Get Rid of Second Car and Use Uber Instead?

uberiphone5Forget borrowing money to buy a car, the concept of owning a car itself is changing. Owning a car requires committing to a long list of expenses:

  • car payment and value depreciation ($1,000+ a year)
  • car insurance premium ($500+ a year)
  • fuel costs ($600+ a year)
  • government tax, registration, and fees ($300+ a year)
  • maintenance and repair costs
  • parking, traffic tickets, and tolls

In rough terms, owning a car runs at least $3,000 a year with most people spending more than $5,000 a year. Consumer Reports calculates the median at $9,000 a year over the first 5 years for new car buyers.

As a couple with two cars, I’ve been thinking about trying to get by with one car in the household. Even besides public transit, consider all the car-based options that may be available:

  • Renting a car, but driving ourselves. (ZipCar, RelayRides)
  • Being driven around by other people who rent or own cars. (taxis, Uber, Lyft)
  • Being driven by autonomous robotic cars. (Google or major auto company)

After recent positive experiences with Uber and reading about the advancements in self-driving cars, I now believe that within the next 10 years we will shed at least one car. (I doubt I would want to go completely carless with two kids and all their activities.) Some food for thought on the subject:

  • With Uber, Less Reason to Own a Car – Farhad Manjoo at NY Times.

    “In many cities and even suburbs, it’s becoming much easier to organize your life car-free or car-lite,” said David A. King, an assistant professor of urban planning at Columbia University who studies technology and transportation. By car-lite, Dr. King means that instead of having one car for every driver, households can increasingly get by with owning just a single vehicle, thanks in part to tech-enabled services like Uber.

  • A Financial Model Comparing Car Ownership with UberX (Los Angeles) – Kyle Hill at Medium.

    So there you have it… for the average American who drives 13,476 miles per year, owning a motor vehicle will cost them $12,744 per year to maintain, and the cost of taking UberX everywhere will cost them $18,115 per year. However, Americans who drive less than 9,481 miles in a year should seriously consider ditching their car, because UberX will be cheaper.

  • How Do Car Ownership Costs Compare to Uber? – Uber Blog.

    The math doesn’t lie. In a city with with a fast, practical (and cool) alternative like Uber, it would very much be worth your time to crunch the numbers and see how much you’re really spending on your gas, parking, maintenance, etc. and how much time you spend doing those things. Because having your own personal driver pick you up in a slick car each and every day is a hell of an appealing alternative.

  • Uber vs Car Ownership – Sam Altman.

    Taking uberX everywhere is now cheaper for me than owning a car (I have an expensive car, so it’s not a super fair comparison, but I still think it’s interesting).

Of course “the math” depends on where you live and how you drive, but even small to medium cities will be affected. Uber now has UberFamily (car seats) and UberPool (multiple passengers heading the same direction). Now look at self-driving car technology. If I buy a self-driving car, that’s really just another convenience/luxury that costs me more money. But what happens when Uber and Lyft don’t have to pay drivers? (Robots taking jobs again!) Fares will drop even further.

PaperKarma App: Take A Photo Of Your Junk Mail and Say Goodbye

pkappI totally missed this app the first time around, but PaperKarma is an iPhone/iPad app and Android app that helps you stop junk mail. Catalogs, magazines, coupon books, flier, credit card offers, yellow books, etc.

You just snap a photo of any piece of unwanted mail, and that’s it. (Try to capture the address label and any tracking codes.) They scan the photo, grab the pertinent details, and contact the mailer directly to remove you from their distribution list. They’ll even contact you when you are successfully unsubscribed. For free. That sounds almost too good to be true.

Previously, I’ve had success with the websites CatalogChoice.org to stop unwanted catalogs and YellowPagesOptout.com to finally end delivery of those huge phone books (both free as well).

How Simple or Complex Are Your Finances?

Dan Kadlec of Time magazine offers up 9 Ways to Simplify Your Finances. I always swing back and forth, wanting a nice simple financial life one day, and the next day itching to try out all the cool new financial tools out there. I tend to split up my accounts into “core” and “explore”. The “core” accounts hold the vast majority of my money, while the “explore” accounts result from sign-up promotions and/or pure curiosity. Anyways, let’s see how I did one the 9 ways listed:

  • Get down to one mutual fund. The article recommends target-date funds, which I think are fine if you go Vanguard, Fidelity Index, or maybe T. Rowe Price. Right now my portfolio holds 10 mutual funds/ETFs and some individual TIPS. If it weren’t for different 401k providers, I could get down to about six.

