For those who are unaware a mortgage accelerator is a loan that combines the qualities of a home equity line of credit and a checking account.  Each month you would deposit your regular income checks into this account.  By doing this you are reducing the overall balance of your mortgage.  You will then pay your monthly expenses out of this account and at the end of the month whatever is left over will go towards the principal of the loan. The objective here is that you would accumulate interest slower over the time of the loan and be able to pay off the debt much faster.  I won’t go into great details of the intricacies of these programs, you can read a great article here on that topic.  What I want to comment on is why you don’t need to do this.  Here are 2 other articles on that subject:

Mortgage Accelerator Programs
Avoid Mortgage Accelerator Programs

The underlying philosophy of any mortgage acceleration program is that if you can lower the principal, you will pay less interest and pay off your mortgage faster.  Let me ask you something, would you pay someone to give you that piece of advice I just gave you?  Well when you use a mortgage accelerator program that is basically what you are doing.  You have all of the wherewithal within you to do this very thing without having to pay someone to do it for you.  There are many ways to pay down your principal if that is your goal, here are a few.  Two of the simplest are adding more money to your mortgage payment each month or by sending in an extra payment or payments each year.  Those two simple things alone will lower your principal.  By the way if you want to pay me for that please feel free to do so. 

If you have trouble saving enough money to come up with an extra payment then here is a simple suggestion.  Open a savings account, and set up an automatic deposit into that account each week.  Let’s say your mortgage payment is $1500 per month.  You can have $30 per week automatically deposited into your checking account.  At the end of 1 year you will have saved $1560 and you can make your mortgage payment.  It will take some discipline, but you can do it so save your money and go pay off that mortgage.

As a mystery shopper your job really depends on your ability to keep your emotions out of the process and to keep your identity concealed.  If employees sense you are a mystery shopper they will immediately be on their A game and you won’t be able to get a fair picture of what’s really happening.  Your job is really to observe and take lots of mental notes.  It is important that you remember the things you observe because you won’t be able to write anything down while in the store but will have to wait until you have left.  What companies want from you isn’t ranting and raving but a full clear picture of everything that happened during your experience shopping, so the more details you give the better.  I found that companies want information that will help them improve their customer’s experience and it was my job to help management know what that experience is like.   

As far as pay goes, from my experience as a shopper, I found the shops paid anywhere from $7-$20, depending on what the shop was, but I did find some that paid more.  Generally these shops will last anywhere from 5 – 20 minutes, unless it was a sit down restaurant.  When I was doing your shops if I had  to purchase anything I always got reimbursed for it and I kept whatever I purchased.  It was nice picking up some new things and eating at nice restaurants without paying for it and getting paid to do it.  As a mystery shopper you will be an independent contractor so you can work with as many companies as you want and when and where you want. 

To find mystery shops you will sign up with a company that will provide you with a list of all of the mystery shops in your area and you can decide which ones you want to do.  The terms of the shop will be clearly spelled out as well as the payment for doing it.  If you like the terms go forward and if not you don’t have to do it.  When searching for companies you will find there are lots of companies out there that will charge you money to give you access to all the mystery shops.  You should never pay for any of these services because the legitimate companies don’t ask for any money upfront.  I have a couple of links below with companies I have worked with.

For me mystery shopping was fun and simple and I made some extra cash.  I have since gone on to do other things, but every now and then if I feel the need to get a free meal at a restaurant I may put on my mystery shop hat and go to work.

Here are some great links for mystery shopping:

Suite 101
Market Force Information
Intelli-Shop
Mystery Shopping Providers Association

When a company makes you a job offer there are usually 2 factors that impact the level of salary they offer you.  The first is the perceived value you will bring to the company and the second is how much they have budgeted for that position.  The first is a variable you have some control over, the second is one you have absolutely no control over.  In my experience interviewing and hiring I would often come across quality candidates who would be wonderful additions to my team but there salary demands just exceeded what was budgeted for that position.  Even though there may have been some flexibility, it was within a certain range and after that it was beyond my control.  However there are some simple things you can do to improve your chances of higher compensation.

