All posts by Jacob A Irwin
"High-End" and "Value" Pricing Strategies on Consumer Goods
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- Walmart.com – Polo Shirts
- All priced at whole numbers, ranging from $7 – $12, both even and odd Dollar values.
- What a deal, right!?
- Walmart.com – Rollbacks of the Day
- All priced at whole numbers, ranging from $5 – $25, both even and odd Dollar values.
- Gap.com – Men’s polo shirts
- All priced at prices in 50 cent increments ($32.50, $49.50)
- Gap.com – Sales page
- All priced at prices in 99 cent increments ($19.99, etc)
- Talbots.com – Sweaters
- All priced at prices in 50 cent increments.
- Talbots.com – Sale items
- All priced at prices in 99 cent increments.
- “Fractional prices suggest to consumers that goods are marked at the lowest possible price.”
- To me, this explanation means that when a retailer places a price at a 99 cent increment, we as consumers feel that it was almost painful for the seller to place the price under the Dollar mark.
- Very cleaver little plan!
- “Judgments of numerical differences are anchored on left-most digits, a behavioral phenomenon referred to as the left-digit anchoring effect. This hypothesis suggests that people perceive the difference between 1.99 and 3.00 to be closer to 2.01 than to 1.00 because their judgments are anchored on the left-most digit.”
- I think this explanation makes a lot of sense. I believe that we as consumers are conditioned to see, process, and decide on things very quickly.
- As a result, we often just see the “1” and the “3” in front of the two prices, are aware of the incremental cents involved, but just subconsciously place less importance on the 99 cent figure.
Return on Investment of Your College Education – Top 15 Schools and How to Calculate It Yourself!
Recently, I was reading the Monday, August 9th edition of the Investor’s Business Daily
newspaper, and came across a very interesting article about the US colleges with the top 25 return on investment (ROI).
A quick listing of the top 15 schools is shown below:
- Georgia Tech
- Brigham Young
- University of Virginia. Go UVA!
- William and Mary
- Colorado School of Mines
- Virginia Tech
- University of Michigan
- UC Los Angeles
- UC Berkeley
- University of North Carolina – Chapel Hill
- University of Florida
- Cal Tech State University (not California Institute of Technology)
- Texas A&M
- James Madison University! Go Dukes!
- University of Delaware. There are some smart ones in Delaware!
A couple of key points stick out to me on this list, as described below:
- The State of Virginia has 4 of the top 15 highest return schools! Go Virginia.
- I’m partial because I live in this state. 🙂
- The 1st Northeastern United States school is not until #15 on the list, University of Delaware. The first California school is not until #8 on the list.
- The ROI is not looking too good for the two areas in the US with the highest cost of living.
- 8 of the top 15 schools are in the South.
So, without a doubt, this is very interesting information. All of the source data from this article comes from PayScale.com. If you have children that are debating among colleges about which to attend, this site has useful information about potential salaries and return on investment.
But, as I was reading through this article, I was curious about how I could expand the advice in this article so that everyone could calculate what their annual return on investment has been in the years that they have worked since attending college.
To calculate your ROI, you need the following two pieces of information:
- Return = average annual income that you have received since you ended college
- Investment = total cost to attend college
- PayScale.com calculates this by summing tuition, room, board, and fees.
How about you all? Do you all currently tabulate your ROI for your college education? How did your school come out in the above rankings?
Let us know by commenting below!
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Rejuvenate Your Investment Strategy for Retirement Using Currency Exchange
Today’s guest post comes to us from Mike Trinkle. Mike is a currency trading author, who is sharing with us today a foreign currency exchange strategy that works well for him.
Are you looking for ways to change your investment retirement strategy due to poor performance? Or lower than expected returns? Admittedly, the recession has caused the majority of new and experienced investors to look for new avenues in to which to relocate their funds.
Currency exchange will recondition your overall investment basket and allow you to claim your short-term returns. However, you should also note that the forex market is much more volatile then the stock, bond, and commodity markets.
