making the most of my time and my moneyRetired To Win

Home Warranties Work For Me

April 2nd, 2014 at 12:10 pm

When you own your own home, you have to be ready for unexpected repair costs at any time. And sometimes that can get expensive. But home warranties have kept my repair costs way down and made it easier to get things fixed.* Here is my 14-year experience.

I learned about home warranties when I bought my second house in 2000. That house came with a home warranty provided by the seller. If any appliance or operating system (plumbing, electrical, etc) in the house failed, the warranty would cover its repair or replacement minus a set $100 deductible. "Nice," I thought, "an extra little peace of mind." And then I promptly pushed the warranty to the back of my mind -- until the gas furnace failed to start up a couple of months later.

Getting a home system fixed isn't just costly; it is also a stressful hassle -- especially when you are new in town, as I was. Who do you call? How do you know they will do a good job? How do you know you are paying a fair price? Getting those questions answered takes time and trouble. And sometimes you have to learn by trial and error. But having the home warranty changed all that for me.

I got my hands on the home warranty booklet, verified that furnace repairs were covered (hurray!), and phoned the repair request number in the booklet. And... presto! In just a couple of minutes, the claims agent gave me a repair approval code number and the contact info for an approved furnace repair company. So I did not have to search for one myself. And the warranty company would guarantee the service outfit's work. I did not have to worry about that problem, either.

So I contacted the service company, gave them my repair approval code number, their technician came and replaced some expensive gizmo in the furnace, and I just paid a $100 deductible. Problem solved. Case closed. And I was sold on home warranty policies.

Since then, I have had home warranty policies on 3 different houses in 3 different towns. I have had many electrical, plumbing and heating problems solved under those warranties. Twice I have had to ask the warranty company to rework a problem, and both times this has been done without argument. And I have had several items replaced outright: a well pump, a large refrigerator, a clothes dryer, an entire set of incoming water lines. In my experience, having a home warranty policy has been a complete success.

Financially I am also satisfied. My annual cost for a home warranty policy has averaged around $500 and fit with no trouble into my $18,000 annual baseline budget**. Aside from the $100 per call deductible, I have been totally shielded from large repair or replacement bills. I have contained my home repair costs and avoided nasty cost surprises.

In short, having a home warranty policy has given me much more control over my expenses. And it has reduced my level of homeowner stress. Home warranty policies have certainly worked for me.

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*Repair It or Replace It?:
http://retired-to-win.savingadvice.com/2014/03/31/repair-it-...
**My $18K Annual Baseline Budget:
http://retired-to-win.savingadvice.com/2013/12/29/my-18k-ann...

Posted in Financial Planning My Way | 2 Comments »

Index To All My Financial Planning Posts

April 1st, 2014 at 12:08 pm

This index consists of a title link list to all my posts in this category. I will edit/update this post each time I publish a new post on a financial planning topic. And I will set/update the order of that list so that it has as much thematic continuity as possible, regardless of when each post was published.

I hope this makes it easy for visitors to my blog to browse and access all my posts in an organized manner. And here is the list.

Index to All My Financial Planning Posts
(Updated October 29, 2014)

When My Financial Freedom Ducks All Fell In a Row:

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Posted in Financial Planning My Way | 1 Comments »

Repair It Or Replace It?

March 31st, 2014 at 08:40 pm

(I now blog weekly on frugal living, personal finance & earlier retirement at:

Text is retiredtowin.com and Link is
retiredtowin.com)

I think a lot of people have a "replace it" mentality that makes them jump into buying instead of fixing far too easily. And that -- particularly over the long run -- can cost one heck of a lot of money. Not me. I always try to repair first. And that saves me lots of money.

I am particularly mindblown whenever someone talks about running off to buy a new car because the one they have needs something like a new transmission. How does it make any sense to prefer spending thousands to replace one's vehicle instead of hundreds to repair it and get it running right again? Not me. I budget $1200 a year to keep my 1996 Dodge Dakota* running reliably. And I avoid the horrendous burden of buying a new(er) car**.

But my "repair first" mindset applies not just to big ticket items. It also works on small stuff; the stuff some people don't even think about before they run off to spend money buying new.

Is the heel of my shoe worn? I go to the cobbler, not the shoe store. Is the kitchen faucet leaking? I go to the hardware store's plumbing parts section, not the section where the new faucets are displayed. Is my computer getting cranky? I take it to the repair depot***, not to the dump on the way to the new computer store. And so on.

Being consistent about this helps me keep my basic living expenses below $15,000 a year****. And it leaves me much more money to either invest for the future or to spend on something really fun.

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*My Frugal 1996 Dakota Keeps On Trucking:
http://retired-to-win.savingadvice.com/2014/03/26/my-frugal-...

**My Oldie-Goldie Thrifty-Nifty Truck:
http://retired-to-win.savingadvice.com/2014/03/25/my-oldie-g...

***A Frugal Tale of Two PCs:
http://retired-to-win.savingadvice.com/2014/01/11/a-frugal-t...

****My $15K Annual Baseline Budget:
http://retired-to-win.savingadvice.com/2013/12/29/my-18k-ann...

Posted in The Frugal Game My Way | 0 Comments »

A Double Fistful of Credit Cards

March 30th, 2014 at 12:28 pm

I just counted and I have 26 active credit cards. Adding the card credit limits, I have a total of $319,900 in available revolving credit. But I pay off my balances every month and don't use credit cards to finance anything. So what is the point of having all those credit cards? Here are six reasons.

Credit cards give me financial flexibility. Like the time I bought a Subaru Forester with a credit card check because my own funds would not become liquid and available for a few days.

Credit cards give me bonus discounts on major purchases. Like the $135 I got last Fall as cashback rewards on a $9000 roofing job.

Credit cards give me a higher FICO credit score (currently 831, according to DiscoverCard). Because having more credit cards showing on-time payment records means getting a higher credit score. And because having higher aggregate available credit compared to your combined owed balances means getting an even higher credit score.

Credit cards give me an additional level of financial reserves.* So that all my reserves do not need to be in cash.* And that frees up more of my cash for investment.

Credit cards give me lower "street risk". Because having them means I carry just $50 in my wallet.

Credit cards give me a last resort "get-out-of-Dodge" option. Because with or without cash, having credit cards means I can go anywhere and do anything at a moment's notice.

Credit cards are not the enemy. Misusing credit cards is the enemy. And I reap a lot of benefits from having credit cards as my friends.

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*Making Over My Emergency Reserves Plan:
http://retired-to-win.savingadvice.com/2014/01/04/making-ove...

Posted in Financial Planning My Way | 5 Comments »

A Discretionary Fund, Not a Discretionary Budget

March 29th, 2014 at 11:16 am

I separate my retirement spending, practically -- and even more importantly psychologically -- into a baseline budget and optional disbursements from a discretionary fund. My baseline budget* covers what I have decided is the minimum lifestyle acceptable to me. The discretionary fund functions as a super flexible pot of money -- distinct from my baseline reserve** -- from which I can pay for goodies, fun, extras, whatever without having to worry about what that spending will do to my budget. Here is how that actually works.

The Baseline Budget
My baseline budget defines my baseline lifestyle. I have chosen to include in that baseline budget living in and up-keeping a country house (instead of a cheaper apartment), having internet access and basic drive-around gas money, eating a meat-and-vegetables diet (instead of a rice and pasta diet), drinking Chivas Regal instead of a cheaper brand, as well as a few other items that distinguish my baseline budget from the minimum budget I could probably survive on. My baseline budget raises my retirement lifestyle from minimal survival to my own personal level of baseline living comfort.

My annual baseline budget* ($18,000) is what I had to have as passive income before I could stop working and retire. I had to keep working until I had crossed that passive income threshold. This is an important point, given that my key financial objective has been to retire as soon as possible in order to free up as much of my remaining life as possible. Life is a zero-sum game, after all. I -- like you and everyone else -- have a set and finite number of days to live. One more day working is inevitably one less day free.

I have taken one more step before turning loose my discretionary spending. Even though my entire baseline budget is covered by my Social Security payments, I sleep better knowing that I have a baseline budget reserve** "just in case." So I have one year's baseline expenses set aside in a savings account. With that in place, I have become very comfortable with my discretionary fund spending.

And here is how a discretionary fund works for me.

My Discretionary Fund
My passive income over and above my $18,000 annual (or $1500 a month) baseline budget gets moved over once a month into a separate discretionary fund bank account. Those discretionary funds accrue there. Whenever I want to do something optional -- book a trip, buy a gadget, hire out something I could otherwise do myself -- I check my discretionary fund balance. If I am comfortable withdrawing from that balance the cost of whatever it is I am considering doing or buying, I go ahead. And I never have to question whether "my budget" can afford the extra cost. Because that is all off budget.

And what if an unexpected unavoidable expense comes up? What if my truck dies... or the well pump goes bad... of I have to travel to see ailing family? Well, my uncommitted discretionary fund stands there ready to bail me out.

This way of handling my finances has had a lot of benefits for me.

Benefits of a Fund Approach
To My Discretionary Spending
First and foremost, separating my wants from my baseline needs*** made it clear to me that I could stop working much sooner than I had thought. So this budgetary approach allowed me to retire years earlier to what I knew I would consider a comfortable baseline lifestyle (for me).

Second, keeping a discretionary fund -- essentially an uncommitted pot of money -- has given me maximum flexibility as to what I can do with that money. If, instead, I had developed a discretionary budget the result could have been becoming committed to recurring expenses just because I could afford them. Expenses such as car payments, time-share payments, club memberships, obligatory annual trips to destination X, and so on. And an expense one becomes committed to can no longer be considered discretionary.

The flip side of this is that keeping my discretionary funds uncommitted allows me to pounce on and take advantage of unexpected opportunities for fun when they present themselves (like grabbing a super bargain of a boat on Craigs List.)