Don’t be afraid to ask – There is a verse in the Bible that says “you have not because you ask not”.  A company may just be willing to bump your salary but you won’t know that unless you ask.  Please be realistic in your asking.  If a job is advertised with a salary of $50,000 you may be able to move them a few thousand dollars but keep it within reason.

Demonstrate your history of success – Your paycheck is often based on an expected level of performance.  Most companies don’t mind paying for results, but they hate overpaying for potential.  If you have a track record of successes throughout every step in your career companies will be willing to reward you for that, because you can help their bottom line.  If you have received any awards, great reviews, any press coverage for things you have done then bring these to the table.  This is your time to shine and if you have the goods don’t be afraid to let them know that.  It’s ok to be confident but don’t be cocky, because I hated cocky people when I interviewed and most people usually do.

Be willing to accept performance based compensation – I have spent over 15 years in sales and one of the things I have always loved about sales is I can determine how much money I make.  If you are confident in your ability to improve the performance of the company, then ask if a clause can be added to your compensation that if I improve performance by a certain percentage than that would result in either a bonus or pay raise, preferably the pay raise.  Remember companies don’t usually mind paying for results.

Negotiate the non-salary aspects of your compensation – Remember salary is not the only thing that makes up your compensation.  Vacation time, personal days and other perks make up this as well.  Maybe a company has a smaller budget and they can’t increase the salary but maybe they can give you an extra week of vacation or flex time to make up for the salary.  In some instances in my career I have traded more time off for a little less money and I really didn’t mind because I enjoyed the time off.

Another key factor in negotiation is how much do you really want the position and how badly do you want to work for the company.  If it’s a place you really want to work then its ok to start a little lower because you will have plenty of time to grow and increase compensation along the way.  As I stated in the beginning there are no tricks but confidence and good performance history will go a long way to getting maximum results.

Here are some additional thoughts on the topic:

Tips for a Successful Salary Negotiation
The Career Doctor
Negotiate Your Salary in a Down Economy

We might as well dive right in by explaining what this alleged online auction site is really all about.  They auction really nice, genuine, name-brand consumer electronics, appliances and other high-demand items.  It’s operated on a pay per bid system.  You buy your bids for $.60 each.  They’re worth $.12 cents in terms of boosting the auction price.  I know.  That sounds confusing.  It’s really not.  We’ll let Swoopo explain:

Here is how it works: our online customers buy “bids” in advance. They cost $0.60 each and are sold in packs of 40, 75, 150, 400 or 1000. Bidders have the choice of placing single bids, or, using an electronic bid assistant called the “BidButler”.
Every bid placed, increases the price of the product by 12c and the auction countdown by up to 20 seconds. To help keep track of the money spent on bidding, each auction displays the amount spent on bids by the customer and how much the bidder would save overall, if they won the auction at that moment.
The ‘last bidder standing’ when the countdown reaches zero, wins the auction – usually at a very low price; winners save, on average, 65% when compared to the recommended retail price.
In December 2007, Swoopo was successfully launched in the UK, followed by Spain in May 2008 and the US and Austria in September 2008. Swoopo has launched Canada in June 2009, more countries are going to be added in the future.

So, what’s wrong with all of this?  You can conceivably pay a few bucks in bids and end up with a great retail item for pennies on the dollar, right?  Absolutely.

That’s why Swoopo isn’t a scam, per se.  It delivers on its promise.  You bid.  If you win, you get the item.  Even CashMoneyLife, who is very critical of Swoopo concedes that it’s not an outright scam.  The combined cost of your bids may be a very small percentage of the value of the item under consideration.

Swoopo pulls it off profitably because it’s collecting all of those other $.60 bids that only juiced the item’s price tag by $.12.  Remember, if you bid on Swoopo and you LOSE, you really do lose.  Your bids go into the Swoopo coffers, not back to you.

