Sunday, April 5, 2009

Sunday Quote


After a visit to the beach, it's hard to believe that we live in a material world.

~Pam Shaw

Friday, April 3, 2009

Understanding Opportunity Cost


"Time is money."

I'd always heard that growing up, but it wasn't until I took an economics class in college that it really sunk in. It was in that class, that I first learned about opportunity cost.

Opportunity Cost - the value of the next best alternative foregone as the result of making a decision.

Learning about opportunity cost really opened up my eyes. It caused me to evaluate how productive I was being with my time. This made me question the usefulness of any given task I was doing - specifically tasks that were earning me money. Was it worth the time and effort?

For example, I had a little eBay business in college, and I started to wonder whether or not it was a worthwhile endeavor. I calculated the time spent gathering the items to sell, taking pictures of them, uploading the pictures to my computer, writing descriptions of the products, filling out the forms on ebay, checking updates online, sending emails to the winners, packaging the product, going to the post office to send the items, and so on.

After calculating all of these things, I realized I wasn't even making minimum wage. I could have spent the hours I worked on the eBay business working for a neighbor who had offered me $10/ hour. That was my opportunity cost! But I liked doing my eBay business, so I began finding ways to cut down the amount of time I spent in order to make it worthwhile.

Knowing about opportunity cost also made me realize the real costs of going to school or going on unpaid vacation. Here's a scenario for you:

Billy is a waiter at a classy restaurant in Las Vegas. He finds a killer deal on the web, and decides to take off work for one week to go on a ski trip to Colorado during the week of December 29th - January 5th. Although his co-workers tell him that it's going to be really busy that week at the restaurant, Billy tells them that he just can't pass up this deal. He claims he'll never find this good a deal ever again.

Or will he...

Let's crunch the numbers.

Billy found a one week, all-inclusive ski package at a nice hotel for $350 (normally $700).
He also found a roundtrip airline ticket on craigslist from Vegas to Denver for $50 (normally $150).

That's a savings of $450!

BUT...

On a normal day at the restaurant, Billy earns $20 in wages and $100 in tips. However, since it is the week of New Year's Day, Billy can expect to walk away with nearly double the tips of a regular day. Hence, $220/day will be foregone as opportunity cost.

$350 Hotel-Ski package
$50 flight
$1,540 opportunity cost (wages + tips for one week)

=$1,940 TOTAL

Billy thinks he'll never find a better deal. In reality, all he has to do is go to Colorado during a low time at the restaurant (like mid-March) and pay full price for the package. That way the math will look like this:

$700 Hotel-Ski package
$250 flight
$840 opportunity cost (wages + tips for one week)
=$1,830 TOTAL

So, it's nearly $100 cheaper for him to go at a different time and pay full price for everything. And although he may not get the steal of a deal he found before, he'll likely find a way to avoid paying full price! Plus, if he chooses a low time, his opportunity cost will probably be less as well since he could very well make less than his average of $100/day in tips.

Hopefully this gives you an idea of the power of opportunity cost. Examples really help me to grasp concepts, and this one is as clear as day. Got a comment? Leave it here before you go. I'm out - YCC

Thursday, April 2, 2009

Bargain Travel Sites


These days there are countless, clever commercials for sites that claim to find the best deals in the world if you use their travel search engine. Expedia, Priceline, Travelocity, and a host of others think they are all that.

In reality, they aren't all that great. Even sites like Kayak that search all of the search engines aren't able to yield anything special. When you do find a great deal, you have to deal with all of the extra fees that these sites charge and that isn't fun at all.

In my experience, there are two sites that have really done wonders in terms of finding great deals.

Travelzoo.com is awesome. If you're willing and able to make some spontaneous travel plans when a good deal comes along, this site is a dream come true.

Travelzoo's bread and butter is their Top 20. This is a list of the top 20 best bargain vacation deals they are able to track down. Typically the deals are flight deals, but they will often include deals that include airfare+lodging, airfare+rental car, or other combo deals. They come out with a new Top 20 every week, and you can sign up to receive a weekly email with the deals. Having been on this list has allowed me to encounter some outstanding deals.

The thing about the deals is that they are often location specific. That's the only way to explain how some of the deals are so mind blowing. Today there was an incredible deal flying out of Tampa, but that does nothing for me since I live on the other side of the country. But when something comes around out of my town, it's a beautiful thing.

