In walks the TA (teacher’s aide). And it’s his first lecture. A new TA for a 300-person lecture? This is odd, I thought. Turns out he’s leading the course. And English is not his first language. And as hard as I try, I just cannot follow what he is saying.

I may have been young, but not young enough to know a ripoff when I saw it.

I went back to my dorm room, consulted with the parents, and within a few days was enrolled to take the same course at a local community college – at a fraction of the price. The credit would transfer over to my degree at the university.

Day one at the community college: in walks a doctoral professor. Not only is he an experienced professor, but it turns out English is his first language – AND – come to find out, he’s also a professor at the same higher-priced university whose class I just dropped and he teaches the exact same course I just dropped. The community college gig is a side income for him. At the same time, I can pretty much ask any question and get any personal attention I want, because the student headcount dropped from 300 to about 20.

Certainly, this supreme upgrade in educational experience would cost me more, right?

Well, if the spread in price then was similar to what it is today:

• University: $420.75
• Community College: $81

Then… wait, it was less than 20% of the cost?! Is this some kind of sick joke?!

Let’s recap that real quick:

1. More qualified and experienced instructor.
2. Student/teacher ratio dropped from 300-to-1 to 20-to-1.
3. Credit hour transferred over to the University.
4. Price dropped by over 80%.

When I figured this out, I felt guilty/dumb for taking any/every course that I took at the university that I could have taken at a community college instead.

Why was I doing this? Why would anyone do it?

The College Experience Debate

Every now and then a friend or work acquaintance will start a conversation about the cost of college.

Most of my friends are in their 20′s or 30′s, so they have graduated college not too long ago. And usually the context of the conversation is about kids (since many of them are newly minted parents or about to become one) and how much it will cost them to send their kids off to college.

A 4-year public in-state university education costs $50,000 these days. And that doesn’t even include room, board, meal plan, books, other fees – which should at least double that cost.

What will it be in 20 years when they send their kids off to school?

Well, if we look at how education inflation (@ 7% annually for the past few decades) has quadrupled the price of an education over the last 20 years and project that forward? You’re looking at a cool $200 Grand, $400 G’s with room/board. No amount of 529 Plan hoarding is going to cover that.

Everyone seemingly comes to an agreement: that’s quite ridiculous.

Daddy must be proud…

But then someone reminds us all why the ridiculousness is worth it: THE COLLEGE EXPERIENCE.

Ahhhh, yes… under-age drinking, the more than occasionally awkward pursuit of the opposite sex, unhealthy cafeteria gastro-nightmares, miserably out-dated-stuffy-nasty-germ ridden dorm rooms – all at $420 per credit hour – with no f’ing clue what I want to be when I grow up. How could I have forgotten?!

Now, don’t get me wrong, setting a bunch of drunken, horny students on the loose, away from their parents for the first time ever, can result in some fun college experiences.

But would I have been any less of a person today without that experience?

Or what if I had simply gone to community college for the first two years, focused on my studies entirely (and possibly even gotten a scholarship as a result), and then had all my cheap credit hours transfer over to the University, basically cutting my college costs in half in the process, while still giving me the same piece of paper that got me the job I have today and still allowing for two years of drunken college adventures?

Sure, some things in life would be different. But it’s hard to say those who follow that path are worse off than the 4 or 5-year plan. Particularly if they have $25-$50k less in student loan debt.

I can tell you this much – just about everything I learned at University is irrelevant to what I do in my job today. And most people feel the same way. So when this debate surfaces, the ONLY rational argument is “the college experience”.

And while those two extra years of college experience might have justified the cost in 1970 or 1990 – you’re going to have a hard time convincing me it does in 2013 or will in 2025.

Related Posts:

• 7 Personal Finance Teachings that could Save our Nation
• Why Graduate Degrees are a Rip Off
• Student Loan Deferment & Forgiveness Options
• Harvard’s Huge Endowment Fund Hoard

Is “The College Experience” Worth the Price? It’s Debate Time… is copyrighted by 20somethingfinance.com without consent to republish.

Now, if you want cheap, you could move to the backwoods of northern Michigan, but:

a. you’d be bored out of your mind unless you could find a way to make a living selling smoked fish or chasing Sasquatch or UFO’s

b. yeah… so basically you’d be unemployed and bored

In my story, I talked about how it took me about 300 applications to actually find a job. And it was a job that could have been won by a high school diploma. And that was in a decent job market. Very few employers want to hire a new grad to train vs. an experienced candidate unless they are rapidly hiring and have no other option.

Cheap is important, of course. Just about any college grad can move to the heart of New York or San Francisco and find a $30-40k job, but with the cost of rent and food, good luck saving anything. But cost of living data is not the only thing you should look at. Low unemployment rates and burgeoning job sectors are important for new grads.

Complex city guide has done some of the work for me and came up with a list of the top 10 based on living wage data (which isn’t far above the U.S. poverty line, by the way). So I took it a step further and looked up unemployment rates (so you can compare vs. the U.S. unemployment rate of 7.6%) and added in some additional color that the original author was probably a little too buttoned up to add, working for a big media publisher and all. Here are their picks and highlights on why they chose them and my additional thoughts (I think half of these are good – the other half, not so much):

10. Worcester, MA

• Annual income needed for a living wage, before taxes: $20,384
• Unemployment rate: 7.8%
• Summary of their thoughts: medical field there is growing (isn’t it everywhere?).
• My thoughts: Bonus for living there? Romneycare! I kid, I kid. I always thought Worcester was the home of Worcester sauce, but then I found out it was Worcestershire sauce. Worcester? Seriously, having a hard time buying this pick. If you’re in the medical field, you can find a job in whatever state or big city you want. And if you aren’t already living in Worcester, why would you move to Worcester?

