August 30, 2013

Best of Blogs for Week of September 2nd

Every Friday afternoon I share some of the more interesting or notable posts that I have seen in the personal finance blogs and other sources for the past week

TheBigPicture answers the question  How Much Has America’s Net Worth Recovered?

MyMoneyBlog discusses Mosaic: Crowdfund Solar Projects With Just $25, Earn 5% Interest


August 29, 2013

Poverty Rate is Inflated by up to 0.7% Due to College Students

A recent Planet Money article A College Kid, A Single Mom, And The Problem With The Poverty Line said that : "U.S. Census Bureau recently reported that more than half of all college students who are living off campus and not at home are poor."    That shouldn't be a surprise to anyone that a lot of college students have low income.   But what they really mean is that the US government adds these college students to the official tally of people in the nation that are below the poverty line.  

I also found a Census blog post on it here When Off-Campus College Students are Excluded, Poverty Rates Fall in Many College Towns  Here is the full Census report on the topic : Examining the Effect of Off-Campus College Students on Poverty Rates

If you are in college and you don't live with your parents or in a college dorm then you are counted as a household.   College students living on their own who have low income below the poverty line are added to the number of people in the nation officially deemed as living in poverty.    If you live with your parents then you're included in your parents family and the poverty rate is based on your families entire household with your parents income.   The Census excludes people living in college dorms from the poverty statistics.   But if you live off campus and don't live with family then you're considered your own household and your poverty rate is figured based on your own income.

 If you look at table 2 in the Census report it tells us that 51.8% of college students not living with parents or on campus are below the poverty rate.    That is not surprising.    But there are actually 2-3 million such people in the nation and it adds up.   Table 2 also shows that the impact on the poverty rate in the U.S. of excluding college students living on their own would be a -0.7% difference.

As of 2009-2011 figures the official poverty rate was 15.2%.    But that includes college students living on their own.    If college students living on their own were excluded from the poverty tally then the poverty rate would change by -0.7% and would have been 14.5% instead of 15.2%.   

It makes an even bigger difference if you look at local areas like college towns.   The Census report says : "For example, Monongalia County, West Virginia where the University of West Virginia is located , had its poverty rate drop from about 23 .0 percent to 12.6 percent."     But there are not a lot of counties in the nation that see large changes.  

Should they include college students living alone or not?     Well I think it depends.   If you happen to live alone in an apartment your rich parents pay for and you make $8 an hour working 10 hours a week for spending money then I don't think you should be added to the governments official tally of the ranks of the poor.     But if you're a 29 year old who is officially independent from your parents and paying your own way through community college on 30 hr/week minimum wage job then yes maybe you should be in the poverty ranks.    I don't know but I would suspect that most college students are not really independent.

It seems clear to me that including college students living in off campus housing is inflating the poverty rate in the nation.   I'm not sure how much of the 0.7% difference is really students who get support from their parents.     I think they should exclude any college student who can be claimed as a dependent by someone else.    I'm assuming that the Census survey that figures the poverty rate doesn't ask if you can be claimed by someone else.    If your parents are claiming you as a dependent then I really don't think you should be counted in the poverty figures for the same reason that they already exclude college students living on campus or living with family members.


August 27, 2013

Are Employees Unskilled or Picky or are Employers Too Picky?

Notice :  this is a semi-rambling, venting and opinionated article.  Just giving you fair warning.

I ran across this article Why Millions of Job Openings Are Unfilled which seems to claim in general that many jobs aren't filled due to lack of skilled applicants.   They talk of "scores of employers practically begging for new hires to fill openings to no avail". I'm not sure if they realize that score means 20 and that scores means 40 or more.   So in relation to the USA economy thats a minuscule drop in the bucket. But thats OK I will set that nitpicking aside for now so I can get on to the bigger complaint.

Here's the bit I really wonder about...

They have this quote : 

"Another cause of the supply-demand imbalance is a persisting stigma towards blue-collar jobs. Many people simply believe that certain jobs are "beneath them" and simply aren't interested.

Krystal Wells, owner of Portland, Ore.-based cleaning service The Other Woman, recalls how difficult it has been to find good workers to join her staff.

"I have gone as far as contacting over 400 different individuals that I took the time to read their profiles to see if from what I read they would be a fit and custom pick the people who most fit this job to call," Wells said. "After all the people I contacted, I had one person that was interested and never showed up to the interview

OK first of all they refer to "contacting over 400 different individuals" that she "took the time to read their profiles".    I"m not really clear whats going on there.    That sounds like she's skimming Linked-in or something looking for possible candidates.   Then she says she was looking to "custom pick the people who most fit this job to call".    It really sounds like this woman didn't put out a job ad but instead went browsing somewhere for people she might hire.  I don't know what she was looking at.  Theres no mention of where these profiles were.   I'm really confused.    Maybe she's reading the profiles of 400 applicants?    If she got 400 applicants then couldn't find someone to hire then that doesn't mean that people think the job is "beneath them" but instead means that there are literally 100's of people wanting that job.   But that doesn't match what they said, cause they are saying that many people think this job is beneath them.   So there must not be 400 applicants and so she's just browsing Linked in?    I'm confused.    If you want to hire someone you don't just go ask 400 strangers if they want to work at your company.  You post an ad to Craigslist or wherever and then sort the replies.   Pure and simple.

And the thing is that the woman is looking for people to clean houses.   I have to think that if you're looking to hire people to clean houses and you browse 400 profiles to look for the "custom fit" for the job that you *might* just be a little too picky about who you hire.    That sounds more like the job search process some Fortune 500 companies put into hiring their CEOs.

Of course there is no indication of what she wants to pay them and I have to wonder if its a minimum wage job.    I found the companies website and it doesn't list a wage and says the work is 25-30 hours with 1 week of vacation after a year and no mention of any other benefits.   I don't know, and its quite possible that she wants to pay handsomely.   But it doesn't say that anywhere.  It doesn't say "and I was going to pay $15/hr or $20/hr".    Sounds more like lowish pay with virtually no benefits and not even full time hours.     Now thats common enough for house cleaning work I'd guess, but its not really going to entice the best applicants.

