Best of blog posts for week of February 10th

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.

Doughroller has a nice series of articles about How to Earn Extra Dough with a Home Based Business and related What a Great Home Based Business Looks Like plus  75 Ways To Make Money On The Side


Bargaineering explains Soft Credit Check vs. Hard Credit Check
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Five Financial Ratios

Financial ratios are one way to do a quick assessment of how you're doing.   The 5 ratios below can give you an easy snap shot of how you're doing.   FreeMoneyFinance discussed the five financial ratios below, three of which were from The Dough Roller.

1 ) Emergency Fund Ratio (Liquid Assets/Monthly Expenses) -- The generally accepted rule of thumb is that you need 3 to 6 months of expenses in an emergency fund.

2 ) Doomsday Fund Ratio (Financial Assets/Monthly Expenses) -- How long could you last with no income at all?

3 ) Net Worth Ratio (Net Worth / (yearly income * age / 10)) -- You want this ratio to be 1 or higher.


4) Net Worth / (gross income earned since working )

5) Retirement Fund Ratio (Retirement Savings / Yearly Income) -- The goal is to retire with at least 12 times your annual income.

Here is how I come out on those 5 ratios:

1) Emergency fund = liquid assets / monthly expenses = 30 months
2)  Doomsday fund = total assets / monthly expenses = 10.5 years
3) Net worth ratio = net worth / income * age/10 = 1.2
4) net worth / gross total income = 0.55
5) Retirement fund ratio = retirement savings / yearly income = 1.65

I come out pretty well on the first four.   For the first two I used our normal spending.  However we could easily cut our spending if we paid off our home mortgage and cut back on some discretionary spending.  If we paid off our home mortgage using liquid assets then the doomsday fund would come out to over 12 years.

We look pretty bad in the last ratio because a lot of our assets are not in traditional retirement savings.  I only used our 401k & IRA account balances for that.   However I consider our real estate to be retirement investments as well.   We have a much higher % of our assets in real estate investments.  If I added those then I'd have a higher ratio there.

Personally I'm mostly focused on the #1 and #2 ratios.   I want a high amount of liquid savings / emergency fund so we can ride out any potential disasters.    I'd also like to have that 'doomsday' fund high enough to last decades.  I look at that as another measure of whether or not I'm ready to be truly financially independent.

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Why I Do NOT Ride the Bus to Work

TheSimpleDollar recently ran an article about the cost savings of using public transit.   This is a pretty common money saving tip and it often makes a lot of sense.   A transit pass can usually cost less than the insurance on your car.   If you consider the total cost of car ownership then public transit usually wins hands down.  My wife and I spend at least $200 a month on gas and insurance alone and that would buy us monthly all access transit passes.  So its an easy financial argument that taking the bus is cheaper.   But I don't ride the bus.

The key reason I don't ride the bus is this :   It takes too long.

Bus ride : It would take me 47 minutes including a 1/4 mile walk to get to work in the morning. 

Drive my car : I live 2.5 miles from work and it takes me 6 minutes to drive.  

Taking the bus to work would cost me 82 extra minutes per day.  

My wife and I have three cars.   We each have cars we drive daily and I own a classic car that sits in the garage most of the time but I drive once in a while for fun.   We could cut back to 2 cars and sell my daily driver.   I could then theoretically take the bus every day to work.   I figure I would save something around $3000 a year if I got rid of the car.  That figures the cost of extra gas to drive to work only and the cost of insurance and replacement costs.  A bus pass would run me around $100 per month.  So In total I'd save just $1800 if I got rid of my car and took the bus.   However I'd spend about 300 hours extra commuting to work.   Thats about a cost of $6 per hour.  This isn't great nor awful amount.  Its close to minimum wage roughly (after tax).   Financially it makes marginal sense based on the extra time used.  If I was broke and needed the $1800 a year a lot more then it would make more sense.   But for me an extra 82 minutes per workday is not worth the cost savings.

This is not meant to be a criticism of the mass transit service around here.  We actually have very good transit in our metro area.    I live in the suburbs and our bus service is not bad.  It is just that the routes don't happen to coincide with the path between my home and my place of work all that well.    If I happened to work in the center of town then I might take the train to work.   In that situation I'd just take a short 10 minute walk to the train stop from my house and then the train would take me straight into town without any fuss.   The route into town center has really bad traffic during rush hour so the train would likely save me time overall.

I could move closer to work and simply walk to work.   That would however cost a lot of money to sell our home and buy a new home.   It is something I might have considered 14 years ago when I bought my home, but I don't think its a feasible choice right now.   Not to mention I'm pretty sure my wife would veto the idea.