If you have been looking for short-term profits then the forex market is very easy to access; it’s open 24 hours a day / 5 days a week (markets are closed on the weekend).
Applying your current retirement investment strategy to the forex market may work with a few tweaks and knowledge base expansion. In order to have a successful forex strategy and increase your short-term returns you will need these three components; fundamental analysis, technical analysis, and strong discipline.
Fundamental Analysis
To have a lucrative fundamental analysis, you would be required to look for important news that would affect the overall currency market. The forex news consists of important news (macro-economic level) and the not so-much important news (micro and small ineffective economic news). Since, the global recession started in late 2008, there are three required economic news that need to be part of your fundamental analysis; unemployment rate, NFP (Non-farm payroll), and the Federal fund rate.
If you are trading the Euro (which is made of 27 European members) against the U.S Dollar and a positive or negative sentiment macro-economic news is announced; it will surely shake up your EUR/USD currency trade. Let’s take a look at the U.S unemployment rate and the NFP number that was just recently announced as an example to illustrate the reaction of breaking news. The forecast was that the unemployment is going to increase from 9.5% to 9.6% (negative for the U.S dollar) and that the NFP is going to decrease to -63K from -131K (positive to the U.S dollar). Looking back at all major currencies (Euro, GBP, and Yen) you would have noticed that the U.S dollar plummeted on that day … reason? The unemployment rate actual number was neutral/positive because it stayed at the same rate of 9.5% percent but the NFP number increased to an astounding -131K which was more then double then the original forecast.
Technical Analysis
Technical analysis is needed in currency trading more than in the stock, bond, or commodity markets to be prosperous.
In the forex market, the technical analysis of any currency will consist of two vital components; trend and resistance lines.
Trend is simply the flow of the currency is moving at; for example, currency moving in an downtrend direction (moves from the top-left corner to the bottom right corner) and vice-versa an uptrend direction (moves from the bottom-left corner to the top right corner). Why are trends relevant in the forex market? It’s because the daily trends are long-term lasting and it’s where majority of traders (commercial and professionals) are placing their buy or sell positions.
Resistance lines are previous points where the traders decided to start a new buying position or the buyers decided to sell. Resistance lines are important in the currency exchange market because that’s what the majority are watching as an entry or exit point. If a resistance line is broken on the upside, then you would know that your buy position is strong and if the vice-versa occurs where your buy position breaks a resistance line on the downside; you will need to exit and take the loss.
Discipline
The majority of the forex traders fail in the forex market because they have little to no discipline while trading. Many trade the forex market as a form of gambling or luck which is the wrong stance to have. You are not required to trade everyday but only during the times where you view the probability to win is greater then to lose. There will be times, where you will lose but being able to control your risk and having the proper money management plan; will give you a greater probability of short-term profits. Forex trading should be part of your retirement strategy and short-term gains will add up very fast but remember in order to be successful you must control your risk.
Here is a great quote from General George S. Patton about risk taking, “Take calculated risks. That is quite different from being rash.”
Thanks for reading!
Mike
How about you all? Have you all ever tried currency trading? Was it successful for you? Was it too risky?
Note from blog author: After analyzing the different aspects about foreign currency trading through reading this article, I’ve determined that while it is a worthwhile endeavor for some people, currency trading with currencies such as the US Dollar, Yen, or Bitcoin does not fit well in my investment strategy.
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Two New Tax Advantaged Investment Accounts You Need to Know About
Recently, while reading Burton Malkiel’s book, A Random Walk Guide to Investing
, I came across a description of two new types of investment accounts that George Bush was helping to develop when the book was published. These two types of accounts could potentially be added to your overall investment mix of stocks, bonds, or buying gold as an investment.
The two types of accounts are listed below, along with descriptions of their features:
- Retirement Savings Account
- Designed to replace Roth IRAs
- Allow each individual to contribute up to $7,500 per year. Has to be earned income.
- No tax deduction when funds placed in to account. No tax held upon withdrawal in retirement.
