Author: Mr. Cheap

Frugal

The Great Powdered Milk Experiment

Post author By Mr. Cheap
Post date July 24, 2008
29 Comments on The Great Powdered Milk Experiment

For some reason EVERYONE seems to have had powdered milk when they were a kid and HATED it. I have no idea when or where I tried it, I just remember that it tasted like evil. As I mentioned in a previous post, I’m reading “The Complete Tightwad Gazette”, and one of the articles in it talked about how great powdered milk is.

I definitely agree that milk can be a pain in the butt to keep around. It expires quickly, it’s heavy to lug home and it’s not cheap (it’s around $1.25 / liter in my neck of the woods). In Ontario, milk is often sold in 4L bags (with 3 smaller bags inside a larger outer one: this site explains it). Because there aren’t any good grocery stores near where I’m living, I’ve been buying milk at the convenience store (since it would be hard to carry milk home in addition to my other groceries).

Never one to let my childhood prejudices go unchecked, I grabbed a bag of powered milk and decided to test whether it’s drinkable or not and in what (i.e. I was pretty sure it’d be ok in coffee, but how about straight in a glass or on cereal?). I’m a dairy fanatic (cutting back on cheese when I was trying to lose weight was tough), so I really wasn’t sure what the results would be.

To quickly outline the benefits of powdered milk:

Lasts FOREVER (compared to liquid milk) – the 1 kg bag I got is good until Nov 2009.
Easier to get home (lighter in powdered form)
Easier to stockpile (you don’t have to run to the store when you realize you’re out of milk, you just mix up some more)
Cheaper (it’s about $0.90 / L) – might be possible to buy it for even less if you bought in bulk
You can control the “creaminess” (mix it to taste like skim or 2%, just by adding more or less water)
Great in an emergency (if you can’t buy milk for a few days because of a natural disaster, just mix your own)
Easier to cook with
As nutritious as regular milk (according to some sites I’ve checked on)

The instructions on the bag said to refrigerate after mixing it, but I couldn’t wait and tried a taste after mixing. It was pretty unpleasant (gritty). Undaunted I threw it in the fridge overnight. In the morning I opened the door, crossed my fingers and poured myself a glass. I took a swig and:

It tasted just like the milk I usually drink.

It was actually creamier than I was used to (I drink skim milk). I’ve since tried it on cereal, and in coffee and tea, and so far it tastes great everywhere.

Years ago I switched from 2% to skim, and it was tough at first. When you’re used to something, and you have something subtly different, it’s easy to reject it. However, I quickly adapted to both skim milk and powdered milk.

I wonder if the powdered milk we all had as kids was just served too soon (they didn’t let it sit in the refrigerator)? Maybe kids just have more acute taste buds than adults…

I’d definitely recommend grabbing a bag of powdered milk and seeing if you can switch over. If it’s tough to stomach, try “cutting” (mix them half-and-half) real milk with powdered milk until you get used to it.

Another option for “stockpiling” milk is to buy bags of it and freeze them. Families in the more rural areas where I grew up would sometimes do this (so they wouldn’t have to make trips into town just for milk). Shake the bags after you’ve thawed them to mix the fat back in with the liquid.

Frugal

Coupons

As much as I love to save money, something I’m embarrassed to admit is that I never bother with coupons. I’ll grudgingly submit rebates (I hate them though, just sell me the thing cheaper please), but coupons have always seemed like more trouble then they’re worth.

Every so often you read about a coupon queen and it always makes me suspicious I’m missing out on some big savings. An article I read a while back said to combine coupons that give you money off EACH item, with “buy one, get one free” sales in order to get paid to buy things (i.e. they give you the items AND money).

Recently I got “The Complete Tightwad Gazette” out of the library after a reader recommended it. One suggestion turned me off a bit. “Make potholders out of old blue jeans”. My reaction was “come on! how big of an expense are POTHOLDERS for the typical family!”. Most of the suggestions are reasonable though, and even things like this she’ll often acknowledge don’t really make sense from just a dollar and cents perspective (she makes her kid’s Halloween costumes, even though she agrees that they can be purchased pretty darn cheaply – its about crafting as well as saving money).

She addresses coupons at one point, and her feeling is similar to my own: that they’re a lot of work for debatable savings. She makes the point that many people look at their SAVINGS from coupons, rather than their TOTAL SPENDING. If you save $20 buying name brand products with coupons, but you could have saved $30 buying store brands, are you any further ahead?