Bottom line : I don't take the bus because it takes too long.
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NFL Ticket Prices

Before the Super Bowl, Barbara Friedberg posted a topical question : FOOTBALL TICKETS; ARE THEY AFFORDABLE?   She happened to look at NY Giants season tickets.    I thought it would be interesting to look at the cost of tickets across the NFL.


I got data from the following sources and the numbers are a mix of 2010 and 2011 figures.   
A USAToday article gave the 2010 ticket prices for each time including the range of retail prices for tickets.
I found average ticket resale  prices at SeatGeek 
I got the attendance % figures for 2011 season off the ESPN website.


Here is a table of all the teams with the minimum and maximum retail ticket prices and the average resale price on the secondary market.  I also list the attendance % for the stadium in question.   100% attendance means the stadium sells out and I'm assuming >100% is due to some sort of flexible seating or something.

NFL Ticket Prices by Team :

	Min	Max	Resale	attendance
Arizona Cardinals	$25	$112.50	$104.80	96.5%
Atlanta Falcons	$55	$125	$115.47	96.8%
Baltimore Ravens	$55	$135	$131.41	100.3%
Buffalo Bills	$40	$80	$50.02	85.8%
Carolina Panthers	$32	$97	$28.20	98.0%
Chicago Bears	$68	$125	$178.51	101.0%
Cincinnati Bengals	$60	$85	$42.31	75.2%
Cleveland Browns	$32	$85	$106.06	90.0%
Dallas Cowboys	$75	$239	$179.49	106.9%
Denver Broncos	$45	$125	$66.18	99.0%
Detroit Lions	$30	$140	$66.05	98.8%
Green Bay Packers	$67	$83	$221.81	96.7%
Houston Texans	$30	$120	$58.29	100.6%
Indianapolis Colts	$38	$126	$162.55	102.9%
Jacksonville Jaguars	$30	$98	$92.74	92.8%
Kansas City Chiefs	$30	$145	$68.14	93.9%
Miami Dolphins	$34	$120	$49.25	81.0%
Minnesota Vikings	$15	$145	$46.38	98.0%
New England Patriots	$65	$169	$160.92	100.0%
New Orleans Saints	$25	$190	$221.13	100.1%
New York Giants	$85	$160	$332.82	96.3%
New York Jets,	$95	$150	$96.93	95.7%
Oakland Raiders	$26	$151	$108.89	94.0%
Philadelphia Eagles	$70	$95	$151.66	102.3%
Pittsburgh Steelers	$64	$98	$143.70	97.0%
San Diego Chargers	$54	$98	$121.02	91.7%
San Francisco 49ers	$29	$149	$27.99	99.3%
Seattle Seahawks	$52	$110	$128.57	99.1%
St. Louis Rams	$25	$140	$151.81	86.3%
Tampa Bay Buccaneers	$25	$115	$80.10	86.2%
Tennessee Titans	$45	$85	$34.78	100.0%
Washington Redskins	$29	$99	$93.60	83.9%

As you can see theres a pretty wide range in prices from team to team.

The cheapest retail tickets are $15 to see the Vikings play.   The most expensive retail prices are $239 at Dallas.   On the resale market the cheapest average is just $27.99 for the 49'ers and the most is $332.82 for the Giants.

I'm sure there are tons of reasons that tickets can vary so much from team to team.    The performance of the team matters of course.  If a team plays well then more people will want to see the games and prices can be higher.   The fan base size can impact the ticket prices as well.   Its easier to sell tickets and charge more in larger cities with a lot of football fans creating higher demand.   Philosophy of the team ownership can matter as well.  I'm assuming some teams are purposefully keeping their 'cheap seats' lower cost so they can ensure that there are tickets available for a reasonable price.  The design of the stadium itself would impact all the ticket prices too.   Some stadiums may have minimum prices that are very cheap but maybe those seats are 'obstructed view' that virtually nobody really wants.  

Resale prices vary a lot as well.   They aren't directly proportional to the retail prices.   Resale prices can be a lot higher if theres high demand and if tickets sell out easily.   I am also guessing that the state laws regulating resale of sporting tickets could cause the price of tickets for some teams to be restrained.  I figure that the attendance % could also impact the ticket prices.  If a stadium sells out every game then its probably harder to get tickets and this could increase the average resale prices.   But if the stadium doesn't fill up then you'd assume its easier to get tickets directly and resale values would not get inflated.



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