- Lifetime Savings Account
- Each individual in a family could contribute up to $7,500 per year, irregardless of the source (i.e. does not have to be earned income).
- No tax deduction when funds placed in to account. No tax held upon withdrawal in retirement.
These two types of accounts could give a serious tax advantage to the individual investor that knows about them and uses them effectively.
While reading this, I began to wonder what the status was for these types of accounts. Did a law ever pass allowing these accounts? Are they still being debated?
In searching around the internet a little, I could find no evidence that these types of accounts were ever enacted or if they are actively being debated.
Does any one out there reading this know about the status of these account types? They should like they would be quite attractive options!
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How to Maximize Your Profits with Dropshipping
Today’s guest post comes to us from Corry Cummings. Corry is the owner of LearnToImportFromChina.com. His website offers information on how to get true wholesale products from China.
His post is about dropshipping, which is a subject that ties in nicely with my previous posts on selling items on eBay and Amazon to make extra money.
I have never tried dropshipping, so please be sure to share your experiences if it has or hasn’t worked out for you. I can imagine though that the key factor is to ensure that the dropshipper you use is reputable and will not simply take your money and run.
Almost anyone with an Internet connection can get into online retail these days. Ebay, Amazon, and Yahoo have all created easy and effective ways for individuals to sell products online.
If you are looking for a way to sell more products while maximizing your profits, dropshipping can be a great way to do just that.
Dropshipping is a method of selling your products online that does not involve any inventory or shipping costs on your end. You pay a company that stocks your products and your customers order the product from you. You then give the money and shipping information to the dropshipping company, who then ships your product to the customer. This allows you to sell a wide array of products without having to worry about storing them or paying for shipping. Also, your customers will not necessarily know that you are not shipping or storing the product. Using dropshipping is a great way to maximize your online business’ profits.
Researching to Maximize Profits with Dropshipping
Before you start selling products, you need to research the market to see what products are selling. Many dropshipping directories will feature data files for their products that show where the highest profit margins are. This is usually done by comparing their prices to MSRP. Also, look at eBay and Amazon to see what are the highest selling items. These websites can also be a good indicator of what you should charge for your products. A lot of shopping sites will have lists of their hottest selling items of the day, week, month, etc. These can be good indicators of what consumers want at the moment. Bear in mind that these are not the most comprehensive lists.
Keep Profit Margins on Your Mind
Profit margins can be all about perception. If your dropshipper charges you $20 for a product and you sell it for $40, you have a 100% profit margin and you have made $20. However, if your dropshipper charges you $500 for a product and you sell it for $550, you have had a profit margin of 10% but you have made $30 more. Keeping track of your profit margins in terms of dollars rather than percentages can be a great way for you to see just how much money you are making dropshipping. Selling highly priced items with dropshipping carries no more risk than selling lower-priced items.
Niche Products
A niche is a segment of the market that is not having its needs sufficiently met by the greater market. A niche, to someone who is looking to maximize products with dropshipping, can mean huge profits and a customer base that is reliant on you alone to meet their needs. A niche can be hard to find – there are so many different online retailers selling so many different types of products. The trick is to find one that is not served by many retailers and to try offering better services than the other retailers. This will take a lot of research and planning on your part but in the end it can mean huge profits for your dropship business.
How about you all? Have you ever had success with selling items online through dropshipping?
Share your experiences by commenting below!
Did you like this article? You can get the complete text of all the latest articles at My Personal Finance Journey in your email inbox each evening by clicking the link below and entering your email address. Your address will only be used for mailing you the articles, and each one will include a link so you can unsubscribe at any time.
Subscribe to My Personal Finance Journey via Email
Related articles about dropshipping at several of my favorite personal finance blogs:
AllBusiness.com – Make Sure Your Dropshipper is Genuine
My Current Asset Allocation and Net Worth Growth – August 2010
My Personal Finance Journey Homepage
Let’s take a look….
Net Worth Growth (not including condo)
From July 14 (when the last portfolio update was published – see link below for more information) to August 11, the S&P 500 index went down 1%.