9. Memphis, TN

• Annual income needed for a living wage, before taxes: $20,306
• Unemployment rate: 10.4%
• Summary of their thoughts: Memphis has tons of entertainment value, and new grads seem to like that, right?
• My thoughts: Stay away. Memphis might be a cool city, but it has a 10.4% unemployment rate which means it is struggling right now, because it is almost 3% higher than the U.S. average. When tourism is your biggest draw and people aren’t traveling, that’s a problem. And if touristy entertainment is the biggest draw to a city? Moving there for a low cost of living is not.

8. Ann Arbor, MI

• Annual income needed for a living wage, before taxes: $19,738
• Unemployment rate: 5.7%
• Summary of their thoughts: Kiplinger claimed that Ann Arbor was the second best city for new graduates and Ann Arbor is making a lot of “best” lists, therefore it must be good.
• My thoughts: I’ve spent some years living in Ann Arbor. If you can stomach self-righteous hipsters and the world’s cockiest, most self-congratulatory college fan base, Ann Arbor can be a pretty cool city. The unemployment rate is only 5.7%  – second lowest on this list. Huge medical sector and the University of Michigan is a prevalent employer.

7. Austin, TX

• Annual income needed for a living wage, before taxes: $19,609
• Unemployment rate: 5.0%
• Summary of their thoughts: Lots of good music, people like to drink, and 300 days of sunshine.
• My thoughts: Unemployment rate is 5.0% – almost 3% lower than the U.S. average and the lowest on this list. You’ve got a burgeoning tech job sector that every big tech company wants a piece of and the University of Texas is a huge employer. Not only would this be a great place to live, for everything I’ve heard (Austin is making everyone’s “best” list), but with the low cost of living, desirability, and job growth, I would imagine that Austin presents great home buying opportunities that will benefit from price appreciation in the coming decades. This might be my #1 pick on the list.

6. Buffalo, NY

• Annual income needed for a living wage, before taxes: $18,458
• Unemployment rate: 10.8%
• Their thoughts: 2nd most populous city in New York, but much cheaper than New York City. Friendly residents.
• My thoughts: No thanks. 10.8% unemployment (highest on this list) in a city that doesn’t rely on tourist dollars means that it is still in a full-blown recession and probably will be for a while yet. I’ve been to Buffalo and see zero appeal to live there. Plus, you are nowhere near New York City.

5. Colorado Springs, CO

• Annual income needed for a living wage, before taxes: $18,077
• Unemployment rate: 8.6%
• Summary of their thoughts: Four graduate schools, including the University of Colorado at Colorado Springs, which was ranked as the ninth best public school in the country.
• My thoughts: I’m buying this one. I have friends who live here and say great things. And when you’re surrounded by the Rockies and sun, it’s hard to go too wrong. Colorado is a growth state, and this is the second most populated city, at close to half a million.

4. St. Louis, MO

• Annual income needed for a living wage, before taxes: $18,065
• Unemployment rate: 9.2%
• Summary of their thoughts: St. Louis has more free major attractions than any other U.S. city. Make your savings account happy and spend your free time at the St. Louis Zoo, St. Louis Art Museum, or the Anheuser-Busch Inbev Brewery.
• My thoughts: High unemployment rate means stay away. I spent a few nights in St. Louis in 2010 and there was NOBODY downtown, free entertainment or not. Plus, walking around in the middle of summer feels like walking in a steam room with the humidity.

3. Pittsburgh, PA

• Annual income needed for a living wage, before taxes: $17,244
• Unemployment rate: 7.3%
• Summary of their thoughts: Something about Big Macs, blah blah… the Great Allegheny Passage—a bike and running trail that when completed, will connect Pittsburgh to Washington, DC. (Now that’s appealing!)
• My thoughts: 3 pro sports teams and a population of just over 300,000? Impressive. Pittsburgh has really transformed itself from a sooty steel-town to a great place to find a job and live. There has been a significant amount of re-development along the riverfront that has given Pittsburgh the reputation of an example of how to re-invent yourself as a city. And unemployment is lower than the U.S. average. I’m a strong buy on this pick.

2. Dayton, OH

• Annual income needed for a living wage, before taxes: $16,732
• Unemployment rate: 9.0%
• Summary of their thoughts: Known as one of the most affordable places to buy a house and one of the top metropolitan U.S. areas for education.
• My thoughts: I really don’t have too many thoughts on Dayton. Unemployment rate is high and if you’re looking for a Midwest college town in that general vicinity – Columbus, Ann Arbor, East Lansing, and Madison all seem like better picks. Affordable housing is always nice though.

1. Spokane, WA

• Annual income needed for a living wage, before taxes: $15,318
• Unemployment rate: 9.9%
• Summary of their thoughts: $520 monthly rent (seems really low). A 100-block area where residents can access free wireless internet. Not only is the cost of living in Spokane just over 9 percent lower than that of the U.S. average, but minimum wage is $1.19 above Spokane’s living wage.
• My thoughts: Free wifi sounds really nice. Also, there is no state income or corporate tax. If you consume less (8.1% sales tax in Spokane) – and I know you do – you really have an opportunity to get ahead with low taxes, low rent, and free wifi. And I REALLY like the fact that you are within 100 miles of Glacier, Cascades, and Mt. Rainier. My only concern is that unemployment rate.

Best Cities for New Grads Discussion:

• Have you lived or spent a good amount of time in these cities? What’s your take on them?
• What cities would make your list and why?

Related Posts:

• The Top 10 Cities for Young Professionals
• The 10 Best Cities to Find a Job in
• The 10 Cheapest College Towns to Live in

The Top 10 Cheapest Cities for New College Grads (& Everyone Else) is copyrighted by 20somethingfinance.com without consent to republish.

Frontline’s 52-minute documentary, The Retirement Gamble has been getting a lot of press lately – at least in personal finance circles – so it was on my to-do list to watch, learn, and critique.

