Saving money

Don’t expect this week’s gas-out to solve anything

Dave Farquhar Saving money ,

Last Saturday a woman standing in line with my wife and I told us not to buy gas on May 15.

She beamed at her Ford Super Duty pickup. She said she’s tired of paying so much to fill it, and she’s looking forward to sticking it to the gas companies.

The gas companies love people like her.Voluntarily not buying gas on May 15 won’t solve anything because people are just going to buy more gas on May 14 or May 16. My wife sees this effect on her business, on a smaller scale, all the time. On and around April 15, she doesn’t sell much because people just paid their tax bills. So the cashflow dips, but then the customers are back with a vengeance within a couple of weeks. To a lesser extent, the same thing happens on most major holidays.

Business is like that. Every business has at least a few slow days in a year.

Gas-outs have been happening ever since the beginning of Gulf War II. I remember people at work talking about one in 2002, and another one in 2003. I’m sure there have been some since then but my e-mail filters usually catch them.

In case you don’t remember, in April 2002, gas jumped to $1.40-plus a gallon. Then in September of 2003, it surged to $1.70-plus a gallon, then it backed down into $1.50 territory. By mid-2004, we were in $2.00 territory, and it’s been there ever since. Well, except when it’s been $3 a gallon, that is.

Did you ever think $1.40 gas would sound good?

Gas prices are high right now primarily for two reasons. One is investor speculation. You can buy gasoline futures the same way you would buy stocks. And right now it’s a much safer bet that $100 invested in gasoline right now will be worth more in August than the same amount of money invested in, say, Time-Warner stock. So investors with a Las Vegas mentality (and there are lots of them) have been investing in gasoline and, in some cases, crude oil, which is the raw material gasoline is made from.

The second factor is, well, we’ve proven time and again that we’ll pay these high prices. We’ve been paying $2 a gallon for gasoline for three years. When gas prices go up, there’s no incentive for the oil companies to rush to fix the problem that caused prices to go up. We keep buying gas, and they keep raking in record profits year after year.

There are a couple of things we can do to drive gas prices down again. But none of them are short-term fixes.

Basically, we’ve gotta burn less gas. Driving less helps. Instead of running to the store the minute you remember you need something, make a list, plan out a route, and go get everything in one trip. Google Maps has a cool new feature now where you can punch in a destination, then add multiple destinations, and drag them around to try to find the optimal route and cut down on backtracking. Every little bit helps. I use this web site every single weekend. Besides saving me gas, it almost always saves me more time than I end up spending planning the trip in the first place.

But that Super Duty pickup truck is an even bigger part of the problem. Every day when I go to work, I see people driving ever-bigger pickup trucks. Or Chevy Suburbans. Pickup trucks are designed to haul cargo, while Suburbans are designed to haul families. As commuter vehicles, they’re doing neither. At 12 miles per gallon, all they’re really doing is burning a lot of gas.

My Honda Civic burns 1/3 the fuel that a pickup truck burns. It’s not even a hybrid. I get mad when it costs me $36 to fill its tank. But when a pickup truck with a 30-gallon tank is sitting on empty, you’re looking at $90 to fill it.

Most of us only haul stuff on weekends. Given that it costs $30 to rent a U-Haul, you would be better off driving a Civic during the week and renting a U-Haul on the days you need to haul a lot of stuff. Odds are you’ll find you really only need a lot of cargo space a few times a year anyway.

The same logic can apply to large vans and SUVs. A lot of people buy those and justify them by saying they go on a trip once or twice a year and they need to haul a lot of luggage and extra family members. Considering that monster vehicle is costing you anywhere from $30 to $60 a week more to drive than a passenger car costs, it’s costing you about $1,500 a year to drive that thing. And that’s just in gas–it’s not even counting the higher monthly payments. It would be a lot cheaper to rent the thing twice a year. Even renting a 15-passenger van would be cheaper.