Thirdly, this financial planning method gives me a very solid psychological safety net regarding my financial future. It is a lot less worrisome to think about -- and plan for -- an unexpected drop in passive income when I only have to consider how to continue to cover my baseline budget. On that basis, it would be extremely unlikely that I would have to make any adjustments at all to that budget. Anything else would be, after all, just discretionary.

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*My $18K Annual Baseline Budget:
http://retired-to-win.savingadvice.com/2013/12/29/my-18k-ann...
**Making Over My Emergency Reserves:
http://retired-to-win.savingadvice.com/2014/01/04/making-ove...
***My Financial Independence Key:
http://retired-to-win.savingadvice.com/2013/12/17/my-financi...

Posted in Financial Planning My Way | 6 Comments »

Budgeting By Exception

March 28th, 2014 at 11:38 am

I have said that I have a budget. I have even set it out in detail on a blog post.* But the truth is I do not budget at all! What I do is to keep track of my spending and continuously optimize that spending. That is how I cut my baseline spending down by a third over a period of less than a year. And here is how that works.

Like everyone else, I have fixed expenses and variable expenses. Big expenses and small expenses. Planned expenses and unexpected expenses. And on a rolling basis, I keep reviewing each one of those costs and testing to see if I can reduce it without diminishing my life satisfaction or comfort level. It is what I call budgeting by exception. So to speak, I listen for the squeaky cost wheel and then apply some frugality grease to it. And by continuing to do this, I continue to trim down my spending run rate.

But I do not really have a budget. I think that in itself moderates my spending. I do not go to the grocery store with a limit on how much money I can spend there**. I do not go to the gas station thinking I can only put so much fuel in the tank, or set a limit on how much I can drive my truck***. What I do is to approach every spending decision with a firmly internalized mindset to optimize that spending. Not in order to get the biggest bang I can get for my buck -- but rather to get the bang I will be happy with for the fewest of my bucks.****

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*My $18K Annual Baseline Budget:
http://retired-to-win.savingadvice.com/2013/12/29/my-18k-ann...
**My $50-a-Week Food Expense:
http://retired-to-win.savingadvice.com/2014/03/23/my-50-a-we...
***The Frugal Game -- Errand Bundling:
http://retired-to-win.savingadvice.com/2013/12/26/the-frugal...
****My Financial Independence Key:
http://retired-to-win.savingadvice.com/2013/12/17/my-financi...

Posted in Financial Planning My Way | 0 Comments »

Index to All My Frugal Living Posts

March 27th, 2014 at 11:26 am

This index consists of a title link list to all my posts in this category. I will edit/update this post each time I publish a new post on a frugal living topic. And I will set/update the order of that list so that it has as much thematic continuity as possible, regardless of when each post was published.

I hope this makes it easy for visitors to my blog to browse and access all my posts in an organized manner.

Frugal Living Index
(Updated July 19, 2014)

Frugality As A Way Of Life:

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Posted in The Frugal Game My Way | 5 Comments »

My Frugal 1996 Dakota Keeps On Trucking

March 26th, 2014 at 03:56 pm

I detailed the financial "secret weapon" power of my 1996 Dodge Dakota pickup truck in another post.* I explained how keeping it instead of buying a late-model vehicle every 5 years lowered my retirement "magic number" by $150,000. How its cheaper operating costs lowered that magic number by another $50,000. And how that moved up my financial freedom retirement date by more than SEVEN YEARS.
But is there a "dark side" to an older vehicle like this? Here is why I say "NO".

Some people think older vehicles have to be inefficient... unreliable... unsafe. But no; that does not apply to my truck.

My Dodge Dakota has never broken down on the road. Has never failed to start up. Has never had to be towed. NEVER. And that is 100% reliability. You cannot get any better. A newer, costlier vehicle could not be any more reliable. (And I can thank my by-the-book maintenance program* for that.)

In an accident, I would rather be in my pickup truck than in any car I can think of. Weight, height, bumper strength, material strength would all be in my favor. But the most important factor affecting my driving safety is my risk-averse driving. I do not exceed speed limits (much). I do not drive on ice, snowed-up roads, or in bad rainstorms. I do not have to, remember? I retired seven-plus years earlier than I otherwise could have thanks to my oldie-goldie, thrifty-nifty truck.*

I know someone is going to bring up comfort as a counter-argument to my vehicular frugality. But expense and extravagance are not necessary to attain comfort. I can drive for hours sitting in my Dodge Dakota car seat without stiffness or fatigue. I keep the heater and airconditioner in good repair so temperature control in the truck cab is just fine. And all the while I am driving I am listening to great classical music on a wonderful sound system that I bought on sale and had privately installed at a total cost under $200. So, no. Neither late model, leather, or over-the-top electronics are requirements for comfortable driving. At least not for me.

I do take a hit on fuel efficiency. I get 20 miles per gallon (mpg) and I drive 12,000 miles a year. That is 600 gallons and about $2100 annually . If I had a newer vehicle yielding 30 mpg, I would burn 200 gallons less and save $700 a year. Fair enough. Choosing to keep my 1996 Dodge Dakota means I have had to build up my savings by an extra $14,000 to cover the extra fuel expense. Overall, though, I am still $186,000 ahead on my financial independence magic number. I am still ahead over seven years. And based on a 30-year retirement, that has increased my post-retirement free years by a minimum 25%. All thanks to that little pickup truck.

But my Dakota experience is just one example of how the right vehicle can help set you financially free. If you need a vehicle that can carry a large family, there is a money-saving one for you. If you need a vehicle with cargo capacity, there is one for you. Even if you need a prestige vehicle for your sales/professional career, there is one for you. (I worked as a corporate sales manager in the 1990s, driving clients around in an impeccably maintained 1980 Ford Thunderbird and my clients LOVED it.) The point is: your vehicle is a choice that is either helping to make you financially free faster -- or it is a choice that is dragging you down and binding you to the working world longer and longer.

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*My Oldie-Goldie Thrifty-Nifty Truck:
http://retired-to-win.savingadvice.com/2014/03/25/my-oldie-g...

Posted in The Frugal Game My Way | 0 Comments »

My Oldie-Goldie, Thrifty-Nifty Truck

March 25th, 2014 at 04:11 pm

I drive a 1996 Dodge Dakota pickup truck. It has over 130,000 miles on it. It runs just fine. It is safe, reliable and comfortable. And it is one of the "secret" weapons that sped up my arrival at financial independence. The big deal here is that years ago I consciously made the choice to treat my vehicle as a means of transportation -- and not as a status symbol. That decision lowered my financial independence "magic number" by $150,000 and cut 8 years off my working life. Here is what I mean.

A status symbol vehicle would easily cost me $500 a month in loan payments and depreciation. If I -- like so many others do -- chose to buy such a new vehicle every 5 years so I could maintain that status symbol impression, that $500 a month would become a permanent part of my baseline budget. And funding that hard-wired expense would require an extra $150,000 in retirement savings (based on an annual 4% safe withdrawal rate to generate the $6000 a year needed to cover those costs).

Not having to bank that extra $150,000 has allowed me to retire 6 years sooner. But the financial power of my secret weapon pickup truck does not end there. Operating my Dodge Dakota is thrifty-nifty too. And cut even more time off my working life.

I do not skimp on maintenance or repairs. My truck gets the full Jiffy-Lube treatment every 3000 miles. Every system is maintained according to manufacturer specs. And once a year, a state-mandated full vehicle inspection identifies and leads to the repair of anything that may need it. My cost for all that is $1200 a year. What would that cost be for a late-model status symbol vehicle? Twice that? More?

And let's not forget the cost of insuring a vehicle. The low $5000 or so replacement cost of my Dodge Dakota lowers my premium payments compared to a late-model vehicle.

If my 1996 Dodge Dakota is only saving me $2000 a year on maintenance and insurance, then that has resulted in another $50,000 I did not have to add to my stash before declaring financial independence. And that meant another 2 years I was able to cut off my working life.

Keeping my truck has given me 8 EXTRA YEARS of financially free life. And that is priceless.

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(There are counterarguments, of course: fuel efficiency, safety and reliability. And we will examine all in an upcoming post.)

Posted in The Frugal Game My Way | 8 Comments »

A $5000 No-Guilt Spending Spree!

March 24th, 2014 at 04:08 pm

Covering my basic living expenses with $18,000 a year* leaves me a lot of surplus discretionary money. First, I paid off my debts with it. Next, I bulked up my reserves with it. Then, I built up my retirement stash with it. But now I have no debts. My reserves are covered**. And I have all the retirement funds I think I will need. Still the surplus money keeps coming in and piling up. So I think it is time for a no-guilt spending spree. Here is how I am going to do it.

I actually have to "work" at spending money because I have a strong frugal mindset and a very satisfying basic lifestyle***. I just will not go throwing money around spur-of-the-moment or on whims. That is part of why my discretionary fund is now well over $28,000. I have to plan to spend at least some of that. So I am targeting $5000 for a planned spending spree. Here are the details.

$5000 Spending Spree
[] $750 for a spring break hiking trip because I love hiking****.
[] $1000 for a winter comfort to-do list because I hate winter.
[] $500 to kickstart a local trail improvement volunteer program.
[] $500 to test run astronomy as a new hobby.
[] $1000 to have a blog professionally set up because I am so frustrated at trying to do it myself
[] $500 to have built-in bookcases done because I collect books (and I am feeling too lazy)
[] $750 for big-boy toys: a microscope and a little lake rowboat from Craig's List, plus a new rifle.

Finally, I need to set a deadline for this spending and make myself accountable to meet it. So I am setting June 30 as the deadline for the spending to be done. And I will be putting up a Page on my SavingAdvice blog to make public my progress -- or lack of it -- on this spending.

