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August 2010


I’m still a fan of the mobility and flexibility offered by renting a place to live rather than buying. I don’t know where I’ll be living in the next few years, and I wouldn’t want to deal with the expense and hassle of selling a house so soon after purchasing. Perhaps my evaluation of my situation is changing, however.

I like the area where I live. As of today’s thinking, I probably won’t move way from the greater Princeton area unless my girlfriend and I decide to live closer to her family in Queens or Long Island. The borough of Princeton is an expensive place to live, as is the surrounding township, so if I were to buy a house in this area it would be out of town.

Though the decision to buy is influenced by my needs and concerns, it’s always helpful to look at the real estate market in the area. For most non-investment real estate transactions, a homeowner would sell one house and buy another, sitting on both sides of transactions. All things being equal, he or she would not see an advantage in a sellers’ boom market because he or she would also be buying, and the same is true in a buyers’ market as he or she would also be selling. The only time one can really take advantage of a buyers’ market is when they are buying a house without selling one, as one would do when buying a first house.

That’s where I stand right now. Home prices are historically low, even if Princeton has seen a 5% increase in median sale prices over the last year. Although the Case-Shiller Home Price Index is up 3.6% this month, many analysts still forecast low prices for a while.

One option I am currently considering is buying a multifamily house, living in one unit and renting out another. With renting being a popular option right now, and with a location in close proximity to an Ivy League campus, this could be an interesting way to build equity and create new cash flow.

If I decide to move away from the area, I could rent both units in the multifamily house. Managing the house from afar could be difficult, but if there is enough cash flow, I could hire a management company.

The plan relies on finding the right kind of house for the right price. If I do end up leaving my day job, it will be harder to qualify for a mortgage and if I do, I’ll most likely have to pay higher interest rates. This plan may need to be enacted, if at all, before I quit the rat race to work on my projects full-time.

Any thoughts are welcome. Do you think this is a good plan? What would you do?

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My brain is slowly re-wiring itself now that I’m finally free of credit card debt, and I’m wondering about things that I never seriously considered before. I remember many years ago talking with a friend who tried explaining to me that it made sense to spend $600 on a pair of shoes, if they were high-quality enough to last for decades. At the time, I rejected that idea immediately and, I thought, forever. After all, they’re just shoes.

But now, I’m allowed to think about paying more for higher quality in additional areas of life, and I find that I want to think about it before spending money on just about anything. Maybe shoes can be worth $600, maybe it’s worth it to have a suit tailored exactly to my body, maybe there’s a good reason one hammer costs twice as much as the hammer hanging right next to it.

For example, last week we bought an oscillating lawn sprinkler. In the last seven years we’ve bought probably seven or eight sprinklers, some of them fancier than others, but none of them what you’d consider high end (at least not if you’ve done the research I just did). Last week’s sprinkler probably cost just over $10 after tax. We tried to set it up in the yard and we simply couldn’t figure out how to get it to spread the water out in the right pattern. It’d get stuck in one position, or only go up halfway before coming back down. The controls didn’t make any sense, and when we tried to get it to stop spraying upside-down, it broke.

After we gave up, I did some research at the Home Depot and Lowe’s websites, and cross-referenced their options with sprinkler reviews at Amazon, and I found two surprising facts: 1) neither Lowe’s nor Home Depot sell sprinklers at my local stores that are well-reviewed on Amazon, and 2) it looks like you need to spend at least $35 for any sprinkler that is well-reviewed.

Actually, I learned a third surprising thing: a person could theoretically spend almost $2,000 on a lawn sprinkler. I didn’t get that one, I got the first one I could find with more than a couple five-star reviews, which ended up being $37.80. It still seems like a lot to spend on something that should be easy to make cheap, but according to several reviewers, this is a brand that can last up to ten years. In other words, it goes against the “they don’t make ‘em like they used to” concept.

I tested the new sprinkler just now, and it worked right the first time, due in large part to controls that make sense. So, I’m adding sprinklers to the list of things I’d pay more for, in addition to video and photography equipment, computer hardware and software, trash cans, wine, coffee, power tools, haircuts, mattresses and bed frames, cars, air filters, pet care, vacations, exercise equipment, and dinner ingredients, not to mention the occasional visit to a nice restaurant.

But there are still some things I will always buy the cheap version of, if only because I tend to lose them. That’s being generous; I always lose them. Sunglasses and fingernail clippers, for example.

I’m still not so sure about shoes, though. What did you used to buy the cheap version of, before you decided to spend more on quality?

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While half-watching the Primetime Emmy Awards last night, I considered what it must take to be the best in an industry. From what I could glean from the broadcast, and from what I’ve seen in my own life, winners share intense focus, hard work including sleepless nights, strong talent, moral support, and no tolerance of mediocrity. None of this applies only to the entertainment industry, of course. The most successful CEOs don’t receive their positions by luck, except perhaps for the few who inherit a business from their relatives, whose good fortune rests slowly in birthright.

Intense focus. I’ve made the case for generalism in today’s economy. Being good at a wide variety of things can lead to better career prospects, being a better leader of people, and living a more fulfilled life. Successful specialists, however, have configured their lives in such a way that they don’t have time for spreading their attention around too many unrelated interests. Their efforts are singularly focused on perfecting their skills and competing amongst the best.