I appreciate a mainstream media effort to raise awareness about the fact that pensions are extinct, 401K’s are a crappy replacement, and average retirement savings are putrid – but most of the 52 minutes of the documentary was not groundbreaking material. Good, just not mind-blowing news.

I don’t see that there’s any way to avoid a U.S. retirement crisis (quite possibly leading to a zombie apocalypse of seniors roaming the streets for meds). This documentary re-affirmed how imminent that possibility is, with many of the same points I’ve highlighted previously:

• Pensions were the perfect retirement system for everyone, but employers wanted to shift risk from company to employee.
• 401K’s started as a tax loophole for high income employees, but became a means for employers to shift retirement responsibility risk.
• For a while, 401K’s as the go-to was fine. Stocks boomed through the 80′s and 90′s. Everyone was watching their balances explode. Things were great. Then the dot-com bubble hit. And then the housing bubble. And most still have not recovered.
• One-half of Americans say they don’t have enough money to save for retirement.
• One-third have no retirement savings at all.
• For those who do have retirement savings, most of those savings are being eaten up by 401K fees and expense ratios from actively managed mutual funds.

There were, however, a few new interesting take-aways that I discovered for the first time and thought were important enough to to share with you:

Fiduciary Responsibility

Fiduciaries are required by law to act in their clients best interest. A fiduciary is a person in a position of authority whom the law obligates to act solely on behalf of the person he or she represents and in good faith. Fiduciaries may not seek personal benefit from their transactions with those they represent.

Here’s where it gets interesting for most of you – 85% of “financial advisers” are not fiduciaries.

The term “financial adviser” doesn’t really mean anything. Advisers are not obligated to act in your best interests – most are just sales brokers selling the most profitable financial products – and they get handsome kickbacks for doing so.

Outside of finding financial planners with these characteristics and taking these steps to limit conflict of interest, ask them to sign a legally binding agreement that they are willing to act in your best interests as a fiduciary 100% of the time, under ERISA. If they won’t – know that they are a glorified sales rep. who probably will not act in your best interests.

The U.S. Labor Department proposed in 2010 to enact fiduciary standard on all retirement accounts, but Wall St. has immense power in Congress and effectively lobbied to squash that idea. Immense lobbying power is what has effectively kept Wall St. regulation out of the retirement industry.

If you’re interested, this PBS companion article has more on this – definitely worth a read.

All this being said, there is an even easier way to avoid financial adviser conflict of interest and the high costs of actively managed funds…

Low-Cost Retirement Investing Really Matters, when Compounded Over Time

I know that low-cost investing is important, but just how important? Leave it to an interview with Jack Bogle, founder and retired CEO of Vanguard, to drive home that point.

75% of the best content from The Retirement Gamble came from the Bogle sit-down. In fact, your time might be better spent reading the full Jack Bogle interview (which was not aired in its entirety in The Retirement Gamble) than watching the documentary. At age 84, Mr. Bogle is still razor-sharp, and his low-cost ETF and index fund approach to investing is iron-clad solid.

A couple of really poignant points from Mr. Bogle:

The Impact of High Fees: 7% return with 2% fees (net 5%), would result in two-thirds of your final balance being depleted, after compounding. “If you compound a 7 percent and the 5 percent return over, say, 50 years, let’s call that an investment lifetime — well, in fact the investment lifetime is longer than that — something like 70 percent of the market return goes to the purveyors of the services, Wall Street if you will, and 30 percent goes to the fund owners… What happens in the fund business is the magic of compound returns is overwhelmed by the tyranny of compounding cost. It’s a mathematical fact.”

On top of this, most actively managed mutual funds do not beat indexes, especially over longer periods of time.

So what is an investor like you and I to do? Passive index investing through low-cost index funds and commission-free ETF’s.

Expected Investment Returns: I also thought this exchange between Bogle and interviewer, Martin Smith, was very interesting – and wanted to share it in full:

Smith: If [you have] 2 percent earnings growth over time, then you have about a 2 percent dividend.

Bogle: That’s another big thing that changed. We started off the ’80s, at least in the late ’70s, the dividend yield was almost 6 percent. By the end of the ’80s, it was almost 3 percent, and by the end of the ’90s, it was 1 percent.

Smith: Because we had all these dot-com stocks that didn’t pay any dividends.

Bogle: Yeah, and also people were bidding up prices generally. …

Smith: So what’s this business about?

Bogle: First of all, the long-term return on stocks is 9 percent, OK? That’s the historical return, because it averages 4.5 percent of dividend yield averages over 100 years and 4.5 percent of earnings growth. That’s the 9. …

Smith: But your prediction for the future is lower than that.

Bogle: It’s lower than that in part to give you the simple part. The original returns I just told you [were] based on a 4.5 percent opening dividend yield, and now we have a 2 percent dividend yield.

Smith: So going forward, … it seems like by your scenario, there’s very, very little money to be made.

Bogle: … Look at it this way. If the dividend yield is 2 percent lower than the long-term return of 9 percent, we’ll drop to 7. It’s a deadweight loss, that dividend. So 7 percent is a pretty good return in this day and age, because bonds are yielding maybe 2, maybe 3 percent depending on your portfolio. So stocks are really a pretty good investment for the next 10 years. Should be.

Smith: … But once you subtract your fees, you adjust for inflation, and you subtract tax costs, you’re down into pretty paltry return, 1 or 2 percent.

Bogle: We don’t tell people that, you see, in this business.

Smith: You’d be a very bad marketer. …

Bogle… I’m not selling managed mutual funds. I created the first index mutual fund. So instead of taking out, say, 2 percent a year from the market’s return, I’m going take five basis points, less than 0.1 of 1 percent out of that market return. So if we get a 7 percent return, I’m going to give you 6.95 in the index fund because it only costs 0.5 of 1 percent to run.