This is a happy problem, I know. And I think anyone (almost anyone?) can have this happy problem if that person adopts a frugality-without-sacrifice*** living mindset and resolves NOT to deficit-finance an otherwise unaffordable lifestyle.

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*My $18,000 A Year Basic Living Budget:
http://retired-to-win.savingadvice.com/2013/12/29/my-18k-ann...
**Rethinking My Reserves:
http://retired-to-win.savingadvice.com/2014/01/04/making-ove...
***Playing the Frugal Game is Fun:
http://retired-to-win.savingadvice.com/2013/12/14/playing-th...
****I Love Hiking:
http://retired-to-win.savingadvice.com/2013/12/23/my-love-af...

Posted in Financial Planning My Way | 0 Comments »

My $50-a-Week Food Expense

March 23rd, 2014 at 11:17 am

Buying whatever I wanted to buy, I spent $420 on groceries and other food items for the 2 months of January and February. That's an average of $50 per week for 8.4 weeks (59 days). And that's not as a food "budget", where I set out to limit my spending to $50 a week. No. That's $50 a week buying what I wanted and practicing what I call "frugality without sacrifice."*

I kept my costs down by stocking up on storable items when they went on sale, and staying flexible on my weekly choice of vegetables, fruits and other perishables. Since I only ate out 5 times during that two-month period, the $420 I spent paid for 172 meals plus a robust amount of snacking. Here are the details on how I eat on $50 a week.

My breakfasts consist of oatmeal with milk, strawberries and bananas. My lunches include a ham, turkey or salami and cheese sandwich, a pickle, some beer, and fresh apple. Between lunch and dinner, my snacks may be yogurt, apple and cheese, shredded wheat with milk, or toast with peanut butter.

My dinners are heavy on meat and vegetables, low on starches. Neither rice, pasta nor potatoes form part of my usual daily diet. Instead, on my dinner plate you will find either steak, pork chop, country rib, roast beef or chicken along with large helpings of 2 fresh steamed vegetables such as carrots, broccoli, cabbage or cauliflower. To this I add a large mixed salad and fruit for dessert.

After dinner, I will do more sporadic snacking on crackers with cream cheese, chocolate, or more fruit or yogurt. And I will indulge my extravagant coffee habit.

I am a Keurig K-cup coffee fanatic. My absolute favorite is Tully's French Roast, and I will go through 2 K-cups of that coffee each day. These normally cost 64 cents each in packs of 18. But I manage to get them at a hefty discount. By using store coupons and leveraged cashback redemptions**, I keep my cost down to 40 cents per K-cup. And I keep my food expense down to $50 a week without making any sacrifices on what I choose to eat.

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*Playing the Frugal Game is Fun:
http://retired-to-win.savingadvice.com/2013/12/14/playing-th...
**Leveraging Up Cashback Redemptions:
http://retired-to-win.savingadvice.com/2014/03/18/leveraging...

Posted in The Frugal Game My Way | 8 Comments »

Index To All My Investing My Way Posts

March 22nd, 2014 at 05:42 pm

This index consists of a title link list to all my posts in this category. I will edit/update this post each time I publish a new post on an investing topic. And I will set/update the order of that list so that it has as much thematic continuity as possible, regardless of when each post was published.

I hope this makes it easy for visitors to my blog to browse and access all my posts in an organized manner.

All My Investing My Way Posts
(Updated December 21, 2014)

My High Yield, High Risk Investing:

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Posted in Investing My Way | 0 Comments »

A 10% Stock Profit in 5 Weeks!

March 21st, 2014 at 11:26 am

I just sold 1700 shares of oil stock MEMP for a 10% profit in just 5 weeks. I bought the shares on February 4th for $35,323 and sold them on March 10th for $38,855. My realized gain was $3532. That is a 10% profit in 5 weeks -- which is equivalent to a 100% annual profit. This was an excellent example of how my stock price setting strategy works. And here are the details.*

How I decide which stocks to buy I have outlined in my post "A 16% Stock Profit in 6 Months"** and explained in detail on my blog page "How I Invest in Stocks".*** But the profit I made on this stock sale was a function of the limit price I set for the buy. Because one doesn't just have to pick "good" stocks; one also has to pick "good" stock prices. Here is how I did that this time.

On January 31st, MEMP closed at $21.93 per share. That presented a very good opportunity because MEMP's price chart showed strong buying support at $19.50. When I added MEMP's yearly $2.20 dividend to that $19.50 support price, it gave a "safe" buy price of $21.70. (See my blog page "How I Invest in Stocks"*** for the reasoning.) And MEMP's January 31st price was just 1% above that!

So I put in my buy order on February 3rd at a buy price of $20.77, to allow some room for the price to drop due to a quarterly dividend expiring on February 4th. That next day, I caught the stock as its price predictably dropped. In the following 3 days, MEMP's price slumped to $20.43 but held above its 200-day moving average line. And sure enough, MEMP's price started moving up after that. Which set the stage for me to take a 10% "yearly dividend in advance" profit a short time later. (See my blog page "How I Invest in Stocks"*** for that reasoning.)

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*I am not a financial advisor and this post is not stock investment advice.
**"A 16% Stock Profit in 6 Months":http://retired-to-win.savingadvice.com/2014/03/10/a-16-stock...
***"How I Invest in Stocks":http://retired-to-win.savingadvice.com/how-i-invest-in-stock...

Posted in Investing My Way | 0 Comments »

Big Job Estimates Save Me Big Money

March 20th, 2014 at 11:17 am

A few months ago, I had to replace my roof. Some of the estimates I got went as high as $16,500. But by continuing to get estimates based on my "high-low outlier" approach, I was able to get an excellent job done -- with the same materials -- for $8000. Getting these estimates saved me up to $8500.

Getting estimates ALWAYS saves me money. It is critical to the wellbeing of my stash to invest time in getting estimates for major projects. Here is more.

Replacing my roof. Paving my long, long driveway. Installing my whole-house backup generator. Every one of these and many other major home and auto projects could have cost me umpteen thousands more dollars than they did. But they did not -- thanks to my disciplined insistence on getting competing estimates until I find what I call the "low cost outlier" provider.

A case in point is my recent roof replacement. I had to do it or my home insurance company was going to cancel my policy. But even under that kind of pressure, I kept getting estimate after estimate until I knew I had found that low cost outlier. And doing that saved me -- at the very least -- $2500 (and maybe as much as $8500)!

I only sought estimates from "name brand" national home improvement companies and from more local outfits with stellar records on Angie's List. The job quotes were all based on the same brand and type of roof shingle and the same installation process. An apples to apples comparison. And yet the estimates that came in were thousands of dollars apart.

The first 2 estimates were fairly close to each other: $10,500 and $11,300. Then the roofing company with the best record on Angie's List came in at $8000. That looked good. But how would I know that estimate was the low cost outlier deal to take? Answer: I had to keep getting estimates until I found the high cost outlier and could establish the price point around which average quotes clustered.

Sure enough, the next 2 estimates were higher by huge margins: $13,700 and an outrageous $16,500. So there was the high cost outlier answer, and a complete cost-range picture. I signed the $8000 proposal. And saved anywhere from $2500 to $8500, depending on which other quote you look at.

Some of you may be thinking about now: "Well, yeah... Duh!... Of course you get estimates for big jobs like that." I had the same thought and because of it almost did not write this post. But then I asked myself: if everyone gets estimates like I do, how are the high outlier cost companies staying in business? Some people -- maybe lots of people -- must be buying those $13,700 and $16,500 roofs because they assume all companies will charge about the same and therefore just sign a deal with the first outfit they call. So I am writing this post to make it ABSOLUTELY CLEAR that there's a better way that will save you huge amounts of money.

Like when I decided I would not live one more winter season with a 300-foot-long gravel driveway. The 5 estimates I got for asphalting the driveway ranged from $5200 to $12,000. My $5200 paved driveway worked just fine for years until I sold the house.

Like when I needed to get 3 huge trees trimmed and cut away from my house. The 4 estimates I got ranged from $950 to $2400. The arborist-led company with the $950 estimate got the job done right and with no problems.

(And so you can see just how unbelievably outrageous the difference in estimates can be, here is one more real-life example from my personal experience.)

Like when I bought a whole-house Generac back-up generator and needed it and its breaker panel installed. Every company I contacted for an estimate was specifically "approved" by the Generac people to install and work on their generators. Every company was going to have to "pull a permit" from the County and have its finished work pass a County inspection. Again, apples to apples. But my low cost and high cost outliers were worlds apart. Like $500 versus $5000. A ten-fold difference! My $500 installation job was done on time and passed inspection with flying colors. But some poor fool out there somewhere paid five thousand dollars for his installation.

It is great to be frugal on day-to-day expenses and I am. But it is critical to the wellbeing of your stash to invest your time in getting estimates for major projects until you find that low cost outlier that will still do a quality job. Those companies are out there and they can save you thousands!

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Posted in The Frugal Game My Way | 4 Comments »

I Am A TrailWalker Now!

March 19th, 2014 at 01:04 pm

On my recent two-month snowbird trip, I did a lot of trail hiking in Florida State Forests and Parks. At one of those trailheads, I found a brochure on the Florida State TrailWalker Program**. Now, after hiking 10 of the trails on the program list, I am an official Florida Trail Walker -- jacket patch and all. It took a bit of driving around to get to the "right" forests, but I got it done. Here are the details.

From my snowbirding base near Palatka, on January 10th I went 30 miles south to hike Mud Springs Trail (1.7 miles) and John's Landing Trail (4.5 miles) in the Welaka State Forest. On January 15th, I drove north 20 miles to the Etoniah State Forest and hiked the 4.8 mile Longleaf Pine Trail.

A month later, I did a combination 80-mile trip to the Jacksonville area to hike the Adams Wilderness Trail (1.2 miles) in Cary State Forest, plus the Fire and Water Trail (1.0 miles) and Black Creek Trail (5.0 miles) in Jennings State Forest. The very next day, I hiked the 1.8 mile Up and Down Lake Trail at Duval Moore State Forest (which was just 3 miles from my home base).

