The Software Exodus – Leveraging Online Collaboration Tools for Simplified Business Systems

People that know me fairly well are aware of the fact that I’m always trying to educate myself to be more efficient with my time. Not that I am trying to fit more into my day. But instead, I am looking for ways to maximize productivity while minimizing the number of hours spent working. This is not to say I’m trying to be lazy. I’ve worked hard my whole life and I’m proud of what I have accomplished so far. However, I also realize that in order to be successful in the future as a professional and as a business owner, its essential for me to learn to work smarter as opposed to harder.

I’ve had a strong focus on educating myself about various topics, methods, and industries for the past year. While all the books, articles, journals, and videos that I have come across are all quite diverse, almost all of them seem to revert back to a few central principles. One principle that is most prominent emphasizes the necessity to create effective business systems in order to grow your small business. This may seem like a very simple concept, but it is also one of the most difficult concepts for business owners to buy-in to and implement. Establishing and utilizing effective business systems allows you, the entrepreneur, to put parts of your business on “auto-pilot” while you go out to seek additional opportunities for revenue growth. It seems that the difficulty some entrepreneurs face is their unwillingness to step away from a business they worked so hard to create. They invest their entire lives into a business and they’re uncomfortable letting someone or some system take over.

With this in mind, I’ve been focusing a great deal of my research toward finding sufficient business systems to meet my needs. As a small business owner with basically no revenue to speak of, keeping costs down is an obvious priority. Lucky for me and other aspiring small business owners, the internet, social media, and other web based collaboration tools make starting a small operation simple and cheap. The days of expensive office space, costly and complicated computer software, tedious phone lines, and “manual” lead generation are on their way out. Just as the desktop computer and the cell phone (as opposed to “smartphone”) have become all but obsolete, so too will expensive barriers to getting into small business.

So what is this magical solution I’m alluding to? It all starts with web based software and cloud computing.

Case Study – Building a Professional Website for the non Tech Savvy

I may work for IBM, but I’m far from being a technically savvy individual! So when it came to building a website, I was not looking forward to the task. I realize the functional uses and implementations for technology, but I have no idea how all these things really work. Nonetheless, I was ambitious to get started on creating the website for our business. Costa and I agreed to buy a domain (actual 2 domains after we decided to change our business name) from GoDaddy. Step 1 seemed pretty easy. But now we got into this whole deal with hosting. We did some research and decided to buy a hosting package from GoDaddy for $12/month. Great! We have a domain and we have hosting…now what?? Where do we possibly start in getting the website ideas that are in our head onto a published website. Again we went back to researching the web for the best web design tools. We started and ended numerous free trials for website software that we downloaded to our laptops. This software was all very complicated and included a bunch of html coding which I was not interested in. I’m a powerpoint kind of guy…I like the point-click-drag kind of stuff. We had some success using Dreamweaver, but then things got complicated when it came to getting what we created in Dreamweaver to be published to the web. I’m sad to say, we ultimately settled for Microsoft Publisher! Our website was nothing special but we were just happy to have something published to the web.

This is how our website stayed for months. Of course we didn’t promote the site and we probably had no visitors because we really didn’t want to associate our company with this unprofessional site. However, as we have made more and more progress in our business over the past few months, we knew it was time to find a legitimate solution. We went back to the researching the web. This is when I discovered wix.com. Wix is a free flash website design software that allows you to create professional looking websites using easy to use drag drop techniques. There is no software to download. All you do is sign up, start creating, and hit “Publish” when you are done. I started with the free version (has wix ads and a wix domain) and I could not believe how easy it was to use. I didn’t have all this junk software on my computer which meant I could edit the website from anywhere on any computer with internet. As I realized this was the ultimate solution, I transferred our domain from Godaddy and purchased the “unlimited plan” from Wix. Sound expensive??? Its not! For $6.20 / month I get flash website design along with no Wix ads, unlimited bandwidth, the use of my own domain, and way more. That $6.20 / month includes hosting my site! I couldn’t believe it. To sum up, I get web hosting and awesome flash design functionality for less than I was paying GoDaddy for hosting alone! We’ve been working hard on our website and I think it looks great! The site should be live in a few weeks.

The important part of the story is that our solution lied within web based “software” or “apps”. There was no software to download and the interface was easy and intuitive. This story is also not unique. Online companies are finding new ways to throw traditional software out the window and make programs available on a web based platform for little or no cost to the user.

