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Monday, June 14, 2010

Drink Your Way to a Million Dollars

Every year, well over $60 BILLION is spent on bottled water.

Somehow, people around the globe have been convinced to spend big money on water. Thirty years ago, the market for bottled water was almost non-existent.

My hat is off to the marketing geniuses at Coca-Cola and the other large bottlers who have cleverly managed to convince Americans to spend hard earned cash on a product that we used to get for free.

The really bizarre thing is that these people think they are getting value for their money- like bottled water is somehow better than plain old tap water- which is really amazing because a huge chunk of the bottled water sold in this country IS TAP WATER- municipal water repackaged and heavily advertised (sometimes they run the tap water through a filter first).

Just for fun, read the labels on some of those bottles. They'll usually have a fancy name like Aquafina Dasani Refreshing Energy Water- but if you look on the label, in really small print, you'll likely see something like "made from filtered City of Cleveland municipal water"- ummm, delicious!)

It's NOT "better for you." It is NOT "more pure" (for many years, the standards for tap water were more stringent than for bottled). It's just water in a plastic bottle (and the chemicals from that plastic bottle may be leaching into your water- umm, chemicals).

I'm not even going to get started on the environmental damage done by people buying bottled water, because this blog is supposed to be about money, and I could rant for a couple of pages on that subject alone.

I don't think a lot of these people even think about how much money they waste on the stuff. Prices of bottled water vary significantly, but you will likely pay 50 cents or more per bottle.

Drink just 2 bottles a day, and you end up paying $365 a year. I know that doesn't sound like a lot to most people, but little expenditures add up over the long haul. If you had chosen to drink tap water instead of bottled water, over a 45 year period (the number of years a typical person works), you could have saved about $288,000 (assumes a 10% return on investment in a tax free retirement account).

Making little savings like this can be the difference between retiring penniless or retiring as a millionaire.

Think about all the other places you spend small amounts of money every day. Do you order the $2 iced tea or soda with lunch rather than drinking the free water? Do you buy a $4 cup of Starbucks coffee rather than drinking the free coffee at work? Do you spend $6-10 buying your lunch every day when you could brown bag your lunch for a dollar or two? Do you pump a couple of bucks into the snack machine every day?

These are the kind of little expenditures people make every day and don't even think about.

Lets say you just spend an extra $5 every work day- maybe $1 on bottled water and $4 on that triple-shot hazelnut lowfat frappucino grande vente latte frappucino (or whatever those things are called- I don't speak "Starbucks" language very well).

$5 every work day x 250 work days per year= $1,250 per year.

Using the same assumptions as last time, if you'd avoided these expenditures and invested the money instead, you'd have $988,494! Lets round it up and call it an even $1 million.

Yes, that's right, just by choosing free tap water and free office coffee over bottled water and fancy coffee, you could drink your way to becoming a millionaire!

Tuesday, June 8, 2010

Dumping Expensive Home Phone Service

A lot of people are getting rid of home phone service altogether and using cell phones exclusively. However, cell phones have many shortcomings- they may not work well in your home, they aren't as effective for 9-11 service, etc.

Unfortunately, even basic phone service from the phone company is expensive. While local service starts at around $15, by the time you figure in all the taxes and fees, you end up paying on the order of $25 per month before you even make your first call.

Vonage and other VOIP (internet based) phone services are often cheaper when you consider that they include long distance in their plans, but you will still likely pay $25-30 per month.

There is a better alternative.

If you've ever had a bout of insomnia and found yourself watching TV at 3 a.m., you've probably seen a commercial for a gadget called the "Magic Jack."

For $40, you buy a little USB gadget that plugs into your computer. This gadget claims to give you unlimited local and domestic long distance service for one year, and cost's $19.99 for each year thereafter.

Like most late night infomercials, the claims sound too good to be true. As a person who is not a heavy long distance user, I was not happy paying $30 a month for my unlimited VOIP program through my local cable provider, so I figured I'd give it a shot given that you can return it within 30 days if you buy from or using normal store return policies if purchased elsewhere.

I installed it a month ago AND IT WORKS!

