Author: Mr. Cheap

Categories
Opinion

When Heroes Fall From Grace

Some time back I went to a book signing that Kevin Smith was doing to promote his book “My Boring-Ass Life” . The plan was that I’d tell Kevin that one of his previous books was my first inspiration to lose 70 pounds (it’s true!), he’d ask me for details, and after chatting for a bit he’d invite me to hit the road with him. We’d chat and be best friends forever in between takes for the movies he’d be working on (it’d be like a Clerks movie that would last the rest of my life).

Sadly he was interested that I’d lost weight, but his reaction was simply “70 pounds? That’s great dude!”. Kevin himself (I can use his first name since we’ve met and are now such good friends) has written about how he tries to avoid meeting his heroes, as they often let him down.

More recently I saw a trailer for “Expelled: No Intelligence Allowed“. I was excited that it was a project Ben Stein was associated with, as I find him wicked smart and funny. Once I realized the topic was the “unfair” treatment of people who try to bring religion into scientific curricula I had an unpleasant experience as Mr. Stein (alas, I have yet to meet him) was championing a cause that I find quite kooky.

As Superintendent Chalmers said “Prayer has no place in schools, just like facts have no place in organized religion”.

I have no problem reading articles or watching movies that present an alternative viewpoint from my own (I quite enjoy it). Mrs. Pillars (Mike’s wife) wisely pointed out at one of our get togethers that the best blogs to read are those that present views different from your own: they’re the ones that challenge you and help you grow. I love Michael Moore movies, even though I don’t buy a lot of his views on society. I’m looking forward to watching Expelled (but I’m not going to pay $10 to see it in the theater: it’s a renter).

It wasn’t that the movie was presenting a kooky idea that shook me, it was that Ben Stein was. I know what to expect from Michael Moore, but this took me by surprise. I’ve had similar experiences with bloggers who otherwise seem to be intelligent rationale people, but then they post one thing that seems to be way out in left field (or very poorly thought out). It makes me question their other ideas (past and present). Probably people have come across ideas I espouse and disagreed with them enough to become skeptical of other things I write. Every time we get together Mike says at least once that he’s “shocked at the depths of my ignorance”.

I wasn’t sure if the proper response was to re-think my position on the subject (intelligent design) or re-think my opinion on Ben Stein and the ideas he presents in various mediums.

In the end I came to the decision that Ben Stein is a human being. He has very clear, well founded ideas on many topics. He has goofy ideas on other topics. Different people will put his different ideas into different categories. Its probably good to never accept a source as an absolute authority. How much trust you put into someone’s ideas should be a continual evolution, and some skepticism should always remain.

Have you ever lost faith in a hero when you found out information about them or disagreed with a cause they supported?

Categories
Personal Finance

Everyman’s Guide to $30 / Month in Passive Income

A while back I made reference to $30 / month of passive income and one of my off-line friends was quite interested in more details. Along the same lines as my previous “Everyman’s Guide” posts the rules are that that we’re thinking about ultra-low-risk, very reliable ideas (“get rich quick” schemes aren’t allowed). In previous posts we assumed our “everyman” is poor and unskilled. Unfortunately, passive income usually requires at least one of the two.

Poor and No Skills

  • Sell some junk from around your house each month. Arguably this isn’t passive, but with all the stuff most of us have gathering dust around our place, you could make $30 pretty easily slapping an ad on Craigslist or Kijiji and having someone come by your house to pick it up. I could probably make $30 / month for the next couple years if I started selling off my DVD collection.