Have any of our readers saved big by getting serious about coupons? Can you find situations where you get paid to take things home (or can get them for next to nothing) very often? Has anyone done this in Canada?

Business Ideas

Private Libraries

This is an idea that I *KNOW* other people have implemented, but I still think there’s room to expand on it. I was in Taiwan for about 7 months teaching English years back and they had private “manga” libraries (manga is Japanese comic books like Astroboy). It was a little shop, packed with stacks of comic books and teenage boys (and young men) perched on every conceivable surface reading. They would pay a monthly membership fee which would let them come and read the books in the shop (which would be quite a bit cheaper than buying all the comics themselves).

In “Rich Dad, Poor Dad” Robert Koyosaki relates starting something similar with comic books that had (incorrectly) been reported to the publisher as destroyed.

Any fringe area could be a source of clients for such a venture. Say I started a “real estate investors” private library. I could buy all the real estate books that are available (and track down rare fringe books such as John Reed’s or books of historical interest such as William Nickerson’s “How I Turned $1,000 into Five Million in Real Estate in My Spare Time“). Rent a small location on a side street somewhere in town, then provide memberships to people for $30 / month. They can come in and read all they want, talk to other investing enthusiasts, perhaps attend seminars (either given by other members or local professionals who want to do business with the members, sell snacks to them, etc.

Basically, it would be a special interest library and social club in one. Similar clubs could be set up for anything that has a serious enough local interests (think historical aviation enthusiasts, wool spinners, home brewers, etc). I don’t think such a venture would be wildly lucrative, but if you had an interest in the area, it would probably be enjoyable to set something like this up.

It would be good for the members, as they wouldn’t have to buy their own copies of works they’re interested in reading, plus it would give them a venue for meeting like minded individuals. With $30 / member / month it should reasonably easy to keep the rent paid, have a minimum wage employee serving snacks and keeping an eye on the place and maintaining the book collection (replace damaged books and get new ones that come out). If you wanted to go cheaper you could run the club as a non-profit and encourage members to donate their time and books to keep it running.

For this post, or any other of the wacky business ideas I post, obviously I’m releasing any ownership claims I may have over these ideas. If you like something I post and feel like you can make money from it, please feel free to do so! Let me know when you’re opening and we’ll do a post on it to give you some free advertising.

Book Review

Review: Maxed Out

A while back I watched the documentary “Maxed Out”, and recently finished reading the book by the same name. James Scurlock developed both at the same time, and its interesting to see people profiled in one medium, then learn more about them in the other.

Both works put a personal face on America’s debt crisis by interviewing some of the people who have been hardest hit. Mr. Scurlock talks to mothers of university students who committed suicide when they couldn’t repay their credit card debts, the family of a woman who committed suicide when her husband was about to find out about her massive gambling debts, a soldier in Iraq whose wife is facing bankruptcy back home, debt collectors, pawn brokers and debt experts such as Dave Ramsey and Elizabeth Warren.

At the end of both works you’re left with a pretty bleak view of the financial situation of modern Americans. Its interesting to have a human face put on a problem and you definitely feel bad for all the people the author/director talks to.

The book and movie’s biggest failing, common to works of this nature, is that they rely on anecdotal evidence to convince you of the problem. They say look at poor person Y and how they suffer. Isn’t it awful? Whatever is causing Y must be stopped at all cost! Given the tight lens they can put on that person and their problems, whatever solution is proposed seems quite reasonable (James Scurlock advocates increased oversight of financial institutions and legal restraints on the marketing of credit cards – for the record I don’t think either idea is the worst I’ve ever heard).

The problem with anecdotal evidence is we don’t know if these are isolated cases. We’re left with the idea that their are hordes of people out there just like the ones profiled in the book and movie, but without comprehensive data its hard to be sure.

If someone wants to help ONE SPECIFIC PERSON, sure tell me about them. If you want to make changes to society as a whole, I feel you need to keep the discussion ABOUT society as a whole. Picking isolated cases and making policy changed based on them seems like a dangerous way to go about things to me. The financial institutions could probably make a movie profiling the dastardly deeds of people who committed fraud and leave us drooling at the end for harsher penalties and less legal protection for debtors.