Installation was easy. Open the package, plug your regular home phone (wired or portable) into the device, then plug the device into an available USB slot on your computer. Wait a few minutes while the software automatically installs, then fill out a simple registration process. No big deal- I estimate it took less than 10 minutes for the entire process- getting the thing out of the heavy plastic packaging was the hardest part of the installation.

You get unlimited calling, voice mail, E911 service (the same 911 service you get with other VOIP providers) and call waiting, as well as some stuff I haven't tried yet (e.g. conference calling).

The drawbacks:

1. You can't port over your old home phone number. I've seen some web sites that say you can, but I sure as heck couldn't figure out how to do it. They will give you a bunch of new numbers to pick from. If you are in a large city, you will be able to choose a local number. If not, you may have to choose a number outside your current area code, which means that local friends may have to pay long distance fees to call you.
2. You have to dial the full 10-digit phone number every time, even for local calls. A minor annoyance which is easily fixed by programming numbers into the system.
3. You have to leave your computer running all the time to make or receive calls. When your computer isn't on, the Magic Jack will take voice mail messages. Since your computer is going to be on all the time, I recommend putting it to use by running a distributed computing program in the background. Distributed computing harnesses the power of thousands of PCs to act as a sort of supercomputer to conduct scientific research or find cures for diseases. I've been running distributed computing programs on my computers for years. The best place to get the software and information about distributed computing is:
4. Every once in a while, you won't get a dial tone when you pick up the receiver- all you have to do is hit the flash and it will work fine.

The bottom line: it is not quite as nice as my old VOIP and regular phone service was due to the minor problems listed above.

But for less than $4 a month, this thing is great. I dumped my VOIP service completely. I'll save about $360 this year using Magic Jack (heavy long distance users may save even more).

For $360, I'll put up with those minor inconveniences. Also, some people may want to get one as a cheap second phone line. If you call overseas often, buy one for your foreign friends/relatives- you can call from your Magic Jack to theirs for free.

Sunday, June 6, 2010

Negotiate Your Cable/Phone/Internet Bill

Cable and Satellite providers love to hook new customers with "teaser" rates. Usually these teaser rates come if you buy a bundled package of cable/phone/internet and are significantly below the regular rate.

Of course, as soon as the tease period is over- usually 6 months or a year, they will hit you with a bill that will probably knock you to the floor. Most people, not wanting to bother switching to a competitor, just grimace and pay the new rate.

However, you don't need to do that. The cable company makes a killing off the people who meekly accept their fate and pay whatever the cable guys demand.

Smart consumers can save a ton of money with a little effort- all it takes is one phone call a year.

Just call up your provider's customer support number and ask to speak to their CANCELLATION department- don't even mess with the "customer service" people as they generally don't have the ability to give you a really good rate.

Once you get the cancellation department, Tell them that you love the service, but just can't afford to pay the regular rate, especially given that their competitor (satellite company/phone company/competing cable company) is offering a great "new customer" rate.

If they try to get you to reconsider with some minor discount, don't fall for it. Hold firm until they offer to give you another 6-months to one year at the teaser rate. This will work every time- they still make money off of your account even at the teaser rate, and they don't make any money if you switch to a competitor. One 20-minute phone call every 6-months can save you $30 or more per month on your bill. That's a pretty good use of your time. I've been doing this for years, right up until last month (I'll explain why I'm no longer on the full bundle in my next installment).

A few pointers:

-- Be pleasant. The service representatives deal with angry customers all day long, they will be often bend over backwards to help someone who is rational, polite, and even friendly.
-- Use current conditions to your advantage. The economy is bad and everyone knows it. If you want to jazz up your story, tell them you can't afford to pay the full rate because you just got laid off. It can't hurt, and may garner some sympathy from the representative, enhancing your ability to keep your rates low.
-- Be prepared. When you tell them that you are going to switch to their competitor (even though you have no intention of doing so), you will sound a lot more convincing if you can quote the competitor's current teaser rate.
-- Be willing to walk. I've never needed to do this, and probably never will need to, but if they decide to call your bluff, you can always switch to the competitor.