Lazy Man and Money

John Oliver Makes Debt Buying Interesting

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This may speak more to the lack of excitement in my life, but one of my favorite parts of the week is watching John Oliver. He’s funny (though sometimes his analogies are too over the top) and he covers important things. It’s surprising how many things just seem wrong with the world. (When I’m the ruler of all mankind, I’ll fix them. You’re welcome.)

For example, it becomes a lot easier to write that you shouldn’t be wasting money on supplements after you watch this:

And you’ll want to watch it, because it’s funny. I’m hoping he’ll cover MLM Scams someday.

In the meantime, his most recent exposé is about the debt buying industry. With more than 3 million views Here it is:

Much of this is stuff that I kind of knew, but I learned a few things as well. It can be important because you never know if you’ll get harassed by debt collectors. I have a theory that everyone has some hidden debt whether it was an overdue library book or Blockbuster video rental fee. I don’t know of a place where you can search for your name and see if you have any outstanding debt, but that would be interesting (if not for all the privacy issues of maintaining such a database.) I didn’t say it was a good theory, just that it is a theory.

If nothing else, perhaps file this away for when you need it?

Finally, I don’t want to give away the ending, but it is really good and worth watching.

“Are You *IN* Debt or Do You *HAVE* Debt?”

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This weekend my wife and I had a date night while the kids slept over their grandparents house. We used the opportunity to go to Foxwoods casino for a special dinner and to see comedian Chris D’Elia. He was a co-star in NBC’s Whitney and Undateable, two shows that I thought were fantastic. I didn’t particularly like them due to D’Elia, but he was the common theme.

I’ll get back to Chris D’Elia and the dinner in a bit, but I found the opening comedian somewhat interesting. I think his name was Mike Lomborg. I wish I could find out for sure, but he wasn’t mentioned in writing anywhere I could find. My best attempts to dig through Google came up empty.

Comedy usually doesn’t pay good money for people at this level. And that’s a point that Mike grabbed onto and ran with. Comedy also works best when it’s a little self-deprecating. Mike explained that having a scooter instead of a car significant diminishes his dating prospects. He also said this (paraphrased) about one of his break-ups:

“She said that she loves me, but she’s not in love with me… That’s like me saying that I have debt, but that I’m not IN debt. So I went to the bank and told them that while I have debt with them, I’m not IN debt with them, so I’m not going to be making any more payments.”

Obviously, that wouldn’t work out very well for Mike’s personal finance situation. I found it funny, so I had to share it.

He had another personal finance joke. This one was about student loans. He mentioned how he wrote a $300 check and somehow still owes the same amount of money (it’s a comedy show, not math, but let’s presume that the interest rate is the reason). He goes on to ask if they are the mafia, because it would be easier if they just broke his legs and called it even.

He warned that this is what happens when you go to college and don’t use the degree. That’s some sage advice from a guy who started out his act with about 25 pointless swears in the first 2 minutes.

Ever see the movie Memento where the movie’s scenes are in reverse and then returns to the present day at the end of the movie? I’m going to steal that idea for this article.

A couple of hours before Mike took the stage, my wife and I sat down for dinner at David Burke’s Prime Steakhouse at Foxwoods. This was not going to be a cheap dinner. However, I hoped to have a steak that I wouldn’t forget. In a way, they delivered on that promise, just not the way I had hoped. I’ll start by saying the service and the table-side Caesar salad were very good. Unfortunately, the 75-day dry aged ribeye was very ordinary… and certainly not of the worth the premium price in my opinion.

Continuing the Memento backwards theme, we were a half-hour early for our reservation. We decided to have a drink at the bar.

The price of wine at David Burke’s Prime was shocking. The cheapest bottle on the menu was $82. I’d say only 20% of the bottles were in two digits. I’d say the median was probably around $125. With four glasses of wine per a bottle, that’s anywhere from $20-$30 a glass. They had good wine, but having been to several of the vineyards, they weren’t extremely premium-priced ones. The interesting thing to me is that if you bought wine by the glass, there were many selections between $18-22. That seems to be the best way to go… if you want wine.

I went with the beer myself. At $7-$8 for most of the drafts, you can have 2-3 before you get to the price of a glass of wine… or around 15-18 drafts for the price of (my estimated) median bottle of wine. (Note: Please don’t try to drink 15-18 beers.)

I don’t think I’ll be back. It’s not because it was bad, but I found David Burke’s Prime Steakhouse was a slightly above average experience for an extreme price.

Before we went to David Burke’s, we stopped to play some craps. I’m a big fan of craps, probably because I know many of the odds. That helps you minimize the house’s advantage… which is the best that most people can hope for.

