Adventures in Money Making

Got mentioned in this week's Festival of Frugality.

The sheer number of options for tomato products defies comprehension!!! But Adventures in Money Making, against all odds, perseveres, and lives to purée another day.

Another Blogger, James L had some incredibly flattering things to say about me. I don't like to brag but....what am I saying, of course I do! Here's what he says

On friday, Empty Spaces, Inc. dropped by and left me a bunch of comments. Of course, I had to visit his blog to see who he was all about. This 31 yr old is truly something. He's done extremely well in real estate buying, selling, flipping, and cash-flowing and has ventured into partnerships to buy businesses and even looked into buying an oil field. His talents doesn't only lie in his investing acumen, but also in asset protection and tax savings strategies. On top of that, he also holds a full time job as a programmer and is married!! I can learn a lot from this guy.

He's on his way to FIRE at the ripe young age of 34, by 2009. I just want to wish him luck and hope to learn more about his adventures in his quest to FIRE.

He earns a link to his blog. Who says flattery doesn't work? [Bribery works too!] We wish him luck in his investing endevors and his quest to become Financially Independent by 2018 at the age of 41.

Ever go to the store to pick up 5 items and spend an hour because you had spent 10 minutes per item comparing the prices?

I have this compulsion to get the best price on the shelf for the item I'm buying. Of course stores recognise this and try to confuse you. One brand will list price per ounce and another will list price per serving. Even in brands where the price per serving is listed, both will have different serving sizes.

For example, the wife sent me to get some tomato puree. Great! There are about 8 different brands. On top of that theres canned tomato sauce and tomato paste on the same isle. So now I have to pick up all the different cans and read all the ingredients to figure out what the difference is. Some of the cheaper brands list corn syrup and either fructose/dextrose/maltose as ingredients. That just means they put 2 or 3 different types of sugar in to avoid having to list Sugar first as the major ingredient. Of course these need to be discarded. But then there's still the problem of finding the cheapest per ounce from the remaining contestants. Of course at that point the difference in price is probably marginal but I still would like to see which product is truly cheaper than its competitors.

Does anyone else have these sort of "issues" or am I the only one who gets upset over buying tomato puree?

And what the hell is catsup?

According to a research paper by Brad Barber and Terrance Odean, women make better stock investors than men.

Psychological research has established that men are more prone to overconfidence than women. Thus, models of investor overconfidence predict that men will trade more and perform worse than women. Consistent with the predictions of the overconfidence models, we document that men trade 45 percent more than women and earn annual risk-adjusted net returns that are 1.4 percent less than those earned by women. These differences are more pronounced between single men and single women; single men trade 67 percent more than single women and earn annual risk-adjusted net returns that are 2.3 percent less than those earned by single women.

Atleast men are better cooks! [and now I'm running for cover.]

I was putting together a personal financial statement for a bank and I realized I have over $1.8 million of debt against my credit. [I've partnered with investors on some deals, so there's actually another $800,000 that I've agreed to share 50% of the burden without it being on my credit]. On top of that I have open credit card balances worth nearly 100k.

Competition time?? My debtload's bigger than your debtload! [Of you need a positive networth to qualify].

Political Calculations has a classic Cow Model theory, which I've shameless reproduced below.[in my defence, he stole it off the internet].

The Classic Cow Model....

Let no one say that economists don't have a sense of humor, although it's true that you may be hard pressed to identify the cheerful human characteristic among that most dismal of groups. Here are excerpts from an e-mail I recently received that define economic theory and practices around the world according the the "classic cow model," which also abuses some stereotypes (and yes, I realize that it has probably circulated around the WWW several hundred thousand million times):

Socialism

* You have two cows.
* The government takes one and gives it to your neighbor.
* You form a cooperative to tell him how to manage his cow.

Communism

* You have two cows.
* The government seizes both and provides you with milk.
* You wait in line for hours to get it.
* It is expensive and sour.