And if you rented those vehicles when you needed them and drove a Honda Civic or Toyota Corolla the rest of the time, you’d be burning 1/3 the fuel you’d otherwise burn. Drive a hybrid, and you might be able to drop that down to 1/4 or so.

Imagine what would happen if 100 million households decided to cut the amount of fuel they burn by a third. That would actually stand a chance of causing fuel prices to drop permanently.

I think the government ought to try to sweeten the pot a bit, offering incentives for owning any fuel-efficient vehicle, not just hybrids, in order to encourage this to happen more quickly. But that would make sense, and petroleum companies and most auto manufacturers would oppose it, so I don’t expect it to happen.

But as long as people keep driving huge vehicles with capabilities they only use a handful of times a year, and just complain about sky-high gas prices, those prices will stay high. Complaining alone doesn’t accomplish anything.

I’ve talked economics enough, so if anyone’s still reading, hopefully you’ll indulge me for a few minutes. Every time I turn around, I hear about the problems with the possible solutions to the gasoline. Ethanol, biodiesel, and hybrids all have their problems.

Fine.

Why aren’t we combining them?

The fact is, hybrids do save energy that otherwise gets wasted, and if you drive them correctly, that means better fuel economy. So a gallon of ethanol gets fewer miles per gallon than a gallon of gasoline. Wouldn’t a hybrid ethanol/electric engine more than make up the difference?

Biodiesel isn’t quite as efficient as petroleum diesel. But diesel fuel of any type gets more miles per gallon than gasoline. Why aren’t we building hybrid diesel/electric engines to reap even bigger benefits?

And why are plug-in hybrids only available as hacks by garage tinkerers? If you plug in your hybrid, you can do your local stop-and-go type driving entirely on electricity and not burn a drop of gasoline. Why isn’t this benefit available to the masses?

And why not take it a step further? My car sits in the hot sun in a parking lot for 8 hours a day, five days a week. What if it were a hybrid with solar panels, using those solar panels to charge the battery? Of course the benefit wouldn’t be the same as plugging the car in overnight, but the energy doesn’t cost anything either, aside from the cost of the solar panels.

Maybe there’s a good reason why a diesel/electric hybrid that plugs into the 110 outlet my garage and has solar panels on it doesn’t exist. But the light bulb didn’t exist either, until Thomas Edison decided its benefits outweighed the pain required to invent it.

Maybe there’s someone out there who knows how to build the thing. The world would be a better place if someone would.

"I don’t have enough saved up for repairs on a used car…"

Dave Farquhar Saving money ,

I found myself involved in discussion about cars today. Two people are looking to buy something. One’s leaning toward a used car, while the other is bound and determined to buy a new car.

I know which will be retiring first.The logic behind buying used: There are lots of very low-mileage used cars out there, some of which are even recertified, have the bulk of the factory warranty on them, are eligible for an extended warranty, and cost $4,000-$5,000 less than a new car.

The logic behind buying new: For "only" a few thousand more, you get new car with a 100,000 mile warranty in its entirety.

The problem I have with that logic is that I’ve never sunk $4,000 on repairs into a car. The most expensive repair bill I’ve ever faced was $800 for a blown head gasket, and that was on a car that had well over 100,000 miles on it. If you’re paranoid about repairs, you’re much better off, from a financial standpoint, to buy the used car, figure out what the payments on a new car would be, and sock that money away in a bank account so you have it if and when you ever need it.

The person arguing in favor of a new car also argued a new car is more reliable. But not necessarily. A warranty isn’t a guarantee you won’t have problems. It just means that if the problem you have happens to be covered under the warranty, someone else is footing the bill. And no, most warranties don’t cover everything. Sometimes you get a choice between a power train warranty or a bumper-to-bumper warranty which will cover pretty much everything, but that bumper-to-bumper warranty will be a lot shorter.