One Step Further – Integrating Online Collaboration Tools with Google Apps

Not to continue discounting GoDaddy, but another thing we were fed up with was the outdated email interface of GoDaddy webmail. Both Costa and I use Gmail for personal use and we are very happy with the interface and the organizational functionality. We set up our personal Gmail to grab our business email from GoDaddy…but we had some issues with this as well. After a bit of reading, I was turned on to “Google Apps”. This was absolutely the perfect solution! Google Apps allows you to connect your business with Google mail, calendars, documents, and hundreds of other Google Apps and Apps provided by 3rd party vendors. You use your own domain name so your email stays professional. You and all your employees/business partners all use the same integrated system that is all hosted by Google. And again…its all online! Nobody needs to download software! You can access all your business mail, docs, etc as long as you have an internet connection. Compare this to Microsoft Outlook. Outlook is a very expensive software. Worse yet, every person’s software is customized to them on a specific machine. If an employee were to use a different computer, they would not have access to their email! I currently have this issue with IBM and Lotus Notes. I can’t access my email unless I’m using the laptop issued to me (this is also due to data privacy restrictions which I can’t really blame them for).

Google Apps is free for the first 10 users. After that, it is still very affordable at $5/user/month. All the Google Apps are free and most of the 3rd party apps have free versions as well. Costa and I are using a fulling integrated suite of Google apps absolutely free. I welcome the day our company grows to the size that we will require additional users and we have to pay the cheap price to upgrade.

A Specific case of how all these web based apps work together can be found in our process for capturing web based leads. I’ve written before about Zoho CRM. Zoho is a web based Customer Relationship Management tool that allows small businesses to track potential business and organize their leads. Of course, there is no software to download. Better yet, Zoho CRM is a 3rd party app that works seamlessly with Googl Apps! Below is an example of how multiple online collaborative tools will soon be working together harmoniously for our business.

• I create a website on wix.com
• I create a web to lead form on Zoho CRM (This is a form that will go on my website. The user enters their info and it automatically populates as a new lead in Zoho)
• After someone fills out the Zoho form on my Wix website, the lead comes in. The person who submitted the form gets an automatic “Thank You” email from my Business GMAIL account.
• We follow up with the lead and schedule an appointment using Google Calendar
• We analyze the deal potential by using Google Spreadsheets.
• We move forward on the deal and manage the entire project using Viewpath 3
• We make money on the deal and analyze our income using Wave Accounting

All of the above is free. There is no software to download. All users can access these tools and use them collaboratively.  This is a phenomenal way to take advantage of business systems. Here are the best reasons to take advantage of Google Apps if you are a small business owner:

• No software to download
• Tons of free storage and cheap storage after you reach your limit
• Fully integrated system
• Access your account from anywhere or anything with an internet connection (smartphones and ipads included)
• Gmail is better than outlook and others email clients
• ***This is the trend of business! You need to buy in now to online collaborative apps! Software as we know it is on its way out.

You may not know it, but you use online apps everyday. Websites like Facebook, Twitter, Mapmyrun, Link’d in, Youtube, etc are all very similar. You sign into your account and you dont download any software. Google Apps takes all these apps and brings them all together!

Bottom Line – To grow your business you will need to take advantage of business systems that do the work for you. Software is on its way out. The best business systems involve online collaborative apps such as Google Apps.

The “Live-In Landlord”

I wrote previously about the importance of thinking in terms of your personal net worth. Your net worth is a true indicator of your personal financial health. Many people are quick to associate income with financial health, but this is simply inadequate. The reason income alone is inadequate is that a person who makes a high salary could also have the tenancy to overspend. This makes it entirely likely and surprisingly common for individuals who make an average salary to have a stronger financial health than those with above average salaries.

When evaluating your net worth its important to look at the trend in your net worth as opposed to your net worth at one specific point in time. Its completely acceptable to have a low net worth, as long as you are taking the necessary steps to grow your net worth over time (My current net worth is way negative at $-127K). I’ve written about consciously making spending decisions that will increase or maintain your net worth. I’ve spent the last few months researching and educating myself on some of the best ways to increase my net worth. Sure, if I simply continue working my job, paying off my loans, and saving a % of my paycheck, my net worth is bound to increase. However, I’m not satisfied with this rate of improvement.

One strategy I am starting to implement is investing in rental properties. After doing the research and analysis, this strategy is no brainer for my current situation. I will explain below why becoming a “live in landlord” makes complete financial sense for a young individual looking for your first home.

The Easy Decision

After leaving New York, I moved back to Hamburg where I currently live with my parents. My parents were gracious enough to allow me to stay at home until I find a place of my own. While I love the company of my new “roomates” and all the perks and meals that come with living at home, I need to move out! At age 23, I have the desire to build my independence and continue to grow my career. My current situation is summarized simply: I need a place to live, I have no long term commitments, and I want to increase my net worth.