So I take out the management cost, I take out the portfolio turnover cost, I take out almost all the tax cost, because we’re not trading all the time and realizing capital gains. I don’t mean to be commercial about this, but it is simply mathematically a proposition that cannot be dis-proven. …

That, my friends, is why low-cost investing truly matters, for your retirement.

The Retirement Gamble Discussion:

• Did you watch The Retirement Gamble? What stood out to you? What was new?
• Do you invest in actively managed funds or index investing, or both? And why?
• Did you know about the fiduciary standard and have you asked your adviser if they would sign a fiduciary agreement?

The Retirement Gamble: Why Low-Cost Indexing Reduces your Risk is copyrighted by 20somethingfinance.com without consent to republish.

Because of this lesson learned, we have since dramatically cut our lawn watering, as we have gradually replaced more and more of our lawn with mulched gardens. Grass is horribly inefficient and only looks good 3 months out of the year, max. Replacing with gardens is a great way to reduce your impact on the environment and save money in the process. If you’re interested in more tips like this, check out my recent post on 10 easy ways to save the planet and money.

How Much Does Watering your Lawn Cost?

I knew that watering lawns was a huge waste of water. But I reluctantly chose to do anyways because burnt brown grass looks awful. How much water was I wasting? I just recently found out, and I couldn’t believe it.

I was digging through my water bill this past weekend as I discovered that my city water utility has a nifty little online tool to compare water usage month-by-month, and year by year. I had no intention of finding anything shocking in the analysis, but I did.

Comparing my water usage from May 13 – August 11th, 2010 period to the same period a year ago, I used only 9,724 gallons of water versus a whopping 19,448 last year. Wow! My usage was more than cut in half over the three month periods. Here’s a screenshot:

Drilling down further, I found something even more shocking. The difference was almost entirely from the month of May, 2009.

My water usage this May fell to 2,251 gallons compared to a relatively ridiculous 8,700 gallons in May of last year. That’s just one-quarter of last year!

Why such a drop?

Then I remembered. I watered my lawn every other day last year because my wife and I chose to lay new sod in my front yard.

What’s more is that I even watered my lawn this May a few times (let’s estimate 3), for a net addition of 12 waterings last year.

And the craziest thing about it is that my front can be completely covered by moving my sprinkler just once. I was only watering for 15 minutes at each location.

The result? Watering my lawn an additional 12 times for a total of 30 minutes each time quadrupled my water usage in one month! Forget the showers, dishes, drinking tap water, the laundry, the toilet flushing, it was all relatively insignificant in comparison.

Making the Decision to Water Your Lawn is About More than Just Actual Cost

How much did all that lawn watering cost me over the month? Maybe $10 or so. Water from utilities in the U.S. is cheap. Ridiculously cheap to the point that cost is typically not a factor (when you drill down into your water bill, sewer and storm water surcharges make up the majority of your total utility cost). Heating water is a whole other story.

The environmental/ethical cost of watering your lawn? That can be a bit more expensive. In order to keep a lawn looking nice, it requires a lot of water and usually expensive fertilizers that are harsh on the environment, and re-seeding. My advice to you: think twice before choosing grass over a garden. And if you have grass, convert to gardens as soon as you can. There could be a whole lot more than your finances riding on it.

Related Posts:

• The True Cost of Bottled Water Vs. Tap Water
• How to Stop Standby Appliance Waste
• Money Saving Products I Use
• 7 Ways to Save Water
• 7 Ways to Cut your Heating & Cooling Bills

Watering my Lawn had MULTIPLIED my Total Water Usage! is copyrighted by 20somethingfinance.com without consent to republish.

Just ask anyone who bought Apple, at some point during its never-ending rocket to an inevitable $1M per share.

If you bought Apple, as just about everyone in my peer group suggested I do around its peak of $705 (Sept., 2012), you would be down 40%. If you had merely put your money in the S&P 500 index, you’d be up about 10% – or 50% better off over the last eight months.

May sound like cherry (or apple) picking – and it is – but the point is that every hot stock chills out – at least for a while.

Why? Market securities analysis scholars have labeled this as the “shitus happenus” theory. And it tends to surface with predictable and unpredictable events:

• Analysts once again discover that exponential growth doesn’t continue forever (who would have thought?!) and hammer the stock.
• A new competitor flexes its muscles and everyone gets scared.
• The financial news media gets bored and runs to the next shiny suitor.
• An insider trading or back-dating options scandal breaks.
• Another recession hits.
• The stock’s market sector falls out of favor.
• A natural disaster wipes out the company’s supplier base.
• The CEO, and his cult of personality, leaves for a higher-paying opportunity.
• The chairman is caught in an affair with his assistant.

Show me a stock that has done nothing but ascend month/month or even year/year over the last 10 years, and I’ll take back my claim that the perfect stock does not exist. Then I’ll buy it.

The longer a stock’s success streak, the more everyone who does not own the stock wants it to fail. Analysts, brokers, mutual fund managers, and even company insiders are just waiting for that little nugget of news that shows the smallest crack in the stock’s once impenetrable armor. Quite suddenly, that crack is ripped open, with the guts of twinkly-eyed amateur investors spilling all over the stock exchange floor. “Told you so”, the talking heads will say, ad nauseam.

The hotter a stock is, the more likely it is to fall hard.

Over the past few decades – those perfect stocks have tended to have a strong tech theme – IBM, Microsoft, Yahoo!, Google, Facebook, and Apple – but the phenomenon is not exclusive to the sector.

I cautioned everyone about the Facebook IPO. Why? I knew amateur speculation would be rampant because so many people use Facebook – inflating the offering price – and a lot of amateurs would jump in right from the start. Meanwhile, everyone else wanted the IPO to badly fail. Something had to give. If you bought it on day one and given up hope just 3 months later, you would have lost about 60%.

The tips I gave in that Facebook article are relevant to any “perfect stock” you are considering buying.