And a lemon is a lemon, whether it’s new or old. You’re much better off researching what models are reliable and buying one with a little age to it rather than buying something assuming that it’ll be reliable because it’s new. The last thing you need is to get stuck with a lemon and be making high payments on it. Then you have the worst of all possible worlds.

Car companies have programmed us to think we need new cars all the time. It’s a pretty nice scam they have going. They sell us a car, sell us expensive preventative maintenance on it to keep the warranty good, charge a nice fat interest rate on the loan, and then in 3-4 years they convince us it’s time to trade it in for a new one. Then they get to sell the car for a big markup to some other sucker and the cycle starts all over again. Meanwhile, the consumer has nothing tangible or useful to show for it.

Somehow they’re still losing billions of dollars in spite of having one of the sweetest business models ever concocted, but that’s their problem. It shouldn’t be yours.

With proper maintenance (we’re talking things like regular oil changes here), most cars on the road today can go for 200,000 miles. If you’re concerned about breakdowns, carry a cellular phone at all times and get a AAA membership so you’ll have roadside assistance. The cell phone is something most people have anyway, and the AAA membership is a lot cheaper than perpetually making payments on new cars you don’t need.

That’s why the last car I bought was a Honda Civic with about 26,000 miles on it, and I doubt I’ll ever buy a new car again.

Buy a reliable car that you can pay off quickly, and then you can pay your house and other debts off that much more quickly because you won’t be sinking $400 down a bottomless pit every month for the rest of your life.

How to get Black Friday specials without camping out before the crack of dawn

Dave Farquhar Saving money , , ,

So, tomorrow’s the biggest shopping day of the year, with deals like 2-gig SD cards for digital cameras for $25; Sony Playstation 3s for, well, regular price while they last; 1-gig USB disks for $13, select CDs and DVDs for $9.99 and under, laptops for under $300, and so on.

Did you know you can get some of that stuff without leaving home?Right now I’m buying a USB disk and an SD card for a digital camera from OfficeMax’s web site. They’re actually offering the specials today. Some sites don’t offer the specials until the stroke of midnight. But if you don’t want to fight the crowds and camp out in parking lots, or if you’re like me and–ahem–have to be at work tomorrow (I was going to say “have to work,” but we all know how productive tomorrow’s going to be), it’s still possible to get the deals.

So, hit the newspaper or your favorite Black Friday site (blackfriday.info isn’t a bad place to start), find what you’re after, then start hitting the web. Maybe you’ll have to stay up until midnight tonight, but that’s a lot easier than getting up at 4.

I won’t keep you.

My lawnmower adventures

Dave Farquhar Saving money , , , , , , ,

I’ve had the same lawnmower for the last 4 years or so. Maybe three. I lose count. It’s a piece of junk–worth slightly more, perhaps, than what I paid for it (nothing) but it didn’t work right when I got it, and this mowing season it just fell apart. And besides falling apart–the wheels really were coming off, and I couldn’t find anyplace that sold new ones that fit–it was getting to be impossible to start.

My wife found another one at a yard sale for $25. It didn’t start either, but at least it was in good physical condition and it was only a year old.

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Western Electric rotary phone tips and tricks

Dave Farquhar Saving money , ,
Western Electric rotary phone tips and tricks

I heard on the radio this morning about an 82-year-old who up until two months ago was still paying AT&T $29.10 a month to lease an old Western Electric rotary phone.

Those old Western Electric rotary phones are good. But they aren’t worth $29.10 a month in rental fees.

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A couple more ideas for saving gas

Dave Farquhar Saving money

Chrysler criticized oil companies a couple of weeks back for padding their profits and not trying to do anything to help gas prices. There were some fallacies in their arguments; I’m not even going to try to touch it. I’d rather try to solve the problem: Figure out how to burn less gas. So here are some tricks for saving gas.

I’ve got two cheap tricks that seem to work.You can try the first one the next time you get your oil changed. The last time I changed my oil, the guy at the quick-lube place said my oil looked awfully dark and that I ought to have them flush the oil reservoir (at a price, of course–$15, if I remember right). I said OK. I had the same treatment done on my wife’s car when I had hers changed later the same day.