I honestly doubt there are a lot of people who prefer to clean houses for a living.   Some people do enjoy that work and it can be a fine job for those who do it but I think most people really prefer other jobs if they can get them.    So yes I bet that most people aren't interested in such a job.    As an employer seeking to hire people for this work you have to understand that kind of thing.  You aren't going to get a line of 100 highly skilled people lined up with awesome resumes begging to work hard for relatively low wages.    Maybe I'm assuming too much here but the woman talks of reviewing 400 profiles (a lot of hunting) in order to get a "custom pick" for her job which sounds to me like someone who's really very particular and picky about who they want to hire.  As an employer its easier to be super picky when you have a ton of interested applicants but you don't have that luxury if there aren't as many interested people.     If you really do insist on being very particular about who you hire and only want to make sure you get the absolute best people then you really do have to pay more.   I see no mention of paying more and honestly I have to assume that the opposite is likely the case and I'm guessing its low pay.

You know what they could do to find fill that job opening?   Stop being so picky or pay more.   Its not that hard to figure out.

The article is looking at the number of unfilled jobs and trying to explain why they are unfilled.    A couple years ago I looked at that topic myself and I wrote :

Why 3.2 Million Unfilled Jobs Isn't as Big as It Sounds

Open jobs are a natural part of the work place turnover.    People come and go and jobs aren't filled immediately so there is always going to be a certain number of open jobs.   It normally takes a month or two to fill a job so there's always some empty jobs as they are emptied and filed on an ongoing basis.   

This is a simplistic way to look at it :   Is McDonalds hiring people right now?    Yes McDonalds is probably hiring.   Why is that?  Because someone is always in the process of leaving McDonalds because they have high turnover.   So that 'help wanted' sign at McDonalds does not mean that American workers  lack the skills to work at McDonalds.   Now lets just extend that idea across the entire economy and there will be naturally 2-3% of jobs open at any given time.   Its not an indication that workers are lacking the right skills.  

And actually the number of job openings goes up when times are better.  We had about 4 Million job openings back in 2007 when unemployment was under 5%.   It wasn't a problem back then.   Nobody was trying to claim there was a giant skills gap.    Its not really necessarily a problem now either.   You can't just magically fill 100% of the job openings immediately.  


August 25, 2013

Rental Comp Data for August 2013

Its been over half a year since I reviewed the rental price comparisons for our rentals.   Last time was at the start of the year : Rental Comp Data for January 2013

Here is the data from   for our properties.


3bed 3bed 1bed 1bed 3bed

house house apt apt house
10% $700 $770 $400 $400 $950
20% $795 $799 $425 $435 $963
median $905 $925 $500 $480 $1,095
80% $1,100 $1,100 $535 $600 $1,238
90% $1,195 $1,150 $625 $625 $1,295
 # prop                31               38               27               29               53
 dist              0.5             0.8             0.6             1.3             0.4

Note that these are in different locations.

Generally the rents are up :

Nov-11 $895 $875 $495 $495 $1,095
Aug-13 $905 $925 $500 $480 $1,095
change 1.1% 5.7% 1.0% -3.0% 0%

Thats pretty healthy trend.   The 'B' property is in an area that has been hit hard with foreclosures and has rebounded lately some.  So its nice to see it up.   However back in 2011 the median rent there was $995, so its still not where it was.   


August 23, 2013

My Quizzle Credidt Score is 776 (again)

I just got my free credit score from Quizzle and it is 776. 

As you can see I actually got it on the 21st.

Last time I reported it was back in 2011 and it was 779 and before that in 2010 it was 776.   Interesting that its barely changed over a 3 year period.   I suppose that makes sense since my credit usage really hasn't changed much.

Here's my original post about Quizzle and how it works.   Lately they seem to push financial services more and really seem to want to sell you refinancing or credit cards, etc.   But thats easily ignored.


Best of Blogs for Week of August 23rd

Every Friday afternoon I share some of the more interesting or notable posts that I have seen in the personal finance blogs and other sources for the past week

Wealth Lion lists what he thinks are The Ten Worst Money Mistakes Anyone Can Make

The Big Picture has a chart showing recent 10 years of  Luxury Item Investing Returns
but this should not be interpreted to mean you can make a lot of money simply buying fine wine or classic cars.

MyMoneyBlog looks at  LendingClub vs. Prosper Loan Performance Comparison, 9-Month Update
and then compares LendingClub and Prosper vs. High Yield Junk Bonds

Economix reports that College Costs: Rising, Yet Often Exaggerated
The chart shows the net costs after aid over 20 years.   Looks like public 4 year schools went up about 2.6% and private was up 1.3% but those are AFTER inflation so its still not good.  However i find it interesting that 2 year schools are basically flat after accounting for inflation.


August 22, 2013

Reminder - Contest to win free Chocolate!

Just a friendly reminder, that I'm holding a contest to get some free chocolate bars.

If you haven't entered yet then please follow the link and leave a comment.   Theres nothing required to enter at all, just leave  comment of any sort.     The contest ends tomorrow afternoon.


Nationwide Rental Vacancy Rate 1956 to 2012

The Census Current Population Survey / Housing Vacancy Survey tracks rental vacancies.

Using their time series / trend chart function on the Census page you can pull data.   I got the following image showing rental vacancy rates nationally from 1956 to 2012:

(click image for larger size)

I don't know anything much about what drives rental vacancy rates at the national level.    I assume part of it is building of new housing units versus growth of population.

Interestingly the national rental vacancy rate was relatively high even during the housing real estate boom.  Vacancies were over 10% back in 2003 and 2004.   It could be vacancies in rentals where high during the real estate boom due to individuals moving into single family houses instead.  


August 20, 2013

Contest - Win a Milk Chocolate Bar Collection from Sucré

Time for another contest for free sweets.   I  previously gave away some free macarons from Sucré. 