The best investment is almost never the sexiest or even beer-goggle justifiable investment. It’s the boring, rock-solid Dividend Aristocrat stock that everyone forgot about, it’s the REIT that none of your buddies has heard of, or it’s the commision-free ETF that pursues a passive index strategy. It’s usually the one that nobody you know has even considered.

So when that next familiar, hot, or perfect stock comes along, you’d probably be best off to stay away.

Related Posts:

• How to Get Over the Fear of Investing
• How to Start an Online Broker Account
• A List of Dividend ETF’s

The Perfect Stock is copyrighted by 20somethingfinance.com without consent to republish.

“I seriously regret ever having named my blog 20somethingfinance.”

That’s not something that is easy to admit to anyone, especially a respected blogging peer.

And it’s even harder to admit to you – the loyal 20somethingfinance readers.

When I first started this blog over 5 years ago, I wanted to focus on readers my age who had a similar interest in optimizing their finances. I was in my late 20′s and somewhat shortsightedly, I thought to myself, “hmmm…. how about 20somethingfinance?”. Sounds great!

I didn’t know the first thing about blog marketing, branding, or capturing an audience, so I just went with it.

Fast forward to present date, and I’m not even in my 20′s any more.

Many of you are not either (in fact, over 30% of the reader-base is over age 30).

And a large majority of the 7 million unique visitors (~4-5% of adults in the UNITED STATES?!) who came and left over the years haven’t been either.

I often wonder to myself, “how many tens of thousands of non-twenty-somethings would have stuck around and subscribed and contributed to the blog if only the name wasn’t age-disqualifying like 20somethingfinance.com is?”. Search engines and personal finance tips are age-neutral, but my freakin’ blog name wasn’t. Fail!!! But I digress…

The Shift in Focus

When this blog first kicked-off, I tended to focus almost entirely on the strategic components of personal finance. A lot of the content was targeted towards young professionals just starting out.

Over the years, I have started diving more in to the ideological side of personal finance – values, philosophy, passions, motives.

I’ve also gotten a little further advanced in the strategic and have come to realize that most of the strategic and ideological components aren’t just for “twenty-somethings” – they are for everyone.

Financial independence has become a top priority in my own life. And I’m guessing many of you are in the same boat. And this desire is not tied to age at all.

Yet – that “20″ name lives on and the blog has still managed to become too big to change now.

And the goal, strategies, and motivations are still the same.

What’s Next?

Alas, this post is not a swan song. It’s an affirmation.

If you…

• seek financial independence & partial or early retirement
• want to hack spending to extremely low levels
• want to reduce consumption and minimize impact on the environment
• like learning basic and advanced personal finance strategy and like sharing those ideas with others
• seek to be healthy, wealthy, well-rounded, generous, and genuine

… then you are exactly who I want to write for and interact with. Regardless of age.

And if you know anyone else who meets any of the above criteria – please spread the word.

Even though the name of this blog was an epic fail, your support has been an epic success. THANK YOU for sticking around, subscribing, and being loyal readers and contributors.

I hope to keep bringing you ideas, motivation, and a little bit of entertainment. Even after you turn 30… or 70.

Discussion:

• How old are you?
• What would you rename this blog to?
• What kind of finance related content/topics do you like reading the most, here or elsewhere?

Related Posts:

• My Story
• Money Saving Products I Use

Why the Name of this Blog was an Epic FAIL… but that’s OK is copyrighted by 20somethingfinance.com without consent to republish.

“Rogers CEO says customer service needs to improve ‘significantly’”.

Rogers, a Canadian cable, wireless, and media company (Canada’s version of AT&T) – made the bold statement that they need to improve their customer service. The outgoing CEO, Nadir Mohamed, made similar statements when he took the job 4 years prior.

I’m not a Roger’s customer. I’m not even Canadian. But the headline and CEO statements got my blood boiling a bit.

Telecoms are world renown for their soul-crushing customer service. In the U.S., Comcast, Dish, AT&T, & Time Warner frequently make annual lists of the companies with the worst customer service, as rated by the people who should matter most – their customers. Banks like JPMorgan Chase and Bank of America are not far behind.

Does it have to be this way? I’ve worked with plenty of big businesses that I should also hate by the fact that I must pay them money and they occasionally raise rates on me. My experience with Liberty Mutual, a large insurance company, has every reason to be awful. It’s not. Same goes for American Express. And the regional bank I work with – TCF. I’ve never had a bad customer service experience that left me bitter towards them. Each time I have talked to them on the phone or in person, I feel like they have customer service reps who are empowered to give a damn about customers.

If they can do it, why can’t every company?

So, I was feeling a bit charitable and wanted to do my part and write this “letter to the management” of the most hated customer-facing companies in America, in the hope that maybe it actually makes it to someone who gives a damn. Maybe it ads a bit of much-needed perspective from leadership who may come across it. You aren’t going to hear this message from short-sighted shareholders, those who report to you, or your board of directors. Hopefully it adds some third-party perspective and gives you an alternative course to pursue. And if you’re a reader – let the management know if you agree or disagree – and heck, feel free to send them an email with a link to this.

Here goes:

To the Management of Comcast, AT&T, Dish, JP Morgan Chase, Bank of America and All Companies of Similar Customer Service Reputation:

Look, we get it. It can be tough, maybe even stressful to take the long-term view for the company when all that matters to your bonus, your board, and short-term shareholders is short-term performance growth from one quarter to the next. And rewarding customers with high-paid, high class customer service, and… hold on to your cufflinks… loyalty discounts for remaining a customer – probably lead to a negative short-term profit impact.

So, crazy idea here… what if your reputation was built on things other than short-term results – like making or keeping your customers happy, improving your brand or your customer’s brand, and maybe even setting a legacy that lasted longer than a few annual meetings and conference calls? What if you won one for the people?