My Personal Finance Journey – July 2010 Portfolio and Net Worth
During that time period, my net worth (excluding condo ownership) decreased 4.31%. This decrease is due to the fact that I am not counting my home equity in my overall net worth / asset allocation calculations. The reasoning for this was discussed in a previous post at the following link – How Does Home Ownership Fit in to Your Overall Asset Allocation?.
Condo Equity Growth
Since I am not counting the home equity in my condo as part of my asset allocation, I need to add a new section to these monthly portfolio reviews to account for this important aspect.
Currently, I have 7.62% home ownership in my condo (up from 0% last month), with this accounting for 56% of my real net worth (so net worth subtracting the condo loan – this is different from the net worth above).
I have now achieved the following financial goals in 2010:
- Achieved my short term target net worth for this year.
- Contributed the maximum contribution level of $5000 allowed for my Roth IRA for the year 2010 (and 2009 as well).
- Eliminated all significant holdings in individual stocks from my portfolios.
- Eliminated the actively managed Vanguard Short-Term Investment-Grade Fund (MUTF: VFSTX) and replaced it with the following short-term bond index fund – Vanguard Short-Term Bond Index Fund (MUTF: VBISX).
- Successfully purchased a condominium to live in for graduate school. Yah!!!
- Initiated Rollover IRA to Vanguard from my Fidelity 401k from my previous employer.
- Purchasing a TIPS inflation protected mutual fund.
For a detailed list of my short term, mid term, and long term financial goals, click on the link below:
My Personal Finance Journey – Financial Goals
Review of Current Asset Allocation (excludes condo)
- Overall Fixed Income / Equity Allocation
- Currently, 24% of my net worth is invested in fixed income instruments (cash or bond funds), and 76% is invested in equity.
- This is almost perfectly aligned with my targets for these categories of 25% (fixed income) and 75% (equity).
- Equity Allocation
- In the equity portion of my portfolio, 64% is invested in US Domestic Equities with the remaining 36% being held in international equities.
- This is significantly off from my equity breakdown targets of 71% and 29%, respectively, for US Domestic and international holdings, and will have to be corrected through rebalancing actions when I roll over my 401k holdings to a Vanguard IRA (more detail below).
While the overall percentages for these categories may not be ideal, a detailed look (table below) at the allocation breakdown reveals the real story and provides for better analysis of the current state.
Remember: a red flag goes off if your current % allocation in a category is greater than +/- 5% off of the target allocation. This is my trigger that I need to rebalance that aspect of my portfolio.
% Cash (money market target 5%) 8%
% non-inflat Bond Funds (target 15%) 16%
% TIPS Bonds (target 5%) 0%
% International Equity (Target 11%) 19%
% International Emerging Markets (Target 11%) 9%
% Domestic Large Cap (Target 8%) 12%
% Domestic Small Cap (Target 8%) 16%
% Domestic Small Cap Value (Target 14%) 8%
% Domestic Large Cap Value (Target 13%) 6%
% REIT (target 10%) 6%
The components of my portfolio highlighted in red above are outside of the 5% safety band, and therefore, need to be analyzed for reallocation. Fortunately, due to my current situation of rolling over my Fidelity 401k to a Vanguard IRA, I will be able to remedy most, if not all, of these discrepancies. Yah!!! Finally, the time has come!
- TIPS Bonds –
- During the roll-over to a Vanguard IRA, I selected to place the equivalent of 4% of my net worth in to the TIPS mutual fund. This will satisfy this category of my asset allocation.
- International Equity and Small Cap Equity –
- As you can see from the %’s above, I have 8% of my net worth too much invested in international and small cap equity funds.
- To remedy this, I will exchange 8% of my net worth out of these types of funds to the small cap value, large cap value, or REIT category. Problem solved!
- Small Cap Value and Large Cap Value Equity –
- I currently need 7% and 6% more worth of my net worth in large cap value and small cap value equity funds, respectively, to be aligned with my asset allocation targets.
- In order to gain this alignment, I simply instruct Vanguard to purchase this much of these respective mutual funds during the roll over. Easy as could be!