Finally, on February 20th I drove 75 miles to the Withlacoochee area and hiked the Holly Hammock Trail (2.3 miles) at Ross Prairie State Forest, and the Tidewater (3.0 miles) and Black Prong (3.5 miles) trails in Goethe State Forest.

All in all, I covered 7 Florida State Forests, 10 trails and 28.8 hiking miles. But not "just" for the TrailWalker patch. Have I mentioned I LOVE hiking? (

http://retired-to-win.savingadvice.com/2013/12/23/my-love-af...

**Florida TrailWalker Program: http://www.freshfromflorida.com/Divisions-Offices/Florida-Fo...

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Posted in Retirement Living My Way | 0 Comments »

Leveraging Up Cashback Rewards

March 18th, 2014 at 02:17 pm

I have written before about how I consistently earn 5% cashback rewards on gasoline, grocery, home improvement, restaurant and many other routine expenses by charging them to particular credit cards. But there is more. I have found 2 ways to boost my earned cashback reward by up to 50% at redemption time. Most recently, I have made redemptions that boosted my earned cashback percentage to 6.25% and 7.5%. Here is how.

I just redeemed 20 DiscoverCard cashback dollars for a $25 Bed Bath and Beyond gift card. That is a 25% redemption bonus. Not too long ago, I redeemed 40 DiscoverCard cashback dollars for an $80 Enterprise Rent-A-Car certificate. That is a 50% redemption bonus.

I have learned to never redeem DiscoverCard cashback rewards for straight cash. Instead, I leverage my redemption by obtaining gift cards or vouchers from over a hundred participating companies offering juicy redemption bonuses like the ones I just mentioned. With a hundred-plus outfits to choose from on the Discover redemption website, I always find a useful way to redeem with leverage.

But it is just the opposite when it is time for me to redeem my BankAmerica cashback rewards. Because I have a BankAmerica checking account, anytime I have accrued 20 or more BankAmerica cashback dollars, they can go straight into that checking account. With a 50% bonus on the deposit. I have done it over and over.

I just did it again, turning another 20 BankAmerica cashback dollars into a $30 deposit into my checking account. And isn't that nice?!

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Posted in The Frugal Game My Way | 0 Comments »

Florida Snowbirding the Affordable Way

March 17th, 2014 at 01:35 pm

I just got back to Virginia from 2 months in Florida that only cost me $3967. That is $66 per blissful snow-free day, including 3000 miles of travel and staying at spacious lakeside homes equipped with everything I could have wanted. Even a bike and a rowboat! Here is how I made that happen.

I drove down from Virginia in my 1996 Dodge Dakota at an easy 250-mile-a-day pace, doing 2 Best Western motel nights each way. Booking those rooms 2 weeks ahead saved me 20%, so the 4 room nights cost me $316. For the 3000 miles of driving I did those 2 months, I spent a total of $513 on gasoline by always filling up at discount stations and using my 5% gasoline cashback ChaseCard.

I stayed one month each at 2 lakeside homes in North Central Florida. I had the run of fully equipped houses. Great big televisions and super sound systems to enjoy on rainy days. Decks over the water to lounge and enjoy beautiful sunrises and sunsets. Even a rowboat to explore the lake. By renting the houses by the month and booking one year ahead, my 60 days of housing in Florida cost me $3040 (about $50 a day) with all utilities, taxes and cleaning fees included. Thanks to fully equipped kitchens, I ate great just like I do at home so had no extra food costs for snowbirding (except for 3 times I ate out for a total of $49). And I spent $9 on odds and ends.

Aside from enjoying the snow-free weather, my main activity on sunny days was hiking the trails in Florida State Parks and Forests. I LOVE hiking (

http://retired-to-win.savingadvice.com/2013/12/23/my-love-af...). I did hikes on 32 of my 60 Florida days, covering and covering again 19 trails in 9 parks and forests. By buying a non-resident pass, this cost me just $40 in fees. When the weather was not so good, I watched marathons of cable movies and special shows. And I read.

All in all, I had an excellent time away from winter conditions. I did my regular work via the internet, I hiked my fanny off, I watched a lot of good movies and shows, and I read 2 great military history books. And I did not have to spend an arm and a leg to do it.

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Posted in Retirement Living My Way | 0 Comments »

Raking In Credit Card Cashback

March 11th, 2014 at 04:22 pm

For January and February, I've earned $63 in credit card cashback. The $63 came from getting 5% on groceries, 5% on gas, 5% on restaurants and 1.5% on motels and sundries. Using a different card for each spending category allowed me to max out my earned cashback. If I keep this up the rest of the year, I'll receive almost $400 in 2014 cashback just on ordinary expenses. Here's how I'll do it.

The standard credit card cashback is 1%. But most cards do promotions each quarter that yield 5% cashback on specific spending categories. I take advantage of those promotions and carry those cards. So, for the first 3 months of 2014, I'm carrying a Citicard for 5% on groceries, a Chasecard for 5% on gasoline, a DiscoverCard for 5% on restaurants, and a Bankamericard for 3% at Walmart and 1% on everything else. Come April, the promotions will change and so will the credit cards in my wallet.

Knowing what each card's promotions are is not hard. Most card companies send me emails telling me. In March, I'll do a sweep of all my credit card websites to enroll in the promotions. Then I'll put the corresponding cards in my wallet, along with a note to remind me of which card offers what. And I'll be set to go on raking big cashback on everything I buy.

And I do mean everything. Last year, I put a $9000 roofing job on my DiscoverCard and got $112 in cashback for it. If it's chargeable, I keep my cash in my pocket and make sure I charge it.* Taking all my spending into account, this should earn me well over $500 in cashback this year. And there's a lot I can do with an extra $500!

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* (When the credit card statements come I make sure I pay them off. No interest charges for me!)

Posted in The Frugal Game My Way | 3 Comments »

A 16% Stock Profit in 6 Months!

March 10th, 2014 at 11:46 pm

I just sold 1378 shares of oil stock QRE for a 6-month 11.4% gain. I sold for $25,313 and my cost was $22,751, so I made $2562. Plus I collected $1120 in dividends during the 6 months I held the stock. That gives me a 16.2% total 6-month profit amounting to $3682. This is a perfect example of how my high-yield high-risk investing strategy works when it works. Here's what I do.

I only buy stocks with dividend yields above 8%. To contain my risk, I limit any one stock to 5% or less of my portfolio value. I make sure I understand the company's business model going forward. And I only buy into companies passing these financial health tests: (1) current assets exceed current liabilities, (2) total assets (minus goodwill) exceed long term debt, (3) operating income exceeds interest expense, and (4) operating cash flow exceeds dividends being paid.

I set my buy price based on the price support level showing on the stock's 6-month price chart. For example: if a stock's price support is at $18.25 and its annual dividend is $1.65, I add those 2 numbers together and set a limit buy price of $19.90. And under no circumstances will I buy above that $19.90 limit. That way, if the stock's price drops after I've bought I've got an excellent chance of having the dividends make up for the drop.

Then I sit back and collect my dividends -- unless and until the stock's price rises 10% above my buy price. At that point, I can collect a year's dividends in advance by selling. So I do, which is what I just did with that QRE stock. And having collected that $2562 "dividend gain" in advance has given me a whole year to find another stock to invest the $25,313 cash generated by the sale. Which is what I am doing now.

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For a deeper look at my investing strategy, see my post My High Yield High Risk Investing Strategy at http://retired-to-win.savingadvice.com/2013/12/20/my-high-yi...

(Disclaimer: This strategy works for me, but there's no guarantee that it will work for anyone else. I am not a financial or investment advisor.)

Posted in Investing My Way | 2 Comments »

How I Tamed My Health Care Cost Monster

January 18th, 2014 at 08:11 pm

As I was coming close to turning 65, I knew I had to make some important decisions regarding my health care coverage. For the previous 20 years, I had been riding the coattails of my wife's employment, and paying sometimes nothing and sometimes a token amount for soup-to-nuts health insurance coverage. But no more. The minute I turned 65, I would be dropped like a hot potato from my wife's employer-provided health insurance policy. Goodbye, free ride. Hello, Medicare.

There are plenty of health care cost horror stories on the blogosphere and, like most of you, I had read my share. Health care costs: the bottomless pit... the destroyer of retirement stashes... the car crash waiting to ruin my carefully laid plans for financial independence. What to do?

While all these happy thoughts were progressively rising to my mind's surface more and more often, my mailbox started spewing forth more and more direct (junk) mail packets from insurance companies eager to take my money in exchange for... what? I figured I had better start digging in and find out.

Asking the Right Question
Yes, Medicare would cover a very large part of the front end, but not everything and not without limit. And it would actually cost me?! (Surprise, surprise, I thought all that money deducted from my paychecks for over 40 years would take care of that.) And so, to cover what Medicare would not, I would need a Medicare supplement policy. Or not (!) since I could also opt for a "Medicare Advantage" policy to combine the core Medicare coverage and the supplemental coverage under one insurance roof. Boy, oh boy.

I started making lists and evaluating policies, tabulating who gave what for how much and up to what limit, and yaddy yaddy -- and then it came to me. Too many possible answers. But... what was my question? What problem was I trying to solve? Without nailing that down, no way would I recognize the right answer when I saw it.

The first thing I realized, before even formulating that all-important question, was that I had begun my policy search implicitly trying to replace what I was losing: soup-to-nuts coverage. But did I really need that? Sure, it had been great "fun" to go to doctors and be able to walk out having to co-pay a whole ten bucks (!) for a consultation or an annual physical or anything. Blood tests? Sure! An x-ray? Bring it on! A colonoscopy? Well, if I really had to. What did I care; I wasn't paying for any of it.