Poor and Some Skills

  • Start blogging. I was actually surprised when Mike start monetizing the site. My expectation was that we’d get enough money each month to mail a letter or two, but its been better than that. Its debatable whether this is passive or not, but if you’d blog even without getting paid, then monetizing it can be viewed as passive income (its especially passive for me since Mike does all the work).
  • A generalization of the first point, but sell something that you’re currently creating for fun. Do you knit, sell what you make! Paint? Sell them! Make pottery? Ditto. You probably won’t get anything near minimum wage for your efforts, but if you keep enjoying it for its own sake, getting a bit of cash from it might be ok.
  • Create some product that can sell on its own. Think T-shirts at Cafe Press, a how-to or recipe book at Lulu or create a casual game and sell it through Reflexive Arcade.
  • Buy other people’s junk cheap and re-sell it on Craigslist or Kijiji.
  • Get other people’s broken junk for free, fix it, then re-sell it on Craigslist or Kijiji. Think computers, cars, or bicycles.
  • Property manage OTHER people’s real estate. If real estate is passive, than managing other people’s property should be passive as well. If you found someone who had a condo or small unit they’d probably be willin to pay you 5-10% of the gross rent to show it to potential tenants and be a “first line contact” in case of problems. 5% of $600 is $30 / month.

Not Poor and No Skills

  • Pay off $1,242 on a 29% credit card (saving $30 / month is as good as earning it in my book)
  • Buy $8000 of General Electric stock (currently yielding 4.5%) or $8372 of Royal Bank stock (currently yielding 4.3%)
  • Put $11,804 in 3.05% PC Financial’s Interest Plus Savings Account.
  • Buy real estate that will have cash flow after paying all expenses (including a monthly vacancy and maintenance budget).

Not Poor and Some Skills

  • The world is your oyster, seize it!

Some of these are a stretch as “passive” I’ll admit, but passive income always seems a bit ambiguous.

What ideas do you have (or better yet, things you’ve done) for getting $30 / month in passive income?

Categories
Business Ideas

Gated Community Websites

One of the natural tendencies of anonymous (or semi-anonymous) communication is that people act like jerks (“Trolls” is what the kids call them). I was a SysOp on a BBS (think mini, proto-internets) years ago. There would be message boards (forerunners of the forums we see today) and without fail they would degenerate into a flame war, drive people off, then run smoothly for a while until the next one occurred.

I see the same thing happening with forums and sites that allow comments today. When its small, you get a community of smart people having great discussions (“think Four Pillars” he modestly suggested). When it gets too large, the trolls drive off the decent people and you’re left with Slashdot (I love the posts, can’t stand the comments – I don’t think the people who run it even read them).

This business would be an infrastructure for creating private versions of public websites. Say you like Slashdot, and would like to talk about the articles, but can’t stand the comments on the main site. A mirror of the site would be set up, that would either post the articles in a simple form (strip all the style away from it – you could just format their RSS feed), or would automatically duplicate the look of the site (which wouldn’t be too great of a technical challenge, see below). The comment area would be replaced with a private comment area (on this business’ server). You invite people you like, kick off the idiots, and maintain the community you want to interact with.

Companies could do this to allow them an area to privately and confidentially exchange ideas on topics relevant to the company. Perhaps Microsoft would like to have discussions about articles posted on Slashdot, but don’t want the world at large to be able to view them or participate. Perhaps Investors Group would like to have their own private versions of top personal finance blogs to discuss how to use the ideas presented to market their products, perhaps a research group would like to talk about way to extend research other groups are working on and discussing.

I am not a lawyer (although I play one on the Internet), but my understand is that there’s ways to re-mix websites in this manner that are legal (one option is to have the USER load the content from the original site, then make modifications on his computer. Greasemonkey is an example of something along these lines.

If you were targeting companies, this could be sold as enterprise software. If you were targeting consumers, you could slip your own ads into the pages you were generating, or charge the “host” (the guy who originally sets it up and moderates it) of the private site.

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.

Categories
Personal Finance

An Alternative to Networth

I personally have no problem with it, but many people in the personal finance blogosphere seem to have objections to networth as a measure of wealth (and especially whether to include your principal residence in the calculation, Mike and I even disagree on this one).

While re-reading “The Millionaire Next Door”, one idea they mention in passing is that one view of “your wealth” is the length of time you could go without working (i.e. without receiving a paycheck). I thought this was an intriguing idea, as it factors in your spending and lifestyle as well as your assets.