Capitalism: American Style

* You have two cows.
* You sell one, buy a bull, and build a herd of cows.

Bureaucracy: American Style

* You have two cows.
* Under the new farm program the government pays you to shoot one, milk the other, and then pours the milk down the drain.

American Corporation

* You have two cows.
* You sell one, lease it back to yourself and do an IPO on the 2nd one.
* You force the two cows to produce the milk of four cows. You are surprised when one cow drops dead. You spin an announcement to the analysts stating you have downsized and are reducing expenses.
* Your stock goes up.

French Corporation

* You have two cows.
* You go on strike because you want three cows.
* You go to lunch and drink wine.
* Life is good.

Japanese Corporation

* You have two cows.
* You redesign them so they are one-tenth the size of an ordinary cow and produce twenty times the milk.
* They learn to travel on unbelievably crowded trains.
* Most are at the top of their class at cow school.

German Corporation

* You have two cows.
* You engineer them so they are all blond, drink lots of beer, give excellent quality milk, and run a hundred miles an hour.
* Unfortunately they also demand 13 weeks of vacation per year.

Italian Corporation

* You have two cows but you don't know where they are.
* While ambling around, you see a beautiful woman.
* You break for lunch.
* Life is good.

Russian Corporation

* You have two cows.
* You have some vodka.
* You count them and learn you have five cows.
* You have some more vodka.
* You count them again and learn you have 42 cows.
* The Mafia shows up and takes over however many cows you really have.

Belgian Corporation

* You have one cow.
* The cow is schizophrenic.
* Sometimes the cow thinks he's French, other times he's Flemish.
* The Flemish cow won't share with the French cow.
* The French cow wants control of the Flemish cow's milk.
* The cow asks permission to be cut in half.
* The cow dies happy.

Just found this great website called Housing Tracker.

It lists some of the larger cities and shows the pricing/inventory trends for the past 6 months.

I'm glad to know that inventory at my favorite city Salt Lake City, is down to 2,116 from 5,308 in 6 months. for a city with 900,000 people thats really tight supply!

On the other hand San Diego's inventory jumped from 9,656 to 11,076 in the same time period.

I'm glad I got out while the going was good!

Here's a great post from The Big Picture on the Consumer Price Index.

Its so funny, I'm reproducing the whole post.

CPI reveals that except for everything going up in price, there is no inflation

Original:

"Consumer prices surged last month on higher energy and food costs but underlying price pressures remained largely contained."

Translation:

"Consumer prices surged last month."

Here's the breakdown:

"In January, energy prices rose 5%, after falling 2.1% in December. The advance was led by a 5.5% surge in electricity costs, the largest increase on record for that component. Gasoline prices last month rose by 6.4% and natural-gas prices increased 1.7%. Year over year, all energy prices advanced 24.8%.

Food prices were up 0.5% due to sharply higher fruit and vegetable prices. Medical-care prices increased 0.1%. Housing prices, which account for 40% of the index, rose 0.5%. Prices for new vehicles increased 0.6%. Clothing prices increased 0.3%, while education and communication rose 0.4%."

So to reiterate, except for everything going up in price, there is no inflation . . .

Source:
Consumer Prices Jumped 0.7%
As Food, Energy Costs Climbed
WSJ, February 22, 2006 8:49 a.m.
http://online.wsj.com/article/SB114061330703180066.html

Bought a 1 ounce silver dragon coin on Ebay. Its a beautiful coin, minted by the Perth Mint in Australia. [As I mentioned in a previous post, I'm a big fan of the Perth Mint's Golden Lunar Series.]

Don't know why I bought it. Maybe its because I like shiny things. I think silver prices might jump 50% over the next 3 years but the 1 ounce silver is current worth about $9.25 and the coin was just under $20 with shipping and insurance. I definitely won't make my fortune with a $20 coin. But I guess its better than blowing money a DVD. Or is it??

Anyone else out there who likes collecting coins?

