Archive for the ‘Money’ Category

Earning 3% back at CostCo Wholesale

Most people that know me, know that I am a huge fan of CostCo.  I love everything about them from the product selection to customer service to the way they treat their employees.  I have never really had a bad experience shopping at a location.  However, I do try to avoid the store on the weekends at all cost as the crowds can be overwhelming.

I just recently renewed my membership and upgraded to the Executive Level which gives me 2% back (pre-tax) on all purchases.  It also gives me a nice fancy black card that sets me apart from the rest.  The cost of this membership level is $100 upfront, but even if you don’t spend enough to get the 2% back they will send you a check to make up the difference to the basic $50 membership level.  So the membership never costs more than $50 a year. (Edit: They told me this at the counter, but I have not seen this stipulation in writing.)  The only downside is you are giving CostCo $50 of your dollars to invest.  However, I plan on spending more than enough to recover my $50 and then some.  Between myself and the other card holding member I would expect to spend a conservative $3000.

$3000 * .02 = $60 check

$60 – $50 Executive Costs = $10 earned over the regular membership

Even if you only make $10 on the deal, that works out to be a 20% return on the extra $50 investment.  Granted you did have to spend $2500 at CostCo before obtaining this award.  This is similar to a rewards credit card that has variable tiered reward payouts and will only offer a reward after the $2500 mark.  Keep in mind that the maximum reward payable by CostCo is $500… if you just happen to be a family or business spending more than $25,000 there a year.

Now, if you also get the American Express TrueEarnings Card you get 3% back on gasoline, 3% back at restaurants, 2% back on travel and 1% back on everything else, including CostCo.  Add this to the 2% back from the Executive membership and you are accumulating 3% back at CostCo after you spend $2500 there.  This is a pretty good rate and works out to be:

$3000 * .01 = $30 + $10 = $40 back for that year.  This comes out to be 1.3%.  Of course this rate increases the more you spend because of the need to spend $2500 to cover the extra membership cost.  If you did spend the maximum of $25000 the rate would be:

$25000-$2500 = $22500 * .02 = $450 net earned (not counting the $50 for the regular membership)

$25000 * .01 = $250

Total = $700 back for the year or 2.8% overall of your total spent.

Who ever said shopping does not pay?

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13

02 2009

Saving Money with a Programmable Thermostat

Yesterday, I installed a Honeywell programmable thermostat to automatically regulate the temperature in my house. It will work well as my schedule is pretty typical for the work week. It was relatively easy and only involved disconnecting the old thermostat and reconnecting 4 wires.  Fortunately, all of the wires were correctly labeled Yellow, White, Red, and Green so it made installation a breeze!  Follow the instructions that are included with your unit.

Now, I need to work out the details as far as the programming.  Here are the factory defaults for the work week.

Winter:

  • 6:00 AM – 70° F
  • 8:00 AM – 62° F
  • 6:00 PM – 70° F
  • 10:00 PM – 62° F
Summer:

  • 6:00 AM – 78° F
  • 8:00 AM – 85° F
  • 6:00 PM – 78° F
  • 10:00 PM – 82° F

Now, I won’t be talking about the summer settings as I am not able to figure those out at the moment.  I tried the default settings for this morning and it seemed like the furnace was running the whole two hours to try to get the house back up to 70° F.  This can’t be good.  I never kept the house this warm with the old thermostat. So here’s my first attempt at a modified schedule.  I’ll update this post after I let it run through a bit.

Winter:

  • 6:00 AM – 66° F – I’ll keep it a bit warmer for waking up in the morning.
  • 8:00 AM – 60° F – This seems like the minimum I should go for right now.
  • 6:00 PM – 65° F – I used to keep it at 65° whenever we were home with the old one.
  • 11:00 PM – 62° F – Turning the heat down at night will be new to me to help save money.

I do not feel like our house is well insulated, so I wanted to keep the temperature swings a bit less to prevent the furnace from running for hours to heat the house back up to a reasonable temperature.  I have also seen other sites recommend turning it back 10-15 degrees, but I have tropical fish tanks in the house so I do not feel comfortable going much lower than 60°.  The fish tank heaters will only compensate 15-20 degrees of ambient temperature.  The fish like to be at least 75°.

Here are two other websites with more information on using a programmable thermostat.

1/21/2009 Update:  The temperature settings seem to be working well.  I just hope it ends up lowering my gas bill!

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14

01 2009

My Flight is Not Profitable for AirTran Airways

AirTran Airways

AirTran Airways

It is true.  Flights are incredibly cheap right now.  Today I purchased a nonstop flight to Orlando, Florida from Baltimore, Maryland for $54.00 before fees and taxes from AirTran Airways. The return trip costs the same amount.  This seemed incredibly cheap to me so I decided to do some research and see if they are actually making any money from me.  It turns out that the airline reports their CASM (Cost per Available Seat Mile) on their accounting balance sheet for the year.  The most recent CASM is 11.43 cents with all fuel costs.  I did a quick search on the distance from Baltimore to Orlando and came up with 790 miles.