All I can say is that since having that done, my car gets better gas mileage. Right when I first got it, it could occasionally get 39 miles per gallon on the highway. Gradually, my highway mileage declined. Well, after that treatment, I’m back up in the 39 MPG neighborhood again in my 2002 Honda Civic.

I’m sure that having it done every time is overkill, but it’s not a terribly expensive experiment. I have a 12-gallon tank. If it saves me two miles per gallon (which is about right), that saves me a gallon roughly every second tank of gas ($3). Since I get about 400 miles per tank of gas, that’s 10 fillups between oil changes. So the maintenance will pay for itself if gas prices hold.

I’ve heard about another trick, where people are putting a couple of ounces of acetone into a full tank of gas and reporting better gas mileage and better engine performance. I don’t really want to mess around with acetone. But one of the advocates said something interesting: He claimed that the main ingredient in most fuel treatments is acetone.

Well, I’m pretty sure fuel treatment won’t void my warranty, although I’m not sure about acetone.

I used to giggle at the “Use every tank!” sticker on gas treatment. When gas cost $1.09 a gallon, it didn’t make much sense to spend $1.50 to try to squeeze out another mile or two per gallon. But at $3 a gallon, it makes sense to use at least every other tank.

Here’s a tip: Don’t buy it at the gas station if you can avoid it. It’s cheaper at discount stores. Sometimes I even see it at dollar stores. When the goal is to save money by burning less gas, it doesn’t make sense to overpay for gas treatment.

I think both of these things are worth doing, even if they prove only to be break-even propositions. If everyone did them, it would reduce usage, and when demand falls, price usually goes along with it.

I noticed one other thing yesterday. At my sister-in-law’s, 89 octane gas is actually cheaper than 87, at some stations, because the 87 octane gas is 100% gasoline, while the 89 is 10% ethanol. When there’s a price difference, buy the cheaper one.

Stock up on compact fluorescent lighting

Dave Farquhar Saving money ,

Compact fluorescent (CF) bulbs are on sale at Kmart this week. I bought a bunch.

I’ve been gradually replacing the light bulbs in my house with CFs as they burn out. CFs cost enough that I wasn’t comfortable throwing out 30 perfectly good bulbs and buying all CFs in one hit, especially not at 2002 prices.

I’m glad I took that strategy, because today’s CFs are better and they’re cheaper.Here’s the idea with CFs: a 23-watt CF gives off about as much light as a 100-watt traditional incandescent bulb. But it consumes 77 watts less power. So the 23-watt CF will save you, theoretically, about $40 in energy costs over its lifetime. Plus CFs generally last about 7 years in regular use, so you save the cost of replacing bulbs too. So that $6 light bulb could end up saving you almost 50 bucks.

With energy costs escalating, that savings estimate might actually be a bit low. Also, it doesn’t factor in the heat. If you have 15 100-watt bulbs going in your house, it’s like running a space heater in the summer time. Your air conditioner has to make up the difference. So 15 23-watt CFs generate 77% less heat.

The other thing I’ve noticed now that I’m not living alone anymore is that light bulbs burn out a lot more often. Particularly those vanity globe lights in the bathroom. CF vanity globes last almost three times as long, use less power, and they only cost 50 cents more. My bathrooms had 25-watt bulbs in them All I can find are 11-watt CFs, which are roughly equivalent to 40W. So I’ve been using half as many bulbs, leaving burned-out bulbs in place so the fixtures don’t look funny. The light from eight of those CFs might be blinding.

New CFs light up more quickly than the ones I was buying in 2002, and I think they give off more light now too. The equivalence on the package used to be pretty optimistic; an old 23-watt CF didn’t give off quite as much light as a 100-watt bulb. Today’s bulbs seem to give off comparable light, or sometimes even a bit more.