This time Sucré will give the winner a free Milk Chocolate Bar Collection with retail value of $21.00

Contest rules :

  •  To enter please reply to this post and enter a comment.   (one entry per person please)   
  • Contest closes Friday at 3PM Pacific US 
  •  On Friday I'll pick a random number and select a winner among the commenters
  •  You'll need to provide your shipping address so Sucre can send you the macaroons.
  • Contest is open to residents of the continental U.S. only.
  • The prize is offered by Sucré 
  • edit :  anonymous comments won't qualify.

Follow this link to go straight to the comments

p.s. again I'm not getting any compensation or even free food from this.


Hodge Podge : Tax Estimator, Medical Cost lookup and Median Incomes & Rents

Here are three interesting sites that I've ran across.   They are all useful or interesting.   These were sitting in my pile of stuff to write about but didn't warrant a article on their own so I figured I'd post about them all together...

Estimate Your Tax Bill : TurboTax's TaxCaster This one is pretty useful to figure out your rough income tax bill.   You can also use it to model how different changes would impact your taxes.   Its smart enough to know what you can and can't claim based on your tax levels.

Get Average Medical costs: FairHealth's medical cost lookup
You can look up specific medical procedures by ZIP code.   It gives estimated costs in your area for various procedures and it figures both the insured costs and uninsured costs.

Median Income & Median monthly rents by Census tracts: Rich Blocks, Poor Blocks
You can put in your address and find the median rents in your area.   This is handy for setting rents or market research for rentals.   You can also look up median income levels which is more for curiosity sake.  I found it interesting to see the huge differences in median incomes in various areas of our town.

--This article may contain referral links which pay this site a commission for purchases made at the sites.

August 19, 2013

Retirement Savings Rate versus Working Left Till Retirement from MMM

Mr Money Mustache wrote the article The Shockingly Simple Math Behind Early Retirement and in that article he derived a table that lists the retirement savings rate versus the working years until retirement.   Normally I'd throw this in a Best of Blogs roundup but its such a neat table that I thought it was worth writing a separate article to point people to it.

The table is based on the assumption that you'll get returns of 5% after inflation and you'll use the "4% rule" for retirement spending.  You can use this table to figure how much of your income you should be saving if you have X years to retire.   Or you can use it the other way around to find out how many years you'll need to continue working based on a certain savings rate.

For example:
Say you start working at age 22 and plan to work till you're 65.  Thats 43 years of work.   Looking up in the table it has a savings rate of 15%.   Therefore you should try to save 15% of your income if you want to retire at the standard retirement age.

On the other hand say you start work at age 22 and you save a lot of your money and you have the goal of early retirement.  Lets say you're able to save 35% of your income.  Based on the table that would put you in good shape to retire after 25 years so you might be able to retire early at age 47.

Now lets consider if you had a late start on your retirement and you didn't get any retirement going until you were 35 years old.   If you want to retire at 65 then thats 30 years until retirement.   Looking up in the table he has values for 32 years and 28 years so we can guesstimate that the savings rate required would be midway between those.  That would mean something between 25% and 30% or roughly 27.5%.


August 18, 2013

Percent of Population in College by Age

Currently about 50% of people age 18-21 are in college.   

I got data from the CPS for School Enrollment of the population as of Oct. 2011.   The data covers both undergrad and graduate.

Here it is broken down by age group :

You can't see it in the chart but surprisingly 0.2% of the 14-15 year olds are in college.   I suspect theres more genius kids out there than I realized or its just kids enrolled in a joint community college deal through their high school.

Theres a notable difference in the college enrollment rates between men and women.   Here is how it looks side by side:

About 45% of 18-21 year old men are in college and around 55% of women.


August 16, 2013

Best of Blogs for Week of August 16th

Every Friday afternoon I share some of the more interesting or notable posts that I have seen in the personal finance blogs and other sources for the past week

Wealth Lion explains Why I Use a CPA to Do My Taxes
My wife and I use a CPA for most of the same reasons.  

Retireby40 thinks Peer to Peer Lending Is A Pretty Good Passive Investment


August 15, 2013

Be Wary of Real Estate Seminars

I used to watch Flip This House on A&E.   It was a fairly entertaining and interesting show about people who would flip houses for profit.  I think the show ended around the real estate market bust (though I'm not sure).    I assume it was a lot easier to make money flipping houses when the market was going up irrationally.     Anyway, one of the people on the Flip This House show was a guy named Armondo Montelongo.  

That brings me to this :   Forbes article Meet Armando Montelongo: The Home-Flipping Huckster Who'll Make $50M This Year

Its an interesting article for sure. I'm surprised that they can make as much as they do with such seminars.   I'm actually a little sad that so many people pay so much money for such a thing. 

The Forbes article quotes one of the seminar attendees Lori Jakubowski who said “You don’t get anything substantive.”    That quote right there is the main thing I think we should all walk away with.   Its a first hand account from someone who's paid for a seminar and described it as lacking any substance.  

After staring on the TV show Armondo got into the real estate seminar business and now makes ridiculous amounts of money teaching others how to make it rich with real estate.   Unfortunately this seminar business of theirs has few people he can point to who are a success and an F rating with the BBB     And this gem on that : "Andy Moon, Montelongo’s corporate attorney: “You know the BBB is based in Austin, which is very liberal and in the consumer protection capital of the world.”...   Wow, I've not seen such a ridiculous explanation with someone waving their hand and trying to dismiss an awful BBB rating.   And honestly its my understanding that the BBB is relatively business friendly anyway.

A TV report from KSAT12 of San Antonio warns consumers about the seminars and discusses the BBB complaints.    An Inside Edition episode talks to a couple that spent $30,000 for one of the seminars and they show video of people in some sort of costume party.   They have a nice humble quote from Mr. Montelongo saying "I am the single greatest real estate investor in this modern era".  

Another one of the stars on Flip This House was Than Merrill.   Merrill's company was advertising on the radio in my area not long ago about their seminars.   Than Merrils company is called Fortune Builders Inc.   I found an article from Better Business Bureau Warns of House-flipping Seminar Headed for Saginaw BBB warning of their seminars.   But Fortune Builders Inc however has an A+ BBB rating    Thats a confusing contradiction there to have a warning from the BBB about the seminar when their BBB rating is an A+.   