A few weeks after moving home I started to discuss the option of buying a rental property with my business partner and long time friend, Costa. We discussed how our situations were similar. We also have been doing quite a bit of research on real estate investing as our business is centered around real estate. We began searching for opportunities and we soon found ourselves in and out of 3 or more homes per week to evaluate the investment potential. We recently found what we feel is a great property and we signed a contract last Friday. If all goes well with the closing process, we will take ownership of a 3 unit home in 2 months. We will live in one of the apartments and continue to rent out the other two. We completed a thorough analysis of the opportunity and we are confident that this will be a great start to our real estate investment portfolio.

Breaking Down the Numbers

I’ve already discussed how buying a house is healthy for your net worth whereas renting is detrimental. I understand that some people have situations where renting is the only option. However, you should do whatever you can to own a home instead of renting. There are a lot of things to consider when owning a home. While the main argument for home ownership is that you build equity (thus increasing your net worth) as you pay off the mortgage, there are also several expenses that do not contribute to your net worth. Some of these expenses are outlined below:

• Property Taxes
• Homeowner’s Insurance
• Maintenance & Repairs
• Utilities
• Advertising Expenses

We are well aware of these expenses and we have included them in all our analysis. The home we are purchasing is a 3 unit home with a current rental income of $1,675 per month. When Costa and I live in the house, this rental income will decrease to $1,075 as we will not receive the $600 rent from the unit we occupy. We use this expected revenue along with all our monthly expenses to evaluate the investment opportunity. Below is a breakdown of the monthly analysis:

You might see this and wonder what it is I’m so excited about. After all, we’re losing money every month! At first glance it doesn’t seem like a good deal at all. However, when you break down the value we are receiving, you see that it is indeed a great step toward increasing personal net worth. Consider the following:

• I get to move out of my parent’s house. This is one of my main goals!
• Costa and I will pay less than $300 per month to live in the village of Hamburg! When was the last time you were able to rent an apartment or house for less than $150 per person? Also keep in mind that our calculations include utilities.
• As we are “losing money” on a monthly basis, our mortgage is being paid by our tenants. We are gaining equity in this house every month we pay the mortgage. Our net worth will continue to increases as our equity in this house increases.
• We will gain invaluable experience in a rather low-risk land-lording situation. Being onsite will allow us to learn what is necessary to be an effective landlord. This will help us down the road as we expand our investment portfolio.

As you can see, its a pretty good deal when Costa and I live in the house. But what happens if and when we want to move out? That’s simple: We move out and rent out the unit we were living in. That would result in increased revenue for the property and a decrease in utility expenses (as these would be paid by the tenants). In this situation, not only is our net worth increasing as the tenants pay the mortgage, but we are also generating positive cash flow of over $400 per month. Below is the same monthly summary with all 3 units rented out:

The analysis shown here does not consider the home value and rental appreciation. I have a more complex analysis that covers this. However, my intention is to point out how a simple strategy like this can benefit your personal financial health. I understand that it may not be feasible for everyone to try this strategy. However, I encourage you to evaluate your current financial situation and look for ways to increase your net worth over time. There are many safe investment strategies that can help you to obtain an upper hand on your finances.

I’d be happy to discuss this strategy or other real estate investment strategies with anyone who is interested. As I mentioned, my new business venture is centered around real estate. Costa and I have made a great deal of progress since I moved back from New York. We have some very exciting announcements to make in the coming weeks. Please stay tuned!

As always, I’ll leave a snapshot of my current progress on eliminating my student loan debt:

Coming Home: Softball, JP’s, & Beer Tents

One of the many reasons for my last post (Top 10 Inexpensive Things to do in NYC) was to bring closure to what was an unbelievable year living in New York City. It had been something that I’ve always wanted to do, and I’m really glad I had fun while I was there. However, one of the best things that came out of my time in New York City was my realization of much I missed home: Buffalo, NY.

Throughout my High School years, I exemplified an intense animosity toward Buffalo that could be found among the majority of Western New York youth. We complained constantly about there being “nothing to do in Buffalo” and we all shared the notion that anywhere in the country had to be better than this place. We saw the bright lights of NYC and the surfing culture of the California coast and we made it our life mission to get out of here. We felt that we had to “make up for lost time” and have fun like all the other kids in the country. Unfortunately, some young people still harbor this internal desire to completely remove themselves from Western New York. Many people have given Buffalo a shot and it truly is not for them. However, I am confident that many young people fail to realize the benefits that come from living in a place like this. For me, it took 5 years removed from my hometown to finally realize how lucky I was to have grown up here. I’ve discovered that “the grass isn’t always greener” and that I would be more than happy to make Buffalo my long term home.