VacationsToGo.com is amazing when it comes to travel deals. The specialty at this site is cruises, and their recipe for success is the 90 day ticker. It's not at all unusual to see cruises that are priced 75% below the regular price.

These deals are really incredible when you time them right. In my experience, the longer you wait to book, the better the deals get. There is some risk that the cruise will sell out, but I've never had that problem. Those ships are huge and they want to fill those rooms!

Hotels.com has been my go-to site for hotels. They have a huge selection of places to stay and very detailed descriptions of the hotels. There are always plenty of comments from previous visitors to the hotel which gives you a great idea of what to expect. You'll learn everything from the convenience of the location to the cleanliness of the blankets.

I typically use hotels.com in conjunction with calling the actual hotels. Hotels.com is great for getting an idea of the range of costs and quality of the hotels, and from there you can potentially book a better deal with the guy at the front desk.

I am sure there are some other diamond in the rough sites out there, so let all of the YCC readers know where to find them. Post a comment! I'm out - YCC

Wednesday, April 1, 2009

All You Have To Do Is Ask


As I type, I am on hold with US Airways. Don't you love being on hold? It just gives you a warm, fuzzy feeling inside.

Yeah, right.

I loathe being on hold. Luckily, I have speaker phone and that allows me to set the phone down and listen to annoying hold music until an agent finally greets me.

As much as I hate sitting on hold for what seems like years, it has really paid off for me. Companies are far from perfect. They make mistakes. In the case of US Airways, I was quoted one price and charged another. We make mistakes as well. Oftentimes the reason we call customer service is because of our own errors. But that doesn't necessarily rule out our ability to reverse our errors and get what we want.

When it comes to customer service, I've always had success getting what I want. Here are my secrets:

Be friendly. Start off the conversation with something like, "Wow, I thought I'd never get off hold - I bet you guys are swamped today!" You have to remember that these are real people with lives, and they would like to be treated well. Just do your best to win them over in the beginning and they will be more likely to want to help you out. A first impression is a lasting impression, and if you start off the call screaming at them with your problems, you're probably not going to be happy with the results.

Calmly and clearly explain the problem. Explain your situation and why you feel like you were overcharged (or whatever the problem is). You really need to keep your cool throughout this explanation. Remember, this agent didn't cause the problem, he's just fielding calls.

Have records ready to strengthen your case. Emails, chat transcripts, confirmation codes, even your own personal notes are vital to your case. This will help you to stay consistent and give you a whole lot of credibility.

Be persistent. Don't get flustered and hang up the phone when you don't get the results you are looking for right away. Repeat the details of your situation. Although you should stay calm, you can get a bit more firm as the call goes on.

Don't make it their fault.If you put the blame squarely on them, their pride will be hurt and they'll be less likely to budge. Instead use phrases like, "It was just a misunderstanding," to keep the conversation less argumentative.

Say "thank you" every now and then. Typically, when agents are working on making billing changes or other such matters, they will have to put you on hold. Each time they say, "Can I put you on hold for a minute?" say something to the tune of, "Of course. I know you are working hard on this and I really appreciate that."

Speak to superiors. If the agent you are talking to repeatedly tells you there is nothing he can do, ask to speak to someone who does have the power to help. This is usually a manager or a supervisor. Although you may have to start back at step one by explaining your situation, you've got another shot with the people at the top.

Call back. If you can tell your agent isn't going to budge, call again to get another agent. Some agents just aren't willing to do anything for you, but odds are there is an agent out there that will. In big companies especially, you'll typically get a different call center, let alone a different agent. I've done this many times, and while one agent will tell me "there's nothing I can do," the next agent is able to clear up my issues in a jiff. Again, you'll have to start over at step one, but it will pay off in the end.

Well, I just got off with the customer service agent. Problem solved. I just saved myself $300 by making a phone call. I definitely had to execute those strategies that I outlined above (especially the one about being persistent - the call lasted over an hour!). But it paid off.
US Airways just got added to my list of successful customer service exchanges. In case you are wondering, here are some others as well as a brief explanation of why I called.

Wells Fargo - I've called about overdraft fees at least a half dozen times. These aren't cheap - typically around $25. I've always had them reversed.

