100th Post

August 29, 2008

The last post was our 100th post! I’m glad to report we are still alive and kicking after starting a little more than a year ago. This would not be possible without our contributors spending their valuable time to share their experiences and thoughts with everyone. Please look forward for another year of happy investing.


College Apartment Costs Can be Cheap

August 22, 2008

With University of California (UC) tuition and fees running around $8000-$9000/year, and nationwide tuition also increasing, all college students have to find ways to save money.   Sure there are many ways students can go about finding financial aid, applying for scholarships, and taking out various loans to fund their education and save money, but I prefer to focus on the housing aspect of college.

From the chart below, you can see I tracked my apartment living expenses (for 5 years) that encompassed rent, electricity, water, and cable internet/TV.   My 60 month average of living off campus in the UC San Diego area averaged $294.62.  If I remove the one month that I subleased my room for a month during the summer, then my average increased to $299.62.  Either way, it’s very difficult to really beat under $300/month rent in a very nice area near UCSD and La Jolla.   During this time span, I live at Costa Verde Village and La Jolla Crossroads, both luxury garden apartments with swimming pools, jacuzzis, communal gym, and many other apartment amenities.

Cost/month for a 60 month time frame

Cost/month for a 60 month time frame

Keep in mind that I never felt I sacrificed the quality of living during the 60 months of living off campus.  I didn’t live in an area that was visually undesirable or live with an area that contains a high rate of crime and violence.  I lived within a couple of miles of UC San Diego and within close proximity to University Town Centre mall, Whole Foods (WFMI), Vons (SWY), Starbucks (SBUX), Ralphs (KR), and many restaurants.   During this time frame, I did relocate three times (twice within Costa Verde Village) and lived with four to six people in every situation.  How did I do it?

Look For Move in Specials

Most times, move in specials would be offered to attract new renters and these apartment complexes like Costa Verde or La Jolla Crossroads would offer a partial month free or a 10-20% price reduction compared to the “retail price.”  You can get an even better deal if you intend to move in a month right before the major influx of college students are looking for housing (late May/early June or late August/early September).

Find Apartmentmates, Especially Someone to Share a Room

Finding people to live with is extremely important if you want to save money.  Living with 4 or 5 people will allow the utilities to be split multiples ways and toward the termination of the lease, everyone will be responsible for any necessary cleaning fees.  Just finding a roommate to share a room should save you $3500-$4500 over the course of a year.   If you’re someone who can’t stand sharing a room, just consider the $4000 savings you could allocate toward investing, food, or other college expenses.

Try to Live in the Same Apartment For More Than a Year

The more people have to move, the more costs are involved like paying for overlap to ensure that you have enough time to move from one location to another.  For some people, they may be paying for two places for up to a month while trying to make the transition.  Also the time it takes to move is very bothersome and time equals money.  For those that are light travelers and don’t own much, this might not be as big of a factor, but those who own furniture and bigger items will have to consider the cost of renting a U-Haul or a truck.  At the apartment I lived at, living for at least two years ensured that painting cost at the termination of the lease would be free.  Make sure to find out these long term bonuses before you commit to a lease.

Sacrifice Common Area Space

While this might not be a practical situation for all people, I rented out our living room for the first half of the time I lived off campus, which equated to an approximate $3000 savings over the course of those 2.5 years.  This does cut into the communal area for social gatherings but to me, the savings outweighed the cost of losing that common space.  For the more ambitious savers, renting out the dining room will also generate some additional savings.  I rented out a space (enough to fit a mattress and desk) near our dining table for about four months which yielded another $250 in savings.

Look For Subleasers While Leaving the Apartment for Extended Amounts of Time

There are kids looking for sublease situations while they are in between leases or just looking to rent for a summer session.  They can easily be found through Facebook marketplace or the housing section of Craigslist.  A lot of times, you can sublease your part of the apartment out for more than what you pay because people will pay a premium for a short term rental situation.  I would only consider subleasing if you intend to be away for at least one month.  Any less seems like too much of a hassle for the savings.

Sure, there are many other factors you have to consider when looking for an apartment or townhouse while in college but costs definitely should be within the top of your priorities.   Apartment chemistry, roommate habits, and proximity to campus should also be factored but are more case dependent on the individual.   Happy renting.

Craigslist Notifiers, Lessening Valuable Findings

August 13, 2008

I remember the days of trying to win something on Ebay (EBAY) and waiting until the last few seconds before the item ended in attempt to “snipe” the auction.  As time evolved, various software tools (none of which I have ever used) allowed you to time the auction in order to get the final bid which ensures that you were the winner and that no one else would be able to place a bid after you.   There are still many good deals on Ebay but I feel that the amount of true deals on Ebay are waning due to the continuous increase in fees (which causes sellers to post less items for auction), increase in amount of Ebayers (odds are that the auction you’re tracking is being tracked by many others), and increase in buy it now auctions.

Now we move onto Craigslist which is the most successful online classified website.  Ebay even has a 28% ownership stake in Craigslist.  Yesterday, I posted a listing in the SF Bay Area Craiglist section for a free 14″ CRT Compaq monitor with accompanying keyboard.  Even though these items were easily 5 years old and barely worth the gas to come pick up, I got a reply from a guy named Manny that said he could put the equipment to use and would be willing to pick up ASAP.   After exchanging contact information via e-mail with Manny, he came within 3 hours to pickup the equipment.