My next moves for the August/September 2010 time frame will be to do the following:
- Sign up for a biweekly home loan payment plan.
- Set up accounts for making home ownership automatic – automatic deductions for loan repayments, real estate taxes, maintenance reserve funds, insurance, etc.
- Begin to set up a will (since I don’t have one right now and it’s something that everyone needs if you have any kind of assets).
Wish List
- At some point, purchase the Vanguard Total Stock Mkt Idx (MUTF:VTSMX) to replace S&P 500 index fund. This gives better, broader diversification to the US stock market.
- Purchase more microloans in developing countries as part of my “making a difference” life value in my Purpose Focused Financial Plan.
How about you all? Did you make any big moves that affected your net worth this past month?
Do you consider your home equity as part of your net worth or do you leave it as separate?
Did you like this article? You can get the complete text of all the latest articles at My Personal Finance Journey in your email inbox each evening by clicking the link below and entering your email address. Your address will only be used for mailing you the articles, and each one will include a link so you can unsubscribe at any time.
Vanguard vs. Fidelity – Which Funds Are Better?
Yesterday morning, I had the distinguished honor of being on a call with Fidelity, the administrator/provider of my previous company’s 401k accounts, to roll over my 401k to a Vanguard IRA.
During this call, the sales agent was fiercely trying to persuade me to rollover the 401k account to a Fidelity IRA. His two major selling points were that he claimed that Fidelity had..
- 1) Lower expense ratios than Vanguard, and
- 2) Better money managers/actively managed mutual funds.
I then proceeded to get in to an argument with the sales rep about how active management is a foolish game in which to play. He fought back valiantly, stating that if you find a good money manager that takes advantage of the Modern Portfolio Theory, you can achieve higher returns through proper asset allocation.
Needless to say, he was digging his own grave with this piece of wisdom, since that has nothing to do with why active management is superior (asset allocation can be done on your own with index funds).
Regardless of how I felt about the validity of reason #2 above (better actively managed funds), reason #1 did in fact get me thinking because I have never done a personal, head-to-head comparison of Fidelity and Vanguard. I merely was trusting that Vanguard was superior because it is the most recommended in the investment books I read by Malkiel, Siegel, et. al.
Because of this, I wanted to dedicate today’s post to comparing Vanguard against the largest mutual fund company in the world (as far as quantity of capital invested goes), Fidelity.
Point of Comparison #1 – Comparison of Expense Ratios (and subsequently, performance)
As you can see on the table above, Vanguard features lower expense ratios (and therefore higher returns) on 10 of the 14 funds that I am holding. This corresponds to Vanguard beating Fidelity on expense ratios 70% of the time.
Moreover, Fidelity does not even offer index funds for the small-cap value, REIT, and Emerging Market arenas. This is rather inadequate for the asset allocation-obsessed investor.
Simply put – no one can beat Vanguard on index investing.
Point of Comparison #2 – Trading Fees / Commissions
When it comes to trading fees and commissions for trading ETFs and mutual funds, Fidelity and Vanguard are tied.
They both offer $0 trading on their proprietary mutual funds and ETFs.
Point of Comparison #3 – Minimum Balances, Initial Quantities, and ETF Availability
This point is an area where Vanguard shows though as having a clear advantage, at least in my perspective.
Fidelity requires that an investor have (for each mutual fund) a minimum initial investment quantity and continuing investment balance of $10,000. For the majority of investors, especially for younger investors, I feel that this is simply not realistic.
On the other hand, Vanguard requires a minimum initial investment of $3,000. However, once the account is established, the balance can dip below that level without penalty.
As far as ETFs go, Vanguard reins superior over Fidelity because 1) their ETFs feature lower expense ratios and 2) Fidelity does not even offer their own ETFs. Instead, the ETFs listed on the table above are actually iShares ETFs that Fidelity offers with $0 commission trading.
Point of Comparison #4 – Ease and Simplicity of Navigating Website
In trying to find the expense ratio data in the above table, I have to admit that I obtained a serious headache in the process.