In any case I would make a blanket statement that :   You should avoid going to or paying any money for real estate seminars.   Those seminars are not teaching people anything magic and are mostly just going to make money for the people who conduct the seminar.   If you're interested in real estate investing then you can read all about it in books from the library or on the web from various free sources.  Don't waste money on seminars.    In fact, don't go to free seminars either because they are just a sales pitch for high priced seminars.

 You don't get anything substantive.


August 13, 2013

Colleges With the Highest and Lowest Student Loan Default Rates

Little while back DQYDJ mentioned in an article that 30% of people in repayment on their student loans are in default.  That number was shockingly high to me.   I'm still puzzled why its so high.   But anyway after reading that I was looking into default rates on student loans and I came across a page on the Dept. of Education site that lists the student loan default rate by university.   The data they have is from 2011 and looked at 2008 so its a bit out of date.   Unfortunately the default rates have apparently gone up significantly since '08.

I thought it would be interesting to see the list of schools with the highest and lowest default rates and so here they are.    I filtered the list to only look at schools with at least 100 students.   I noticed a few schools with the worst rates only had 1-4 students listed so that threw things off.

You can draw your own conclusions about what high or low default rates mean.   

First he bad news, schools with the highest default rates.

These are the FY 2008 two year cohort default rates with at least 100 students: .

School State Default
Academy Of Healing Arts NV 46.89
Everest Institute TX 35.28
Tucson College AZ 34.65
Aviation Institute Of Maintenance IN 32.52
Everest College CA 31.17
Lamson College AZ 30.48
Pennsylvania School Of Business PA 30.09
Centro De Estudios Multidisciplinarios PR 29.57
Talladega College AL 29.41
Wyotech FL 29.20
California Healing Arts College CA 28.71
Institute For Business & Technology CA 28.33
Plaza College NY 28.06
Institute Of Technology CA 28.01
Everest Institute FL 27.62
Everest College MO 27.56
College Of Office Technology (The) IL 27.38
Career Institute Of Health And Technology NY 26.88
Lincoln College Of Technology TX 26.34
Everest College CO 26.24
West Hills Community College CA 25.97
Dudley Nwani The School TN 25.93
Kaplan Career Institute OH 25.76
Everest Institute NY 25.71
Newbridge College - San Diego East CA 25.68
Ntma Training Centers Of Southern California CA 25.48
Everest College WA 25.27
Prism Career Institute PA 25.00

Most of the schools are for profit trade schools.  I see one school there that is obviously public, the West Hills Community College.   Everything else there looks like a for profit school.   Oh and "Institute of Technology" in California should not be confused with the California Institute of Technology.

Why do these schools have such high default rates?    I don't know.   One reasonable guess might be that they do not adequately prepare their students for the job market and thus present a poor educational value.   But thats just one theory.  I suppose there could be other potential reasons.

Now the Good news, the schools with ZERO defaults

There are a full 39 schools in the list with at least 100 borrowers and absolutely 0 defaults.   Those schools are :

Albany College Of Pharmacy And Health Sciences
Albany Medical College
Amherst College
Award Beauty School
Barnard College
Carleton College
Carroll College
College Of Saint Benedict
Concordia Seminary
Connecticut College
Davidson College
Eastern Virginia Medical School
Edward Via Virginia College Of Osteopathic Medicine
Erskine College
Haverford College
Illinois College Of Optometry
Kalamazoo College
Kansas City University Of Medicine And Biosciences
Lancaster General College Of Nursing And Health Sciences
Luther Seminary
Mayo Clinic, College Of Medicine
Medcentral College Of Nursing
Medical College Of Wisconsin
Muhlenberg College
Nebraska Methodist College Of Nursing & Allied Health
New England College Of Optometry (The)
Ross University School Of Veterinary Medicine
Saint Mary'S College
Southern California College Of Optometry
St. John'S College
Thunderbird School Of Global Management
Tui University
University Of London - London School Of Economics & Political Sci
University Of Massachusetts Medical Center
Vermont Law School
West Coast University
Williams College
Wisconsin Lutheran College
Wofford College

I don't recognize most of these but I do see several medical schools on that list.

Now this doesn't mean you should rush out and enroll in one of the 39 schools listed above without defaults.  I have no idea why their students haven't defaulted. 

I was curious and looked up my own alma matters and found that one was just a bit over 1% and the other was a little over 5%.   I wasn't surprised by either.

Whats the default rate for your school?   Is it a surprise?


August 11, 2013

Cheap or Free Magazines - Review of

I've been using for magazine purchases for nearly a year now.   Last fall I
bought a magazine subscription as a gift for someone.   I've gotten 8 subscriptions through the service.   Five of those I got free or close to it by using  $5 gift card or promo coupon code they've emailed to me once a month.  I got 3 subscriptions for free and paid $1 and $5 for the other couple.

*** UPDATE Oct 14, 2013 :   In the couple months since I first wrote this article, I've stopedd getting free $5 gift certificates.   The deals I've gotten lately are $5 off select titles or $5 after buying certain titles.   Neither of which can be used for free magazines.
*** UPDATE Oct 22nd.   :    They just sent me a $6 free code via email so I guess the freeby deals have not gone away after all.

Disclaimer : Yes I know magazines aren't super frugal.  You can generally get the same or similar content online for free.   But some of us like magazines.  Personally I like to get them to read on the airplane.   I used to find myself spending $5 retail a few times a year to get a magazine at the airport newsstand before a flight or during a layover.  I instead started getting a subscription for $10-15 and saved money doing so.