The light from a CF is still noticeably more blue than incandescent light. My mother in law likes it better. I’m not sure if I like it better or not. But I’ve been mixing CFs with traditional bulbs to tone it down, so I still get quite a bit of savings without dealing with weird light.

And while that 7-year lifespan claim may seem optimistic, I can say this: I’ve been buying CFs for 3 1/2 years now, and I haven’t had to replace one yet. Last year, during those lean times when money was short and I couldn’t really think about the long term, I was buying regular light bulbs again, and some of those have burned out already.

The biggest problem with them is that the dimmer switches in a couple of the rooms make CFs sing. I need to take the dimmer switches out and replace them with regular light switches if I want to use CFs in those rooms.

CFs aren’t the future: I believe the future is LED light bulbs. You can’t buy those at your local Kmart just yet. But white LEDs aren’t cheap enough yet that I would consider them practical. A 2.5W LED bulb gives out comparable light to a 40W incandescent and has a life expectancy of about 17 years, but it costs $30. The equivalent of 60 watts costs about $60. For $10, I’d consider the 2.5W for some applications, but not for $30.

Maybe the technology will be ready when my CFs start burning out. I hope so.

Frequent your local produce market

Dave Farquhar Saving money

There’s a tiny produce market in a former Amoco gas station about a mile from where I live. I’ve driven past it for years without ever so much as stopping in to see what they had.

I wasted a lot of money that way.I read in the excellent book Eat Healthy For $50 a Week that produce markets sell fruits and vegetables for less than grocery stores. Finally last weekend, my wife and I checked out that assertion.

What we found was that the selection wasn’t nearly as great as the produce section of a large grocery store–at least not in March–but the prices were good. They were never any higher than the grocery store, and often the prices were much lower. We got a head of lettuce for 25 cents, for instance. Prices vary. Lettuce was 25 cents on Sunday, and it was 98 cents today. I’m guessing on Sunday he was trying to sell down his inventory, so he cut the price. A bag of apples that usually costs a couple of dollars at the grocery store was a dollar.

It’s probably best to stop at a produce market a few times a week to get a feel for the best day to buy different things. But since I eat a couple of pounds of apples a week, that stand could easily save us a dollar or two a week. That’s $50 or $100 a year. Not exactly chump change. And that’s on a single item.

The other good thing about produce markets is they’re generally locally owned, so you’re supporting your neighbor, and while not everything sold there is going to be locally grown, you can bet anything that’s in season locally will be. Supporting your local economy is always a good thing.

Incidentally, that book has lots of other good ideas in it. My wife and I probably spend more than $50 a week on food, but the ideas in the book probably have saved us $10 a week, minimum, since we read it. That’s $500 a year. That’s half a house payment.

Get your valuable Windows licensing information from Microsoft!

Dave Farquhar Saving money

Do you know what the least expensive way to buy legitimate copies of Windows is? Do you know what the Microsoft Volume Licensing agreement covers?

Of course you don’t. Nobody can figure out Microsoft licensing. But Microsoft wants to send you a FREE! USB flash drive filled with this ultra-valuable information!

And oh, yeah, nothing stops you from erasing this information when you’re done and replacing it with your own, even more priceless data.To get your free drive, visit the Microsoft Mystery Solved page. If you don’t have a Passport account, sign up for a Hotmail account while you’re at it, and when this offer asks for your e-mail address, feed it the Hotmail address.

The drive probably isn’t all that big (I’d be shocked if it’s any bigger than 32 megs) but a free drive is better than no drive, and 32 megs is still useful. I also don’t know if it’s bootable, USB 2.0 capable, or anything else about it. But mine should be here 6-8 weeks from last Friday.

And if supplies run out before you sign up? I predict a glut of Microsoft-branded USB flash drives on Ebay in about two months. It’s just a hunch I have.

How to make more money, but more importantly, keep more of what you earn

Dave Farquhar Saving money , , , , , , , ,

Most GenXers don’t spend their money wisely.