If you’ve read the book or watched the movie, I’d definitely recommend the other if you enjoyed the first (read that sentence a few times until it make sense). If you haven’t seen either, but are interested in the real stories of Americans who have had their lives seriously damaged by debt, I’d recommend both.

Opinion

How to Increase the Odds of Getting Anything You Want

Post author By Mr. Cheap
Post date July 14, 2008
20 Comments on How to Increase the Odds of Getting Anything You Want

In class one time a woman was complaining about how hard it is to recruit participants for her experiment. The professor told her that she just had to approach people who fit the profile she was looking for and ask them. She was clearly uncomfortable with this idea and protested “what if they say no?”.

I couldn’t help myself, so I made the observation that this would give the women in the class insight into what men go through when we’re asking women out on dates. Its an old chestnut, but I think there’s real value in the idea “half of life is showing up”.

Literally related to dating, I truly believe its a numbers game. I think anyone who is unhappily single just needs to go on more dates, and keep going on them until you click with someone. The love of your life isn’t going to break into your apartment to find you! Dating can be exhausting, but its part of the process. A women I worked with met her future husband when they were both waiting in cars for their friends outside a 7-11. He started chatting her up, got her phone number, and years later she was working with me, married to him and had two kids. He decided it was worth taking a chance on talking to the woman in the next car and it paid off for him big time.

The brother of a former professor of mine went to MIT. I asked him if his brother had astronomically high marks, and found out that he didn’t, he’d just gone down to Boston to visit some friends, got talking to people in the media lab, and they liked him well enough that they encouraged him to apply and fast tracked his application.

When I describe my brother’s job, people are amazed (some people have even asked if he won a contest to get the job 🙂 ). When there was an opening, a friend told him about it, he applied and he got it. Similarly I was on a reality TV show / documentary years ago. I enjoyed watching the show, so I applied for the next season and got on it (I joke with people that I’m the most minor celebrity in the world – I’ve been recognized by strangers a total of 3 times).

In the 4 Hour Workweek Tim Ferriss relates giving a talk to a group and offering a deluxe vacation to whoever could connect with the most famous person (all they had to do was get a personal note or e-mail back from them). He wanted to prove the point that if you just make overtures to people, sometimes they’ll respond. Ironically, he didn’t give out the prize because NO ONE applied! Supposedly tons of scholarships aren’t awarded every year because no one applied: everyone assumes they won’t be competitive, and take themselves out of the race before it starts.

I’m certainly not saying that all you have to do is desire something and you’ll get it (talk to “The Secret” nuts for that perspective). We all have desires that we don’t do anything about, and often the hardest part is doing ANYTHING to move us in the direction of achieving it.

Think about the things you’d like out of life, and consider if there’s something you could do in 1 hour that might (no matter how improbably) help you achieve it. Give it a try this week and see what happens!

What experiences have you had where you took a long shot and something big paid off?

Business Ideas

Virtual Mail Drop

This is one idea I was a little hesitant to post, just because I’m positive *someone* is already doing it. My, admittedly shallow, search hasn’t turned them up (although I’ve found very similar things), so I’m going to call it fair game as a wacky business entry.

A mail drop is just a business that you get mail sent to their address, they package it up and forward it on to you. Because I’m always moving, I use my parents’ address for anything important, and they forward me all my mail when it builds up or when something that looks important arrives. I do the same thing with a friend in the US (which is what let me open a Prosper account, build credit in the US, maintain a US bank account, etc).

My “twist” on this concept is that you could allow a completely virtual connection to the end user by providing an address for them, and as mail arrives open and scan it, send them the resulting documents (in a convenient choice of formats), and allow them to e-mail you documents which you’ll then print and mail. This would give the person / business the perfect appearance of operating out of a fixed location, when they could actually be based anywhere in the world.

The processes to send and receive mail would be the core of the business, however you could grow these organically. If you wanted to started with just a PC and a multi-functional printer you could manage a number of clients. Eventually you’d probably want to have industrial scanners, and a fairly sophisticated web portal to let customers view and track their mail.

You might get your postman scratching his head when letters start arriving for “Unit #203” at your house. I’m not totally sure what the laws are surrounding handling other people’s mail, but since companies operate mail drops, there must be a way to do it.

Combine this with a VOIP with a local number, and customers could have a roving office that will seem to be an established brick and mortar.