Pricing and promotions

Normally their pricing ranges all over the place.  Their normal prices seem to be OK but not great.  You can generally do better elsewhere if isn't having a sale.   Their prices aren't bad but not the best.   However they have such frequent sales that you just have to wait for a sale and you can find a good deal. does have a LOT of sales and discount deals.  Once you buy from them and get on their mailing list my inbox has been almost bombarded with promotional offers.   I probably get about 1 email a day from them on average.  Honestly its a little too much email.   However there are a lot of great sales deals and better yet frequent coupons or gift card codes for $5-10 for free magazines.   With the $5-10 free deals combined with sales you pretty easily get some free subscriptions.   For example I got myself year subscriptions to Popular Science for free and Money for $1.
YMMV :  I don't know if they send the free promo deals to everyone.  Note that the original purchase I made as a gift was for a relatively pricey magazine and so I may be target for freebie deals more often due to that. I'm not sure but its a possibility.

Free magazines

I mentioned free magazines in the title.   I've gotten some free subscriptions myself.   The way to get free subscriptions is to wait for a free $5-$10 coupon code in your email and then go shopping for magazines on sale for less than the coupon value.    So for example, they sent me a $5 coupon code.  I then went to their site and saw that Popular Science was on sale for $5.   So I used the code and bought Popular Science for a net cost of $0.

Service and customer support

I've had good service with    I've had to contact them a couple times for service and the service has been good.    First I was confused about a charge to my credit card and I couldn't find the corresponding order on their site.  They responded quickly and explained the charge.  I'd simply not noticed the second page of orders on my account history.   The second time I used their support was to cancel a magazine we didn't want.  They replied quickly and canned the order without any fuss.

Don't forget 26% rebate via Ebates

If you do buy a subscription on you can also get a 26% rebate via Ebates.    That rebate alone can make some of their prices a great deal and if you add a good sale at Magazines then the combined savings can be hard to beat.

To get the cash back you need to be signed up with Ebates.  Then simply go to Ebates to get the referral to the the store before you do your shopping.  I also get a referral bonus if you use my links to sign up with Ebates

You do Have to Watch for Sales to get the Best deals

As I said their prices often start out higher but can be deals if you get a sale.
For example right now the renewal price on one magazine I get is $19.99 but the same magazine is $10 on Amazon.  However that magazine was on sale at for $14.99 a couple weeks ago.   If I had one of their $5 codes that would make it $9.99 net cost.  If I throw in the Ebates rebate then I'd be paying $7.49.   Another example, right now Popular Science is $12 on their site for a year but if you wait around a little you can easily find it on sale for $5 to $10 and if you use a $5 code you may get it for free like I did.

Bottom Line :  I give a thumbs up.    They have great selection and good services.  If you watch for sales and use their free coupon codes you can find great deals.

-- This article may contain referral links which pay this site a commission for purchases made at the sites. I am not getting a referral or commission from but I do have referral links for Ebates

August 9, 2013

Best of Blogs for Week of August 9th

Every Friday afternoon I share some of the more interesting or notable posts that I have seen in the personal finance blogs and other sources for the past week

 DQYDJ asks Should You Care About Income When You Choose a Major?

The Big Picture shares a neat graphic with Annual Returns by Asset Class

Wealth Lion discusses the idea of  Moderate and Selective Frugality


August 8, 2013

What To Do When Tenants Are Late Paying Rent

If you're a landlord for very long then its almost inevitable that eventually you'll have a tenant that is late on a rent payment.   Even the best tenants may occasionally have late payment due to circumstances beyond their control or simple accidents on their end.   One of the unfortunate jobs of a landlord is dealing with late rent.  Its never fun to have to chase down tenants and be the 'bad guy'.   But if you're prepared and follow a rational process you can minimize the pain as much as possible.   Below is my advice for how to handle late rent.

First  The Quick Summary: 

I've got a lot of points below but I wanted to first cover the basic key points.

1. Don't panic and treat it professionally as a business transaction.  Your finances should be in order so this shouldn't set you back personally (assuming they do eventually pay). 
2. Enforce your late fee and get a commitment for repayment.
3. Don't let the tenant get too far behind. 
4. If it goes on for more than a month then first suggest they move and if that doesn't resolve it then start forward on eviction process.

Be Prepared For Late Rent

You should expect that your tenants will be late with rent on occasion.   To prepare for that you really need to have your own finances in order.   If you're living paycheck to paycheck yourself then you'll end up struggling with your bills if your tenant hasn't given you money they owe.    You should have a reasonable financial cushion for your rentals.   This can either be its own fund or part of your personal emergency fund.   If you have your money in order then a late rent check won't really hurt.   You should also expect some losses due to tenants who move out without paying in full.    Don't expect to get 100% of the rent money 100% of the time, that is unrealistic.    If your finances and budget are in order with realistic expectations then a late check won't cause undue harm to you financially.   Being prepared for late rent will also help you deal with it emotionally which brings me to the next point ...  

Don't Panic

Its easy to get anxious and give yourself an ulcer if you worry too much about when a tenant will finally come through with an over due rent check.    Late rent is inevitable.   It will happen eventually.   You should first prepare yourself for it so that when it does happen you don't over react or panic.   A late check doesn't mean you won't get the money.   More often than not tenants will pay their rent after being late.  If all goes well then you'll get the money and no harm will be done.    If the tenant is simply unable to pay then this is a loss that is part of the business.

Don't Take it Personally

Some people may get upset and take personal offense to a late rent check.    A late rent check has nothing to do with the landlord personally.   Tenants don't choose to be late on rent in order to inconvenience you.  

Keep In Mind that You're Running a Business not a Charity

You're renting housing to make money and thats hard to do if you're too accommodating or forgiving with regard to late rent.    Its REALLY easy for landlords to be nice to tenants who are having financial difficulties by being lax on late rent.   Thats a natural reaction to want to be flexible for someone who's having a hardship.  But you really do have to remind yourself that you aren't running a charity and that you need to keep the business interests of your rentals in focus.  

Don't Be a Jerk

So this may go without saying, but its easy to get upset about something like late rent and you may unintentionally vent your frustrations on the tenant by being less than kind with them. 
As we just discussed, this is a business and businesses should be ran professionally.    You may be unhappy or even insulted that your tenants are late.   You should be professional and straight forward with your tenants. I'm sure your tenant didn't want to be late on rent and they do not enjoy the situation.  If you were late on a bill you wouldn't expect or want the lender to be a jerk about it would you?   Make sure to keep it civil and professional.