We proceeded to lose $50 fairly quickly. What are the odds of three straight rolls of 3 on the come out roll? Well, it’s 3/36 for one roll. My math skills are very, very rusty, but I think it’s something like 27 in 46,656… or about 1 in 1725. That’s exactly what happened to us.

We figured that we might as well move on to dinner. Though it was early for our reservation, maybe they’d be able to seat us early. Worse case, we could pass the time to dinner with a drink at the bar.

Now we jump to ten minutes before the Chris D’Elia show starts. I decide to hop on Twitter and see if people in the audience are Tweeting about him. I do a search and see tweets saying that his show Undateable was cancelled by NBC hours before. I figured that this could be very interesting…

… it didn’t get interesting as he didn’t mention it until near the end of his act when someone in the audience brought up Whitney. He said something about his stand-up routine being different from his television stuff. So that was disappointing. He also seemed to be so tired that he’d laugh at his own jokes before he told them. One time he told a joke and ad-libbed something and said, “Hey someone Tweet me that so I remember that.”

This is nitpicky stuff as most of his act was very good. He had two financial jokes (that I remember).

The first was about Wells Fargo greeters. It was funny, but I couldn’t related because: 1) Wells Fargo is barely in New England and 2) Who actually goes in banks? I’ve been inside a bank about 3 times in 5 years… and they were for fairly unusual circumstances such as getting a HELOC for solar power and opening a business account.

The second joke, and I’m not sure this was supposed to be a joke, was D’Elia admitting that he has no idea how to switch banks. He thought that perhaps they give you bags of money with money signs on them when you leave the bank.

I wonder, is this really a problem that people can relate to? I understand that it’s a joke, but it seems like the joke would be funnier if there was basis of truth that people could laugh as if to say, “It’s funny, because it’s true.”

My favorite joke of D’Elia’s was about how we are the stars of our own movies. While we might all agree that he’s the star right now with the literal spotlight on him addressing a large crowd, there’s an entirely different perspective to consider. For some couples, such as ones on a date, he’s just a small part of their evening… he might as well be “Comedian #2.”

Let’s end this rambling article on that sage thought from “Comedian #2.”

P.S. If you are still reading, I’m going to be releasing a special deal exclusively on my mailing list tomorrow. It’s free, so you might want to sign up if you aren’t a member already.

Dig Yourself Out of Debt in 2016

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The following is a guest post by Holly Trillo

If you’ve started off the New Year with a worrying debt, you’re not alone. According to NerdWallet, the average U.S. household with debt carries a balance of $129,579 in total debt, with almost $16,000 of that attributed to credit card debt. If you’re ready to begin ridding yourself of heavy debt and its devastating consequences. Start 2016 off with a bang and use these tips to start eradicating your debt as quickly and as easily as possible.

Establish a Budget Immediately

The first thing you need to do is sit down and create a budget using something like Mint.com. Plan out all your future expenses by using a guide made up from your past few months of spending habits (this is when saving receipts comes in handy). Write down your projected monthly income, and factor in money for an emergency savings fund. Having a budget in mind and established guidelines will help you make better monetary decisions—you’ll definitely need to scale back on spending if you want to make any sort of headway with your debt issues.

Options for Debt Payment

The first hint for paying off your debt is to pay more than the minimum each month, especially if you’re only dealing with a few accounts. Creditors and banks capitalize with each extra month you spend taking to pay them back, and minimum payments will merely prolong your debt struggles, not get you out of them.

If you’re dealing with a multitude of debt accounts, you’ll want to consider the snowball or avalanche methods of making payments. Should you choose to use the avalanche method, your focus will be on paying off the accounts with the highest interest rates first, so as to avoid overpaying as time drags on. If you are feeling overwhelmed with the sheer number of accounts you’re paying off, you might benefit more from the snowball method, in which debtors pay off the smallest account first, checking off account by account. There’s no right way, and you’ll have advice telling you to do both—it’s simply a matter of choosing the method that works for you.

Put the Credit Card Away

Start the year off with a resolution to leave your card at home. It’s easy to use your card for everything, especially if you have a rewards card that gives you points or cash back. This habit can easily plummet you further into debt, and may in fact be the original cause of your current predicament. You’ve likely racked up a hefty amount of bills after the holidays, and your first goal should be to pay these off before even considering using your card in 2016. While you should keep up with any automated payments you have on the card, avoid taking it out on shopping outings. Instead of taking a credit card with you to grocery shop or buy clothing, pull out a sum of cash—when it runs out, your shopping is done.