Labels: Coins

Didn't do much over the long weekend. Just tried to relax and recharge my batteries. Happend to get a really good book from Barnes and Nobles called
The Millionaire Maker by Loral Langemeier.

It;s basically the same sort of philosophy that I believe in. Use debt to leverage yourself into wealth, get rid of consumer debt, buy wealth producing assets. But its a very structured approach on how to do that. The book sort of picks up where Kyosaki's Rich Dad Poor Dad stops. Rather than the feel good, change your mindset type of book, its a hands on workbook on taking yourself to the millionaire status in 3 to 5 years.

Of course, if you're reading this blog there's a good chance you're already on the raod to millionaire status, but if you find yourself floundering without a roadmap, this book is the place to start.

Got a call today from my mortgage company. They told me that today was the last day to get pay for 3 mortgages without the late charge. I told him the only reason I hadn't paid was because I hadn't recieved a mortgage statement. [ I had just closed on the 2 properties in December]. The same guy had called me 2 weeks ago to tell me I hadn't paid on another mortgage for one of the same 2 houses in question.[4 loans in total. 2 loans on each house].

I asked him where they were sending the mortgage statements. He said they were being sent to the properties 2000 miles away from where I live. I blew my top. I had repeatedly told the loan broker, escrow and the lender that the statements needed to be mailed to my mailing address, but apparently it was too difficult to follow. Anyway I he already had my checking account info and I gave him authorization to pull the funds directly from there.

I asked him to send me the mailing address and loan info and I'd add it in for direct online payment right there and then, but as usual they were about to sell the the loans so there was no point. I guess I'll have to go through the same scenario next month.

Going to college is an important part of growing up. The friendships and experiences you gain last a lifetime. And in the process you usually get an education that provides the opportunity to earn a decent living. Provided of course, you make enough to pay off your student loans.

According to an article about a social worker with $118,000 in student loans posted on Boston Gal's Open Wallet some people go overboard to get a degree that doesn't pay well enough to pay the bare necessities. A graduate degree in social work only nets you a $30,000 salary. Not enough to pay off your student loan.

Maybe you should consider that when choosing your major. In most businesses, any improvements or additional investments have to meet a 3 year payback period to be considered worthwhile. When getting an education that costs $120k, you should be able to make an extra $40k over what you would've been able to make without it. After all, going to college is an investment in yourself, right?

The girl in the article somehow found a part-time job that pays $25/hr to supplement her income. Maybe she should make that her full-time job and do social work on the side!

According to an article in the Sydney Morning Herald, Home prices have slumped in Australia.

Its the same ol' story that I've been harping on about thats affecting parts of the US like California. The scary thing is since its already happening over then, how far behind are we???

I just read online that Syria just announced that it would start charging for its oil in euros instead of the tradition dollar. In researching this topic i found a very interesting article. Don't know if its conspiracy theory or not, but its interesting reading nonetheless.

The Proposed Iranian Oil Bourse
here's an excerpt.

The Proposed Iranian Oil Bourse
by Krassimir Petrov

I. Economics of Empires

A nation-state taxes its own citizens, while an empire taxes other nation-states. The history of empires, from Greek and Roman, to Ottoman and British, teaches that the economic foundation of every single empire is the taxation of other nations. The imperial ability to tax has always rested on a better and stronger economy, and as a consequence, a better and stronger military. One part of the subject taxes went to improve the living standards of the empire; the other part went to strengthen the military dominance necessary to enforce the collection of those taxes.

Historically, taxing the subject state has been in various forms—usually gold and silver, where those were considered money, but also slaves, soldiers, crops, cattle, or other agricultural and natural resources, whatever economic goods the empire demanded and the subject-state could deliver. Historically, imperial taxation has always been direct: the subject state handed over the economic goods directly to the empire.