Don't Worry Too Much About the Reason

I've heard a wide variety of excuses for late rent.   A selection of reasons:    "Problem with the bank",   "Personal emergency",  "Car broke down",  and my personal all time favorite was "We had to buy grandma a big screen TV".      When it comes down to it the reason for the lateness really doesn't matter a whole lot. If a tenant gets too far behind in their rent then at some point they'll need to move out.   And if you accommodate it too far then you'll lose money.  If a tenant really is struggling with personal hardship then they aren't going to be able to afford the rent for very long and its in their best interest as well if they find alternative living arrangements.    So whether your tenant is simply irresponsible or they're perfectly responsible but having a hardship the end answer is the same that if they can't pay rent then they will need to move out.
Enforce Your Late Fees

Usually when tenants are late they will conveniently forget about the late fee policy they agreed to when they rented from you.   If a tenant calls and says they are late or if you have to chase them down to get an explanation then make sure to remind them that there will be a late fee due.    Generally I think its OK to give them a one time pass on the late fee for the first instance if you want.   But after that it really is important to enforce late fee rules with tenants.

The reason you need to enforce late fees is to give the tenant a reason not to be late.   When people are having trouble paying their bills they will usually pay the most urgent bills as a priority.  If theres no late fee on the rent then they may consider it less urgent due to there being no specific consequences of being late.   The tenant probably has multiple bills due and is going to pay other bills with fines or penalties before those that have no late fees.

Get a Specific Commitment from the Tenant

The tenants late on their rent will often tell you when they can pay.   But if they don't offer that information then you really need to request it from them.   Repayment "when I can"   is not acceptable and you really press them for a specific date.    If they can't or won't commit to getting the rent to you by a specific day then that is what I'd consider a red flag.   Sometimes they just need guidance and you may want to ask when they get their next paycheck and if they can at least pay you on their next pay day. If the tenant can't tell you when they'll pay then its likely they aren't sure how they'll get the money or really have no means to do so.   Occasional setbacks in paying bills is pretty command and easier to deal with but if a tenant has no real plan to get money to pay their rent then that is a much bigger problem.

Handling "The check is in the mail"

You've probably heard the term "the check is in the mail".    You may get this as the first response from a tenant.   Theres often not reason to doubt the truth of it and you may very well get the check tomorrow.. or the next day or the day after that.   I would remind the tenant that rent needs to be received on the due date not mailed on the due date and politely remind  them of the late fee.   If you do get the check then note the date it was mailed on the postmark and figure out how long it took to get to you and if it was mailed before or after the tenant said it was in the mail.   If they mailed it AFTER they said it was in the mail then note that for future reference.    If the check doesn't arrive then you've got clear evidence that the tenant was not telling you the truth and more aggressive action proceeding to eviction may be necessary.

Don't Let Tenants Get Too Far Behind

This part is really very important.   Once a tenant is behind on their rent its quite possible that they may not be able to get caught up.   If they are already living paycheck to paycheck and then they have a large expense that costs them to get behind they may not be able to come up with the money to get them back on track.   They may then continue to kick the can down the road and continually ask to make partial payments.   If this happens then before long they may be a little short on a future months and then "not have it all" another month and after a time you're all the sudden looking at a tenant that is behind 2-3 months worth of rent.   If you see a tenant getting behind more than a month then its time to take further action.

Handling Partial Rent Payments

A lot of the time a tenant will not have the whole rent check but they will offer to pay you part now and then the rest at a later time.   In general, I would agree to this arrangement (at least once).  Its better to have some money now than nothing later.   However you need to have specific details as to how much they'll pay and when it will be paid.   If a tenant gets behind too far then you'll need to demand full payment or move on to further action.    One reason you may not want to agree to partial payments is that it will generally stop you from eviction proceedings.  If you go to court and the court finds that you had an agreement for partial payment then the court may not allow the eviction because any agreement for repayment needs to be followed through on before you can have cause for eviction.   Agreeing to partial payment is an agreement with the tenant and you need to follow through on that agreement before you can evict.     For this reason I would be specific in the terms of repayment and not extend if they fail to meet the initial agreement.

Suggesting they Move out Or other Alternative

If a tenant gets behind more  than a month then its probably a good idea to ask if they should be looking for somewhere else to live.    I think its a good idea at this point to let the tenant know that you will agree to letting them out of the lease terms if they need to move.   It isn't like you're likely to get much money out of this tenant to enforcing the lease term is really not going to get you anything.   The tenant may feel obligated or trapped in the rental due to the lease term so if you let them know you'll let them out of the lease then that may open the door for them to look elsewhere.

The Security Deposit is Not a Rent Payment

Tenants who are late on rent and planning to move may expect you to use their security deposit to cover a rent shortfall.   Do not agree to this in advance.   If you let them use their security to cover unpaid rent then they won't pay the rent and may leave you with the bill to cover the cost of repair for any damages they caused.   You wouldn't agree to blindly refund a security deposit before a tenant moved out and without a final inspection of the rental would you?    If you agree to use their deposit for rent then thats in effect what you're doing.

Should you Accept Barter?  

Occasionally in rare instances you may have a tenant offer to do some work or try and settle payment by giving you their personal belongings.   Personally I'd avoid such arrangements but I think this one is really up to you.   If you need someone to mow the lawn and they're willing to do it for a couple months to work off $200 then that could be a good solution for you both.    However I'd keep in mind you're likely not getting professional work and there could be quality and liability concerns with hiring someone without demonstrated experience.  It can be hard to judge if the work you may get from a random tenant is really worth the money in question.  

When To Evict?