The calculation would simply be: (assets – liabilities) / monthly spending.

As an example, my assets (after subtracting liabilities), including cash, stocks and my investment condo were worth about $87,318 as of June 1st (I’d also consider this my networth). Since I’m living on about $1300 / month, I could go for about 67 months ($87,318 / $1300), or 5.5 years without working (BIG IF: my living expenses didn’t increase and my assets didn’t decrease in value).

Alternatively, you could use assets / monthly spending (including debt servicing) if your liabilities are greater than your assets (and having a negative number would bum you out).

I especially like this calculation as it favours my approach to life :-). I’d be significantly higher on the networth ranking of PF Bloggers if we factored in lifestyle costs.

Factoring in the principal residence is still a tough issue, as selling it would probably INCREASE your monthly expenses (since you’d have to rent something comparable). *sigh*

How long could you go without receiving a paycheck? What do you think of this measure of wealth compared to networth? Any ideas for what we should call it?

Categories
Business Ideas

A New Form of Dating Site

I’ve used dating sites a fair bit over the last 8 years. Match.com was the big site for a long time, then LavaLife.com got big (a buddy of mine is gearing up to marry a woman he met on there). The two I recommend to friends are OkCupid.com and PlentyOfFish.com (both are free, of course).

For a while I thought collaborative filtering (where things you like help match you up to things people who are similar to you like: think Amazon’s recommendation system) would be an interesting idea for a dating site, but someone beat me to it.

The other idea I’ve had comes from what I think is a massive problem with on-line dating. Dating sites CLEARLY came from a techie’s mind. They aren’t much more than than a web interface slapped on a database. You choose the characteristics you want (red hair, not religious, no kids) hit search and start working through the list of results. This is a great way to order stereo equipment, but is it really the best way to find romance and/or a life partner?

Ok Cupid gets around this by having all users answer questions, rate how important each question is, then match people up algorithmically this way. Better, but it still involves a lot of shifting through people pictures, scanning their profiles and writing lots of messages for every response you get.

The joke of it is, women on these sites often get big egos because so many guys are contacting them, but then they don’t like the guys that they’re meeting. Some try to deal with this by putting a list of “requirements” on their profile for any guy who expects a response to them, and often come off as prima donnas. Guys realize these sites are a numbers game, and start spamming the women. There’s a very low signal to noise ratio for the whole experience.

The dating site *I* would design would be a radical departure from this model. Instead of wrapping a website around a database, the site would be like cocktail party with a VERY attentive host. When you first logged on, there would be minimal information to enter (for some reason people hate filling out profiles, about 1/4 of them whine about not knowing what to write). Say you get started with an e-mail address and password. You’re assigned 3 people to “talk to”. You can enter VERY, VERY minimal filtering criteria (perhaps just sexual orientation and geographic location). You and the three people you’re chatting with are given a question with a very limited space to answer a general question (perhaps “what was the last good movie you saw?”).

The next day you log in and see the responses from the people you’re currently interacting with. You pick the ones you want to keep talking to and reject the ones you’re not interested in. The ones you want to keep talking to and you are then given a more detailed question (or are asked more personal information which is exchanged, such as “how many children do you have?”). The ones you reject are replaced with other people you then exchange a short question with again.

If you get a question you’ve already answered, it resends your previous answer (you can update these if you want), so then you just accept or reject the response you get. Eventually you have chosen to interact with someone enough that the system suggests you exchange e-mail addresses, phone number or meet “off-line”.

Collaborative filtering could be applied to pick the people for you to interact with from the general pool of people.

The big advantage of this system is that I think people don’t really know what they want and are attracted to. With the database search we filter out people we may have taken a real liking to. Perhaps a woman refuses to date men younger than herself, until she starts interacting with a guy who loves the same music she does, has a wicked sense of humour and looks like her favourite contestant on “Survivor”. Perhaps a guy normally would have rejected dating outside his race until he gets into deep exchanges with a woman who shares his values and spiritual outlook. Perhaps two people who are 20 years apart in age find out they’re more compatible with each other than the people they’ve each been dating in their own age range.