Even though I am very used to and partial to Vanguard, Fidelity’s website is a pain to navigate. It is much harder to sort mutual funds based on asset class and whether they are index funds or actively managed.
Additionally, I feel that Fidelity tries to complicate index investing too much by offering “enhanced” index mutual funds. This makes it even harder to drill down to the investment vehicle that you want.
Key Takeaway
By the evidence shown above, I believe we have disproved what the sales agent was saying about Fidelity offering lower expense ratio index mutual funds.
As I am wrapping up this post, I am trying to brainstorm in my head just why Fidelity manages the most capital in the world, when Vanguard is clearly superior as far as index investing goes. Thus far, I have thought of the two reasons listed below:
- Fidelity markets itself better to institutions, encouraging them to establish their 401k accounts with their company.
- Fidelity specializes more in active management vs. index investing.
- Since sadly, the majority of investors fall in to the active management trap, I suppose it would make a lot of sense for Fidelity to have an increased amount of capital.
How about you all? Do you all use Vanguard of Fidelity for your index and/or actively managed mutual fund needs? What made you go with the provider you chose?
Share your experiences by commenting below!
Related articles comparing Vanguard and Fidelity at several of my favorite personal finance blogs:
- Comparison of Vanguard, Schwab, and Fidelity @ the Investing Guy
- Target Retirement Funds Face Off – Vanguard and Fidelity and T Rowe Price@ The Amateur Asset Allocator
Weekly Roundup – Moved In to The New Condo Edition – Week of August 2nd
Whew!!!! It has truly been a whirlwind of a week.
On August 2nd, I moved out of my apartment in the Northeast, passed down through the Mason-Dixon line, and have settled in to my new condominium that I purchased in Virginia. It’s definitely good to be back!
This week has been quite hectic for creating posts myself, but it has been convenient because it shut me up long enough to publish some great guest posts! Take a look at them when you get a chance!
One that truly shocked me was the comparison that Jordan did about the cost of living in California. Apparently, a $100K salary in California only covers the bare essentials! Ridiculous!
We also had a lot of luck this week with getting our articles featured at different blog carnivals around the blogosphere.
Listed below are the various articles that got selected for the competitions.
- Does Being Green Make Economic Sense – Part 2 – Recycled Paper and Rechargeable Batteries was included in the Best of Money Carnival at Budgets are Sexy
- A Credit Card Debt Saga – And How I Survived was included in the Carnival of Personal Finance at UltimateMoneyBlog.
- The all-important My Personal Finance Journey Account Hierarchy was included in the Carnival of Financial Planning at The Financial Blogger.
- eBay vs. Amazon – Part 1 – Comparison of Selling was included in the Carnival of Financial Independence at Ditch The Boss
- What Would You Do If You Had Credit Card Debt? was included in the Carnival of Debt Reduction
- How I Saved Myself Money with Rental Cars (and You Can Too!) was included in the Carnival of Money Stories at MoneyBeagle.
- Tax Benefits of Home Ownership was included in the Carnival of Real Estate Investing at TheIncomeBlog.
- Aldi vs. Wal-Mart vs. All the Rest was included in the Festival of Frugality at Yes I’m Cheap
- Are IPO’s a Good Investment Option was included in the Stock Carnival Ecstasy at FastSwings.
How about you all? What was your favorite post on the blogosphere this week? Any good ones that you have ran across in blog carnivals?
Did you like this article? You can get the complete text of all the latest articles at My Personal Finance Journey in your email inbox each evening by clicking the link below and entering your email address. Your address will only be used for mailing you the articles, and each one will include a link so you can unsubscribe at any time.
Buy-Sell Agreements – What They Are And The Important Role of Life Insurance
My Personal Finance Journey Homepage
How about you all? Do you all have a small business/business and have a life insurance plan on your business partner? Have you ever participated in a buy-sell transaction?