Of course you don't want to be a jerk and threaten to evict tenants at the drop of a hat.   But you are also running a business so at some point you'll need to take action on a severely delinquent tenant.  Eviction of course is the last resort but eventually it may be necessary.     I'd recommend talking to the tenant first to see what you can work out.   Suggest they move elsewhere and see how that goes.    If a tenant is resistant to moving and gets behind on rent then you definitely need to give them a Pay Rent or Quit notice sooner rather than later.   The Pay Rent or Quit notice is the first notice of eviction intention.   You need to give them this notice in order to proceed with eviction processes further if necessary.   The large majority of the time tenants will either pay rent or move out after getting the first posted Pay Rent or Quit notice.   If you delay on giving the Pay Rent or Quit then it simply delays or avoids moving forward.  It allows a tenant to get more and more behind and it delays eviction proceedings.    If a tenant fails to pay rent or arrange to move out after the Pay Rent or Quit notice then you need to move forward with eviction proceedings.


August 6, 2013

Do You Waste 40% of Your Food?

Do you waste 40% of the food you buy?    I sure don't.  I hope you don't either.   Yet theres a report claiming that Americans waste 40% of our food.   The National Resources Defense Council (NRDC) issued the report that New Report: America Trashes Forty Percent of Food Supply
 Wasting food is pretty ... well... wasteful.   Its always bad financial sense to buy stuff then throw it in the trash.    If you're actually wasting 40% of our food then thats a good 40% of our food budget we shouldn't have to spend.

They claim :
"Americans trash 40 percent of our food supply every year, valued at about $165 billion;"
"The average American family of four ends up throwing away an equivalent of up to $2,275 annually in food;"

I'm not sure how they figure the $2,275 per family figure.   Theres about 123 million households in the country so if we waste $165B in food a year thats about $1,341 per household.     If you take the $165B and figure it per capita then 4 people would waste about $2,149 total.  Maybe thats what they're doing?

However looking at their full report on the topic its clear that the 40% of waste is not simply left overs thrown in the trash in American homes.   The 40% waste includes all stages of food production, distribution and consumption. 

In the full report they say :

"American families throw out approximately 25 percent of  the food and beverages they buy.69  The cost estimate for the average family of four is $1,365 to $2,275 annually.70"

So first of all its not $2,275 that we waste but instead its $1,365 to $2,275.    I don't know but that seems like an extremely imprecise estimate that makes me doubt how accurate it is.   More so the $2,275 figure is just the high end of their estimate but thats all they say with an "up to" in front of it.

Now note that there are footnote numbers in that quote for footnotes 69 and 70.   Lets read those:

"69 Bloom, American Wasteland, 187. The author reports a 15 percent  loss in homes, with potentially an additional 10 percent loss in liquid products.
70 Bloom, American Wasteland, 187

Their source is the book American Wasteland from Jonathan Bloom.  I'm a little puzzled how that footnote translates into 25% waste in homes.    The footnote says 15% loss with potentially 10% more in liquid products.      Well that reads to me as if the waste is 15% in general but up to 25% for liquid products.   That doesn't equate to 25% of waste in total, but instead something between 15% and 25%.

I went looking for more references to get an idea what Bloom's book actually says.   I found an article from Nourishing the Planet that says : "Bloom estimates that as much as 25 percent of all the food Americans bring into their homes goes to waste."    You'll note the "as much as" bit in front of the 25% figure.    So its not 25% its some value under 25%.

Is it 40% or 25% or 15%?   Is it $1,365 or $2,275?

I think it makes more sense that the total food production chain might waste a larger amount of food like 40%.   If you look at each step of the system it seems realistic.  If there is 10% waste at the farm, then 5% waste in transport, then 10% waste at the grocery store and then people waste 15%  then that all adds up to 35% total loss.     But when the article says we waste 40% of our food it sounds like they mean that an American family throws 40% of their groceries in the trash.   

I do agree that we waste too much food and its certainly a problem that we should all work to fix.

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August 4, 2013

1 in 5 chance You'll Lose Money in the Stock Market in a 5 Year Period

With savings accounts generating less than 1% in interest nowadays it gets tempting for people to look elsewhere to find higher return on their savings.   Some folks then decide to invest their savings in stocks.   Now putting money in stocks is great for the long run and I still feel its going to net you the best return over 10 years or longer.   However if you have a need for money in a shorter term then putting it in the stock market can be quite risky. 

I pulled the historical return data of the S&P 500 from Yahoo Finance.  They have numbers going back to 1950, so thats over 60 years worth.

Lets just look at a 5 year period.   I'm looking at returns over 60 month periods starting on any given month.   So if you start from July 1950 and go to July 1955 or October 1983 to October 1988.  

Here's how frequently you would have gotten returns in different annual rates:

So just shy of 1 in 5 times you would have lost money in the market over a 5 year period.   About 1/3 of the time you would have averaged 10% or better, which is quite good.   In the middle you get 0% to 5% returns about 1 in 5 times and a little over 1 in 4 times you'd get between 5% and 10%. 

(side note:  The title of this article is written as a prediction but its based on the assumption that the future of the stock market will act the same as the previous 60 years and there is no guarantee that will happen moving forward, but I think it sounds better the way written and I personally think the market will more or less act similarly in the future)

The worst return for a 5 year period was -8.5%  annually and the best return was 26.2% annually.  

The odds are still in your favor that you'd have done well in any given 5 year period.     However the point here is that there is still a significant risk that you could lose money.   Theres still that roughly 1 in 5 times that people would have LOST money in the market.    Keep in mind that this doesn't account for inflation.     And it doesn't compare to simply making 1% or so in a CD or getting a safer 0-5% return in low risk bond funds.   Stock market investment is not for the short term.    If you can't stand to lose money then I wouldn't put money in the stock market for less than 5 years. 


August 2, 2013

Best of Blogs for Week of August 2nd

Every Friday afternoon I share some of the more interesting or notable posts that I have seen in the personal finance blogs and other sources for the past week

MyMoneyBlog shares Auto Insurance Quote Comparison Results: State Farm vs. GEICO vs. Allstate vs. Progressive vs. Liberty Mutual

TheSimpleDollar created The Ultimate Guide to Amazon Coupons and Discounts

DQYDJ asks Should You Major In Photography?

