Archives for July 2015

Amazon Prime Day 7/15 : One-Day Sale for Prime Members

Posted on July 15, 2015 // 8 Comments

Expired: Sale is over! Amazon is holding something called “Amazon Prime Day” for their Prime members on July 15, 2015. Non-Prime members can sign up for a free 30-day trial to be eligible to participate. Here are the deals that caught my eye:

Also check out Walmart.com, as they announced that they will also compete with Amazon today with a bunch of deals. They also have Wal-Mart Dare to Compare Deals, where supposedly everything on the page is cheaper than Amazon (shipping may vary).

Filed Under: Deals & Offers //

Weight Management vs. Money Management: Taking the Long-Term View

Posted on July 14, 2015 // 16 Comments

nodietI’m currently reading Smart People Don’t Diet by Charlotte Markey. The book offers a “science-based approach” to weight management backed by academic research from scientists, doctors, nutritionists, and psychologists. Sounded good to me. The main takeaway from the book so far is exactly what the title says: Diets don’t work.

Why? You can’t achieve permanent weight loss with a temporary plan. A diet is almost always a short-term gimmick, like “no carbs” or “eat only this smoothie for lunch” or buying meals from Nutrisystem. Once you go back to your original eating habits, you’ll go back to your original weight. Therefore, any changes you make should be something you can maintain for the rest of your life. Can you really not eat bread ever again? Or eat processed frozen meals forever? For a few people yes, for most people no.

Looking at everything through the long-term “rest of your life” filter encourages you to consider carefully and find changes that are sustainable. Skip the ideas that are unreasonable (for you). These days, there is no way I am waking up early to work out every day. I will probably never be a vegan or even vegetarian. However, I can exercise twice a week in the evenings and reduce my portion sizes.

It feels natural to compare weight management and money management. For weight loss, you are consuming and burning calories. For personal finance, you are earning and spending money.

  • In terms of consuming less calories, this meant consciously choosing food that truly give me joy, and cutting back significantly on the rest. I love cheese, crusty bread, and roasted vegetables. I discovered that I could reduce the following to once a week or less without significant pain: beer, desserts, and red meat. Research supports the idea that for weight loss, eating less is far more important than exercising more.
  • In terms of managing my spending, I tried to identify the things that truly give me joy, and cutting back significantly on the rest. I plan to always spend a big chunk of money on travel every year. On the cutting room floor: I spend very little on clothing and entertainment, I never go to bars or clubs, and I dine out at restaurants less than once a week. Here, your savings rate is most critical, which places high importance on your income levels as well.
  • One-time actions can also be sustainable as you don’t have to use up your willpower over and over, such as moving into a smaller house (lowering housing, maintenance, insurance, and utility costs all at once). In terms of eating, simply never allowing certain tempting foods to enter your home will help you avoid eating them (salty, crunchy things like potato chips are my weakness).

Can I keep all of this up forever? I don’t know, some stuff I’ve already kept up for years, and others have only lasted the last 6 months or so.

  • I suppose you could argue that if you manage to accumulate a big enough pile of money, you could never have to work again. But even that assumes a certain level of long-term discipline, as many people with many millions of dollars still manage to go broke all the time.
  • No matter how much or how long you starve yourself, there is nothing that will allow you to eat junk food all the time without gaining weight again. On other hand, this also means that even if you eat horribly for a day or even over a month, you can still recover. Now I don’t feel too bad about that bag of Cheetos I had for “lunch”. 🙂

Which reminds me… taking the long-term view also means you need to expect failures, both financially or weight-related. The important thing is to accept that you stumbled, pick yourself up, and keep moving forward. You’ve got the rest of your life to go, right?

Filed Under: Book Reviews, Budgeting //

AirHelp, Refund.Me, AirTaxBack: Get Money Back For Cancelled, Delayed, or Missed Flights

Posted on July 13, 2015 // 3 Comments

airhelpHave you been on a delayed, cancelled, or overbooked flight to/from Europe within the last within the last three years? Ever just missed a flight? You could be entitled up to $800 from the airline, or a refund of your taxes and fees.

AirHelp and Refund.me are services that help travelers claim compensation for certain flight problems. Too often, airlines convince folks to settle for food vouchers or drink coupons when they can claim cold, hard cash. Right now, they only appear to work with flights to and from the European Union. Specifically:

The flight passenger rights stated in the EC 261/2004. apply if you are leaving the EU with any airline or arriving in the EU with an airline registered in the EU (or Iceland, Norway or Switzerland). AirHelp helps passengers from all countries who have experienced delayed, canceled, or overbooked flights that are subject to this EU regulation.

You provide them with your information, and if they can use EU regulations to get your compensation (supposedly they’ll even take them to court), they’ll send it over (after taking a 25% cut). If they can’t help, there is no cost for you. It seems like if you’ve already experienced a delay or cancellation, it wouldn’t hurt to give them a shot. I haven’t had the opportunity to use either of these companies, so I can’t say which is better.