Thus, Swoopo rakes in enough dough to cover the purchase price of the auctioned item.  The cumulative amount of money spent on the bidding process can represent several times the actual retail value of the item.

Ben Hollis broke it down on an “auction” for a shiny new iMac.  The conclusion?   An item worth approximately $1,400 went for only $365.  Swoopo collected $9,800 in the auction!

So, what’s wrong with that?  People played the game.  Some lost.  One won.  Swoopo makes a profit for providing the playing field.  In the immortal words of Dr. Hunter S. Thompson, “Buy the ticket, take the ride.”

Well, there may be nothing wrong with it in that sense.  There are potential legal problems stemming from the fact that the process eventually turns out to be little more than a dressed up lottery, but that’s a legal issue stemming from gambling regulation.  It isn’t prima facie evidence of pure evil.

Or is it?  I guess that depends on your perspective.  There are those who will undoubtedly wag a finger at Swoopo for taking advantage of the frailties of human psychology to generate a profit.  There are those who will be disgusted by Swoopo’s effort to appear like a “new and improved” version of a legitimate online auction service.  There will even be those who don’t really buy into capitalism with a Milton Friedman-like furor who will be upset by the fact that Swoopo may be generating such a huge profit margin on some of its “auctions.”

Personally, I’d stay away.  You won’t find David Lampsen bidding on Swoopo.  Ain’t gonna happen.  Then again, you don’t see me lining up at the convenience store on the day of big Powerball drawings stuffing my pockets with tickets.  If you like lotteries, you’ll love Swooopo.  If you’d prefer to manage your money with a bit more wisdom, you’ll stay the hell away!

While looking into Swoopo, I found a number of extremely interesting assessments of what they’re doing and how they’re doing it.  If you find the whole thing as fascinating as I do, you’ll want to read these:

• Jonah Lehrer has an ubelievably cool piece about the psychology of Swoopo at Frontal Cortex.  If you only read one article about why people gravitate to the site, make it this one.
• Jeff Atwood’s oft-cited assessment of Swoopo at Coding Horror lays the groundwork for why the auctions are really nothing more than mini-lotteries.  It also contains a perfectly apt Wargames reference for those who remember Dr. Falken.
• Ian Ayres’ contribution to the world of Swoopo analysis at The New York Times “Freakonomics” blog is outstanding.  It explains why this weirdness produces the kind of results it does in a very accessible way.

Hi Everyone,

Here are some Blog Carnivals that we participated in over the last week.  Enjoy!

- Carnival of Twenty Something Finances was hosted by Money Under 30 and you can find our post entitled Scholarships for Left Handed People? Sort of. listed there.

- Carnival of Personal Finance #213 (The New Zealand Edition) was hosted by Man vs Debt and you can find our post entitled The Average Cost of Groceries Per Person: Best Guesses listed there.

- Money Hacks Carnival #73 (Working for the Weekend Edition) was hosted by Money Beagle and you can find our post entitled Save Money on Your Coffee Addiction: Buy a Starbuck’s Gift Card listed there. ]]> http://www.personalfinanceanalyst.com/personal-finance-carnival-round-up-33/feed/ 0 http://www.personalfinanceanalyst.com/the-average-cost-of-groceries-per-person-best-guesses/ http://www.personalfinanceanalyst.com/the-average-cost-of-groceries-per-person-best-guesses/#comments Tue, 07 Jul 2009 09:02:15 +0000 David R. Lampsen http://www.personalfinanceanalyst.com/?p=2091 After writing about The Grocery Game and Coupon Mom–and being impressed with some of the miniscule grocery bills their adherents claim to pay–I started wondering how much most people actually spend on grociers.  I wanted an idea of the average cost of groceries per person in the USA.

So, what’s the magic number?  I still don’t know.  I have a pretty good idea, though.

First, it was interesting to find that I wasn’t the only person wondering about this.  Yahoo and answers and other Q&A sites are littered with people asking the same thing.  Unfortunately, they rarely get answers. Well, they get answers, they just don’t get an answer to the question.  Respondents tend to state what they spend on groceries, which really doesn’t give us any idea of the average.