Whether you realize it or not, the long-term outlook for your company actually depends on you being able to convince others of the importance of this very issue. Do you want to be known as the guy/gal who was there for a few short years, business as usual before fading in to obscurity? Or do you want to be known as THE ONE who changed everything for the betterment of customers, employees, loyal shareholders, and the company’s legacy?

Here’s the thing – when enough customers hate you for long enough periods, they are going to exhaust every possible resource to find alternatives to doing business with you. This is true whether you have legitimate competition or not. If you enjoy a partial government-granted monopoly (i.e. Comcast for cable in just about every geography you serve), they will find a different market sector to move to entirely. By the way, Comcast (special message just for you here) – changing your name to XFinity and creating a funnel to direct unhappy loyal customers to reps whose job is to say “no” is not fooling anyone. Your customer service still sucks. This is not 1990 anymore – we have alternatives, and we are not afraid to use them.

I’m sure you have all kinds of analysts to crunch the numbers – so here’s one that you are encouraged to compute and use as a pillar for change within your company: the lifetime value of a happy customer. Odds are that value is far greater than a customer who signs on for a cheap promotional rate and churns over and over until finally they’ve had enough with your disloyal, scheming ways towards them.

Shame on you for continually raising prices on loyal customers and nickel & diming them with new fees while offering sign-on bonuses and steep discounts to acquire customers with no loyalty.

Shame on you for outsourcing customer service to low-cost foreign workers.

Shame on you for locking customers in by contract when you could have locked them in by virtue of treating them well.

Shame on you for not having customer service policies that reward your representatives for making customers happy.

Shame on you for devoting resources to fight and eliminate market competition instead of focusing on a better offering.

Shame on you for not giving your customers the choice to pay for what they really want, a la carte.

These practices will not produce the marginal short-term gains that pad your bonus at the end of the year when there is no customer base left to draw from. And as consumers only get more and more educated in today’s information economy, and more and more technological disruptive competitors hit the scene, you can damn well bet customers are going to do everything in their power to not only find an alternative, but tell everyone they know and meet about how much better that alternative is than you. Your strategy may have worked prior to the advent of the Internet. It’s doomed now.

You have a choice – do you want to fade away in to the imprisoning walls of your McMansion – left to fight the voices in your head who charge you for doing wrong to others? Or, do you want to go out with a bang and make yourself, your company, and a small slice of this world better for trying?

What’s the worst that can happen? You already have untold millions in the bank, and if you lose your job, you can take a golden parachute and then get some pretty sweet gigs in consulting for companies who do give a damn about their customers, be a consumer lobbyist, and maybe even get a nice book deal. Who knows – you might even make a lasting difference and become celebrated.

I can promise you, your efforts will not go unnoticed.

Sincerely,

Everyone who has ever reluctantly given your company money

Related Posts:

• The 5 Worst Return Policies
• How to Replace your Comcast Modem & Save
• The Lifetime Cost of Cable TV
• Best Customer Service Tips

A Letter to the Management of Companies with Hated Customer Service is copyrighted by 20somethingfinance.com without consent to republish.

The first is excitement. Those who have been bitten by the frugality bug have an incredible connection to others who also have. There’s a synergy. A commonality. I think that comes from being in the small minority, but having similar goals to simplify, break free, and thrive. Consumption minimization without deprivation requires creativity and some hustle. It’s fun. And there’s a sharing of knowledge that can occur here that is really enlivening. Good stuff.

The second is shock or astonishment. “You spend how little per month?! That’s crazy!”, “You sold your car and bike to work? Why?”. This reaction usually comes from those who just haven’t really been exposed to the ideas, as the virtues are definitely not trumpeted in the mainstream. Sometimes these conversations can be really fun because there is a curiosity and it can present a teaching/learning opportunity. Other times, it can seem like you are talking in a foreign language. You get weird looks. Sometimes some head nodding.

A third reaction comes in the form of minimization. This, on its own, usually comes in two forms. The first is the blow-off: “Well, that’s nice, but I could never do that. I have to have my (fill in the blank).” Other times, it surfaces as attempted humor. You know, the “you’re such a cheapskate” type jokes. Mostly harmless stuff and I play along, but often times the humor comes with a twist of spite. People make fun of things they don’t really understand or they feel a bit threatened by. Those with wasteful spending habits feel threatened by frugality because it turns the mirror on their wastefulness. But I guess I would prefer to have it directed towards me in the form of minimizing humor than the fourth and final reaction…

Angst. This comes out in the form of name calling or attempts to diminish ones self-worth. I’ve seen it directed towards others. I’ve actually had people tell me on this blog, on a number of occasions, that I must be miserable. That they feel sorry for me. That my way of living is not worth living.

My initial first response to this kind of negativity is bewilderment… I mean, if you don’t like the lifestyle concept of frugality, what are you doing following, reading, and commenting on a personal finance blog that espouses the virtues of frugality and reduced consumption on a weekly basis!?

Playing armchair psychologist, I assume that this kind of reaction is for one of two reasons:

1. The person really does have a misconception that frugality = misery. Their belief is that if you are frugal (aka not someone who spends your money on whatever pops in your head as a potential “happiness-driving token”), you are not truly living life. Money is meant to be enjoyed through spending and if you aren’t spending it, you must have a miserable existence.
2. The person has so identified with their spendy lifestyle that they take it personally that I’ve indirectly questioned it. Their response is a retaliation to try to make me feel bad or question my own lifestyle.

Do I ever take it personally? No. And my message back is this…

Spending will Only Take you So Far

I have already obtained 99.9% of the sustainable happiness/fulfillment that could be obtained from spending more money. I eat healthy, wonderful organic food. Brew wonderful brews. Drink wonderful drinks. Experience the entertainment I want to experience. Bike when I want to bike. Hike when I want to hike. Go on trips I want to go on. Have adequate means of getting where I want to go. A nice roof over my head. We have 3 awesome pets. What more stuff do we need? All of our basic needs and MUCH more are covered. More stuff cannot take me any further down the path to eternal bliss.