    I really don’t feel these funds are very hard to manage though as I have my target asset allocation already determined and I simply rebalance with new funds and once a year otherwise.

  • Keep two credit cards. Fail. I go through a lot of credit cards. Right now I’m meeting the spending requirements on the Barclays Arrival Mastercard and the Chase Ink Plus. It’s a profitable hobby, I tell myself.
  • Pay bills online. Stamps cost way too much to do it any other way. I charge what I can on credit cards, and the rest is done with online banking.
  • Choose one financial institution. Does this mean bank or brokerage? Probably both? Well, I have one local regional bank account and an Ally checking/savings combo as my core bank accounts. Vanguard and Fidelity are my core brokerage accounts. I guess another fail, but I am unwilling to give up features here for simplicity.
  • Automate everything. Direct deposit for both of us, check. 401ks are always automatic, so check. Automated IRA funding? No, I just do a lump sum early in the year. I’ve tried, but I don’t like to automate credit card bills.
  • Get overdraft protection. Ally Bank checking account has a feature that I can automatically use my savings account for overdrafts with no fee. I don’t even know if my local bank account has overdraft protection or not, as I’ve never had to use it.
  • Create an emergency fund. Check. I haven’t done any rate-chasing recently, as there has been very little to chase. But I know I would if some bank offered a crazy-high APY.
  • Pay yourself first. I don’t do this explicitly, although I do make sure that both of our 401ks and IRAs will be maxed out early on in the year.
  • Get organized through new technologies. I do use the recommended Mint.com (free) to aggregate my spending transactions only. I also use one of their recommended password managers, 1Password ($40+). I like both. I hadn’t heard of the other password keeper mentioned – Dashlane – but it does look polished and the basic version is free.

I like playing around with finances, so I’m okay with my level of complexity for the most part. Things are set up so that most of the important stuff in a few limited places in case something happens to me, but maybe 5% of our net worth might be spread out in some experimental accounts.

Cooked: A Book About Why You Should… Cook

Consider the following questions that you may have asked yourself recently:

  • What can you do to consume fewer calories while eating healthier food?
  • How do you get your family to spend more time together, talk, and connect?
  • How do you get the public to care more about what they are eating, which in turns forces the food corporations to improve their standards?
  • What can modern super-specialized citizens do to feel more in touch with nature and self-sufficient?
  • How can you save some money?

I’m sure the title has given it away by now, but the answer is to cook! Specifically, cook at home for yourself and your family, as close to from scratch as possible. At least, that’s the lesson from the book Cooked: A Natural History of Transformation by Michael Pollan. A previous post expanded on the health benefits of cooking at home, and the book examines cooking as broken down into the four elements: Fire (BBQ), Water (Braises), Air (Bread), and Earth (Brewing).

Indeed, why is it that we seem more obsessed by food than ever (Food Network, Cooking Channel, Yelp, Food Bloggers Everywhere) at the exact same time that fewer and fewer people actually know how to cook? The food industry is betting that the current generation of kids will have hardly any idea of how to cook even basic dishes, as it means even more $$$ for them! A quote from consumer researcher Harry Balzer:

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Cooked: The Health Argument For Cooking At Home

I’m roughly halfway through Cooked: A Natural History of Transformation by Michael Pollan. Although the book covers a variety of topics ranging from chemistry to religion to anthropology, the overarching theme is examining the practice of cooking meals for yourself (and your family).

Cooking food has become one of our most outsourced tasks. Everyone is busy. But is letting huge for-profit corporations prepare what we eat really worth the time savings if it costs us our health? Consider what studies have found:

  • When we cook meals ourselves, we eat less than when we outsource to frozen meals or restaurants.
  • Obesity rates are inversely correlated with the amount of time spent on food preparation.
  • Regular cooking is correlated with superior health and longevity.
  • Poor women who routinely cooked tended to have a more healthy diet than richer women who did not.

In the book, food industry expert Harry Balzer (who knows exactly how often we actually eat out, not just how much we admit to… which is a lot!) put forth some insightful diet advice:

Cook it yourself. Eat anything you want – just as long as you’re willing to cook it yourself.

Essentially, eating unhealthily these days is mostly the byproduct of eating out, including meals-in-a-box and frozen dinners.

There are many other potential benefits of cooking for ourselves, stay tuned for a full review. Together, I’m hoping they’ll convince me to start cooking regularly again!

The Perfect Thing: What Is Your Little Obsession?