Still, the answers were fascinating–primarily because the range from low to high is pretty extreme.   While some college students are paying less than $200 per month for groceries, you can find a commenter at FreeMoneyFinance who spends $400 for herself over the same period of time.  The average cost of groceries per person certainly isn’t represented by either extreme.

You’d think it would be easy to get a more definitive statistic on how much we spend to keep the cupboards from being empty, considering how concerned people are about the issue.  I mean you have people making their own instant oatmeal packages to save a few cents and bloggers have often asked people how much they drop at the supermarket in hopes of developing an understanding of our eating habits.

Finally I tired of wading through anecdotal evidence culled from the very non-representative samples of Internet users interested in frugality.  I decided to look to Washington DC for an answer.  Surely the Department of Agriculture did a survey and figured this whol average grocery expenditure thing ut once and for all.

As it turns out, they didn’t.  But they came fairly close.  There are a few problems with the numbers, though.  First, they’re old.  The USDA released “Food Spending by American Households – 2003 and 2004” in 2007.  That’s right, by the time the document hit the press, it was already relatively old news.  Second, the USDA doesn’t supply information about the average person or average family.  Their information gathering was limited to urban families.

Those numbers are still interesting, though.  And they probably give us a pretty good idea of what the average person spends, although you should consider major economic shifts and 5 years worth of inflation when you look at the data.

So, what is the average cost of groceries per person, according to “Food Spendng by American Households…”?  $1,347.oo, or $112.25 per month.

As one’s household size increases, the per capita spending on food decreases.  The numbers are nearly the same for singles and 2-person households, but by the time you’re talking about six people or more under one roof, the expenditure drops to $937.

As you’d expect from a big gnarly government report (the tables alone constitute 90+ pages), Uncle Sam’s employees at the USDA break it all down by just about every demographic you can imagine.  They also told us how much folks spent on food away from the home (average:  $860 per year, per person in 2004).

So, there you have it.  A not-quite-definitive answer to a very popular question.  I know that the Lampsen household exceeds the average 2007 number, but not by much.  If I was willing to compromise on a few more things here and there, I think we could get slightly under the average line.

Are you blowing that number away or are you fairly close to the mark?  How much are you spending on grocers per month?

Wrong.

We had Ponzi schemes before we had Ponzi.

Charles Ponzi reigns as the namesake for pyramid schemes these days, but he didn’t invent them.  They’ve been around for quite some time and it’s not hard to imagine that they predate Peter and Paul (as in “robbing Peter to pay Paul”, which was the expression generally utilized for such acts of malfeasance before Ponzi did his thin).

Take for instance, Ms. Sarah Howe.  She was pulling a Ponzi in 1880, long before Charlie P. figured out how to bilk people out of their money.  Howe as actually a double-dipper.  She wasn’t just doing the pyramid, she was going it by going after people who’d tend to trust her the most at the time–other women.  That makes Howe a Ponzi-ist and an affinity scammer (sort of like Bernie Madoff).  Apparently, she set up a women-only program, promising an 8% return on everybody’s cash.

The only way that could happen, though, is if she kept getting more women to dump money into the scheme. Obviously, her luck ran out.  There’s not a lot of information online about Howe, but the Wikipedia entry that mentions her pre-Ponzi scheme references a book that might be of interest to those who’d like to learn more about her–and Mr. Ponzi.

She wasn’t the only person “robbing Peter to pay Paul” to beat Pozi to the punch, though.

Nineteen years after Howe, but still 21 years prior to Ponzi in 1899, a guy working for a little tea company near Wall Street came up with a plan.  William F. Miller started telling people, including his bible students, that he could produce a 10% per week return on their investments because he had picked up some golden information by being so close to Wall Street.

He grabbed the cash with both hands while he could, keeping the deal afloat by paying old investors with the money from the new ones.  When it was all said and done, he was sentenced to prison.  He didn’t get his sentence as a rich man, though.  In one of those great ironies, Miller was cheated out of his money by a couple of con artists who were apparently better at playing the grift than Mr. “520%” Miller.

