Since Friday is TGIF day, the day when people make a mad dash to head off to one place or another, I thought I'd introduce a new Friday Feature that I will continue doing until I get bored or run out of stuff to say.
The Friday feature will be gambling. Every Friday, I will post information about some gambling-type activity. It might be a casino game, it might be a betting opportunity, it might be a "con" game or a street hustle, and it even might be a no-cost gamble, like game shows. Every Friday, I'll post about one type of gambling activity or another, and clue you in to a few things they may not mention in the helpful info for potential gamblers that's provided in the rooms in Vegas.
Why gambling? Because this is a blog about solving financial problems, and there are still a large number of people who think that gambling is their only hope to solve their financial problems.
In reality, they're taking the very money that could potentially get them out of debt--that little bit of extra money each month that could start them on the road to financial freedom--and handing it over to somebody else. A casino, a street hustler, or the state government.
I'm going to be preachy. I'm not going to argue that gambling is a sin. I'm going to try to shed some light into those darker corners the casinos keep special for hiding their dirty little secrets.
I won't post about any specific game this week--I just want to say something general about gambling--something I said once before.
If you gamble, you're probably not doing it to make money, even if you think you are. If it were really about money, you would have given it up after you realized it wasn't making you any.
There's probably some perfectly normal and acceptable craving that gambling fulfills. You might crave risk-taking. You might enjoy the little thrill you get from seeing a strategy you used work at the blackjack table. You might enjoy the endorphins that naturally flow when you put some stress on yourself and take a chance.
So all I'm asking you to think about is whether there might be some other way that you could fulfill that need that didn't consist of--in essence--handing your money over to somebody and then waving goodbye to him.
Friday, February 11, 2005
Thursday, February 10, 2005
A New Lease On Life
Is leasing a car a good idea?
It seems to be, doesn't it? The monthly payments are usually a lot lower, and there's nothing more important than that, is there?
Well, actually, yeah there is. See, the difference is, in essence, this:
When you finish the car-financing process, you own a car. It is yours, free and clear. You can sell it and make some money off of it, you can keep driving it without a car payment, you can do whatever you want with it.
When you finish the leasing process--well, you own nothing. You're done. In fact, you probably still owe even more money, like 12c a mile fees for going over mileage, fees for wear-and-tear on the car, etc.
In other words, you basically just rented. Only not only did you rent, but you financed the rent.
Imagine you wanted an apartment that normally rented for $750 dollars a month. Only instead of just paying $750 a month, your landlord made you guess how long you needed the place. You decided five years. Your total payout at that point would be $45,000.
So instead of just taking the $750 a month from you, the landlord says he'll "loan" you the $45,000 right now to pay the rent for the place for the next five years, and you can pay him back in monthly payments, plus 8% interest.
Your monthly payment would now become $872 a month, and you'd end up paying $9,313 in interest above your regular rental costs.
By "financing" the lease, this is essentially what the car company is doing. Charging you interest on what is, after all, just rent, since they own the car at every point.
Of course, at that point, they're willing to sell you the car--but you're certainly not going to get a bargain for it. Anybody will tell you the total payout for purchasing a car after a lease is greater than if you had just bought the car in the first place.
People think leasing allows the dealer to take the "hit" on initial depreciation. This idea, to put it bluntly, is insane. It's calling the grass blue and the sky green.
Leasing is taking the initial hit on depreciation. You are bearing the entire brunt of it, and not only are you doing it, you're paying interest to do it. When you're getting to the point where the guy who financed would start to see some equity, you're giving that machine up so you can go help the dealer pay the depreciation on the next car you lease.
So why are the nice men at the car dealership so eager to push leasing to you as your best and cheapest option?
I'll bet you can guess.
According to Dave Ramsey, who calls leasing "fleecing":
Car dealers know they can sell you on it, because they know most people think in a month-to-month, paycheck-to-paycheck mindset.
So am I saying you should finance new cars? Am I saying you should even buy new cars?
Not remotely. But that's another post.
It seems to be, doesn't it? The monthly payments are usually a lot lower, and there's nothing more important than that, is there?
Well, actually, yeah there is. See, the difference is, in essence, this:
When you finish the car-financing process, you own a car. It is yours, free and clear. You can sell it and make some money off of it, you can keep driving it without a car payment, you can do whatever you want with it.
When you finish the leasing process--well, you own nothing. You're done. In fact, you probably still owe even more money, like 12c a mile fees for going over mileage, fees for wear-and-tear on the car, etc.
In other words, you basically just rented. Only not only did you rent, but you financed the rent.
Imagine you wanted an apartment that normally rented for $750 dollars a month. Only instead of just paying $750 a month, your landlord made you guess how long you needed the place. You decided five years. Your total payout at that point would be $45,000.
So instead of just taking the $750 a month from you, the landlord says he'll "loan" you the $45,000 right now to pay the rent for the place for the next five years, and you can pay him back in monthly payments, plus 8% interest.