I’ve been thinking about another excerpt from investor Charlie Munger’s biography about his father Al Munger:

Though he could not be described as a lavish spender, Al Munger savored just the perfect thing, whatever it was he needed. Al had learned the joy of artful living from his mother. She shopped for the very best coffee beans, then took great pleasure each morning in grinding them for fresh coffee. It was a Tao philosophy, Midwestern style. In the Tao Te Ching, Lao-Tse urged seekers to regard the small as important and to make much of the little. “The little obsessions,” Charlie called them.

This is an appealing idea. Only a select few can afford a Ferrari or Bentley, but most people reading this can afford a great cup of coffee. Instead of focusing your energy on the crazy-stupid-expensive “bests” like an Hermes leather handbag or Patek Philippe watch, why not enjoy the best cheesecake in the city?

Personally, I’m not sure I connect with this philosophy. I like good coffee, but I just buy whatever is cheap and nearby on the days that I need it. I like craft beer, but will drink Bud Light happily. Maybe I have to work on this artful living thing. :)

On the other hand, I did buy what may be the world’s best nail clipper for under $16. Also, my wife makes what I truly think is the world’s best roast chicken based on a really simple recipe by famous chef Thomas Keller. Follow the directions carefully, and it will turn out amazing. Bake some root vegetables alongside it, and you have a perfect meal for under $10.

Do you have an example of something that you enjoy the best of, but it still costs say under $25?

TreeHugger CEO Apartment: 420 Square Feet, 8 Rooms

I’m surprised I missed this earlier since I love this type of thing, but below is a nicely edited video from Gizmodo showing the 420 square feet apartment of TreeHugger.com CEO Graham Hill. It’s cool how they fit in the claimed 8 rooms using moving walls, floor-to-ceiling storage, and clever furniture and appliances: living room, office, bedroom, guest bedroom, dining room, bathroom, kitchen, and I guess they’re counting the closet as a room? You really have to see it to understand.

I like this concept, especially when efficient use of space allows you to be able to afford to live in the heart of a good city where you can do much of your “living” outside in parks, cafes, bars, and restaurants. I’ve seen the moving wall before inside this Hong Kong apartment (only 344 sf), and much of the furniture is from Resource Furniture (eek, that fancified murphy bed costs $12,000). Installing solar panels (on the window shades?) with battery storage is a nice touch, and I’d consider the portable induction burners and combo microwave/induction oven for my own place.

More on this apartment: LifeEdited, New York Times

Related posts:

Why You Should Make a New Year’s Resolution

If you’re like me, you may wonder if a New Year’s resolution is even worth the bother. By chance, I was listening to an NPR interview today with a Dr. John Norcross, a psychology professor who decided to study this phenomenon. Listen, download the mp3, or read the transcript at NPR.org. Here are the highlights:

According to Norcross, 40-50% of people make New Year’s resolutions each year. How did they do when studied over time?

Dr. NORCROSS: In two of our longitudinal studies, 40 to 46 percent of New Year’s resolvers will be successful at six months. So, the half empty is it’s true, most people fail. But 40 to 46 percent is pretty impressive. [...]

You know, I was tired of people saying resolutions never succeed, we shouldn’t even try them. And I said, well, wait a minute, these are life-sustaining behaviors. What’s the alternative? So, the alternative was to track people starting before January 1st with the same behavioral goals, with the same motivation to stop or to take the resolutions but who just weren’t going to do anything then. And that’s – and only four percent of them were successful at six months. So you go from four percent, all the way up to 44, 46 percent by taking a New Year’s resolution seriously and trying to do something about it.

10 times the success rate! So people who made resolutions had a 40% success rate as compared to 4% from those who had the same motivations but didn’t set resolutions. Definitely encouragement for would-be resolvers. More goods news is that the studies found that slips or short lapses in the resolution did not always lead to failure. Many people used the lapses to strengthen their determination.

How to set a good resolution. Norcross recommends setting attainable, realistic, and measurable goals. So lose 10 pounds instead of 50 pounds or “a lot of weight”. Save $100 more from each paycheck vs. saving an extra $15,000 somehow during the year. Grandiose goals set you up for failure, as you need to have inner confidence that the specific goal you set is achievable. This agrees with the popular SMART mnemonic that says that goals should be Specific, Measurable, Attainable, Relevant and Time-sensitive.

So, resolutions are good, especially if you do them right. However, you may want to keep number of resolutions to a minimum:

FLATOW: So you do one thing at a time, you know? Don’t say, I’m going to diet and quit smoking at the same time, because you’ll never get them both done.