There is something that can take me further down that path: time ownership that financial independence can provide.

When you own your own time, it can open up doors that spending cannot: freedom of choice to pursue your interests and passions, learning more, exploring more, creating more, connecting more, contributing more, relaxing more, exercising more, and the personal growth and enjoyment that comes from all of the above. These things can take you further than more stuff ever could. And simply replacing more stuff with that hope and goal adds a ton of life energy and motivation.

So, please, don’t worry about me. And definitely don’t feel sorry for me either. And I hope that one day you might join me.

Related Posts:

• Why do you Practice Frugality?
• Lifestyle Inflation Justified
• The Marriage of Impact Reduction & Personal Wealth

The 4 Reactions to Frugality & Why Spending Can Only Take you so Far is copyrighted by 20somethingfinance.com without consent to republish.

If you fall in to the bucket of those who have a conscience and give a damn about the planet (or if you normally don’t, but want to get started), I’m going to throw out a challenge.

It’s time to take action.

There is a direct correlation between impact reduction & saving money (the more you reduce, the more you save) – so this article is right at home on a personal finance blog, and will present some of the best planet and money saving tips I’ve discovered over the years.

Some are easy one-offs. Others need to become habitual, but you’ve got to start somewhere. So here’s the challenge: Take 1 action – you’re a better human being than you were yesterday. Take 2-5 and you can take comfort in knowing that you are making the world a better place. 5+? I will plant a tree and name it after you. So lets save some money, keep those guilty consciences to a whisper, and get started!

1. Start Growing Some of your Own Food & Getting More from Local Sources

It took me 5 years too long to put in a garden – I finally made the move last year. My yield the first year was miserable, but that only has made me more motivated to get it right and start early.

For most of us, that time is now. Take one of these nice spring weekends to put in a garden, or at least put up some plants in your window or pots on your patio.

Growing your own food may seem trivial in impact, but if everyone were to do it, the impact would be phenomenal.

If you don’t know where to start, one of my favorite blogs on the topic of food production is Old World Gardens.

The ROI on gardening is questionable, until you get good at it. But the satisfaction of pulling an organic tomato fresh off the vine that you walked a few yards to get is hard to beat.

The output of gardening can be tough in the beginning, so you’ll need to complement with fruits and veggies from other sources, so what’s the next best environmentally friendly option? Locally sourced (and organic) food. Usually the best place to get it is farmer’s markets and CSA’s. If you stick to produce, you can actually save money in the process.

Not sure of the CSA’s or markets in your area, Real Time Farms has a nice map to help you find them.

2. Replace Meat with Beans/Quinoa/Veggies in at Least One of your Weekly Meals

I made the switch to vegetarianism a number of years ago. The health and cost-per-unit savings have been outstanding – about $2-3K per year. The environmental impact? Astounding. It takes 16 pounds of grain/soy and 5,214 gallons of water to produce 1 pound of edible beef (the same amount of water one American uses on showers in a year, on average). It takes 78 calories of fossil fuel to produce 1 calorie of protein from beef, while only 2 calories of fuel to produce a calorie from soybeans. Want more? The amount of pesticide use per acre of corn (the main feed for livestock), has increased 100,000% since 1945.

So this one is super simple. Pull up some recipes online and replace that meat centerpiece by some combination of beans/quinoa/veggies. You, your wallet, and the planet will all be healthier for it – and you’ll reduce demand for mass produced animal misery.

3. Take your Own Containers & Switch to Bulk Foods On at Least 3 Grocery Items

The average American produces 4.43 lbs. of trash per person per day. Much of that comes from food packaging. So instead of accepting that your oatmeal, quinoa, brown rice, walnuts, or soybeans come in small amounts, surrounded by plastic that will end up in a landfill – buy it in bulk instead and bring your own re-usable container to package it.

Shopping at Costco or wholesale stores can also help reduce packaging. A 36 oz. jar of peanut butter, for example, produces 3X less waste than 3-12 ounce jars. And the goodness inside is just as tasty.

Bonus? It’s almost always cheaper in bulk anyways.

You can also further cut down your food waste by composting food scraps to enrich the garden you have now… circle of life and stuff.

4. Make your Own Truly Environmentally-Friendly Cleaners

Even though most so-called “green cleaners” claim to be environmentally friendly, there really is no federal regulations of what “green” is. Same goes for “natural”. What is “natural”? I suppose it’s something that was not created from alien metals obtained from an asteroid or manufactured from a science experiment gone wrong, but that is not saying much.

If you have water, lemon, baking soda, white vinegar, rubbing alcohol, hydrogen peroxide, and witch hazel, you can make home-made cleaner combos that will clean just about anything, are 100% safe, and probably more effective than the store-bought garbage. Just make sure you don’t combine stuff that should not be combined (ammonia and bleach generally do not produce safe fumes when mixed with other stuff). And you can buy them in large unit sizes, reducing packaging waste in the process. And it is HELLA cheaper!

Try this glass/all-purpose cleaner:

• 1 cup white vinegar
• 2 cups water
• 1/4 cup lemon juice

Here’s a good article with other non-toxic cleaning mixes.

5. Stop Buying Bottle Drinks & Invest in a BPA-Free ReUsable Bottle

If you buy bottled water, I want you to slap yourself in the face right now.

For starters, each bottle bought is packaging wastefulness to an extreme.

If you care anything about money, I did the math, and every time you buy a bottle of water for $1, you are paying 2,279 times what you would if you re-filled that same bottle with equally refreshing tap water.

Taste tests have proven people cannot tell the difference, so get that misnomer out of your head and make the permanent switch to tap.

6. Unplug Standby Power Appliances

Don’t know what vampire appliances are out there, sucking away your money and the environment, as they sit there, not even in use? Here’s a list of vampire standby power appliances to start.