This site would obviously be the complete opposite of a meat market. People who can’t write worth a damn and get by on their photo on other sites would be at a disadvantage on this one. It doesn’t seem to me to be the worst thing in the world if the site distilled off the flaky, beautiful people and built itself on a core of people who were serious about finding a partner and willing to put some work into connecting with like-minded people (maybe this would be too small of a niche). There are tons of “meat market” sites for people looking for that.

Dating sites are DIRT cheap to create and run (Plenty of Fish is arguably the number one site and is run by a guy out of his apartment), so the financial risk of starting such a site is pretty low (no need for venture capital or anything). Its a HIGHLY competitive area, so if this approach worked you’d quickly get lots of competition. There definitely is a benefit to being established (more users lead to more matches, which leads to more users -> its winner take all). Like the free sites, I’d be tempted to monetize it via advertising in order to maximize the user base. You could do other things like allow more conversations at higher (paid) membership levels and not canabalize your membership when you started charging.

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.

Categories
Announcements

Saturday Weigh In, Link and Updates

Once more I’m going to try to make Mike’s claim of no more Saturday posts incorrect :-).  What should we put the odds at that we’ll get a Saturday post out of Mike next weekend?

Weight was 171 this week.  I’m back on program, eating healthy again and seeing the results.  I’m *SUCH* a fan of logging information you’re trying to change (be it spending, saving or weight).  Come to think of it, that might make a good post…

I’m just going to give one link this week, and its from an older post. I just came across an interview on Financial Jungle that I really liked.  It was posted back in January, but I missed it somehow.  Good to see the results of someone who has pursued this strategy over the long term.  Of course, his results are no indication of what ours will be, but encouraging nevertheless.

I always love interviews:  bloggers should do more of them!  (I don’t think I’ve ever done one on this blog either, that’s something I should change).

Adapting to life in Kitchener-Waterloo has been going well.  The sushi here is over-priced and inedible (and the Pad Thai is just minimally better), so there may be regular trips to Toronto in the future.  Mr. Sushi was good when I was here before, but its gone downhill.  I can make sushi, but its A LOT of work.  Probably it’d be worth learning how to make a decent Pad Thai…

I got my funding all sorted out, and it should be enough for me to live off of.  It looks like I’ll be clearing $1418.40 / month (before my condo or dividend income) and spending around $1300 (given my current estimated and recent spending).  Tight, but manageable.

2 months ago I made a prediction that Toronto was in a housing slump and it’d be clear to everyone by today.  Its still uncertain (although I still feel the market is cooling), so I guess I’ll call myself wrong on this count.  Please keep this in mind any time I make predictions in the future :-).  I keep counseling friends and family to hold off buying, so I hope I’m not leading them astray.

I’m bouncing around the idea in my noggin’ of putting together a book about living cheap in the big city.  Mike suggested that there might be interest in expanding on some of my “frugal living” posts (I had previously suggested expanding his RESP series to a book and us writing a book together so this might have just been a suggestion to get me to stop bugging him).  I’d probably set it up as a print on demand book from Lulu or some such site.  One of my life goals is to write and publish a book, and this may be the time and topic to do so.  Any thoughts about what the level of interest might be in such a beast?  Would any regular readers consider ordering it?  Do you think there’d be interest from people who don’t read the blog?  Do you think this is a topic that’s already covered well by existing books?  Which ones?  What topics would you be particularly interested in if you did purchase it?  Would another topic (maybe a romance novel about a frugal man and the women who love him) be of interest instead?

Categories
Book Review

Extreme Cheap: Charles Long

People have sometimes commented being impressed (or horrified) at how little I live off of. While I’m flattered, I’m often somewhat confused as I know there are people who live on WAY less than I do. One such person is Charles Long, author of “How to Survive Without a Salary: Learning How to Live the Conserver Lifestyle”.