But did that mean I could NOT pay for it? Did I really need health insurance to cover that? What did I REALLY need the health insurance to do? And so I had my question. And I also had my answer. I needed a Medicare supplement policy that would keep me from suffering a catastrophic loss of retirement assets as the result of treating an illness or accident.

Coming Up With the Right Answer
So, what would a "catastrophic loss of retirement assets" look like? How much loss would be catastrophic? That number is (of course) different for everybody. But since this is my story, this is my catastrophic loss number: anything above $25,000. What I needed was a policy that would LIMIT MY RISK to that $25,000. And I should search for and select a policy based on how well it would limit my risk, and not on what I could get for my premiums along the way.

By now, you are probably starting to see where I ended up going. To arrive at what I would consider the best overall deal for me, I looked at 2 factors: annual premium and annual out-of-pocket risk. And lo and behold, a High Deductible Plan F Medicare Supplement policy was right up my alley. My premium is $636 a year. My deductible (and therefore my out-of-pocket risk) is $2110 a year. Add to that $1260 in annual Medicare premiums, $180 a year for my prescription plan, and $325 for my annual prescriptions deductible and it all adds up to $4511 a year.

Throw in another $489 in theoretical prescription co-pays a year and we get a worst case scenario of $5000 a year -- which is one hell of a lot less than my $25,000 tolerance limit.

Every year, I'll pay the premiums (which, I realize, will creep up every year). Then I'll be on the hook for the first $2110 of medical expenses -- over and above what Medicare will pay -- plus the first $325 of prescriptions. And after that... ZERO cost for up to 15 months of hospitalization... ZERO cost for 100 days at a nursing facility... ZERO cost for all physicians services... ZERO cost for all laboratory diagnostic services... plus a bunch of prescription medicines thrown in. (Hey! If I'm still racking up medical costs after 15 straight months of this stuff, it's going to be time to pull the plug anyway.)

So I put those policies in place. Then the last piece of the puzzle for me was to set aside $5000 in a savings account specifically intended to cover two years' worth of the $2435 in annual worst-case medical and prescription out-of-pocket annual medical expenses. Case closed! I could stop worrying about my health care coverage, and get on with my financially independent living.

The big epiphany here? I focused on overall worst case scenario risk to come up with a maximum expense number ($5000 a year) I could most certainly live with. And the best news of all? Even if you're under 65 and without Medicare, you could make this work too (like Mr. Money Mustache has done).

What about you? How have you approached health care cost coverage and its costs so that it won't swallow up your stash?

Posted in Financial Planning My Way | 4 Comments »

What Makes Me Sell a Stock?

January 14th, 2014 at 06:40 pm

I invest in dividend-paying stocks. I've explained why in my blog post "Why I Only Buy Dividend Stocks". And I've detailed how I choose which dividend stocks to buy in my blog post "My High-Yield, High-Risk Investing Strategy." But I also have a strategy for when to sell a stock. When to take a profit. And when to evict a company from my portfolio, regardless of profit or loss. Here is that strategy*.

I hold stocks to collect dividend payments. I don't buy a stock expecting to sell it. And as long as I think a company will continue to pay out the dividends I bought it for, I don't anticipate selling its stock "just" because its price has dropped. But enough of an unrealized gain in one of my stocks will cause me to sell it.

That "sell" signal is based on my portfolio's 8% average dividend yield. (Remember, it's a high-yield, high-risk portfolio.) If the price of one of my portfolio's stocks is up 10% from the price I bought that stock for, that unrealized gain is more than the dividends I could collect by holding that stock for an entire year. And collecting that whole year's dividends now, by selling the stock, is guaranteed. So in such a case, I will sell the stock -- at a 10% profit or better -- and collect all of the next year's dividends in advance.

Having sold the position, I then have to find some other company's stock to buy in order to put the sale's cash proceeds back to work. But -- because I've done the equivalent of collecting a year's dividends in advance -- I have plenty of time to patiently wait for a good buying opportunity.

I will also sell off a stock if a change in the company's business model threatens the continued viability of the stock's dividend. And I will sell it, whether at a profit or a loss.

One example: I've sold off a mortgage Real Investment Trust's stock because the company announced a change in its business model to begin buying mortgages not guaranteed by a government agency. Another example: I've sold a tanker company's stock because the company announced a change in its business model to shift from arranging long-term charters for its ships to putting the ships up for short-term "rental" on the shipping spot market.

In both above cases, I judged the business model changes to pose a serious threat to dividend stability. And so I sold off the stocks. But such sales are not prompted by a stock price drop. They are prompted by my perception of a threat to the high-yield side of my investing strategy.

That's my stock selling strategy in a nutshell. I'll take the profit if the sale will give me a year's worth of dividends in advance. And I'll dump the stock of companies making business strategy changes that I believe will threaten their dividends. Otherwise, I ignore stock market movements and the market price of stocks in my portfolio.

What is your stock selling strategy? What do you think of mine?

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*I am not a financial advisor, and I am not recommending that anyone else do what I do. I have written this post to record what I do and to motivate discussion.

Posted in Investing My Way | 0 Comments »

A Frugal Tale of Two PCs

January 11th, 2014 at 10:56 pm

Not too long ago, while in the middle of doing some web-based stock research, my Dell desktop PC's monitor screen went black. Nothing would bring back an image. Hard shut-offs and new starts didn't help any. And then the PC started to just shut down if I even touched any key on the keyboard.

Uh, Oh, I thought. I have to buy a new computer. But I needed web access right then. So I dug out of storage a 2005 Gateway laptop I had not even started up for 2 years and gave it a try. And it worked, up to a point. Some web pages it loaded very slowly. Some it could not load at all. I made do. And thought to myself: I still need to buy a new computer.

So I fell in love with a new Gateway laptop: well equipped with a 2.2 GHz processor, 4 gigabytes of RAM, 500 GB of storage memory plus lots of bells and whistles. It would cost me around $350 including sales tax. That did not sound bad at all. I certainly could afford it.

Then I thought of all the data files trapped in my presumably dead Dell desktop PC. I had to see if I could recover that data. And that thought eventually led me to ending up with 2 fully functional computers for a fraction of what I would have paid for that lovely new Gateway laptop.

The Desktop PC Gets Saved
I phoned my local Staples Tech Center and found out that for $69 I could have my desktop Dell diagnosed to find out what was wrong with it. Then, if I wanted to proceed with the repair, the $69 would be applied to that repair. If I decided not to get that PC fixed, I could apply the $69 to a retrieval of my trapped data. That sounded OK, so I gave the Staples tech the go-ahead.

A day later, I got a good news / bad news phone call from the tech. Bad news: I had a fried video card. Good news: the fried card was an add-on "upgrade" and the desktop Dell still had its functioning original built-in video card. With a couple of mouse clicks, the tech could bypass the fried video card and have the Dell work off the operational original card. No hardware repair would be needed! And no data retrieval would be needed, either, since the Dell would be functional again.

Great news. But could I have the $69 diagnostic fee applied to another service? The answer was "probably" yes. So I went back to the Staples Tech Center with a 1000 Gigabyte hard drive and a set of Windows 7 system discs, both of which I had bought years earlier but not installed. Would the $69 cover installing both? Yes! So, for $69 out of pocket, I ended up with a re-functionalized desktop PC sporting 10 times its previous storage memory and an upgraded operating system.

The Laptop Gets Upgraded
When I went to pick up my rejuvenated desktop Dell, I brought along my 2005 slower-than-molasses laptop (the one I had dug out of storage when this saga began). Could it get a new lease on life at a reasonable cost? Yes, again!

This laptop had a fast-enough 1.4 GHz Intel processor. It just did not have enough RAM installed to handle today's web pages and programs. An upgrade from its current skimpy 500 megabytes of RAM to a maxed out and respectable 2 gigabytes of RAM cost me a grand total of $43 -- installed.

So I was good to go -- with a reactivated desktop PC and an upgraded laptop for a combined total cost of $113. I saved 2 pieces of still-serviceable equipment from the trash/Goodwill/dead storage heap. I avoided the purchase of yet one more electronic gadget. And I saved $234 in the process.

And I Learned Valuable Lessons
Finally, I learned something more about living frugally without sacrifice. I should not be too quick to discard and replace. First, I should try to repair. Second, I should look for a substitute item among the things I already own. Third, if replacement is unavoidable, look first in Craig List (something I did not even think of doing). This time, following these steps saved me over $200. Next time, they might save me much more.

What about you? Do you try to repair before replacing? Have you got a story about a change of approach from replacing to "enabling" that saved you dough? Have you recently resisted the siren call of a new shiny gizmo to spend your hard earned bucks on?

Posted in The Frugal Game My Way | 6 Comments »

Strategy Games: My Rainy Day Passion

January 7th, 2014 at 09:23 pm

One of my retirement living rules is to make sure I have fun every day. I limit my daily have-to-do's schedule so that I'll have a decently sized block of time (4 hours at least) left open for want-to-do activities. If the weather is good, my preferences are to go hiking, ride my bicycle, or take a country road drive surrounded by beautiful scenery. If I'm in the mood, I throw in a camera or a fishing rod and I am golden.

But what if the weather isn't so nice? Outdoor activities are not an option for me if it's raining or snowing, or if the ground is too wet, or if the ground or road is covered with snow. So what do I do then to have some fun?

In my case, I have 3 options: watch a DVD movie from the library or my collection, read one of my collected history books, or play one of my computer strategy war games. The movie watching will entertain me for a couple of hours. The reading can absorb me for a while longer. But the war gaming can so completely draw me in that I've been known to keep at it all night and still be playing when the sun comes up the next day.

What's up with that, you may ask. What's the big attraction? Well, playing a strategy war game commands my complete and intense concentration in an intricate, detailed, many-moving-parts planning process against an adversary (the game's artificial intelligence) that is doing the same thing to stop and best me. Hah! That sounds like hard work, doesn't it? But it's very interesting and exciting to me -- just my cup of tea.