T-Mobile - I've called T-Mobile over all kinds of charges I didn't understand. I've also called when I have been close to going over on my minutes. I've always been successful in getting my bill reduced. In some cases they have given me 100-200 free bonus minutes to keep me from going over.

Chase Bank - I was charged a bank-to-bank transfer fee once. My argument was that I didn't know the fee existed, and they reversed it.

There are countless others, but the key is this: all you have to do is ask. Companies want you to be loyal to them, so they aim to please.

You miss 100% of the shots you don't take. So start taking some shots and saving some money. I'm out - YCC

Tuesday, March 31, 2009

Bank Deal Monday


I just realized that yesterday was "Bank Deal Monday" and I didn't post a bank deal. Shame on me. So here's the weekly deal (albeit a day late)...

$125 cash bonus for opening a Chase checking account.

In order to qualify for the $125 you have to:

1) Open the account with a minimum $100 deposit.

2) Set the account up with direct deposit OR make 5 debit card transactions per month

3) Keep the account open for at least 6 months.
For $125, that's a pretty sweet deal. If 5 debit transactions with the debit card will drive you mad, direct deposit is probably the better option on requirement #2. Although you could have your paycheck be deposited into the account (or a portion of it) you could also use paypal for direct deposit. You simply have to move some money from your paypal account into the Chase account. This will count as direct deposit. I know, it's a cool tip.

I'm jealous of you guys because when I signed up for this deal a few months ago, the reward was $100. I signed both my wife and I up so we ended up with 200 benjamins. But still, $250 would have been very nice.

This promotion is only available to existing Chase customers OR individuals who have been referred by Chase customers. Lucky for you, I'm a Chase customer and can give you a referral.
If you're a Chase customer (credit card or banking), sign into your account online and then click here.

If you're not a Chase customer, shoot me an email at youngcashcow(at)gmail(dot)com or leave a comment with your email address and I will gladly send you a code. I only have 10 of these and they will go fast. So, if I give it to you, USE IT. I'm out - YCC

Monday, March 30, 2009

Airborne Settlement


I was pleasantly surprised to receive a check in the mail today for $28.

Why, you ask?

About a year ago I filed a claim in the lawsuit against Airborne and their false advertising about preventing the common cold. I admit, they had my wife and I fooled. We swore by the stuff.

When it came to light that the ingredients of Airborne weren't all that special, and that they had been vastly overpricing their products, it was a no-brainer for us to file a claim.

From time to time, lawsuits allow consumers to receive compensation after buying products that were either harmful, falsely advertised, or otherwise tainted.

Now, like I said, I filed the claim a year ago and had since forgotten about it. So, it was sweet to find the letter in the mail!

Apparently a year isn't a very long time to wait.

A recent lawsuit that my wife and I were also able to take advantage of was due to a lawsuit filed against cosmetic companies back in 2003. In January of 2009, department stores offered free products to anyone who had bought cosmetics at their stores between May 1994 and July 2003.

You can see details of the cosmetics settlement here.

Needless to say, these settlements aren't always heavily advertised. So, I will do my best to keep you apprised of any pending lawsuits so that you can take advantage if you've been financially wronged.

The sad thing is, there were a whole bunch of people who bought loads of expensive airborne products and cosmetics, but who received nothing from these settlements. So check out my "lawsuit settlements" tag from time to time to make sure you haven't missed out on any pending opportunities to be compensated.

Wow, this post makes me sound like a lawyer, doesn't it? I'm out - YCC

Sunday, March 29, 2009

Sunday Quote


The economy depends about as much on economists as the weather does on weather forecasters.


~Jean-Paul Kauffmann

About Me

My Photo
I'm just a young guy, working hard (but not too hard) as a full-time teacher. I survived college without accumulating a penny of debt and have a decent nest egg saved up for retirement. Like my father and grandfather before me, I've been raised to earn, save, and spend wisely. I'm always on the look out for bargains, deals, promotions, financial tips and advice, economic news and anything else related to money. My goal is to let you in on everything that has served me well over the years financially, as well as all of my latest money discoveries. Enjoy!
Got a question for me? An idea for a blog entry? Shoot me an email at youngcashcow(at)gmail(dot)com and I'll be sure to respond asap!