He ended up skirting most of his sentence, receiving a commutation from the Governor.  Apparently, that decision was less about mercy than it was about convincng t Miller to testify against other bad guys.

The interesting thing about these pre-Ponzi schemes is that they bear such a striking resemblance to Bernie Madoff’s swindle.  The names and the centuries change, but the song remains the same.

Give me your money.  I’ll invest it and give you a great return.  In reality, I’ll use your money to pay off the other people I’ve suckered.  You’ll get your money after I find a new mark or two. Eventually, someone figures it out and it all goes down the tubes.

It’s amazing how history repeats itself, isn’t it?  You can draw a pretty straight line through the gutter to connect Sarah Howe, W.F. Miller, Bernie Madoff and a slew of people who who plied their dastardly trade during the intervening years–including the guy who had this great investment opportunity involving postal coupons, the one and only Charles Ponzi.

Let’s talk about one of the biggest common personal finance errors. Wait. Let’s rephrase that. Let’s talk about the undisputed king of personal finance mistakesb. It’s mistake in which millions of people share and it can have some truly life-changing consequences (and not in a good way, either).

The big kahuna of personal finance foolishness? Failing to have a long-range plan.

It’s hard to think decades down the road. Heck, it’s hard to think three weeks ahead sometimes. When it comes to managing your money correctly, however, you need to develop that long term perspective.

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I think the reason so many people fail to come up with a long-term plan is because you can fall into an ugly cycle if you get off on the wrong foot.

Here’s what I mean. You don’t have a plan. As such, you make poor financial decisions. Those poor decisions put you in a tough situation in terms of staying above water. It’s even harder than usual to think “big picture” when you’re in dire straits and living paycheck to paycheck. The lack of that broader perspective, however, insures more poor financial decisions. That leads to… You get the idea. It’s an infinite loop of financial difficulty.

So, how do break the cycle? Short of a few lottery victories or some kind of perspective-altering head trauma, it’s a matter of recognizing that it’s time to get a handle on your money and putting your foot down. Then, you need to combine some good homework with a dedication to taking action.

Realization, research and work. It doesn’t sound like a ton of fun, does it? Maybe that’s part of the reason why people continue to circle the drain in the “no plan–>bad decision–>no plan” cycle. There may be a perception of comfort in the misery of chaotic personal finances.

At some point, though, people do hit bottom. They wake up and realize that they’ve had enough. They finally bite the bullet and get started with the process of devising that long-term plan, even in the face of short-term challenges. If they follow through, they can break the cycle. They can start making progress. They can tame a little chaos and feel much more secure in their futures.

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I doubt any of that is particularly controversial. We know that good money management improves both immediate and long-term qualities of life. We also know that a lot of people are running around without an end goal in mind. It’s a mistake and it’s a common one, but is it really the undisputed king of all financial blunders?

Let’s ask around, shall we?

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Simple Dollar did a piece on “The Twelve Biggest Personal Finance Mistakes People Make Over and Over Again”. They’re top slot went to, “Concern rarely extends beyond the next paycheck or two”. In other words, living in the moment without a bigger goal of a plan is a huge no-no.

The Bankruptcy Law Network explains their version of the “Top Ten Personal Finance Mistakes”. They startthis: “Rule #1: Have a personal financial goal and a plan to achieve it. The pressure of bills and getting the income to pay them typically causes you to lose sight of your personal financial goals. Sounds familiar, right?

Almost every time you look at a list of the worst common personal finance blunders, lacking a goal and a plan almost invariably sneaks up toward the top. Dallas Morning News columnist Pamela Yip sums it up nicely:

Without a plan or goal, your financial behavior will lack focus and you could spend your money – a dollar here, a dollar there – not knowing where it’s going or how the expenditures are affecting your financial security.

She wrote that as part of an article entitled “Top Ten Personal Finance Mistakes”. Her number one, predictably, was ” Not having a goal and a plan for how to achieve it”.