AirTaxback.com is a related service that helps travelers get back Taxes, Fees and Charges (TFC’s) if you for any reason never went on a scheduled flight. Perhaps the flight was cancelled, you or a family member was sick, or even if you simply were late for the flight. Again, this appears to be based on European Union flight laws. They charges a finders fee in advance (from free to €10) after they determine that your application is valid and you are due a refund.

We estimate that in 2012 alone, airlines flying in and out of Europe held on to over €3.5 Billion in Taxes, Fees and Charges belonging to passengers that booked a flight but didn’t travel” We are looking forward to working with the great people from AirTaxBack as this is one more area where most passengers are currently unaware of their rights and are met with indifference, when trying to claim themselves.

Filed Under: Deals & Offers, Travel //

Portion Distortion: Change Your Perspective, Eat Better, Spend Less

Posted on July 8, 2015 // 5 Comments

I’ve got one month left on my $600 in weight-loss bets, and an important tool that has helped me success is portion control. This way, I can still enjoy most of my favorite foods while still losing 1-2 pounds a week. Even naughty things like pizza, pasta, and yes even the occasional chips or french fries. (Of course there are also lots of fruits and veggies to balance things out.)

The National Institute of Health has a page on portion distortion, which outlines how our idea of reasonable portion sizes have changed over the last 20 years. (The slides appear to be from 2004, so make that 30 years?!) Everything from bagels to pizza slices to soft drinks used to be much smaller…just like our bodies! The average American man weighs 195.5 lbs now, which is 30 lbs more than in the 1960s. The average American woman weighs 166 lbs now, 26 lbs more. Here are their slides for cheeseburgers and french fries.

portion1b

portion2b

Just this week, I saw a McDonald’s commercial offering a cheeseburger and small fries for $2.50. They look so small now, but would have actually started out as an oversized meal (due to the extra meat patty).

portion3b

The double cheeseburger has 430 calories, 24g protein, 21g fat. (The single cheeseburger has 290 calories.) The small french fries (2.6 oz.) have 230 calories, 2g, 11g fat. Bring your own water bottle and you’ll have a meal with 660 calories, almost exactly 1/3rd of a 2,000 calorie day. I’m not recommending this as a daily healthy meal, but I found it interesting that you can still order a 1960s-sized meal on their menu which doesn’t completely blow up your nutrition plans for the week.

This NY Times article has many more ideas for meals at restaurants under 750 calories. What do they say is the “most valuable trick”? Don’t eat an entire portion.

Instead of splitting an entree between my wife and myself, I prefer to order two entrees (we like variety and enjoy sharing) but make sure that we leave enough food for lunch the next day. I do the same thing for meals cooked at home; I cook around the same amount as before (due to habit and my use of recipes) but split it into two meals. At the same time, rarely having to pay for lunch saves me money.

I also pulled weight-loss tricks from other sources like eating less “empty” carbs, including enough protein and fiber to feel fuller longer, and keeping healthy snacks like fruit and nuts around at all times. But realizing that my previous portion sizes were simply too big has definitely helped me the most.

If I wanted to stretch this idea further into personal finance, I could point to how the square footage of US houses have doubled since the 1950s, even as average household sizes have shrunk.

Filed Under: Frugal Living //

Home Improvement Receipts: Scan Now, Save Indefinitely

Posted on July 7, 2015 // 1 Comment

housecostbasis2For many people, when they sell a home they don’t even consider taxes. But over time, especially if you live in a relatively expensive area, more and more people will bump up against the federal capital gains exclusions of $250,000 for individuals and $500,000 for couples. (You must have lived in the home for at least two out of the five years before the sale.)

This NY Times article projects that the following share of homeowners in certain high-cost cities will exceed the 250k/500k limits within the next 10 years, assuming just 3.5% annual growth and no further improvements. (Also consider the uncomfortable idea that you really can’t know if you’ll be single or married when it comes time to sell your home.)

housecostbasis

Most importantly, the article provides a good reminder to save all of your home-related receipts because they can raise your cost basis and thus reduce any potential capital gains. It’s so easy, and those little pieces of paper can literally be worth thousands of dollars down the road when the tax bill hits.

In general, you should save all of your home repair and remodeling receipts, although things considered maintenance won’t count (painting, fixing leaks, patching cracks, etc.). Here are a bunch of things taken from IRS Pub 523, Selling Your Home. Don’t take this as specific tax advice, but instead as a potential reminder in case you have done something on this list but don’t have the receipts properly stored away and archived.

Home Acquisition and Closing Costs.

  • Charges for installing utility services, legal fees for preparing the sales contract, title search fees, recording fees, survey fees, transfer or stamp taxes, and owner’s title insurance.

Home Improvements

  • Additions. Bedrooms, bathrooms, garages, decks, patios.
  • Exterior. New roof, siding, satellite dish, storm windows.
  • Interior. Built-in appliances, kitchen modernization, flooring, wall-to-wall carpeting, fireplace.
  • Lawns and grounds. New driveways, landscaping, fences, retaining walls, sprinkler system, swimming pools.
  • Systems. Heating, air conditioning, furnace, duct work, air/water filtration, security system.
  • Plumbing. Septic, water heater, water softener, water filtration.
  • Insulation. Attic, walls, floors, pipes, ductwork.