That’s not an insult on my peers; there’s plenty of blame to go around. Yes, we want what our parents had at 50 and we want it at 25, but part of the problem is the images all around us tell us we have to have all that. And if my education is any indication, the only financial education I received in school was an aside in a U.S. History class.

Let’s talk about how to earn more to dig out of financial ruin, and how to stay out.First and foremost, usually when people get to the point where they start typing “earn more money now” or something similar into Google, usually they need immediate help. A year ago, I was in that situation. Talking it over with the higher-ups didn’t help–a few months later I lost my job. Ouch.

I’d be lying to you if I told you I wasn’t bitter. I still am. But in a way it was the best thing that could have happened to me, because it forced me to look for opportunities. I already had been, but it forced me to find others that I probably wouldn’t have, otherwise.

There are a few ways to make a little money but it won’t necessarily happen immediately. If you have a web site, put Google ads on it. Click my link to find out how. Whether you get your first check in a month or in a year depends on how much traffic you get. A faster way to make a little money is to sign up for some online surveys. You won’t get rich, but a dollar here and five bucks there adds up. Sometimes you’ll hit the jackpot and qualify for a $25 survey. That won’t pay the mortgage but it will pay for a few meals.

Here’s another idea: Become a mystery shopper. Google for it. But don’t pay anyone to become a mystery shopper, not when there are legitimate outfits who are willing to pay you. Just keep in mind some of them want references. That’s actually a good thing. It protects your reputation and theirs. Again, it’s not big money, but it’s fairly easy money.

But I’ll be blunt: If you’re in some real trouble and there’s a bill that’s due in two weeks and you can’t pay it, then it’s time to make some sacrifices. Do you have any recent video games? Any collectible CDs or DVDs or VHS tapes? Collectible toys, such as Star Wars figures? There are lots of places that are willing to buy things like that, but to get top dollar you have to sell it yourself. Search eBay, find out what your items or something similar are selling for, and think seriously about liquidating some stuff. Don’t sell your family heirlooms, but if there are things that you can sell now to get you out of trouble and replace later when you’re out of trouble, consider it. While collectibles do increase in value, I’ll let you in on a dirty little secret: Most of them are doing well to keep up with inflation. None will increase as quickly as your debt–not for a sustained period of time, at least. If you have something that is, sell now. The bubble will burst, and you’ll be able to buy it back cheaper later.

And something sobering will happen as you research what some of the things you own are worth. You’ll find a lot of them aren’t worth anywhere near what you paid for them. There’s a lesson there. It’s much better to spend your money on things that hold their value than on things that have bling factor but have no value once the 14-day return period is over.

So when you have money again, spend less on worthless things so you have more to spend on things that do hold their value. A big truck turns heads and lets you bully people on the road (and the ads to some degree encourage it) but can you really afford $40 a week to keep gas in it? Do you have to haul stuff often enough to justify that expense? For the majority of people, it’s much better to drive an economy car and put the money you save on the lower payment and less gas towards paying off debt. Borrow or rent a truck those occasional times when you need to haul something. So skip the Hummer and get a house. You need a house anyway, and while a Hummer will lose value when you go to sell it, a house usually will gain.

Let’s go back to the eBay thing for a minute. Ebay does a lot of good things. Once you’ve sold your stuff, you have the option to go buy more stuff to sell. Buy what you know and only what you know, and only if you can buy low and sell high. If you can’t either double your money or make $10, don’t bother. It’s best to find something that lets you do both. But if you have the ability to do that, you have an asset that stands a chance of turning your financial situation around within a few years.

But it also does something else. It teaches you how to sell. There is no better, more useful ability than how to sell. Not everyone sells merchandise for dollars, but everyone has to sell ideas. If you regularly find that people don’t listen to you, then that’s a good indication that you need more salesmanship ability. Yeah, but those people are idiots, you say. Even better. There are more idiots out there than smart people. Most rich people got rich by getting idiots to buy their junk.

