you go about managing it. In addition to being a solid strategy, this is also the only way that a novice investor learns to be an expert.

5. Keep Tight Control Over Your Living Expenses

If you look at the most successful people in almost any endeavor, you will typically see that they are people who live the life. That is, they live a lifestyle that is consistent with their level of success. This often leads to more than a little bit of lifestyle inflation, which helps explain how so many super successful people end up in a bankruptcy, and eventually, even the poor house.

Warren Buffett has done an outstanding job of keeping his ego in check when it comes to his lifestyle. It can even be said that he uses the same value principles for investments that he does in managing his own personal finances. For example, Buffett still lives in the same five-bedroom stucco house be purchased in Omaha Nebraska in 1957 for $31,500.

It’s certainly a nice enough house, but it doesn’t come close to the palaces that people who are nowhere near as wealthy as Buffett tend to live in. There is a strong message in that arrangement.

6. Invest in Quality

One of Buffett’s hallmark investment strategies is a investing in quality. This means that he invests in companies that have well-known, well-regarded products that add value to the consumer and the economy. The companies he inverts money in are usually household names, which is to say that they have both strong market penetration and brand recognition.

Many less successful investors are drawn to companies and industries that they know little or nothing about. They assume that the less they know, the more likely it is that the investment will be a success, as though it will succeed based on some unexplained mystery factor. Quality – not mystery – makes a company a long-term winning investment.

7. Buy Value

We can think of buying value as buying quality – when it goes on sale. This is part and parcel of Buffet’s never-lose-money strategy. Simply put, Buffett never pays full price for anything, including the investments that populate his portfolios.

He does this by buying companies that are selling at a discount to their real value. This strategy is more commonly referred to as value investing, which is the practice of buying stock in companies that are undervalued compared to other companies in their industry, as well as to the general market.

Buffet has this down to a science. He looks at the fundamentals of a company – it’s earnings, revenue, price-earnings ratio, return on equity and dividend yield, among other metrics – then he compares them to the same metrics in competing companies. If the company is generally strong compared to the competition, but the stock price is well below them, it becomes an investment candidate.

8. Avoid Fads

One thing that is immediately obvious about Buffett is that you’ll never see him running with the herd. That means no “Nifty Fifty” stocks, no hot stock of the year investments – and nothing that even hints at being trendy.

As an example, Buffett has publicly stated that he avoids buying stock in new social media, like Facebook and Google, citing the difficulty in determining their value and how they will fare in the future.

We can also bet that participating in fads would get in the way of investing in quality and value on a long-term basis. If it’s one thing Buffett is, it’s consistent.

9. Buy When “The Blood Is Running in the Streets”

“We simply attempt to be fearful when others are greedy and to be greedy only when others are fearful.“ – Warren Buffet

I just said that you will never see Warren Buffett running with the herd, and this one of the best examples. His investment philosophy is simple – buy when everyone else is selling (be greedy), and sell when everyone else is buying (be fearful). This is consistent with the Wall Street saying (that few investors ever follow), the crowd is usually wrong.

This strategy is very consistent with Buffets strategy of buying value. If you buy when everyone else is selling, you will be able to get positions in strong companies for a lot less than you would pay when the market is running strong and everyone is buying.

10. Sell Your Losing Positions in Strong Markets

By the same token, if you wait to sell your losing positions until the market is particularly strong, you will minimize your losses. In some cases, you might even recover a profit.

Most investors have great difficulty mastering this concept. Once the stock starts rising, they tend to hold on to it under the assumption that will continue to do so. But in Buffets world, a losing position is a losing position, regardless of where the stock price is at.

11. Risk is Part of the Game – Get Used to It

“Risk comes from not knowing what you’re doing “ – Warren Buffet

Buffets way to wealth is actually a very risky one by conventional standards. He doesn’t invest heavily in safe assets like bonds and treasury bills. He invests primarily in stocks. But stocks are not nearly as risky as people tend think – as long as you know what you’re doing. And Buffet clearly does.