I'm not talking about shoot-them-up games where you guide some individual character around the computer screen blasting away at anything that moves. I'm talking about grand-scope games where you guide and command whole armies and navies around vast operational theaters in concerted military campaigns that may take as long as a year of game days -- or even a lot longer.

Think of being in supreme command of all the actual Allied ground, sea and air forces on December 6, 1941 (War in the Pacific) and going forward from there for the next year to try and stop the Japanese juggernaut. Or put yourself in command of that juggernaut.

Think of being in command of the actual Army of Northern Virginia on July 1, 1863 as it approaches the sleepy Pennsylvania town of Gettysburg and starts encountering signs of federal troop movements (Civil War Generals). Or think of being in command of the actual Roman legions at Cannae in 216 B.C. as you face Carthage's infamous Hannibal and his forces (The Great Battles of Hannibal). Or let fantasy fly and think of being a 16-year-old newly ascended one-town Norwegian jarl in 800 A.D. as you embark on a years-long struggle to unite Norway into a single kingdom and then go on to unite Norway, Sweden and Denmark into a Scandinavian Empire (Vikings). To me, this is FUN STUFF!

Big picture war strategy -- that also demands life-or-death attention to numerous tactical details. This is a big part of the mental challenge I find in playing these games.

If I'm ordering a carrier air strike against an enemy airfield, I have to decide how many fighter planes to send as escorts for the dive bombers and how many to hold back to fly combat air patrol over my taskforce. Get it wrong and my air assault could be repulsed or my carrier could be bombed and sunk in a counterattack.

If I am assembling a longship fleet to raid English towns and abbeys, I've got to decide how many of my Viking warriors to take with me, how many to arm as archers and how many as swordsmen, and how much food to load onboard to feed those warriors and crew (at least until we can resupply by reaching and plundering an abbey). Mess up and we'll be crawling back home, possibly to find our own hometown has been attacked and sacked.

And on and on. Every scenario in every one of these games challenges my mind to consider a multiplicity of tactical variables, to solve many logistical problems, and to apply the best possible planning skills I can muster. Which can all, of course, completely blow up in my face due to the enemy's own counterplans, the fog of war and the fortunes of combat.

In the end, in spite of all the planning, I don't know how anything is going to turn out until it happens. And watching events unfold on the computer screen delivers one exciting jolt of adrenaline after another, with little spontaneous victory dances and slap-your-head bad-news reactions scattered all throughout. Like a big time football game. No. Much better than that because, after all, I'm the head coach aren't I?

How about you? What's your rainy day passion?

Posted in Retirement Living My Way | 2 Comments »

Making Over My Cash & Emergency Reserves Plan

January 5th, 2014 at 06:22 am

Two years of living expenses in a savings account: that's what my cash reserves plan amounted to a few months ago. Then I started planning to write a blog post on the how and why of that plan. And in so doing, completely changed my thinking.

I've gone from a cash reserves plan to an emergency reserves plan -- and that has made a huge difference. Before, my cash reserves consisted of sums in checking, savings and CD accounts amounting to (as I said) 2 years of living expenses. Now, my emergency reserves consist of a 6-month food supply, $2000 cash on hand, gold and silver coins on hand, a year's worth of living expenses in cash deposit accounts, and $270,000 in personal credit lines from 13 different financial institutions. This madeover emergency reserves plan is much much broader in scope than my old cash reserves plan -- yet ties up less money. And the freed money can now be invested for extra income.

This emergency reserves plan works for me thanks to my own individual income and insurance framework. The plan's specifics are not going to be applicable to someone else's financial situation. But the thinking behind the plan may very well open some mental doors worth opening. You decide.

What are my reserves supposed to do?
My reserves are there to give me liquidity and solvency. I don't want to be forced to sell a chunk of my investments (at the wrong time!) because I need the ready cash (liquidity). I don't want to have to do without something I need (such as a car repair or a medical prescription) because I just don't have the money (solvency). I don't want my credit score to plunge because I don't have enough money in my checking accounts to pay my bills when they come due (liquidity and solvency). And I don't want to miss out on an investment/savings/great deal opportunity because I don't have the necessary funds when the opportunity presents itself.

BUT! In the first place, I don't need money in a checking or savings account to deal with some of those situations. And in the second place, there are plenty of situations where money in a checking or savings account (or available balance on a credit card) would not do me one bit of good.

To give myself true (or truer) liquidity and solvency, I've had to revise the elements of my reserve so that I will be covered in a much wider range of possible emergency situations.

What I learned about ready cash from Hurricane Andrew
There are a lot of things I'm never going to forget about the aftermath of Hurricane Andrew in Miami. And one of those things is the little convenience store that reopened up for business a few blocks from me just 2 days after the hurricane hit. There was no electrical power in that entire section of the city, so: no electronic cash registers, no credit card terminals, and no ATMs. Cash was King and prices were inflated. Almost 2 weeks passed before that little store had its electrical power restored. Same thing for the home improvement store half-a-mile in the other direction. If you were out of cash, you were out of luck. And that in a situation where you even had to buy your water because there was nothing coming out of the faucets!

So, Reserves Lesson #1 for me: have a ready cash reserve at home.

But for some people in the areas south of Miami, it was actually worse than that. There were no stores in good enough shape to open and NOTHING to buy. We all saw similar images repeat themselves a few years later in New Orleans. People standing in line for food-and-water handouts from the back of trucks. People completely at the mercy of... whatever.

Something like that can happen anywhere, anytime. Hurricane... earthquake... forest fire... tornado... snow storm... civil disturbance... security lockdown (think Boston)... you name it. The day could come when you have no open stores to go to. For days. If it's really, really bad maybe for weeks. All you'll have is what's in your pantry. (Best to go right through the stuff in your refrigerator the first day, before it all spoils.)

So, Reserves Lesson #2 for me: have a food reserve at home.

What I hope I never learn first hand about the fragility of fiat money
Emergency is the key operating premise in my approach to reserves. And what could be more of a financial emergency than your money becoming worthless, or just disappearing overnight from your accounts?

Last year, Cyprus tried to simply confiscate bank deposits above a certain amount. My Cuban friend lived through a day when -- overnight -- the paper currency was changed and no one was allowed to exchange more than a certain limited amount of the old no-longer-legal-tender money (or bank deposits) for the new paper. That scenario has been played many times in many different countries. And how do I know it won't happen here?

I hope it does not happen. More than that, I don't think it will happen. But even though I don't expect my house to burn down, I have homeowner's insurance in case the unthinkable happens. Even though I don't expect my vehicle to get totaled on the highway by some tipsy driver, I have automobile insurance in case the unthinkable happens. And, even though I don't expect some currency-collapsing crisis to happen here, I think I better have at least a little insurance in case the unthinkable happens.

So, Reserves Lesson #3 for me: have a modest stash of gold and silver coins at home. (And if nothing happens, it will just have been another investment.)

The rest is just a matter of hedging my cash flow
As I mentioned earlier, this emergency reserves plan works for me thanks to my own individual income and insurance framework. And that framework makes it very unlikely that I could get caught in a longterm cash flow crunch.

My Social Security income covers 110% of my basic living expenses. Dividends and interest income from my investment portfolio covers 180% of my basic living expenses. That means that my retirement income could collapse by 60% and I still would not have to fight Sassy, Scampy and Bear for their canned cat food. I cannot see a solvency issue in my horizon; just the possibility of a liquidity one.

And that is where my credit lines come in as a component of my emergency reserves plan. Except for taxes, electricity, and insurance, all my expenses could be paid by credit card if necessary. Having credit lines from 13 different banks gives me a way to bridge any short term lack of liquidity for more than half of my living expenses without having to be dependent on just one or two lenders. I can always pay off any borrowed sums with future cash flow from my Social Security and/or my investment income.

The other "cash only" half of my basic living expenses needs to be covered by, well, cash. So I have hedged that with a year's worth of those expenses in a checking and a savings account.

So, Reserves Lessons #4 and #5 for me: keep a diversified mix of credit lines open, and keep enough money in bank deposits to cover your non-chargeable expenses for a reasonably long while.

The only possible fly that could still be left in the ointment here would be unexpected medical expenses. But I think I have covered that too. I've focused on overall worst case medical expense risk to come up with a maximum possible expense number ($5000 a year) that I could most certainly handle under my emergency reserves plan.

So, more emergency coverage and more money in my pocket
With this emergency reserves plan in place, I have reduced my need for cash reserves by a lot. As a result of investing the freed funds, I have boosted my annual passive income by a goodly amount. And I have hedged against just about every kind of emergency I can think of.

What about you? What do your emergency reserves look like?

Posted in Financial Planning My Way | 2 Comments »

Why I Only Buy Dividend Stocks

January 1st, 2014 at 11:03 pm

For 20 years or more, I invested pretty much the same way most other people do. I put my retirement savings into a basket of mutual funds and hoped the value of that basket would grow. But every price downturn would shake my confidence in that hope of growth. I would look at the drop in market value of a fund -- or of my entire portfolio -- and fret, worry, stress. And if the price drop was deep enough or continuous enough I would finally freak out and sell the position at a loss.

Why? Because my perception of the value of my mutual fund shares was solely based on their market price. Because I saw my retirement future as tied to and dependent on the market price of those shares. Because I did not want to lose any more of that retirement future to stock market drops.

Boy, that really did not work for me. My fear of loss was too powerful a force. Fighting it involved daily stress, doubt and anxiety. And each time I gave into it by selling "to stop the loss" I would be hit with feelings of failure. And if the share prices recovered some time after I had sold, I would add to that feeling additional feelings of guilt, recrimination... and more failure. I felt completely out of control of my retirement future.