Luxury Purchases

If you’re in debt, then halt all luxury purchases. Whether its unnecessary travel plans, tickets to events, or new wardrobe purchases, avoid temptation; your top priority must shift to getting rid of your debt. Adding to what you already owe will do you no favors, and the longer it takes to pay it off, the more you will pay in hefty interest rates—meaning your credit card is costing you much more in the long run.

Hire a Professional

If you’re in dire need of financial assistance, or you’re just not sure what the best route for you, consider hiring professional help from a company like Community Tax services. Those trained in finance can help you save on taxes, keep you from digging a bigger hole, and get your debts settled as quickly as possible. As we draw closer to tax season, professionals may also be able to find hidden tax deductions and aid you in getting out of hot water with the IRS.

Debt can be terrifying, and beginning a New Year saddled with payments can make a fresh start seem almost impossible. Incorporating these techniques and tactics into your monetary decisions for the next 12 months can see you greeting January 2017 with open arms.

Some Simple Debt Solutions

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It isn’t often that I write about debt… I’m mostly interested in growing my net worth. I’ve also never been in debt (though I’ve been pretty close). However, a well-rounded personal finance website covers should cover getting out of debt. Also, it is good to get out of your comfort zone every now and again.

So let’s pretend that you are in debt. What are you going to do about it?

Typically people are in debt for one of two reasons: they spend too much or they don’t make enough money. If you spend too much that can usually be broken down into two sub categories. I like to call them “big one-time” and “lots of dimes”:

  • Big One-Time – If you have McMansion, a Mercedes, or a marine vehicle, you might be in debt because of big one-time purchases. The solution could be as simple as moving to a smaller house in a cheaper neighborhood, selling the Mercedes and buying a Mazda Mazda2, or selling your boat. None of that is fun, but being is debt is also not fun.
  • Lots of Dimes – This is the spending of money on many items consistently. These small purchase over a long time add up.
    If you spend $10 a day at lunch, that is something to consider. Some may call it The Latte Factor. If you have Netflix, Hulu, MLB.tv, HBOGo, Showtime, and every other subscription service known to man, you might be spending too many dimes.

The one wild-card that I don’t mention here is medical bills. They can be tough, and you really can’t do too much about them, except try to prevent them with good health practices and insurance. Actually that’s not entirely true. You may be able to negotiate them down.

If spending doesn’t appear to be problem, maybe it is your income. If you aren’t making much money, any spending is going to be a problem. You may need to switch jobs, ask for a raise, or start a side gig. I’d love to give you good ideas on side gigs, but my own dog sitting service from DogVacay is doing zilch. I haven’t had one request yet. (Update: I had one request, but it was during a time that I had blacked out as I am going out town. Can’t catch a break.)

There are a few other things you can do that might help:

  • Lending Club – If you have decent credit, you may be able to get a loan on Lending Club. You’ll want to make sure that you get a good rate.
  • Enlist Some Tools – Ready for Zero is a great tool to get out of debt, but they take their awesomeness to another level by providing a list of competing debt reduction tools.
  • Look into Debt Consolidation – You want to look for two things in debt consolidation (such as Trust Deed Scotland). One is to get a better interest rate than what you are currently paying. The other thing is to make sure that you aren’t moving unsecured debt to secured debt. These fancy terms mean that you don’t want to put your house on the line because you overspent on credit cards.

Do you have experience in getting out of debt? Let me know how you did it in the comments below.

Skint to Mint: How We Messed Up Our Finances and Came Out on Top

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[The following is a guest post from Maria Nedeva, owner of The Money Principle. I met her at Fincon a couple of years ago and we just hit it off. She’s the proverbial smartest person in the room, so I knew she was going to deliver an awesome guest post. When I read it, I thought, “This is exactly how we’ve been able to save hundreds of thousands of dollars over the last decade.”]

I have a story to tell.

But first I want to say ‘respect’ to Lazy Man. I’ve long admired the honesty, passion and moral stance of Lazy Man and Money: love the blog and like chatting to the man behind it. Oh, and I have wanted to guest post on it for about a year: I just never got the guts to ask. This is why I jumped at the opportunity when Lazy Man asked me to guest post. Of course I wasn’t going to miss talking to you.

And as I said, I have a story to tell.

In January 2010 we were approximately $160,000 (£100,000) worth in consumer debt. At the end of January 2015 we have approximately $160,000 (£100,000) worth of liquid savings and investments.

We went from financial ‘suck’ to ‘rock’ in five years.

People ask me how we did it and expect a story of epic struggle and sacrifice.

What they get is the story of a university professor who researched, learned, analysed and worked out hacks.

What they also get is the story of a woman who had had enough of debt and acted on every single hack she worked out.