Buffet is able to eliminate most of the risk associated with stocks, by buying them cheaply enough that the speculation – and high prices – are completely squeezed out. Most of the positions that Buffet takes have nowhere to go but up. That is the result of buying after everyone else has sold out their positions.

In Buffets world, you would be buying heavily after a market crash, and keeping your powder dry when a bull market has been around for a few years.

12. Pay Close Attention to Management

“When a management with a reputation of brilliance tackles a business with a reputation for bad economics, it is the reputation of the business that remains intact.“ – Warren Buffet

While many investment analysts tend to focus on a company’s numbers, market position, specific assets, and even public sentiment, Buffett looks more closely at management. Every one of those tangible metrics can change in the future, substantially weakening a company. But the caliber of management represents the future of the business. With the right people at the helm, the business will grow and prosper no matter what challenges it may face.

13. Stick With What You Know

Just as Buffett avoids fads, he also tends to stick with what he knows when it comes to making investment decisions. In Buffett’s world, you have no business putting money into companies and industries that you know nothing about. Buffett’s billions came from the fact that he invested in businesses that he knew well.

The businesses that he does buy into also tend to be more basic in concept. As we saw in an earlier specific example, Buffett avoids buying into social media companies, since they are virtually new business concepts and not readily measurable. He favors easy to understand concepts like Coca-Cola and insurance.

14. Keep It Simple

“Derivatives are financial weapons of mass destruction. “ – Warren Buffet

There are a small number of investors on Wall Street who are making a lot of money in exotic investments, such as derivatives. Buffett avoids all such investment schemes, preferring to keep his investments basic. It once again gets back to the concept of investing in what it is that you know and understand.

15. Keep a Low Profile

Just as Warren Buffett lifestyle is incredibly simple considering his stature in the world, he also does his best to avoid the spotlight.

Sure, he’s a regular in giving an opinion on economic and public policy, but he avoids the outrageous behavior that has become symptomatic of the ultra-successful. But the success that he has is determined by the success of his business, rather than on his participation in out-of-the-box activities, or inflammatory public comments, designed mostly to draw attention.

We can probably guess that this low-profile existence makes it easier to focus on Buffett’s business at hand. After all, if you’re running around acting wild and making divisive comments, you won’t need to be spending a lot of time on rear-guard strategies to cover your tracks.

Even if you are not into investing, you can take all of these lessons from Warren Buffett’s life and apply them to your life and business, and with positive results.

Source: goodfinancialcents.com

Apache is functioning normally

In The Little Book of Bull Moves in Bear Markets (which I recently reviewed), author Peter Schiff provides a list of the best jobs to beat the economic collapse he predicts is just around the corner. “I foresee the following as the 10 strongest professions and industries over the coming decade and beyond,” he writes. His list:

  1. Engineering, because the abandoned U.S. industrial base will need to be re-tooled.
  2. Construction, to rebuild the American infrastructure.
  3. Agriculture, as we wean ourselves from imported foodstuffs.
  4. Merchant marine, to transport goods to foreign markets.
  5. Commercial fishing, because demand for fish is increasing in the U.S. even as foreign supply is declining.
  6. Energy, because we’ll need to develop alternatives to fossil fuels.
  7. Computers and high technology, one field in which the U.S. continues to lead.
  8. Entertainment, another industry in which the U.S. should continue to dominate the world market.
  9. Automotive repair, small appliance repair, and the like. It’s going to become more costly to replace items, making repair a viable option.
  10. Tailoring and textiles, because imported clothes will become scarcer and more expensive.

This list is predicated on Schiff’s belief that the U.S. economy is in massive collapse. He also lists job sectors he believes will decline sharply: the service economy, banking and finance, real estate, health care, travel and tourism, and retailing. If you have a job in one of these industries, Schiff recommends planning for a career change.