Your monthly payment would now become $872 a month, and you'd end up paying $9,313 in interest above your regular rental costs.
By "financing" the lease, this is essentially what the car company is doing. Charging you interest on what is, after all, just rent, since they own the car at every point.
Of course, at that point, they're willing to sell you the car--but you're certainly not going to get a bargain for it. Anybody will tell you the total payout for purchasing a car after a lease is greater than if you had just bought the car in the first place.
People think leasing allows the dealer to take the "hit" on initial depreciation. This idea, to put it bluntly, is insane. It's calling the grass blue and the sky green.
Leasing is taking the initial hit on depreciation. You are bearing the entire brunt of it, and not only are you doing it, you're paying interest to do it. When you're getting to the point where the guy who financed would start to see some equity, you're giving that machine up so you can go help the dealer pay the depreciation on the next car you lease.
So why are the nice men at the car dealership so eager to push leasing to you as your best and cheapest option?
I'll bet you can guess.
According to Dave Ramsey, who calls leasing "fleecing":
Smart Money magazine quotes the National Auto Dealers Association (NADA) as stating the average new car purchased for cash makes the dealer an $82 profit. When the dealer can get you to finance with them, they sell the financing contract and make an average of $775 per car! But if they can get you to fleece the car, the dealer can sell that fleece to the local bank, or GMAC, Ford Motor Credit, Chrysler Credit, Toyota Credit, etc., for an average of $1,300! The typical car dealer makes their money in the finance office and the shop, not in the sale of new cars.
Car dealers know they can sell you on it, because they know most people think in a month-to-month, paycheck-to-paycheck mindset.
So am I saying you should finance new cars? Am I saying you should even buy new cars?
Not remotely. But that's another post.
Wednesday, February 09, 2005
Trimming The Fat
So what am I doing to make this work?
Well, basically I've given up everything I don't need, both financially and physically.
Financially, these are some things that went:
The Gym (I lift weights at my folk's house and do cardio on the sidewalk and at home)
Cable (I get just local channels now, which is $5 a month from Dish Network)
DSL (Not that I ever had this, but I have $5.95 a month dialup with access4less.net.)
Memberships (I've been a member of a few organizations that required dues. Not anymore.)
Magazine Subscriptions (Got a couple to support a brother-in-law's fundraising effort. Won't be renewing them.)
Eating Out (Maybe a 99c cent chili or something, here and there, or if I have coupons.)
Buying Books (I have full shelves that can show you where I tend to blow those dollars that are burning a hole in my pocket. Thank heaven for libraries.)
Diet-wise, these things are no longer a part of my diet:
Liquid Calories (No milk, no sodas, no punch, no nothing. Not even diet. I used to drink a Sobe a day until one day I noticed the ingredients and nutritional info were the same as for Mountain Dew, and they cost twice as much. Just water for me, thanks.)
Eating Out (I used to think I was doing my body a favor when I'd order two double-doubles instead of getting fries and a soda, since fries had all that starch and fat, and the burger had the protein. Then I did the math.)
Desserts (Believe it or not, this is an easy one for me. I'm not a big sweet eater.)
Fried Foods (This is my tough one. Fried chicken, potato chips--hoo, boy, that's where I run into problems. I still have some, on occasion, when I've figured my day's eating to compensate for the calories)
Seconds (Don't get me wrong. I still eat frequently throughout the day. I just limit myself each time.)
Skipping Meals (Since I know I'm eating fewer calories, I know my body needs the ones I'm allotting it. I'm miserable if I don't have nourishment.)
White Bread (The wholer the wheat, the better.)
Well, basically I've given up everything I don't need, both financially and physically.
Financially, these are some things that went:
The Gym (I lift weights at my folk's house and do cardio on the sidewalk and at home)
Cable (I get just local channels now, which is $5 a month from Dish Network)
DSL (Not that I ever had this, but I have $5.95 a month dialup with access4less.net.)
Memberships (I've been a member of a few organizations that required dues. Not anymore.)
Magazine Subscriptions (Got a couple to support a brother-in-law's fundraising effort. Won't be renewing them.)
Eating Out (Maybe a 99c cent chili or something, here and there, or if I have coupons.)
Buying Books (I have full shelves that can show you where I tend to blow those dollars that are burning a hole in my pocket. Thank heaven for libraries.)
Diet-wise, these things are no longer a part of my diet:
Liquid Calories (No milk, no sodas, no punch, no nothing. Not even diet. I used to drink a Sobe a day until one day I noticed the ingredients and nutritional info were the same as for Mountain Dew, and they cost twice as much. Just water for me, thanks.)
Eating Out (I used to think I was doing my body a favor when I'd order two double-doubles instead of getting fries and a soda, since fries had all that starch and fat, and the burger had the protein. Then I did the math.)
Desserts (Believe it or not, this is an easy one for me. I'm not a big sweet eater.)