I read a previous version of this book years ago. Its apparently based on a course he taught, and discusses how he lives without a salaried job. He minimizes his (and his family’s) consumer purchases, and does casual work to bring in money.

Minimizing purchases entails things like wearing hand-me-down clothes, not buying his kids the latest toys, driving old beater cars and things along these lines. One part of his book that made me laugh is he finds out what is fashionable when someone will compliment him on some part of his wardrobe (which he’ll have had for years). The next year he’ll be complimented on something else, and people will give him a pitying look for what they complimented him on the previous year.

In his book he complimented readers who HADN’T bought it (e.g. if they got it from the library). You have to respect his commitment to his lifestyle when he’s praising people who are taking money out of his pocket. I’d borrowed it from a friend, so I patted myself on the back.

Casual work that he does includes things like helping people clear out basements (in exchange for them letting him take anything they don’t want – I got idea #5 from his book). He’ll sell the stuff he gets at flea markets, along with vegetables he grows. He finds that you earn less money from doing a variety of small things that bring in money, but he finds it a much more enjoyable life than doing the same thing for 8 hours every day.

Another comment that made me laugh is that his wife and kids would love to send him out to work 8 hours a day (and buy the various consumer goods they’re interested in), but he just refuses. He discusses how his lifestyle has a lower environmental impact, but that isn’t his motivation.

I certainly admire his lifestyle, and without a doubt he out-cheaps me on every front. I’m not sure if I could give up meals out, trips and having to hustle money to pay the rent and/or utilities every month like he does. I do envy him for kicking the 9-5 lifestyle to the curb and taking the actions to allow him to live life on his own terms.

Categories
Book Review

Retire Rich from Real Estate

51gr7nn0bvl_aa240_.jpgAfter reading the reviews on Million Dollar Journey and Thicken My Wallet of “Retire Rich from Real Estate” by Marc Andersen, I contacted the good people at Sphinx Publishing and asked for a review copy (I didn’t win either of the give-away contests, so it was that or buy one).

I was particularly excited by MDJ’s comment: “some of the content in his book is fairly technical in nature. His conclusions are based on research from national real estate investor surveys, demographics and his own experiences.” Unfortunately I was a little bit disappointed from this perspective, as I found the book wasn’t quite as rigorous as I was hoping for. It certainly wasn’t a “get rich quick” book, and was still worth reading.

I disagreed with Dr. Andersen’s advice to use a property management company. He STRONGLY recommends this. I felt he didn’t provide enough warnings about kick backs and conflicts of interest that are common in property management. He did discuss the conflict from the perspective that PM companies will want to keep tenants happy and the building full rather than maximize profits (to keep complaints from tenants AND owners at a minimum), so you have to insist on policies that accomplish your goals rather than theirs.

I thought he gave an excellent treatment on renting to students (hard on units with few complaints). He also talked about numbers (too many students and he feels you’re guaranteed to get a “party house”) and the differences between men and women (more damage and more complaints respectively). Truth be told I think this gender difference is true of ALL tenants (if you’ll allow me to leave my political correctness at the door), not just students.

He has a section on selling, and provides good advice on FSBO vs. using a Realtor: do it yourself if you can, use a Realtor if you live elsewhere or don’t have the time. He advises not to tell your Realtor anything you don’t want the buyer to know.

I liked his references to the Property Owners and Mangers Survey (POMS). Rather than just using personal experience or “best practices” he’s able to provide statistics gathered from a large number of property owners.

He gives good advice, warning that property values and rents aren’t guaranteed to always go up. The books that say to blindly buy real estate “’cause they’re not making any more of it!” always concern me, so its great that he puts in warnings of some of the risks.

All-in-all, I think this is a great book for beginners who are thinking about buying their first property. I was hoping to get more from the book after reading the two reviews, but found a lot of the material to be information I’d already been exposed to. No book can cover everything, so I imagine a nervous beginning investor would still be nervous after reading this, but hopefully it would address some of their concerns.