Did you like this article? You can get the complete text of all the latest articles at My Personal Finance Journey in your email inbox each evening by clicking the link below and entering your email address. Your address will only be used for mailing you the articles, and each one will include a link so you can unsubscribe at any time.
Subscribe to My Personal Finance Journey via Email
Related articles about businesses/insurance related matters at several of my favorite personal finance blogs:
Cost of Living in California Compared to…Anywhere Else
Today’s guest post comes to us from Jordan, a dedicated blog reader and voiceful commentator.
In a previous post on this blog, I had analyzed how my costs of living had changed after hiring movers and moving from the southern US to the Northeast. Jordan’s post, on the other hand, will take a look at how the cost of living in California stacks up to the rest of the world. Let’s get started!
Cost of Living in California Compared to…Anywhere Else
California…Hollywood, Beverly Hills, serfdom. It’s not often that I take time out of my day to moan on paper…er, electrons. Sure, I take plenty of time to gripe in person, or over-the-phone for that matter. But when one of your best friend calls you and gives you a legitimate stage for your molestations, you just have to go with it.
This post will attempt to reconcile the differences between living in California and, well, living in any other part of the world. Of course, being that money is the backdrop here, I will try to steer clear of political diatribe and objectively comment on the sound financial facts.
TO FRAME A PICTURE:
Of course, we have to put all this in context now, don’t we? I have lived on multiple continents and experienced many cultures. And when I wasn’t an inhabitant, I was traveling there. Business…pleasure…it matters not. The point is that I have sampled many corners of the globe and can candidly say, without any qualms, that California is the most expensive place to live – ever.
THE FIRST STROKES:
I moved to San Francisco, California nearly two months ago for work. I was given an Extended Stay hotel to call home while I looked for a place to rent. I was making six figures, had a car paid for, no college debts, and a very healthy credit score. Even though the housing markets in the US are still WAY overpriced, I figured they would have fallen enough in California that maybe I could find a decent deal. Wrong. I linked up with a Realtor and she explained that, unless you are willing to commute 60 minutes to work, one way, there would be no way I would be able to afford a house in a respectable area. I asked her for the definition of respectable…let’s say that many homes come with barred windows to keep out the neighbors.
Realizing that I didn’t want to be the first straight white guy to die in San Francisco, I decided that safety was a priority. So I ended up finding a 700 square foot apartment for myself. 1 bed, 1 bath. $2000 a month. Not bad considering I could buy the same unit for a meager $825,000. Definitely wasn’t in Kansas anymore.
BUILDING THE THEME:
When I got tired of crying myself to sleep at night over the money I was literally throwing away on rent, I decided to go to the DMV to register my car. It is, after all, illegal to drive an unregistered vehicle for more than 30 days. So a short 6 hour wait later, I got to pay $500 dollars to register a 2006 car in California. My eyes bulged. My wallet hid. The guy next to me laughed as he told me he just paid $1800 to register a new truck. I will quit now before the political wheel starts turning.
THE FOCAL POINT:
Okay, I have been sodomized by the state of California so far. I’ll just cut back on other expenses to make up for it. Yea right. Gas: $3.25 a gallon. Milk – more expensive than gasoline: $5.20 a gallon. Tickets for entering an intersection during a yellow light (they have sniper cameras): minimum $300 dollars. A pound of low-grade, shit bird turkey meat: $11.00. Parking ticket for not paying a meter when there are NO change machines around: $50 (even after explaining that I got the ticket WHILE I was getting change for a dollar inside to pay the meter). Parking anywhere? Bring change! State income tax: 10%.
THE MASTERPIECE COMPLETED:
I think it’s fair to say that California is going to cost me nearly 400% more than it would in the midwest. Use an online calculator and that is your base rate. Are you white, male, and able to pay taxes? Square it. All in all I would never choose to live in California. This is the only place I know of where a six figure salary buys you minimal protection and only the bare essentials. Sure there are plenty of things to do, but it takes money to do them all.
How about you all? Have you all lived in California and experienced these kinds of living expenses?
Do the costs anywhere else in the world compare to California? Let everyone know by commenting below!