Physical receipts can get lost or fade over time, but the IRS accepts electronic records so it is quite easy to make a PDF using either your home scanner or just your smartphone. I use the well-reviewed Scanner Pro app and am impressed by its quality, but there are many competitors out there that I haven’t tried. You can then save to a cloud service like Dropbox or Evernote, or simply e-mail them to a searchable gmail account as another form of backup.

Filed Under: Frugal Living, Real Estate, Taxes //

Howard Marks on Assuming Less Risk and Lowering Expectations

Posted on July 6, 2015 // 5 Comments

greatmindsObserver has an interesting profile of respected investor Howard Marks, excerpted from the book The Great Minds of Investing (found via Abnormal Returns).

I enjoy the writings of Howard Marks because his observations are logical and rational, and he doesn’t mind putting out stuff that is boring and hard to do. It is much more popular to write about exciting things that are easy to do like “sell all your bonds!” or “buy oil stocks now!”. This quote from the profile is a good example. (Bolding is mine.)

“You can’t control the environment,” Mr. Marks adds. So the key is to recognize how it’s changing, accept it, and respond as wisely as possible. “The screwiest thing you can do is to think you’re a Master of the Universe. We’re all just little cogs, and the universe will go on without us. We have to fit into it and adapt to it.” For example, at the time of our interview in late 2014, he sees scant investment opportunity and excessive complacency: “What bigger mistake could there be than to think you can safely get high returns in a low-return world?” Investors should adjust by assuming less risk and lowering their expectations. He cites a favorite quote from Peter Bernstein: “The market’s not a very accommodating machine; it won’t provide high returns just because you need them.”

Assume less risk. Lower your expectations. I’ve been reading a lot of Dr. Seuss recently, and I think he would say “you may yawn and boo, but that is what you should do.”

For some reason, this book is out-of-stock at Amazon, unavailable at my library, and third-party copies are $70?! I believe this is because it contains high-quality photographs of the people profiled. Not to worry, Oaktree Capital has all of Marks’ famous memos online for free, or you can read a distillation of them in his book The Most Important Thing Illuminated (my review).

Filed Under: Investing //

Snagshout: Discounted Amazon Products In Exchange For Honest Reviews

Posted on July 2, 2015 //

thermoIf you’re like most Amazon shoppers, you don’t like buying anything unless it has a lot of positive 4 and 5 star reviews. But that makes it really hard for new brands and products to gain traction. Good ole’ capitalism has created a new breed of websites that offer limited amounts of heavily discounted products in exchange for honest reviews. Here’s how most of them work:

  • You are given a special discount code that lets you purchase a product at a steep discount, for example a $20 value product for $1 or $2. Most of these products will work with Amazon Prime, so that your $1 item can ship free on its own (otherwise you’ll have to add it onto a larger order to get free shipping).
  • By purchasing this product at discount, you agree to leave an honest review after using it. Don’t leave a review before receiving the product.
  • Your review must state that you’ve “received this product at a discount in exchange for a review” or a similar disclosure.
  • You will not be able to claim another discount until your review is verified live on Amazon.com.
  • You agree not to resell the items you bought, under penalty of removal from future promotions.

You may think this sounds shady, but the Amazon Vine program works in a very similar way with the manufacturers and vendor supplying free review samples to their “top” reviewers. Amazon’s own policies state that sellers cannot provide compensation for a review, but sellers can offer a free or discounted product in exchange for an unbiased, unedited review.

You don’t need to be a high-volume reviewer for these sites, but you will need to have an Amazon customer account that you’ve actually used to buy things in the past.

Here are the “discount-for-review” sites that I am aware of. I’m sure I’m missing some.

  • Snagshout
  • Secret Deals Club
  • Amazing Deals Group>

While some these sites give the impression that they prefer staying in the shadows (“secret”), Snagshout actually hired a PR firm and sent me a press release:

Snagshout, a new social deals website, launches today to provide a unique shopping experience to consumers by offering deep discounts on a wide range of retail products for purchase, use and review. The site connects shoppers looking for deals with merchants looking to gain traction with new items on Amazon. With deals organized into nine categories such as beauty, toys and media, users can easily search for new products. Most of the deals are between 30-90% off of regular retail price for Snagshout users who are willing to try the product and leave an honest review within two weeks of purchase.

I was a former member of 1bucktoday and just signed up for Snagshout, but really the only thing that interested me there was this instant-read thermometer that I bought for $2 even though the historical price is around $18. (Summer is here and I’ve been grilling a lot recently.) I noticed that there are a lot of non-FDA-approved nutritional supplements on these sites.

thermo2

While these sites may not currently violate Amazon’s terms and conditions, that could always change. Amazon has already had to deal with bad press from websites that just straight-up sell fake reviews. While this is not the same thing, I doubt that Amazon likes it.

Note: I am not affiliated with any of the review websites mentioned in this post.

Filed Under: Deals & Offers //
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