That’s me!

Maria Nedeva, Owner and Mistress Supreme of The Money Principle.

Now you have to make a choice.

You can either go on The Money Principle and try to find your way around the nearly 800 blog posts I’ve written and published on paying off debt, money management, saving and investing, making money and retirement;

or…

… You can stick around and learn about the three things that helped us turn our finances around.

It’s your call but I’d stay put if I were you.

What paying off debt fast is really about?

People will tell you that paying off your debt, and more generally building wealth, is about living below your means.

Hard to argue with something as obvious.

Still, important as it is, living below your means is not enough. Here are four hacks you’d do well to remember:

Hack 1: To pay off your debt – and to pay it off in record time – you should watch your cash flow as a hawk. Oh, and your single point of focus should be how to increase your cash flow, not your debt.

Hack 2: Don’t strip spending down to bare necessities. Allow yourself some of the things you love and learn how to do them differently and much cheaper.

Hack 3: Learn how to make more money. Don’t wait for your big break. Just start doing something. Check out some ideas about how to make money enough to fill your fridge or to pay your monthly bills on The Money Principle. Trust me; babysitting is not even on the list.

Hack 4: Put every penny of your increased cash flow on your debt. Open a beer and watch it crumble.

That’s it. You have to do a lot of other things as well but these four hacks are what matters; the rest follows.

We paid off $160,000 (£100,000) worth of consumer debt in three years. You can do it too!

What does it mean to be a ‘frugal artist’?

Quite a few of my blogger friends are on the frugality side.

So is much of personal finance in the United Kingdom – frugality is respected and admired while making money and investing is seen by some as an expression of greed.

I never bought into the frugality mind set.

Don’t misunderstand me. I like to make my money go further just as much as the next woman; or man, for that matter. It is just that I like to stretch my dollar without losing quality of life.

And I like to make more dollars so that my money stretches even further.

I know, I’m weird like that.

I came up with the idea of ‘frugal artistry’ and have even written a manifesto for frugal artists.

In a nutshell, ordinary frugality and frugal artistry are different in the following:

Frugality as an art formOrdinary frugality
ThinkingComplex thinking accounting for a number of factors.Absolute thinking considering very limited factors.
ConcernsBroad concerns including quality of life and relationships.Narrow financial concerns.
Time horizonLong term prospects.Short term gains.

Put another way, making our bread saves us close to $50 per month. If it were only for the saving, though, I won’t do it. I do most of our baking because, apart from saving money, it helps me relax and is much healthier than buying bread with a ton of additives. This is what being a frugal artist is about.

Buying a cheap suit can be part of ordinary frugality. It saves you money in the short run but is very wasteful long term. One, cheap suits need to be replaced sooner and you may find that ultimately you spend more. And two, wearing cheap suits can jeopardise a promotion at work.

Becoming a frugal artist is worth it. This way, you can make your money go further without loss of quality of life.

What is the ERR strategy for money management?

The ERR strategy for money management is about three things:

  • Eliminate (waste);
  • Replace (what you do and/or how you do it); and
  • Reduce (consumption).

Using this strategy assumes you already have a budget. If you don’t have one, you should.

I came up with this strategy for money management to bring together three very important sides of keeping your budget as lean as a Hollywood starlet without depriving yourself. It was featured on LifeHacker’s blog Two Cents as a way to practice frugality.

I suppose it is.

Eliminating waste is about two things: not wasting food and not paying for things you no longer use or you can get cheaper without loss of quality. We, for example, cut over $3,000 of monthly spending by buying only what we cook, finding competitively priced insurance and planning our entertainment carefully.

Replacing activities and routines is about becoming a frugal artist. Can you impress your friends by cooking a three course French dinner rather than going to a restaurant? Do you have friends who have a summer house and can you borrow it for couple of weeks? Can you barter for some of the services you need (for example, do the neighbours garden if they babysit your kids twice a week)?

Reducing consumption is easy to understand. We all over-consume. We drive to the gym. We have rooms full of clothes we wear couple of times and discard. We over-eat, over-drink and over-indulge. Do you really need 30 pairs of shoes?

Go try the ERR strategy. You’ll shave off 20%or more of your monthly budget, I guarantee.

Finally…

Now you know my secrets.

Turning your finances around is not hard if:

  • You watch your cash flow and increase it continuously.
  • Teach yourself to be a frugal artist.
  • Apply the ERR strategy for money management twice per year.

You know what is the best part of all this?

Once you make the three things I was telling you about into habits while you are paying off debt these are easy to keep when you finish with the debt. And the wealth just keeps growing.

This is our story.

Care to share yours?