Thank heavens I've found a different way of investing that has really worked for me. A way that has put me much more in control. That way is to only invest in carefully screened individual high-yielding dividend stocks.

Now, when I buy a block of a dividend-paying stock, in my mind what I am focused on is the dividend. I am buying the future income stream that will be provided by that dividend. I am not projecting or counting on an increase in the stock's market price (although I certainly will cash in on it if it happens).

I have built my stock (and bond) portfolio to provide me income based on my stock dividends and bond interest. I have NOT built my portfolio on the expectation of following the standard withdrawal strategy of cashing out positions and spending down the portfolio's principal. Some day in the future I may very well adopt a cashing-out plan. But that will be done either as an end-game or in response to IRS required distribution requirements. I will not be cashing out positions just to cover my living expenses.

So, to summarize: in my mind, the value of a stock is in its dividend, not its market price. So now I don't freak out when the market price of any of my stocks drops. As long as I can determine that the dividend will continue to be paid, I do not concern myself. The dividend is my mental defense line against stress and anxiety. Against pulling the sell trigger based on nothing but herd-driven market panic.

This investing mindset works for me. But I am not a financial advisor and I am not saying this will work for you. So, what does work for you? What lets you sleep at night?

Posted in Investing My Way | 25 Comments »

The Frugal Game: Errand Bundling

December 26th, 2013 at 06:59 pm

Mister Money Mustache has talked in several of his blog posts about the incessant one-stop errand running many of his neighbors seem to do. An early morning run for milk. A midday trip to the post office. Maybe even a late night drive to drop off an overdue rental DVD. I think that is nuts. Two or three errand runs a day is to me absolutely nuts. Even 2 or 3 errand runs a week seem to me a wasteful and unnecessary expenditure of my gas money and my time.

I am a fervent advocate of errand bundling. In my case, I group my errands up so that I can do them all in just one car trip a week. (Because I am retired, I also have the luxury of doing that trip on a midweek day, when store traffic is at its lowest.)

With my list of errands and things to do in hand, I do one loop trip, doing convenient target stops on the leg out to my most distant destination, and then knocking off any necessary side trips on the leg back. Keeping my errands limited to that one weekly trip saves me money on gasoline and vehicle wear and tear. And, just as importantly, saves me time and avoids the chopping up of too many of my days.

But what if I run out of something I need right at the time, you might ask. Well, my answer is that I don't run out. My "secret weapon" there is to always have backup supplies. A second printer ink cartridge... an unopened pack of paper towels... a backup box of cat litter. You get the idea.

What about perishables? The answer there is that I stock suitable substitutes. Cans of evaporated milk to back up the fresh milk. Cans of V8 juice to back up the fresh grapefruit juice. Cans of vegetables to back up the fresh ones. And so on. This way, I never run out of anything. "Emergency" errands are nonexistent for me.

The big deal, the real benefit of my errand bundling is more my savings of time rather than money (though there's that, too). I don't have my days interrupted by silly one-stop trips to get this or that. I can stay focused on my plan for the day. And my free time does not get broken up or nickeled-and-dimed away by needless errand running.

I save some money, too. Every drive into town I don't take saves me $6 in car gas and wear-and-tear. So, if my errand bundling is eliminating just 2 car trips a week, it's saving me $12 a week. That's $600 for the year. That may not sound like much. Yet it's more than enough to pay for 5 or 6 of my two-day Civil War hiking trips... or 15 dinners out with my wife... or 1 or 2 (or even 3!) nice new little tools or gadgets I decide I can't live without.

Errand bundling helps me stay in control of my precious time and lets me live just a little itty bit better. And to me, that's one more retirement win.

Do you errand bundle? Or are you constantly running off to go here and there like a crazy chicken?

Posted in The Frugal Game My Way, | 2 Comments »

My Love Affair With Hiking

December 23rd, 2013 at 03:01 pm

Yes, I really like hiking. Love it, actually. There is no other activity that does so much for me, or gives me as much.

Hiking is great for me physically. Traipsing along trails, up hills and over little creeks is good exercise. Works the muscles and burns the calories. And that's good.

Hiking is great for me spiritually. I'm getting all that exercise while enjoying the wonders of nature. And within just a few minutes of starting a hike, I'm already moving into a mind-clearing, peace-inducing zen-like mental state.

Hiking is great for me mentally. That zen-like state triggers a stream-of-consciousness flow of thoughts that proves super-valuable every time. With new ideas for blog topics. With refinements to my money management or my investing approaches. With possibilities for new places to travel. And out-of-the-blue revelations -- such as my most recent one that uncovered a "hidden desire" for stargazing and astronomy.

(All of which is, by the way, why I always carry on my hikes a pen and index card in my shirt pocket. Getting all that stuff written down keeps it from slipping back down my mental well.)

Hiking is also great for me experientially. Most weeks, I do my hiking along nature trails in county, state and national parks. But once a month I'll travel to a civil war battlefield park to do some heavy-duty historical hiking.

Those hikes are different. Instead of going into a zen-like trance, I go on a mentally focused time travel trip. With a clipboard holding battle maps and a mind holding a recently read detailed account of the engagement, I walk on the very paths along which infantry battle formations advanced. I crouch behind the remains of parapets where the defenders awaited those advancing formations. I stand on the exact high ground from which battle commanders viewed the field and issued their orders. And I imagine being there. What it looked like... sounded like... felt like. And I marvel at the courage and discipline of those soldiers, and at the clearheaded brilliance -- or blind stupidity -- of their leaders.

Yes, hiking. What a great thing to be able to do. And how wonderful to be master of my time so that I can do it whenever good weather beckons and the hiking spirit moves me.

Is there some activity that does that much for you? Want to tell us about it?

Posted in Retirement Living My Way, | 3 Comments »

My High-Yield, High-Risk Investing Strategy

December 20th, 2013 at 03:07 pm

The stock market crash of 2008 convinced me never again to invest in any company that does not pay dividends to its stockholders. The crash also convinced me never again to leave the fate of my portfolio in the hands of mutual fund managers, whom I found were just as much at the mercy of crowd panic psychology as any "ordinary" stock investor.

At first, I saw dividends just as a psychological defense line that would buffer me from that crowd panic psychology by establishing an "income value" for my investment holdings independent of their market value and which would keep me from selling out of fear whenever the market value of a stock in my portfolio fell. But when I actually started screening stocks to build this income value portfolio, I saw that here was an opportunity to apply dividend investing as an offensive high-yield (and admittedly high-risk) strategy to grow my portfolio and reach the financial independence that a strong stream of dividend payments would give me.

And so the idea of pursuing a high-yield, high-risk dividend income investing strategy took hold of me. I am not a financial adviser and I am not saying that anyone should do what I have been doing since I had that epiphany 5 years ago. I am just saying that strategy has worked for me, and I'd like to tell how.

Managing The Risk
First I addressed the high-risk side of the equation. This strategy would be a stock-picking strategy. How could I protect myself against picking a stock that would crash on me by cutting or stopping its dividend? A three-part answer came to me: (1) screen the companies based on their financial fundamentals (I know, duh!); (2) diversify the portfolio so no one company's weight in it was too significant (double duh!!), and (3) monitor the news on the companies daily to catch early any indication that the positive reasons for which I had picked the company were turning negative.

Basically, I wanted to check the company's ability to actually keep paying its bills and its dividend. So on the balance sheet I would check to make sure that (1) current liabilities were less than current assets and (2) long-term debt was less than total assets minus the goodwill balance sheet line. I decided that I would bypass the income statement because too many non-cash and/or unrealized charges and credits incorporated into that statement could -- and too often would -- distort the company's real financial picture. And on the cash flow statement I would make sure that net operating cash was greater than the sum of interest expense -- no amortization of interest expense for me -- and dividends paid. (Otherwise, the company would be borrowing money to pay its interest cost and/or its dividends -- and that would be a very bad road to be on).

My personal sweet spot for diversification came down to the numbers 10 and 20. No more than 10% of my portfolio would be in any one industry -- so, I would invest in no less than 10 industries. And no more than 5% of my investment capital would go into any one stock -- so I would hold no less than 2 companies in any one industry and no less than 20 companies in my portfolio. Listening to my gut, I concluded that this would be enough of a hedge against a catastrophic business event hitting any one company (or any one industry) in my portfolio.

Finally, each morning I would monitor Yahoo Finance for company-specific news that might signal a significant change in fortune (good or bad) for a company in my portfolio and require quick action on my part.

Selecting the Stocks
Assembling a list of potential high-yield candidates turned out to be much simpler than all the document searching and mathematical calculating I would be doing to hedge against the high risk built into my strategy. By using my internet broker's customizable stock selection screen, I would be able to generate a list of dividend-paying companies ranked by their percentage yields. And, after thinking about it, I decided I would cut off the list at a minimum 6% yield.

Constructing the portfolio was then straightforward. I just started at the top of my ranked dividend-paying stocks list and worked my way down. I vetted each company based on my financial fundamental criteria. If the company made that cut, I "fitted" it into its allotted industry based on my diversification plan. The result was a list of 20 stocks, 2 to 3 per industry, and those 2 to 3 being the highest dividend yielding stocks in their industry that had passed my financial fundamentals tests.

Oh, and one thing I forgot to mention. NO financial company stocks. Even to this day, I cannot trust them or feel good about them.

Four years after I started on this investing road, I still use the same portfolio construction approach. Every weekend, I run the dividend yield stock selection screen and target industry gaps in my portfolio with the cash that has accumulated during the week from dividends collected and capital gains realized from triggered good-until-cancelled position sales.

As I said at the start, by no means am I recommending that anyone follow this approach to stock investing. But whether by method, skill, luck or a combination of all 3, this approach has worked well for me. Certainly I have hit my share of high-risk potholes on my investing road, but I have never been tempted to panic and on the whole my portfolio has moved steadily forward.