I remember reading a line in a book once that asked me if I could make a better hamburger than McDonald’s. Of course I can. So why did Ray Kroc have more money than me?

By the way, I don’t mean any insult by any of this if people don’t listen to you. There are a lot of people who don’t listen to me either. I need to work on my sales skills as much as anyone.

I did something else before I started selling my stuff. I took a walk. I walked at least once a day. But I didn’t just walk. I was picking up aluminum cans. At 40 cents a pound, an aluminum can is worth about a penny. There’s no way I can pick up 100 cans in an hour, so it’s a lousy way to make money. But nobody else was paying me to do anything else during that time. I made sure I didn’t walk during working hours so I wouldn’t be out if the phone rang with a job opportunity. At least I felt like I was doing a little something. It was very little, but it kept my mind off things so I didn’t get as depressed. It also helped me watch for opportunity. Those cans aren’t worth anything, but the ability to quickly spot things of value from far off is worth something. It made a few house payments when I didn’t have a 40-hour-a-week job.

That’s enough talk about making money. I’ll admit that they’re just general ideas. I can’t give specific advice because something that works where I live might not work 100 miles away. Something else works there. The nice thing about the United States is that there always is an opportunity, no matter where you are. Although politicians seem to be trying their best to destroy that, they can’t destroy opportunities as quickly as you can find them.

I read a study this past week that said 70% of college graduates today can’t balance a checkbook, and when presented with a 20-ounce jar of spaghetti sauce for $1.99 and a 32-ounce jar for $2.49, they don’t know how to figure out which one is the better deal. That should scare some people.

But it occurred to me that I didn’t learn how to do that in school. I learned it from my mother. And I think she learned it from her mother, who must have known it because she managed to raise 11 kids and her husband didn’t have any money.

They don’t teach that kind of thing in school. To me, that’s the only thing math is good for. But I don’t know how old I was when I realized math was useful for that. Before that I thought math was just something teachers used to prove they knew something I didn’t.

There are lots of books out there that try to teach you how to make more money. But a more valuable skill is learning how to spot the good deal. Learn how to calculate the cost per ounce and use it. Carry a calculator with you if that’s what you have to do. There’s no shame in that. A calculator is also a useful tool for keeping a running total of the cost of the stuff in your cart. So it might be a good idea to carry two calculators. They’ll pay for themselves the first time you use them.

And if you have any influence with math teachers, please hand them this word problem. It’s the only good use of math I can think of for a non-engineer:

A television costs $199 at a store two miles from you. The sales tax rate in your town is 5.75%. The same television costs $179 at a store 100 miles away. The sales tax rate in that town is 6%. Your car gets 25 miles to the gallon. Gasoline costs $2.00 a gallon. Is it cheaper to buy the television at the store two miles away, or is it cheaper to buy it 100 miles away?

I’ll conclude with the secret of getting rich. The secret isn’t to make lots of money. It’s human nature to spend more money as soon as you make more money. The secret is to spend less.

I remember when the first of my college classmates bought a house. He told me that at the end of the paper, it told him how much money the loan was for, and how much money he would pay between then and the end of the term. “Am I really going to make that much money?” he asked. Then he laughed it off.

He will. So will I. So will everyone. Most people living in the United States will make a lot more than a million dollars between their first job and retirement. The question is whether Nike and General Motors and Phillip Morris and Coca-Cola get to keep most of it, or whether the wage-earner gets to keep most of it.

I really don’t like the tone of this rant–and it basically is a rant–because it sounds like someone who made it looking back. I’ve only started the journey myself. I started 14 months ago. But my wife and I already have something to show for it. We have no credit card debt, we own two 2002 Honda Civics outright, and if we can keep up our current pace, we will own our house outright in a little over three years. Five years is probably more realistic.

Remember, around 12 months ago there wasn’t enough money to pay the bills. So if I can do it, lots of people can.