If you’ve busted out of the cycle and have put together a plan, kudos. I hope you’ll share what led you to take action and how you managed to get started. If you’re still floating around without a good plan, there’s no better time than now to start putting things into perspective and planning a way out of your current financial turmoil and into a future where money errors don’t cripple the quality of your life.

Hi Everyone,

Here are some Blog Carnivals that we participated in over the last week.  Enjoy!

- Carnival of Personal Finance #208 (The Lobster Roll Edition) was hosted by Money Under 30 and you can find our post entitled The Economic Stimulus Package in Detail… Without the Editorializing listed there.

- Money Hacks Carnival #68 (The Stanley Cup Final Edition) was hosted by Financial Highway and you can find our post entitled Raiding the Roth: Using a Roth IRA as Your Emergency Fund listed there. ]]> http://www.personalfinanceanalyst.com/personal-finance-carnival-round-up-28/feed/ 0 http://www.personalfinanceanalyst.com/top-7-sources-for-free-printable-play-money/ http://www.personalfinanceanalyst.com/top-7-sources-for-free-printable-play-money/#comments Thu, 28 May 2009 13:21:55 +0000 David R. Lampsen http://www.personalfinanceanalyst.com/?p=1938 Sometimes, you just don’t want to use real cash.  Play money can come in handy.

You can use a wad of homemade cash to play board games after you’ve lost the dough that came from Parker Bros. or Milton Bradley.  Printable play money comes in handy when your kids want to play “store” but you don’t want to entrust them with the real McCoy.  It’s good for teaching kid money-related math.  It’s NOT a good idea when you want to buy groceries, though.  The Treasury Dept. doesn’t think it’s funny when that happens.  In fact, they dislike the idea so much that it can be tough to scan your own money and print it out.

In any case, you might have a need for some play cash.  If you do, there are plenty of places to find it.  Here are 7 great places to find it online.

Money Instructor. This site has a nice collection of realistic US bills.  They’re clearly marked “COPY” and bear the site’s URL.  Oh, they also do coins.  Paper coins?  Sure.  They come in handy when you’re trying to teach your youngsters not to fall for that whole “a nickel is bigger than a dime so it must be worth more” trick the big kids always use.

Free Stuff for Kids.  These folks have printable play money in a few different denominations.  The values are easy to spot and read.  The cash looks nothing like the real deal.  Totally different, but almost web 2.0-ish.  There’s something about the way it looks that I really like.

Printable Play Money.  Two different options at this site.  You can either print the stuff that has a real look to it, or you can go with the “obviously NOT U.S. currency” look.  Either way, you can find printable phony cabbage here.

Activity Village. Here’s another site with the standard paper currency and pages of coins.  This one has an advantage, though.  It’s not all US money.  They do Euros.  Get your printable play Euros here.

Disney Dough.  If you’re kids are all about the Magic Kingdom, you might want to print out these $1, $5 and $10 bills featuring Disney icons like Mickey Mouse, Donald Duck and even the Pirates of the Caribbean skull and crossbones.

Festisite. This isn’t really a play money site, per se.  It’s actually a cool little app you can use to create phony bills featuring your own photo or someone else’s. You can create bills from a variety of nations.  If you wanted to, you could even make a Kazakhi dollar bill with Bernie Madoff’s picture on it.  I did.  It’s the picture you saw above.  Your finished products can be saved as PNG files and you could then opt to print them out.  If you want to come up with really fun play money, imagine putting your kid’s face on a $10 bill.  Just make sure that mom and dad adorn the big bills so the kids remember who’s boss!

Donna Young.  Here’s a good source of play bills in a variety of denominations.  They share enough characteristics with the real deal to create some level of recognition in a learning youngster.  You can also print each denomination in a different color to make sorting easier.

There you have it.  Seven different sites where you can print yourself a small fortune.  Lose all your monopoly money?  Have a burning desire to put your snapshot on a Euro?  Need a printout of coins to help your kids learn how to make change?  Get your printable play money now!