So Far, So Good
After cashing in my mutual funds in 2008, I started my high-yield, high-risk investing adventure with the $143,000 I had left in my IRA account after selling off the mutual funds. By late 2013, the portfolio's book value had grown to just over $344,500. Much more importantly to me, that portfolio is now yielding just over $29,000 a year in dividend income. (And that does not count the realized gains from profitable position sales!)

It's all very hands-on, I know. It requires a half-hour each morning monitoring stock news on the internet while I drink my coffee. It involves about 4 hours a week screening and vetting companies. It means analyzing quarterly reports and conference call transcripts for the companies in my portfolio (while sitting back in my recliner with a scotch!). It does take some work. But the payoff for me is that this high-yield, high-risk investing strategy has finally pushed me up and over the bar to make me financially independent YEARS before I otherwise could have.

How much risk would you be willing to take to cut years off your working life and add all of those years to a new financially free life? Or turn it around: how much longer are you willing to stay in your job in exchange for a less risky portfolio? Leave a comment and tell us!

Posted in Investing My Way, | 4 Comments »

My Financial Independence Key: Separating My Wants from My Needs

December 17th, 2013 at 11:26 am

When I started planning in 2009 for a financially independent retirement, I was very clear about one thing. For me, this was all about time. About shortening as much as possible the time I would have to spend in a daily commute-and-work grind. About freeing as much of the time I had left on this Earth -- which is limited for all of us -- to do what I wanted to do and not what somebody else assigned me to do.

When I started this journey in 2009, I had "perceived" personal annual expenses of $33,280. Now, 4 years later, I am FREE... free with yearly personal basic living expenses of $15,000 net of income taxes.

It was my focus on the overriding priority and importance of time over other considerations that got me free. I reasoned that if this was about time then it was not about accumulating (or holding onto) unnecessary things... or about keeping up with the neighbors... or about indulging in lots of optional cost-ridden activities. And what I did to stay focused was to specifically and clearly separate and keep track of my basic living costs and the costs of my wants -- in writing and frequently. By doing this, I was able to so lower my financial freedom budget -- AND accelerate the growth of my stash -- that 4 years later I had reached my goal in January 2013. My time is now mine (and I actually have ended up with plenty of "extra" income to fund lots and lots of "wants").

The real key, though, is a mental one. I had to learn to tell the difference between needs and wants, which is not necessarily that obvious in our consuming-driven society. It was and is vital that I not mix and mingle -- that I not confuse -- my basic costs of living with the price tags for my discretionary toys and playtimes. Recognizing and acting on the difference cut years and years off my working life, and made attaining financial freedom much much more doable.

A Vehicle or a Status Symbol?
A House to Live in or to Show Off?
I need a reliable pick-up truck for a vehicle, and I have one in a paid-for 1996 Dodge Dakota that I've kept in great shape. Recognizing that I do not need to trade it in for a newer $30,000 truck (even if I wanted one) has kept my basic living expenses from increasing by at least $3000 a year -- and saved me from having had to work an extra two years to accumulate the capital required to fund that $3000-a-year expense.

A newer truck or two more years of my remaining life lived in financial freedom? For me, it's a no-brainer. How about for you?

I need a modest-sized house (1500 square feet for 2) with a garage and a workshop on a couple of acres or so (because I learned the hard way I need to not have in-your-lap next door neighbors). But in 2009 my wife and I owned a much larger house in a suburban community plus a 100-acre vacation property. At best, we used (needed) half the space in the house; the other half we just wanted for show. The vacation property we obviously did not need at all, and ended up wanting to visit it less than 12 days a year. An unexamined financial picture had kept us tied to both those places. Four years later, we've sold both properties and used the profits to acquire mortgage-free the right-sized house we really need in a more rural setting that's also more pleasing to us. Recognizing that we did not need the bigger house or the occasionally used vacation property reduced my basic living expenses by $8500 a year -- and saved me from having to work an extra five-and-a-half years to accumulate the capital required to fund that $8500-a-year expense.

A bigger house or five-and-a-half more years of my remaining life lived in financial freedom? To me that's also a no-brainer. How about you? And so it goes for me, even with the smaller expenses.

Basic Need Or Optional Want?
I no longer have a mortgage. I do need to spend money on groceries, medical and other insurances of many types, utilities, truck operation and maintenance, property maintenance and taxes, pet care, investment fees, and income taxes. After a year of judicious cost-cutting that did not require giving anything up, I was able to cut the total of those costs by another $3000 a year. And that saved me from having had to work another extra two years to accumulate the capital required to fund that $3000.

Unexamined living costs or two more years of my remaining life lived in financial freedom? Another no-brainer as far as I'm concerned. What do you think?

I can now cover all my basic living expenses on $15,000 (net) a year and still have a jolly good time enjoying my freedom to hike, bike, canoe, read, blog, movie watch, video game, listen to classical music, and more.

If I want to have even more fun, I'll spend more money -- other money -- on civil war tour trips, national park camping trips, eating at restaurants, snow birding in Florida for the winter, driving off into the country, tackling home or truck improvement projects, and whatever else may strike my fancy. But I am crystal clear that these are all wants. The money I spend on them is separate from what it costs me to meet my basic living expenses. I don't need the wants. And I don't let them morph into needs -- or even quasi-needs -- by letting them slip into my baseline living expense calculations or budget.

Even though my passive income is more than 3 times $15,000 a year, it gives me a tremendous sense of control and peace of mind to truly recognize that my personal baseline living expenses are $15,000 a year. The rest of my money spending is optional, discretionary, for fun and unnecessary. So I keep it separate -- and pay for it out of a discretionary FUND -- in order not to confuse myself into thinking that I actually need a lot more than $15,000 a year to be financially independent.

Have you thought of looking at it that way? How much income do you really, really need to declare yourself financially independent and start living free?

Posted in Financial Planning My Way, | 16 Comments »

Playing the Frugal Game is Fun!

December 15th, 2013 at 12:30 am

A couple of days ago, I was about two thirds through my errands run when I realized I was really enjoying myself. What's this, I said to myself. How can I be having such fun just buying groceries or picking up a ream of copy paper? And then it came to me. I was playing the Frugal Game, I was scoring point after point, and I was really feeling good about it.

Yes. Practicing no-sacrifice frugality puts me more in control. Helps me come out ahead. Gets me in a winning mood. And who isn't going to feel good about all of that?

Too often, when frugality is discussed it is on the assumption that by being frugal one is giving something up. Doing without. Sacrificing one's todays for the sake of one's tomorrows. But that definitely is not how I experience frugality. To me, it is -- literally -- a fun game.

On that errands day earlier this week, I went to the office supply store for some copy paper. Shelf price: $5.79 a ream. But I had gone online for a rebate coupon and I had a credit for bringing in a spent ink cartridge. My price net: $2.00 a ream for 2 reams. Score! And I got even better quality paper than usual, so I definitely gave nothing up.

Next stop, the grocery store. I had room in my refrigerator freezer for more meats and a $5 off coupon in my pocket that I could use if I spent $25. Hey, perfect combination! Ten minutes later, I was walking out with packages of country ribs, steak and chicken -- and a savings of not just $5 but over $15 thanks to my selections. Score! And I certainly won't be giving up good eating either.

(I almost danced a little jig in the parking lot with that one!)

To play the Frugal Game successfully, I find that I have to plan my spending ahead of time. Otherwise, I would not have had those coupons, would I have? Hunting for and finding the deal is definitely part of the fun of the Game.

Last week, I went on a little camping road trip. I planned ahead by making sure I had both my National Parks and Virginia Parks lifetime passes in my wallet. In just 2 days I saved $15 on vehicle admission to the Skyline Drive, $8 on camping in the Jefferson National Forest and $4 on admission to 2 Virginia state parks. Score, score, score! And I got all the same benefits I would have had without the savings.

On that trip, my endpoint destination was Natural Bridge (and Caverns), which sports a hefty $29 admission. But I scouted it ahead on the web and saved myself $6 by pre-buying the ticket. Score! And I gave nothing up on that one either.

I like playing the Frugal Game at home just as well. That's where some people are more likely to think that one has to give comfort up to play the game. But... not so much.

Every day, one of the first things I do on getting out of bed is to turn on my classical music internet radio station. That used to be Sirius, for which I paid a fee every month. But now it's Pandora, which is free. And you know what? With Pandora, I have been able to customize my listening experience so that "my" classical radio station only plays musical compositions I really like! Score on the savings and I improved my listening experience. And I get to start every day with that little win. How cool is that?

Another thing I do every day at home is to use electricity. But I now play the Frugal Game to win by not misusing and wasting electricity. I just got my bill for last month; $48.31 for 425 kWh. A year ago, my bill for the same month was $125.83 for 1107 kWh. Big score! (And another little jig.)

What in heaven's name have I given up by playing the electricity Frugal Game? I have lights on whenever and wherever I need them. I don't limit my computer or television time in any way. I don't keep myself from turning on ceiling fans if it gets warm or a heater if it gets chilly. I have NO idea what I have given up -- if anything -- except maybe the wasteful privileges of walking out of rooms (or the house itself) and leaving lights and electronics on willy nilly... or letting a near-empty freezer just keep churning away 24/7... or being so lazy that I would not take the time to switch out my inefficient incandescent light bulbs?

The bottom line is that my whole daily life is like this now. I am playing an ongoing Frugal Game that keeps rewarding me with little "happy jolts" practically every time I open a bill or whip out a credit card. And it's fun.

Maybe it's that it doesn't take much to make me happy. Or that I have a very strong Scrooge gene in my DNA. Or maybe -- just maybe -- it's that playing the Frugal Game puts me in touch with how much I am in financial control of my life. And that, as they say, is priceless.

How about you? Do you get the same kick out of playing the Frugal Game? Tell us how!

Posted in The Frugal Game My Way, | 2 Comments »