Category Archives: Business

Knowing Where to Tap

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I love the story about the owner of a broken machine who called an expert to fix it. The expert showed up, took out a small hammer, and tapped a piece of the machine back into place. Just like that, the machine was fixed! The owner was overjoyed until he saw a bill for $1000. “This is outrageous! All you did was tap one part into place! I want this itemized!” The expert calmly wrote it out for him: “Tapping part: $5. Knowing where to tap: $995.”

I found a plumber online to fix the faucet. He showed up Tuesday afternoon, on-time, and assessed the situation. Then he pulled off the top of the faucet (just like I’d tried to do and failed), changed out the $0.25 washer that I’d been trying to reach, and put it back together. Problem solved. The actual work took maybe 3-4 minutes. Then he helped me pull off the faucet handle I’d broken so I could replace it myself. Total bill: $39 just for coming out plus $80 for “rebuilding the hose bib” for a total of $119. He left off the $9.95 fuel surcharge that his company wanted him to collect.

Morals of this story: 1) Learning home improvement techniques can save you a lot of money. 2) It’s a darn good thing that there are people who know more than I do about many different topics. 3) One way to make a good living and improve job security is by knowing where to tap.

The Genius of Half-Price Books

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I wish I could buy stock in Half Price Books. They buy much of their inventory from the general public, suckers like me who keep bringing them used books, CDs, movies, and magazines that we don’t want anymore. The employees “appraise” them somehow and offer us money, generally a small fraction of their eventual resale price. Since we’re getting rid of the items anyway, any money in return is better than nothing, so we accept their offer. Even better, while the employees appraise our
items, we wander around the store finding new things to buy. We get a voucher for the stuff we brought in and apply that money to a new purchase. Yesterday I brought in a heavy box of old magazines and young adult books. They offered me $10, and I used it to buy a single book for $13. It’s a win-win, but they definitely got the better end of the deal: a big pile of merchandise to sell and $3 versus my single book. It might be slightly easier for them to just print Benjamins all day, but it wouldn’t be nearly as much fun.

IBC has released the details of the Water is Basic 5K: Saturday, October 13, 8:30 am. I’m already putting together a team. So far we have myself, Jenny, Mom, Dad, Lisa, both Jenny’s parents, and Jenny’s sister Katy, so we’re up to 8. I’m hoping for both brothers-in-law and some others! It’s going to be a great event, and we want to raise tons of money to drill wells in Sudan, so spread the word!

“Free” Credit Reports

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Jenny and I have been retooling our budget and financial priorities lately to spend less and save/give more. In late January I decided to pull up our credit reports, since I’d heard we each get one for free each year. I went to www.freecreditreport.com thinking that was the site. I signed up, and they asked for a credit card. It turns out that the site is run by Experian, one of the credit reporting agencies, and you get your “free” report by signing up for a free trial of their $12.95/month credit monitoring service. It wasn’t completely clear to me when I signed up, but I had a vague notion that I should cancel within 30 days just in case I would get charged. I got the credit reports and filed them away. I also looked around on the website trying to figure out what I’d actually signed up for, but it still wasn’t clear.

A few days ago I saw two $12.95 charges from them on my credit card. The first option on their phone tree was to cancel your membership, which is a bad sign. I talked to a girl with an interesting accent and a definite script aimed at getting me to stay. After arguing with her a bit, I got her to cancel us. I wrote Experian an email about their bait-and-switch campaign and told them I planned to avoid Experian products from now on.

In case you’re curious (and I do recommend checking your credit report), the truly free credit report is at www.annualcreditreport.com. I haven’t tried it yet, and it doesn’t provide your actual credit score, but at least you’re not signing up for something without knowing it.

Live Long and Prosper

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Today’s Cool Website Spotlight shines on Prosper.com, a site that links up people who want to borrow money with people who want to lend money. The borrowers either don’t want to use a traditional bank or have poor credit and can’t get a loan. They provide their financial details, get a credit score, and write up a request for a loan amount and suggested interest rate. Then the lenders look over the requests on the site, including their credit score and debt/income ratio. Then they bid on a piece of the loan, offering maybe $100 toward the loan at 10%, 25%, or whatever the appropriate rate is. Most lenders lend small amounts to many people to spread out the risk of default. If and when the loan is fully funded, the lenders start bidding down the interest rate until the “auction” closes. The borrower gets the money and starts paying it back to the lenders with interest over a 3-year term. If they default, Prosper sends a collection agency after them. It’s a fascinating concept, and if you can tolerate significant risk, it can provide excellent returns for you as a lender. Behold the power of the Internet!

The Bed

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When I graduated from college, I had very little furniture, so I furnished a living room and bedroom. The bed I chose was a wall unit, queen-sized with huge piers on either side and a tall headboard with a mirror, all in oak veneer. This bed is BIG. The matching dresser and chest had plenty of space. I chose these pieces partly because I liked them and partly because I wanted to have enough space for my future wife’s things, in case I ever found a woman willing to marry me. Well, once I did find a wife, she thought the bed was too big and didn’t like it. She also didn’t like my nice brown comforter that had served me well as a bachelor. At first I was hurt and offended, but over time I came to understand a woman’s need to “fluff the nest”. We replaced the comforter early on, donating the old one to some needy folks, but we ended up saving the bed for this weekend. We spent a few hours at IKEA, one of the coolest furniture stores ANYWHERE. We bought a black metal bed with birch nightstands, another new comforter, funky lamps, and a beautiful painting for over the bed. The massive old bed now sits in the guest bedroom. We also got a new mattress set for the guest bedroom from Sleep Experts. They are very nice folks, helpful but not pushy. They rehab and donate your old mattresses to charity, so I like doing business with them. Now that everything is set up, Jenny is happy, and I must admit that I am, too.

And It Will Not Be Long, Love, Till Election Day

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Hee hee…I might be the only freak in the world who gets that joke. Anyway, today was election day, and I did my civic duty by voting against the Republicans and Democrats wherever possible except for the US Senator election. Kay Bailey Hutchison helped repeal Wright, so I couldn’t vote against her, but she also insulted Southwest’s coffee in a press conference afterward, so I couldn’t vote for her, either. She’ll get elected either way. I’m still pulling for Kinky, though…

I have a new project and possible use for my MBA – making money in the stock market. I picked up some books at Half Price Books, and I’ve been reading reports by Warren Buffett on his investing philosophy for Berkshire Hathaway. From what I’ve seen so far, the stock market is largely illogical, despite what I learned in my finance class. We learned tidy formulas for valuing a company based on the present value of projected future cash flows, discounted by the risk premium, etc. But it seems to me that a stock’s price is largely determined by the market’s consensus about the stock’s future movement rather than the actual value of the company, especially if the company doesn’t pay signficant dividends on earnings. The price goes up if the analysts and investors think the price will rise and down if they think the price will fall. How circular is that?!? In addition, a stock’s price is significantly affected by how closely the company hits the analysts’ and its own earnings forecasts, more so than by the actual amount of profit or loss that help determine the company’s health. Even more strangely, Southwest’s stock price often DROPS when we report our quarterly earnings, which have been positive every quarter since the early 1990s, even if we BEAT the target! Despite the insanity of the system, there is money to be made, and I intend to figure out how to wisely carve off a slice for us. I know a couple of people who are getting into day trading with some success, but that sounds a little risky for me. I want something a little more stable and logical. I’ll see what my books recommend…