Eric Thomas says it well: “When you want to succeed as bad as you want to breathe, you’ll be successful.” Eric talks about wanting success so much that you don’t have time to eat or even sleep.

Sleepless nights. Like many people, I had a boss who was a workaholic. As executive director of an understaffed, overreaching non-profit organization, he often worked in his office overnight in order to accomplish everything that needed to be done. We’d come into work in the morning to find him asleep as his desk. I’ve disagreed with him about the importance of sleep to a body and mind’s ability to function, but it was difficult to argue with the leader of an organization that is arguably one of the best, if not the best, in the world in its category.

While I reclaimed some sleep this weekend, I usually sleep less than five hours a night. With my day job taking my time an energy — and this coming week is going to be a major test of my stamina — I spend the rest of my waking time writing and otherwise handling business pertaining to my websites. There is very little time right now to fit in other extracurricular activities like photography.

Strong talent. I tend to think a very small portion of talent is inborn. Genetics may play a role to a point, and learning something new is easier for some people than others, but hard work often leads to what other people would identify as talent. And talent is often relative. According to my recollection, which could be wrong, I started off in third grade as a mediocre clarinetist — for a third grader. After a few months with the instrument, the teacher still placed me towards the end of the row, with the best players at the other end.

That summer, I moved from upstate New York to New Jersey, continued playing the clarinet in elementary school, but discovered I was somewhat more advanced than the students who were just starting in fourth grade. This gave me some momentum and by high school I held the “first chair” position among strong classmates for every year starting as a sophomore. If I hadn’t moved to New Jersey, I might have continue to struggle in comparison to my classmates and never given myself the motivation to succeed.

Moral support. An interesting theme in this year’s Emmy Awards, which I mentioned above, was the tendency for winners to credit parents for supporting their desire to succeed in an extremely difficult industry. While some people are motivated by adversity, and one man or woman vs. the rest of the world often makes an interesting story, most people can’t succeed without cheerleaders. You can make the most of a feedback loop by surrounding yourself with people who believe in what you do and share your intensity.

No tolerance of mediocrity. If you define success by being the best in your industry, you can only succeed by seeking excellence all the time. Like the boss in the non-profit, that organization could only remain world-class by having high expectations for everyone involved. In music, this is obvious. Composer Jack Stamp gives a wonderful presentation about why music matters and explains that 95%, considered an “A” in most courses, is a rate of failure for music performance. Nothing other than 100% is acceptable, because if everybody misses only 5% of the notes of a performance, the music will be unlistenable.

While most activities don’t require 100% accuracy all the time, the danger is mediocrity. This is probably the most difficult of all the above keys to success, particularly for those who don’t like hurting other people’s feelings. Nobody will care about your success as much as you, so the strive for excellence is often solitary. Don’t settle.

The above suggestions don’t guarantee success, and you can reach different level of success without adhering to these tips. These attitudes or philosophies are practically necessary, however, if you are striving for world-class success at the level of an Emmy Award winner.

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On today’s episode of the Consumerism Commentary Podcast, Tom Dziubek talks to Zac Bissonnette, writer at the Huffington Post and DailyFinance and also author of the book Debt-Free U: How I Paid for an Outstanding College Education Without Loans, Scholarships, or Mooching off My Parents.

Tom and Zac discuss how Zac was able to go to college without going into debt, the most cost-effective way to get a decent degree and how to be wary of getting bad advice from family, friends and high school guidance counselors when choosing a college.

Consumerism Commentary Podcast #71
Debt-Free U, Zac Bissonnette: S03E19 / 94

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Table of contents

[00:00] Introduction from Tom Dziubek
[00:30] Interview with Zac Bissonnette
[00:52] Zac’s selection of UMASS
[02:16] College selection advice from family, friends and counselors
[06:27] What prestigious colleges mean to your resume
[08:16] Financial aid
[09:41] Expected family contribution towards college
[12:39] Starting off at a community college
[13:18] The marriage loophole with financial aid
[15:02] Whether or not student loan debt is “good” debt
[18:07] The chances of getting student loan forgiven
[19:45] Getting into a good school without going into debt
[20:43] Finding a good school
[25:36] Working while in college
[32:07] Saving money on textbooks
[34:02] End

We always welcome feedback from listeners. If you have any comments for this episode or for any other, or if you have suggestions for future episodes, please leave us comments here or email us at podcast at this domain name.