$00.1143 * 790 = $90.297

So It turns out that my $54.00 flight actually costs AirTran $36.30 more than I paid. I had expected this at that price.  This does not mean the flight will not be profitable as this is just what I paid and not what the total revenue minus expenses is for that flight segment.  It’s time to get to the skies!

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02

01 2009

Do Not Waste Your Time Delivering Phone Books

Five Cent Nickel’s most recent article, “33 Ways to Earn Extra Money” reminded me of a time when I was home from college during winter break and tried to earn extra money delivering phone books.  It was one of those newspaper ads that sounded too good to be true.  I could earn a couple hundred extra bucks delivering phone books during my time off.  This turned out to be disastrous.

Phone Books on the Street

Phone Books on the Street

First off, let me point out that my hometown is outside of Cleveland, Ohio right in the middle of the Lake (Erie) Effect Snowbelt.  It is not uncommon for it to snow 2-3 feet overnight in December.  At the time, I also drove a 1991 Ford Probe.  So the deal was that everyone who wanted to deliver phone books would meet at this location and pick up a route or two.  So being young and naive, I wanted to earn the most money possible and I went with two routes.  This turned out to be a couple thousand phone books loaded into a Ford Probe!  It was definitely over the maximum weight capacity, but I was not going to ask them to unload any at this point.

To make matters worse, each one of the phone books had to be individually stuffed into a clear plastic bag.  This does not sound too bad as it can be done while watching television, but it really was a huge pain that took more time than it was worth.  Think of the process, unload the car, bring the books into the living room, stuff into bags, repeat a thousand times and load the car back up.   I guess there is a possibility for some process improvement here, but this was before I had taken any classes in manufacturing or process improvement.  This was not even the worst part in the whole deal.

The hardest part was that the phone books had to be delivered to the front porch/steps of EVERY residence. This equated to parking the car full of phone books and walking up and down every driveway or driving up and down the driveways.  Neither of these options were easy. I’d say it took three minutes on average to deliver each book. At the time, it paid between ten and twenty cents per phone book delivered. At roughly twenty books an hour at twenty cents a book that is only $4.00/hour! That does not even figure in expenses such as gas money or wear and tear on the vehicle.  The profit would be significantly less.

It did not help that I was delivering these phone books in the middle of the winter after a recent snow storm left a couple feet of snow on the ground.  More than once, I got stuck trying to get up peoples driveways with a car full of phone books.  It also did not work well to try and walk since I lived in a semi-rural area where almost all the driveways are at least 100 ft long.  It was even worse to try to follow the houses parallel to the road and trudge through the snow door to door.  In the end, I gave up and returned the phone books. The company did not even pay me for the books I did deliver.

I do realize this scenario might be a bit different in other areas and climates, but I know for sure I’ll never waste my time with it again.  Even a phone book every minute at twenty cents a book, that would only be $12/hour.  I made more than that busing tables at the local restaurant.

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15

12 2008

Get Rich Slowly Tips, Tricks and More

This past spring, I opened up a brokerage account with Banc of America Investment Services since I have the majority of my money in Bank of America deposit accounts.  The advantage here is next day transfers between accounts when most other services take multiple days.  They also currently offer 30 free trades a month if you have $25,000 in deposit accounts (Checking, Savings, CDs).  If not, the rates progressively decrease depending on what kind of checking account you have established.

Since then I have poured over many different documents from MSN Money, Google Finance, Motley Fool and many others.  After all this, I was left feeling like all the information I read was written by experts and was not real life experiences.  This is when I ventured off to look for some blogs to read about personal non professional experiences.  The following blogs I have been reading off and on for a few months:

Money Blogs

  • Five Cent Nickel – Decent tips and personal experiences for everyday personal finances.  The great deals for credit cards and savings accounts are always highlighted on the right.
  • Get Rich Slowly – “personal finance that makes cents” is the tag line and is all about sensible personal finance.  Really good tips that followed his journey to becoming debt free.
  • The Rich Canadian – The RC is a different approach from the above blogs.  He freely posts his net worth and claims to be richer than most people reading his blog.  There’s an even more interesting twist with reviews about energy drinks.
  • My Money Blog – Decent site about saving money and investing with an overall goal of $1million net worth by age 45.

One interesting point to make about all of these making money blogs is they all offer up some sort of ad system to boost their networth.  So that’s that for now.  I’ve added a link list to the sidebar to track these sites more easily.  I’ve also added the categories Life and Money as a few new topics to blog about.

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15

10 2008