Schiff’s advice made me curious. What do other experts think are the safest jobs for riding out this recession? I did some digging to find out.

A Second Opinion

There’s actually a new book out on this subject called 150 Best Recession-Proof Jobs by Laurence Shatkin, a career information consultant. His top ten recession-proof jobs are:

  1. Computer systems analyst
  2. Network systems and data communications analyst
  3. Network and computer systems administrator
  4. Registered nurse
  5. Teacher, postsecondary (i.e., college professors)
  6. Physical therapist
  7. Physician and surgeon
  8. Dental hygienist
  9. Pharmacist
  10. Medical and health services manager

The San Diego Union-Tribune recently featured a profile of Shatkin and his book, in which he explains that he derived his list from government statistics. Contrast this with Schiff’s list, which is based not on past data, but on his prediction of the future. It seems to me that these men are coming at the problem from different angles, and their lists reflect that. They’re nearly opposites.

Challenger, Gray and Christmas

There are other experts with their own ideas about which jobs are best in a recession. Representatives from the outplacement firm Challenger, Gray and Christmas made the rounds earlier this year with their list of recession-proof jobs, which included the following rising professions:

  1. Education
  2. Energy
  3. Health care
  4. International business
  5. Environment
  6. Security and law enforcement

They also note a few jobs in which the prospects are declining:

  • Anything related to housing (including real estate, investment banking, engineering, and architecture)
  • State and local government
  • Industries dependent on discretionary spending (e.g. restaurants and retail)

The advice from Challenger, Gray and Christmas is slightly different than that of either of the first two lists. The only real agreement among these three different sources is that industries related to housing and to discretionary spending are in for hard times.

The Jobfox list

Finally, Jobfox, a job-matching website, has been sharing its list of the top 20 in-demand jobs based on statistics for the past year. Forbes published a version of the list, as did Business Week, which created a slide show including median salaries for these careers:

  1. Sales representative/business development ($65,000-$75,000)
  2. Software design/development ($85,000-$95,000)
  3. Nursing ($35,000-$45,000)
  4. Accounting & finance executive ($65,000-$75,000)
  5. Accounting staff ($45,000-$55,000)
  6. Networking/systems administration ($65,000-$75,000)
  7. Administrative assistant ($35,000-$45,000)
  8. Business analysis (software implementation) ($85,000-$95,000)
  9. Business analysis (research) ($65,000-$75,000)
  10. Finance staff ($65,000-$75,000)
  11. Project management ($85,000-$95,000)
  12. Testing/quality assurance ($65,000-$75,000)
  13. Product management ($85,000-$95,000)
  14. Database administration ($75,000-$85,000)
  15. Account/customer support ($35,000-$45,000)
  16. Technology executive ($115,000-$125,000)
  17. Electrical engineering ($65,000-$75,000)
  18. Sales executive ($85,000-$95,000)
  19. Mechanical engineering ($65,000-$75,000)
  20. Government contracts administration ($55,000-$65,000)

This list points to three broad paths for those wishing to avoid the effects of the recession: management, computer science, and accounting. But again, this list is very different from the others.

Aside: Looking at these median salaries makes me a little envious. During 2007, the median salary for guys named J.D. employed by small family box factories in Oregon was $42,000 a year. I wonder how much sooner I might have repaid my debt if I’d done something else for a career…like become a “technology executive”.

Four Experts, Four Opinions

What conclusion do you draw from looking at these lists? The top lesson I get is that nobody can agree on which jobs are best for riding out a recession. As we’ve seen time and again when people try to predict the future, everybody has a different methodology, and everybody comes to a different conclusion. Nobody will be 100% correct.

I believe that in general, the most recession-proof job is the one you already have. If your current career is fulfilling and pays well, then do what you can to make yourself indispensable. Develop your skill-set. Be a valuable contributor. Keep a positive attitude. Network your way to job security. These things won’t help if your company undergoes massive lay-offs, but they will protect you from casual culling.

Source: getrichslowly.org