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ZYNC℠ from American Express 10,000 Bonus Points

by Luke Landes

American Express is best known for their charge cards. In June, Tom Dziubek spoke with an American Express representative about a new addition to their charge card family, anew card geared towards young professionals. ZYNC℠ from American Express is a new charge card specifically designed for students and young adults with above average credit that ... Continue reading this article…

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I’m Tired of This IRS Installment Agreement

by Smithee

Now that I’ve finally gotten my credit card balances down to zero, I’ve been trying to figure out the best use of the extra money I’ll have in my checking account. Options include: make extra car payments, put it in a savings account, put it in a mutual fund, make extra house payments, make impulse ... Continue reading this article…

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Why I Don’t Chase the Highest Interest Rate

by Luke Landes

When a bank, particularly a bank that functions without branches solely or almost completely online, wants to increase its deposits, they employ several specific tactics. The bank increase the interest rates on the savings accounts, establish a significant marketing and advertising push, and if they’re smart, offer new customer or referral bonuses. Let’s go back ... Continue reading this article…

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4 Ways Credit Cards Can Still Penalize Borrowers

by Luke Landes

Last weekend, the final changes to the credit card industry spurred by the Credit CARD Act of 2009 went into effect for all credit card accounts, including existing accounts. While the goal of the new legislation and resulting regulation is to protect consumers by clarifying the terms of using credit and by banning some unscrupulous ... Continue reading this article…

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Home Resale Fees

by Luke Landes

I’m adding to my list another reason I’ll (probably) never buy a condominium. Condos and townhouses often require sellers to pay a fee when sold. The fee is often a percentage of the sale price, such as 1 percent. I didn’t know about this fee when first contemplating whether I’d ever buy a condo. Unfortunately, it’s ... Continue reading this article…

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My Credit Score is Stuck at Good

by Smithee

I am a supporter of Credit Karma, a free service that shows you your TransUnion credit score, among other things, as many times as you want. Lately it seems like it hasn’t been working. It’s been reporting a FICO for me of 732 since March, and I’ve made what I feel are dramatic differences to ... Continue reading this article…

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The Long-Term Prospects for Stocks: Game Over?

by Luke Landes

For as long as I’ve been paying attention, which admittedly is only the last ten or so years of my total thirty-four, personal finance experts have been extolling stocks as the best long-term investments. Over long periods of time they provide more growth than any other type of investment like bonds, with an expected rate ... Continue reading this article…

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Philadelphia Wants Bloggers to Pay $300 Registration Fee

by Luke Landes

Though it was never intended initially, Consumerism Commentary and my writing is a business. I pay fees every year to ensure that the state in which I operate, New Jersey, is aware of my business. Business registration with the state is just one out of many possible fees governments charge entrepreneurs and small business owners. ... Continue reading this article…

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Podcast 70: Avoiding Cell Phone Bill Shock, Michael Gikas

by Luke Landes

Today on the Consumerism Commentary Podcast, Tom Dziubek talks to Michael Gikas, Senior Electronics Editor at Consumer Reports about avoiding cell phone bill shock. Tom and Mike discuss Consumer Reports’ tips, such as monitoring your usage, adjusting your plan and even evaluating prepaid phone options. Consumerism Commentary Podcast #70 Avoiding Cell Phone Bill Shock, Michael ... Continue reading this article…

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Starwood Preferred Guest® Credit Card from American Express earn bonus Starpoints

by Luke Landes

If you’re a frequent domestic traveler, having a good credit card with a great rewards program is essential for not only saving money but also for providing preferential service. Previously, we published our favorite travel rewards credit cards and the Starwood Preferred Guest® Credit Card from American Express was on the top of the list. ... Continue reading this article…

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Should There Be a Limit on Copyrights?

by Smithee

I have a poll that I’m hoping you’ll take part in. Current U.S. law says that copyrights on most creative works (songs, movies, books, etc.) are valid until 70 years after the author’s death. It used to be 50 years, but when the 50 year mark was approaching, it was extended another 20. There’s no ... Continue reading this article…

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Quicken Online Users Must Convert to Mint.com

by Luke Landes

After a three years of operation and the acquisition of a competing product, Quicken Online will be completely replaced by Mint.com on August 29, 2010. Both Quicken Online and Mint.com have served the same purpose. These website applications help people save more money by tracking their financial accounts and offering suggestions for improvements. At the ... Continue reading this article…

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Vanguard Expands Target Date Funds to Young Investors

by Luke Landes

Do you plan to retire in 2055? For some reason, that particular year strikes me as the distant future. It’s only 45 years from now — a year today’s 20-year-olds will be checking out of the cubicle and checking into active adult communities. Perhaps it’s because it’s one century after the year Dr. Brown had ... Continue reading this article…

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Money, Sex, and Infidelity: Who is More Likely to Cheat

by Luke Landes

The results of a study at Cornell University show that in a long-term relationships such as marriage or cohabitation of over a year, income disparity within the couple increases the likelihood of infidelity. The headlines of the study speak more to the data that show men who earn less than their wives are five times ... Continue reading this article…

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Decline Your Own Credit Card With MasterCard’s Help

by Luke Landes

If you can’t control your own credit card spending, MasterCard is partnering with Citi to come to your rescue. The two companies are announcing a new credit card featuring a service called inControl. This will allow card holders to customize spending limits by category, by country, or by several other criteria. The service is already ... Continue reading this article…

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More Professional Collateral for Free

by Smithee

Many of us who want to earn more money have side jobs, or a flourishing freelance business or two. We want our customers and clients to take us seriously, but first impressions are often ruined by amateur—or even bad—graphic design. Unless you hire a designer, you’ll never get the constructive criticism you need in order ... Continue reading this article…

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