The Big Picture gives us Historical Returns by Holding Period


August 1, 2013

Gas Costs Versus Median Income by State

Some friends on Facebook were talking about the higher cost of gasoline where they live and I concluded that yes their gas is higher but their wages are higher too so it evens out.   Then I wondered if the local cost of gas might be at least somewhat proportional to the local wage level.  

The data below is from the sources : Average gasoline prices by state from AAA site and household median income for 2010-2011 from the Census.    I estimated annual gasoline costs based on a typical 12,000 annual miles driven and 25 MPG.    Then I figured the % of median income that this annual gas spending represents.   Of course I assume that annual miles driving and MPG vary some by location as well but I'm ignoring that for simplicity.

Here are all the numbers :

Gas  Median income  Annual gas gas / income
Alabama  $3.37 $44,191 $1,619 3.7%
Alaska  $4.07 $65,720 $1,955 3.0%
Arizona  $3.55 $48,484 $1,705 3.5%
Arkansas  $3.43 $39,832 $1,645 4.1%
California  $3.99 $59,209 $1,913 3.2%
Colorado  $3.55 $61,154 $1,704 2.8%
Connecticut  $4.01 $67,784 $1,923 2.8%
Delaware  $3.66 $53,805 $1,755 3.3%
District of Columbia  $3.88 $56,895 $1,860 3.3%
Florida  $3.59 $47,353 $1,724 3.6%
Georgia  $3.49 $46,867 $1,675 3.6%
Hawaii  $4.37 $61,308 $2,097 3.4%
Idaho  $3.82 $49,293 $1,833 3.7%
Illinois  $3.84 $55,534 $1,841 3.3%
Indiana  $3.62 $47,526 $1,737 3.7%
Iowa  $3.61 $52,781 $1,732 3.3%
Kansas  $3.58 $48,451 $1,717 3.5%
Kentucky  $3.57 $43,860 $1,714 3.9%
Louisiana  $3.48 $44,484 $1,671 3.8%
Maine  $3.76 $49,572 $1,807 3.6%
Maryland  $3.67 $66,928 $1,760 2.6%
Massachusetts  $3.73 $62,634 $1,792 2.9%
Michigan  $3.68 $50,118 $1,764 3.5%
Minnesota  $3.58 $58,094 $1,720 3.0%
Mississippi  $3.39 $37,427 $1,628 4.3%
Missouri  $3.47 $49,615 $1,665 3.4%
Montana  $3.71 $43,607 $1,778 4.1%
Nebraska  $3.64 $52,498 $1,746 3.3%
Nevada  $3.72 $55,559 $1,783 3.2%
New Hampshire  $3.68 $68,187 $1,766 2.6%
New Jersey  $3.58 $68,071 $1,718 2.5%
New Mexico  $3.56 $44,819 $1,707 3.8%
New York  $3.92 $52,683 $1,880 3.6%
North Carolina  $3.52 $44,393 $1,690 3.8%
North Dakota  $3.70 $52,176 $1,776 3.4%
Ohio  $3.54 $48,567 $1,698 3.5%
Oklahoma  $3.50 $48,137 $1,681 3.5%
Oregon  $3.87 $52,758 $1,859 3.5%
Pennsylvania  $3.66 $52,103 $1,756 3.4%
Rhode Island  $3.80 $54,879 $1,825 3.3%
South Carolina  $3.30 $43,566 $1,586 3.6%
South Dakota  $3.70 $50,977 $1,777 3.5%
Tennessee  $3.41 $41,979 $1,635 3.9%
Texas  $3.51 $49,172 $1,683 3.4%
Utah  $3.74 $63,329 $1,794 2.8%
Vermont  $3.75 $53,914 $1,800 3.3%
Virginia  $3.46 $64,095 $1,662 2.6%
Washington  $3.93 $61,241 $1,884 3.1%
West Virginia  $3.63 $41,073 $1,741 4.2%
Wisconsin  $3.66 $53,605 $1,756 3.3%
Wyoming  $3.67 $55,367 $1,760 3.2%

Overall I don't see all that much of a correlation between gas prices and incomes at the state level.

Here are the states listed with their respective ranks as far as gas costs and incomes and then the delta between the gas cost and income rankings :

gas income delta
Alabama  50 44 -6
Alaska  2 5 3
Arizona  37 35 -2
Arkansas  47 50 3
California  4 12 8
Colorado  38 11 -27
Connecticut  3 3 0
Delaware  26 20 -6
District of Columbia  7 14 7
Florida  31 39 8
Georgia  43 40 -3
Hawaii  1 9 8
Idaho  10 32 22
Illinois  9 16 7
Indiana  29 38 9
Iowa  30 22 -8
Kansas  34 36 2
Kentucky  35 45 10
Louisiana  44 42 -2
Maine  12 31 19
Maryland  22 4 -18
Massachusetts  15 8 -7
Michigan  21 29 8
Minnesota  32 13 -19
Mississippi  49 51 2
Missouri  45 30 -15
Montana  17 46 29
Nebraska  27 25 -2
Nevada  16 15 -1
New Hampshire  20 1 -19
New Jersey  33 2 -31
New Mexico  36 41 5
New York  6 24 18
North Carolina  40 43 3
North Dakota  19 26 7
Ohio  39 34 -5
Oklahoma  42 37 -5
Oregon  8 23 15
Pennsylvania  25 27 2
Rhode Island  11 18 7
South Carolina  51 47 -4
South Dakota  18 28 10
Tennessee  48 48 0
Texas  41 33 -8
Utah  14 7 -7
Vermont  13 19 6
Virginia  46 6 -40
Washington  5 10 5
West Virginia  28 49 21
Wisconsin  24 21 -3
Wyoming  23 17 -6

Again I don't see much consistent correlation between gas cost and income.   Sometimes its pretty close with 19 states having ranks within 5 places.   However theres 15 states where the ranks are 10 or more apart.   Connecticut and Tennessee are exactly the same ranks.   Virginia has the widest difference with the 46th cheapest gas and 6th highest income.

Clearly you can't just assume that gas prices are proportional to incomes.


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