After talking to him for a bit, he claimed that with exorbitant gas prices that exist, people need to “reinvent themselves and figure out new ways to get by in life.”  And he is doing just that.  Turns out, after more questions from my part, that he uses a Craigslist software notifier to e-mail him when searches with certain keywords pop up on Craigslist like “free keyboard, monitor, dvd player, television, or cell phone.”  He then e-mails prospective people offering free electronics to see when and where he can pick things up.  Manny claims that he is a self employed individual and is licensed in California to recycle electronics and gets .25/pound for recycled electronics.   On top of that, he has another business set up to sell the better condition electronics that are too good to just be recycled.  I find it quite a tedious job and can’t imagine how difficult it has to be to drive around and haul hundreds of pounds of electronics in the back of your van every day.  A 100 pound TV to be recycled, according to his payout, will only yield $25, and then you have to deduct the amount of gas to transport everything around and your time to pickup these items.

Some of the Craigslist notifiers I found quickly through doing a fast Google/CNET search were Craiglist Notifier 1.1.2 and Ad Notifier Professional.   Therefore if you’re someone trying to snipe some free items off Craigslist, just be aware that there are people who making a living off their free local Craigslist section and it may be hard to come by valuable free stuff (I can imagine free furniture won’t go as quickly due to not being able to get much secondary market value for them).  Craigslist is a great free tool to acquire used items, find subletters and roommates, and even locate a new job, but just be aware that people are using this free tool to make a living or some side cash so search accordingly and hopefully you’ll find a good deal even with these Craigslist posting notifiers floating around out there.

Book Review: Supercapitalism

August 4, 2008

I’m not usually a person who reads books, but I managed to squeeze in Robert Reich’s Supercapitalism: The Transformation of Business, Democracy and Everyday Life, published in 2007. Professor Robert Reich teaches at the University of California, Berkeley and was the previous United States of America’s  Secretary of Labor. The highlight of reading the book was gaining a historical perspective of the business that I did not have before. There were tidbits that were astonishing, such as banks weren’t allowed to set their own interest rates on deposits and loans until 1980. It was almost like finding out what was life like before the civil rights movement.

The book covers the interplay between democracy and capitalism as time progressed and how capitalism ate away at democracy. In the beginning, there was a large middle class and people stayed at the same company until they retired and lived on pension. Now there is great income/wealth inequality with decreased job security. People move from job to job for greater opportunities and are laid off to boost the company’s bottom line. Another part of the book covers how people are conflicted about doing social good and benefiting as a consumer/investor. Walmart was an big example in his book. He also goes into a little about how to better society.

What I gained from the book was a better understanding of why things are the way they are now. I would recommend this book to a friend.

Book Review: Jim Cramer’s Mad Money – Watch TV, Get Rich

August 1, 2008

Mad Money: Watch TV, Get Rich is a follow up to Jim Cramer’s first book entitled Real Money.    On the inside cover of his book, he states “Investing well isn’t easy, but it is possible.  My goal is to make it easier for you to make money.”   I feel that his first book laid out much of the foundation for the average investor to learn Cramer’s mindset and methods of investing.  Real Money focuses again on some of Jim Cramer’s rules on how to go about trading stocks and investing but with an emphasis based around his CNBC Mad Money TV show.  For those who aren’t aware of his TV show won’t get much benefit from chapters 5-7 and 10-11.  That emcompasses almost half the book.

On the Bright Side

In chapter 10 “How Do I Pick Stocks for the Show?”, Cramer does provide a comprehensive but reasonable list of publications that he uses to choose stocks (which includes the Wall Street Journal, Investor’s Business Daily, and the Financial Times).  Most of his stock recommendations and ideas are straight from the same magazines and publications that any average Joe has access too.

The chapter I found the most useful was chapter 2 “Buying a Stock Mad Money Style, Step Two: Do Your Homework.”  In this chapter, he really does emphasize how to compare and contrast stocks with one another and makes sure the investor is comparing apples to apples.  He demonstrates the importance to compare ratios like PEG, forward P/E, and growth rate instead of stock price or hot stock “tips” from friends or third parties.  In the end of the chapter, he gives a summary of how to analyze balance sheets and cash flow statements.  Everyone has the ability to examine balance sheets which are provided free of charge online, but few take the time to understand how to read them properly.  Cramer gives you a good start on this front.

Improvements from the Previous Book

As the investment world evolves, Jim Cramer has to adjust his investment strategy and one major development since Real Money was written was the impact of the international community of developing countries like India and China.  Cramer took this into consideration and updated his cyclical investing and trading chart.  This details what industries you should be investing based on GDP growth and state the Fed is currently in with increasing or decreasing interest rates.   This chart includes economic benefits from what Cramer calls the BRIC (Brazil, Russia, India, China) effect.

Pages: 224
Release Date: December, 2006
Target Audience: Everyone (with additional benefit for those who watch his show)
Overall Grade: B

Bottom Line: Make sure you read Real Money before you tackle Mad Money.  It will make a lot more sense if you start from Cramer’s initial investment mindset and see how it involves in a short 1.5 years.  Also, if you are able to catch a few of his Mad Money shows on TV, a lot of the chapters will make more sense.  I’ve always like the way Cramer presents himself to his audience and he doesn’t try to sugarcoat his investment strategies.  Someone who is able to highlight his or her accomplishments and failures is someone who you want to be able to learn from so you can benefit from what works for them and not to fall into traps that other have previously succumbed to.