Fried Foods (This is my tough one. Fried chicken, potato chips--hoo, boy, that's where I run into problems. I still have some, on occasion, when I've figured my day's eating to compensate for the calories)
Seconds (Don't get me wrong. I still eat frequently throughout the day. I just limit myself each time.)
Skipping Meals (Since I know I'm eating fewer calories, I know my body needs the ones I'm allotting it. I'm miserable if I don't have nourishment.)
White Bread (The wholer the wheat, the better.)
Tuesday, February 08, 2005
Cardio, Ho!: Home Brewin'
Don't have a heart monitor, and looking for a way to tell when you're working hard enough on your cardio, without working too hard?
The new issue of Muscle & Fitness describes the "Talk Test," which was recently validated by researchers at the University of Wisconsin at La Crosse.
As you're doing cardio, recite something simple to yourself on occasion, like the Pledge of Allegiance or nursery rhymes.
For aerobic training, you want to get the point where you're having a little bit of trouble talking, but you can still do it.
For interval, anaerobic training, you want to have intervals of maybe 30 seconds where you pass a bit beyond that point, so you can't really speak. Come down for a minute or two and then go harder for another 30 seconds.
Not only does this give you a good basis for measuring yourself, but it also dispels a myth a lot of people believe about cardio. When people think about cardio, they imagine running like fugitives for fifteen miles in the hot sun, and even the thought of that is too exhausting to deal with.
The fact is, you only have to work as hard it takes you to get your heart rate to a certain point. Fortunately (or unfortunately, depending on how you look at it), if you haven't exercised much in a while, you may not have to work very hard to get to that point.
After a while, it will get easier and you'll have to do more work to reach the same heart rate, but you'll still basically be exerting the same amount of effort--and, when you hit that point, you'll be burning more calories in a shorter amount of time.
But hopefully the idea of walking or jogging at a speed that you're just able to carry on a conversation seems a little less daunting than trying to do a Carl Lewis impression.
The new issue of Muscle & Fitness describes the "Talk Test," which was recently validated by researchers at the University of Wisconsin at La Crosse.
As you're doing cardio, recite something simple to yourself on occasion, like the Pledge of Allegiance or nursery rhymes.
For aerobic training, you want to get the point where you're having a little bit of trouble talking, but you can still do it.
For interval, anaerobic training, you want to have intervals of maybe 30 seconds where you pass a bit beyond that point, so you can't really speak. Come down for a minute or two and then go harder for another 30 seconds.
Not only does this give you a good basis for measuring yourself, but it also dispels a myth a lot of people believe about cardio. When people think about cardio, they imagine running like fugitives for fifteen miles in the hot sun, and even the thought of that is too exhausting to deal with.
The fact is, you only have to work as hard it takes you to get your heart rate to a certain point. Fortunately (or unfortunately, depending on how you look at it), if you haven't exercised much in a while, you may not have to work very hard to get to that point.
After a while, it will get easier and you'll have to do more work to reach the same heart rate, but you'll still basically be exerting the same amount of effort--and, when you hit that point, you'll be burning more calories in a shorter amount of time.
But hopefully the idea of walking or jogging at a speed that you're just able to carry on a conversation seems a little less daunting than trying to do a Carl Lewis impression.
Monday, February 07, 2005
Tale Of The Scale
In honor of my finally getting below 250, I thought I'd post a little link to a page where they're selling a scale like the one I'm using to track my losing.
I know I'm getting my honest weight, because it says so right on the face.
I know I'm getting my honest weight, because it says so right on the face.
Sunday, February 06, 2005
Comic
If you get the newspaper, check out the comic in today's Opus.
I can't find it online anywhere, so it's sort of pointless to post this, but have a look, if you've got it.
And if you know where it's at online, please post it in the comments.
I can't find it online anywhere, so it's sort of pointless to post this, but have a look, if you've got it.
And if you know where it's at online, please post it in the comments.
Sunday Book Review: The Art of Playing "Real Life" Monopoly
Feel like you know absolutely nothing about money?
Stop and think about that for a minute. Money's one of those things you have to deal with all the time, whether you know anything about it or not. If you don't know anything about it, you'll probably fear it. People will use your ignorance against you.
Sooner or later, you should learn something about it. If you can afford to shell out hundreds of dollars a year in interest to credit card companies, do you really think you can't afford to buy a book that can make all this money stuff clear?
The Art Of Playing "Real Life" Monopoly, which is less than 10 bucks from Amazon, does a good job of explaining money and money-type opportunities. Things like stocks, bonds, and real-estate are explained in simple terms. In fact, it's all put into the context of games.
It's always amazed me that people who can understand all the rules to cribbage--or even football--think money's too complicated an issue to figure out.
I will warn you--this book is no frills, no fancy covers. It's printed by some obscure publisher out of Oregon and, as of next year, it will be twenty years old.
But it's still as good a place to get started as any.
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