Dr. NORCROSS: Well, there’s some interesting research on that. And that is, it depends how much time and commitment you have. If the two resolutions are related, then it may make sense to do it together. For example, losing weight and increasing exercise – most people see those things as going together. But if there are two very different resolutions, you may just be overwhelmed with the amount of time and energy that they call for. So, we ask people never more than two. If they’re related, two is great. Otherwise, just do one at a time.

DIY Gift Idea: Yummy Stuff in Trendy Glass Jars

Forgive me frugalistas, but I’ve only recently discovered the retro trend that I call YSIJ – Yummy Stuff in Jars. A friend of ours recently provided homemade passionfruit butter in classic Ball glass jar, which was awesome. Another friend gave us this cookie mix from Williams-Sonoma, which they sell for $19.95:

Upon closer inspection, it’s a Weck jar, which you can buy for under $4 at Crate and Barrel. Aren’t they sexy?

So for a nice DIY gift for well under $10, simply find/create/steal an awesome cookie or brownie recipe and leave out the butter and eggs. Layer the remaining dry ingredients all pretty-like in the jar, stick a nice rustic-looking label on it, add a bow from extra fabric, and you’re done. You don’t even need wrapping paper. Make them in bulk.

You could also bake something that keeps for a while and put it inside – candied nuts, toffee, trail mix, etc. Or cook something like grandma’s marinara sauce. Or actually preserve something, which I have never tried beyond some easy pickles. After they ingest your gift of love via food, they’re still left with a cool reusable jar.

p.s. These glass bottles with stoppers look like great gift ideas too, even better if you can add a homemade drink to put inside.

(End Martha Stewart Hipster mode.)

What Is Your Holstee Manifesto?

Apparently I completely missed this when it first became popular, but the Holstee Manifesto is a set of ideals put forth by the founders of Holstee, a small apparel company which only sells environmentally-conscious and sustainably-sourced products. (Holstee = Holster + Tee, which I don’t think is even sold anymore.) I discovered it today only due to a LivingSocial deal selling a large poster print for $30, designed by Rachael Beresh.

My favorite line is actually “If you are looking for the love of your life, stop; they will be waiting for you when you start doing things you love.” (Although it didn’t happen to me… I was just working a part-time gig to help pay for college.)

What would my own manifesto include? Definitely something about freedom, but that could be taken as similar to doing what you love and following your passion. The difference is that I also appreciate being able to do required and difficult things, as long as I get to do it my way. I hope that made sense.

Instead, I suppose I’d add that if you want to “Keep up with the Joneses”, well, the truth is the Joneses are nearly broke, live paycheck-to-paycheck, and will work until they are quite old. Being different than the Joneses is the only way to go; there are many ways to do so but you have to pick one and be *proud* of it.

Fix Your Stuff: Repair Cafes, Fix-It Collectives, and Free Online Repair Manuals

These days when you inquire about repairing something, you’re often confronted with a $50-$100 minimum diagnostic charge with no guarantee that it’ll be fixed. Combine this with carefully planned obsolescence by the manufacturers, and it’s no wonder that people tend to throw things away rather than fix them.

I was reading an AARP magazine article (yes, I read AARP magazine) about a growing chain of Repair Cafes in Amsterdam, where volunteers gather and help you repair your things from appliances to furniture to mending clothing. I think it’s a great idea for people to share their skills and help each other out in the community. Also profiled recently in the NY Times. My skilled 4-Her wife mends my clothing all the time, albeit reluctantly as she’d rather me look like I fell out of a J. Crew catalog…

I was also happy to find out that there are some local groups in the US doing similar things. It might be cool to volunteer at one, even if just to learn how to fix various things.

There are also many online guides to fixing your own stuff. Check out iFixit.com, their Self-Repair Manifesto, and their goal to make a free repair manual for every device out there from cars to iPhones.

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Stop Delivery of Physical Phone Books – YellowPagesOptOut.com

Visit YellowPagesOptOut.com to stop the delivery of those huge phone books. The site is reasonably easy-to-use, although they ask for a phone number and I chose not to provide my real phone number to an industry based on unsolicited advertising. I don’t have a landline anyway, so I don’t see why they should require it. It would be nice if they made the process opt-in, but I know that’s wishful thinking.

I’m sad to say I missed this up until now, and the last few phone books have gone straight from my doorstep to the recycling bin. If you don’t use printed yellow pages, fight the behavioral tendency to do nothing and opt-out today!