For the first time in history, in the twentieth century, America was able to tax the world indirectly, through inflation. It did not enforce the direct payment of taxes like all of its predecessor empires did, but distributed instead its own fiat currency, the U.S. Dollar, to other nations in exchange for goods with the intended consequence of inflating and devaluing those dollars and paying back later each dollar with less economic goods—the difference capturing the U.S. imperial tax. Here is how this happened.

Early in the 20th century, the U.S. economy began to dominate the world economy. The U.S. dollar was tied to gold, so that the value of the dollar neither increased, nor decreased, but remained the same amount of gold. The Great Depression, with its preceding inflation from 1921 to 1929 and its subsequent ballooning government deficits, had substantially increased the amount of currency in circulation, and thus rendered the backing of U.S. dollars by gold impossible. This led Roosevelt to decouple the dollar from gold in 1932. Up to this point, the U.S. may have well dominated the world economy, but from an economic point of view, it was not an empire. The fixed value of the dollar did not allow the Americans to extract economic benefits from other countries by supplying them with dollars convertible to gold.

ING just announced 4.75% interest on regular savings on all new deposits and accounts until April 15th. After that it drops to 3.75%, unless of course the fed raises the interest rates and then it'll be higher.

While a 1% increase doesn't sound like a lot, it does represent a 27% increment over the previous interest rate. The lower the interest rate, the large % increase it represents. And the lower interest you get on your money, the more you should look to make it work harder.

Of course there are a lot of ways to make more than a measley 4.75% on your money. 2nd trust deeds usually yield 10-15%. Developers and Builders often borrow money for their projects that yield 12-40%. Of course, higher the yield, higher risk.

I'm almost at the end of my ability to buy single family homes now so I've started looking at much bigger projects. As JFK said "They cannot achieve greatness who do not tke great risks", so thats what I've decided to do. Take great risks. Which is why I'm trying to borrow a few million from the bank to finance that oil deal. I'm flying to Oklahoma City to check it out next weekend.

As part of my risk taking strategy, I've decided to buy properties in bulk and sell the the remainder off to other investors. I tried doing that last year in St George, but it seems the builder is now having financial issues and might squeal on his commitments. So I decided to partner directly with the developer on future deals so there's less chance of failure.

I've got a few partners together and we've bought a complete subdivision in the outskirts of New Orleans. Actually, its in Wallace which is sort of in between New Orleans and Baton Rouge [which has seen a huge spike in prices and rents after Katrina]. There's currently a great shortage of housing available in New Orleans. The agents involved have a huge list of people looking for houses to rent.

We'll be offering the lots at a rather small markup and hooking up the buyers directly with lenders and builders. The good thing about it is that the entire subdivision is not in a flood zone and doesn't requrie any sort of flood insurance. The tax rate is also a low 1%. I plan on keeping a few lots for myself and selling them in 12 months. The lots range from 37k to 43k.

You can get a lot loan with 10% down and the payment will only be a few hundred bucks a month. I expect the lots to be worth about 20k more in a year. After waiting for a few months even if i start building, it takes 7 months to build a house, so I can easily stretch it out by a year, which should be great for appreciation.

Also FEMA is going to stop paying families 3-4k rent per month after 18 months, so all these people who're living the high life in hotels and cruiseliners will have to look for proper accomodation. What better place than a brand new home outside a flood plain, thats 30 mins from the center New Orleans and 40 minutes from Baton Rouge!!!

Here's the link to the temporary webpage we threw up. Its called www.preconlots.com. It should have pricing and plat info up pretty soon along with a few interesting links about New Orleans. We're probably going to offer special pricing for the first 12 lots, but I might be able to extend that for readers of my blog. [yeah its an ego thing ;-) ]

Please provide suggestions about the webpage and how to improve it. Its difficult being critical when you have an involvement in the project.

I made the 1st ever Carnival of Entrepreneurship!

Adventures in Money Making offers a tips on what to look at when buying a dry cleaner business. Some of the advice is specific to the dry-cleaning business, but much of it is just good, sound advice if you're considering buying any type of business, like making sure the seller doesn't own another similar business that you're going to be competing against.