Opinion

When Store Credit Expires

Post author By Mr. Cheap
Post date July 8, 2008
14 Comments on When Store Credit Expires

When I was a kid a local convenience store offered a reward program that was a sheet that you got stamps to place on it (one stamp for every dollar spent). They said that the reward for a completed sheet would be announced later and started giving them out. Some friends and I started going to the store every night to buy a pop and a bag of chips, mainly to get a sticker on our sheet. I felt like I’d hit the jackpot when a man ahead of me one day looked at a long string of stamps he’d been given with disdain and offered them to me.

My mother found out about the sheet (and the nightly snack purchases) and told me what she thought of the whole thing (my mother is like Judge Judy, except she directs all her contempt at her children instead of white trash). Eventually the day of vindication occurred and they posted the prizes for complete stamps. The best of the bunch was half-price on a loaf of bread. I threw out my completed sheet.

Roger Williams wrote a great (supposedly) true story about his experiences gambling. One of his throw-away comments that I found quite interesting is that he was thankful he lost his first time at the casino, as it gave him a suspicion of gambling (and expectation that he’d lose), even after he’d had subsequent visits where he came out ahead. I think buying stock right before the high of the tech boom was probably good for me as an investor (it has me half expecting drops in value of 75%). This introduction to “reward points” made me suspicious of “Air Miles” and everything that has been offered to me since.

I’ll take lower prices or cash back at the end of the year thanks very much.

I found in most contexts, when a store offers you some sort of credit (up to and including prizes), you’re often the worse off for accepting it. Reward points, and other such loyalty programs, are designed to encourage us to spend more than we otherwise would at that location. Some people beat stores at their own game. Its damn hard to do.

The WORST game they play is when store credit expires. Either you buy a gift certificate or take some sort of foolish points or something, changing currency that can be used everywhere with no expiration date, for something that can only be spent at THAT STORE within a specific period of time. Bizarrely, we sometimes do the exchange on a 1-to-1 basis. I bought an aunt a gift certificate to a spa once and was horrified when they handed me the certificate and it had a 6 month expiry date on it. I asked them why it expired in 6 months, and their only explanation was “we found everyone would rush in to use it before the deadline when it expired after a year”. The solution of REMOVING the expiry date didn’t even occur to them.

A friend of mine has been filling out surveys, and usually does quite well at it. She recently got into a situation where a company gives her points that are expiring soon, and they don’t offer anything she wants. They’re going to lose a customer over it: why would she fill out surveys for them in the future? Its bad for the customer, and bad for them. It doesn’t even cost them anything to show her an ever increasing balance of “points”, and she may have kept filling out surveys hoping good prizes would show up later which makes it especially stupid on their part.

Real Estate

Real Estate Arbitrage

I alluded to this idea months back, but Telly didn’t like it, so I dropped it (whenever possible I like to do what Mike or Telly tell me). Recently its come up with a couple of friends, so I felt it was worth revisiting.

A friend is planning to move to another area, but she has a rent controlled apartment that she rents for $100-$150 below market price. One thing I suggested she consider is hanging on to the apartment and subletting it to someone for closer to market rent. This would let her keep the place (in case she comes back to the area) and make a little cash at the same time. EDIT: A COMMENTER POINTED OUT TO ME THAT THIS IS ILLEGAL IN ONTARIO (look under section 3a) – Its probably worth checking your local laws before doing this.

Another friend rents a professional office but only uses it 4 days a week. As part of her lease, she’s allowed to sublet days. Renting out 3 days from the office would almost pay the monthly rent.

These aren’t really arbitrage situations, since they aren’t risk-free. They ARE situations where you can increase your risk a bit (if anything happens with the subtenant you’re going to be in the middle of it) in exchange for some cold hard cash each month. The nicest thing about the situation is that your income and expense are very clear (and as long as you’re able to promptly get a tenant and they don’t cause you any problems, its cash flow positive). In one sense, you’re buying living (or working) space in bulk and reselling it.

I’ve toyed with the idea of renting a 3 bedroom apartment in Waterloo, taking the smallest room and renting out the other two individually. If you get $450 / room and could rent a 3 bedroom apartment for $1,150, you’d be living quite cheap ($250 / month for your share of the rent). Again, you’re in the middle of it when one of your roommates puts his head through the wall: Welcome to the life of a landlord!

Living with other people isn’t always a joy, but being the person on the lease would give you total control over WHO you were living with.