I also highly recommend using a power meter device to measure every plug-in item in your house. Here are the results from my electrical use measurement. Actions taken saved me 22% on my electric bill.

Plug the vampires in when you need them and unplug them when you don’t. It’s easy, planet saving, money saving, and you might actually burn a calorie or two in the process.

7. Switch to a Low-Flow Showerhead

I’ve tried a few, and with a good one, you won’t even know it’s low-flow. But you’ll save 50%+ water in the process.

This is the low-flow showerhead I personally use (on the 1.85 gpm setting), and it has the power to deliver a 3-minute or less shower. Average shower heads use 4.2 gpm.

There are admittedly, some low-flow showerheads that don’t have the goods. I tried a 1.25 gpm showerhead, but the shower lasted twice as long, making it ineffective.

For a family of four you’d be saving 21,000 gallons of water and about $200 in energy costs per year. Where else can you get a 1,000% return within the first year of buying something?

Switching is literally as easy as unscrewing the old showerhead and screwing the new one on.

Here are some other ways to save money on water as well.

8. Get a Digital Programmable Thermostat

There may be nothing more first-world wasteful than heating or cooling a home to levels you do not need while you are working or sleeping.

The easiest way to save a lot of money on heating and cooling costs is to swap your old-school thermostat for a digital programmable thermostat.

It is extremely easy to do, so long as you have a screwdriver. If you purchase a $60 device (seems to be about the average), that could earn you a return on investment of 300% in just the first year and nothing but cool savings after that.

9. Start Riding that Bike to Work!

Long time readers are probably sick of hearing this, but I’m going to repeat it again. The #1 biggest financial, health, and planet saving move I’ve made over the last 5 years, maybe in my life – is selling my car and riding my bike to work.

If you’ve never done it, you have to give it a try – and there’s no better week than this week.

You feel relaxed by the time you get to work. You burn off stress and calories on the way back, and in the process you didn’t contribute more to global warming or spend any money.

How much money could you save? Here’s a biking vs. driving calculator so you can plug in your own numbers. It is quite possible that you could save $1M or more in making the move.

Stop making excuses. Do it.

10. Sell Some Stuff on Craigslist, then Buy Something You’d Typically Buy New

How many times have you heard a story of someone buying something used on Craigslist, using it for a while, then selling it for at least as much on Craigslist at a later point in time?

There is no greater money saving invention that has the potential to completely halt the buy -> use -> trash cycle that is so prevalent in our society.

If you haven’t used it in this way, it can be quite competitive. I recommend setting up RSS feeds for keywords of items you need, then acting quickly when they come up.

In the process, you’ll have stopped the wasteful cycle, kept an item out of the landfill, and saved yourself plenty of money.

Earth Day Discussion:

1. What are you going to take action on this Earth Day?
2. What would have made your top 10 recommend action list?

Related Posts:

• How to Run an Earth Day Barter Exchange
• The Story of Stuff
• Consumers Need a 12-Step Program Too

10 Easy Ways to Reduce your Impact (& Save Lots of Money) this Earth Day is copyrighted by 20somethingfinance.com without consent to republish.

I’m a day late, but yesterday was the start of the U.S. National Park Service’s “National Park Week“.

I highlight this every year because the U.S. national parks could be the best idea this country ever had.

And… it coincides with Earth Day (tomorrow). So you can:

1. Visit a National Park for free (on dates listed below) and and get inspired.
2. Take some action on that inspiration (I’ll have a special post tomorrow with some actions you can take).

This year’s National Park Week started Saturday, April 20, and continues through next Sunday, April 28. This year, not all of the days have free admission, however.

With this event, all 401 national parks (apparently we added 4 in the past year because there were 397 last year) do not charge entrance, admission, commercial tour, or transportation fees for Monday, April 22 through Friday, April 26. They actually cut back the weekends this year, probably because traffic was too heavy with the warm weather last year, mixed in with some good ole’ austerity.

268 of the 401 national parks NEVER charge entrance fees, so what’s special about this week? The other 133 high traffic parks usually charge. This week they don’t. Here are a few of the most popular parks where you would otherwise have to pay to get in that are participating:

• Sequoia & Kings Canyon (California)
• Everglades National Park (Florida)
• Yellowstone National Park (Idaho)
• Acadia National Park (Maine)
• Sleeping Bear Dunes National Lakeshore (Michigan)
• Carlsbad Caverns (New Mexico)
• Grand Canyon National Park (Arizona)
• Glacier National Park (Montana)
• Rocky Mountain National Park (Colorado)

Here is a free park entrance list by state, of the parks that usually charge fees. You can also see a full national park map here.

National park week does not cover tours, camping, concessions, or third-party fees, unless the individual park states otherwise. With some national parks, it might be really hard to get camping permits for this week, at this stage.

Also, remember to be careful with high parks that are at a high altitude, suffer from spring-time flash floods, or are in northern locations this time of year. The weather has been very mild this year, but that doesn’t mean it will continue. Check with the park that you’re interested in visiting to identify with roads and campsites may still be closed.

2013 Free National Park Days

If you can’t make it out in April, you can also take advantage of 3 other free national park entrance fee days this year:

• August 25 – National Park Service Birthday
  
• September 28 – National Public Lands Day
  
• November 9-11 – Veterans Day weekend

Free Entrance to National Parks from your Library?

Remember that national park passes are often of of the free perks libraries offer. Check with your local library to see if they have a pass and for restrictions on how long you can reserve the pass. You may have to book it far in advance.

National Parks Discussion:

• Have you been to a national park during free National Park Week or on a free day? How was the traffic?
• What is your favorite national park, and why?

Related Posts:

• Is the REI Membership Worth it?
• 20 Backpacking Tips
• Backpacking Gear & Supplies Tips

2013 National Park Week (April 20-28): Offers Free Admission to 401 National Parks, but Only on Weekdays is copyrighted by 20somethingfinance.com without consent to republish.