What’s your definition of “fun”?

I’ve had an awesome summer so far. What’s interesting about that is the fact that almost all of my summer highlights have taken place during the last month since I’ve moved back to Buffalo! How could this be? I was coming from the biggest and most exciting city in America. For me, it all comes down to value. Everyone knows I track every cent I spend and that I am very cognizant of how to best spend or save my income. It should come to no surprise to anyone that I spent less in Buffalo than I did during a typical month in NYC (even after removing the cost of rent). However, the value of every dollar spent has blown me away. There are things to do here that almost impossible to do elsewhere.

After my first full week back in the Buffalo area, I had my first softball game with a team made up of some of my best friends from growing up. The team is sponsored by a local Hamburg bar (The Pour House), its made up mostly of ex lacrosse & hockey players, and we’ve won 1 game all year (although I’ve been told we’ve been shorted chances for comebacks during a few of the games we’ve be forced to forfeit via “mercy rule”). Sounds miserable. It’s quite the opposite. I’ve never played baseball/softball in my life and I’m absolutely horrible. However, Friday night games are some of the best fun I can possibly imagine. We have a ton of fun playing, we drink beers, and we make plans for the rest of the weekend. We close out the night by going to Hamburg bars like JP’s where the most you could possibly spend on a drink is $2.50. It will be sad to see softball end in a few weeks…but I’ve heard rumors of a bowling team being in the works for the winter!

I mentioned cheap/free festivals during my NYC post. I never realized how abundant cheap and random festivals were in Buffalo. It seems that every weekend I hear about some sort of  cultural festival of church Lawn Fete. Every one of these things has a beer tent. And I have no problem admitting that the beer tent is often the main attraction! This is how a typical conversation goes when trying to figure out a summer weekend in Buffalo:

Person 1: “We should check out the ____ festival”

Person 2: “You think? How fun could that possibly be?”

Person 1: “I don’t know…I’m sure they have a beer tent”

Person 2: “True…Let’s go!”

Some cool festivals/weekend activities:

• Taste of Buffalo
• Lewiston Wine Festival
• Italian Fest
• Queen of Heaven Lawn Fete
• Thursday in the Square
• Allentown Art Festival
• Way too many more to mention!

The main point to all of this is that it doesn’t take much to have a good time here. People love the outdoors and we are all quick to take advantage of all the region has to offer. By far my main highlight of the summer was the party we had up at my family’s cabin earlier in July. It wasn’t anything special. A group of friends, a pond, a bonfire, and several coolers of beer was all we needed. Its times like that when you sit back, think about Buffalo, and think, “What more could I possibly want”.

Lowering the Complaints

Some people will continue to complain that there is nothing fun to do in Buffalo. That is fine. If this is you, I encourage you to try living somewhere else. The bottom line that it extremely difficult to find a comparable quality of life that exists in Buffalo. Buffalo is dirt cheap. The value you can get from a $200K home in this area is unbelievable. We’ve already explored how cheap a night out can be in Buffalo. With all this extra expendable income, you could plan multiple vacations throughout the year. These vacations could fill this void of “fun” while still allowing you to live within your means. Just because Buffalo is your home does not mean that you are never allowed to leave. Buy a home in Buffalo and spend the extra money to visit the more expensive areas of the country.

One thing that really bothers me is when people complain about property taxes in Western New York. This is an extremely ignorant thing to do. Everyone must realize the purpose of property taxes: To pay for the local government services provided by the town/county. It is no secret that property values in Buffalo are extremely low compared to the rest of the county. Therefore, homeowners benefit by paying a lower mortgage for their home. However, the town and local governments suffer because their revenue is generated as a % of assessed home values. Therefore, to make up for this deficit, Western New York has increased property taxes. The people that are complaining about high taxes are the same people benefiting from a $200K home that would undoubtedly appraise for $400K in other parts of the county. I am confident that the average PITI (Principle, Interest, Tax, Insurance) payment of a Western New Yorker is far lower than the national average.  So please stop this complaint and encourage others to do the same!

The Future of the Region

Another complaint that warrants its own section is that there are no jobs in Buffalo. I will not argue this point. It is no secret that Western New York is still suffering form its inability to adapt to the decrease in demand for manufacturing products and an increase in demand for service focused industries. However, I will encourage those of you expressing this complain to be part of the solution and not part of the problem. One thing that Buffalo definitely has going for it is the loyalty of its citizens. Western New Yorkers are extremely proud of this region and I believe we need to take advantage of this pride. This pride is exemplified through our support for our sports teams. Its clear that the Bills suck. But you’ll still be able to find 70K fans at Ralph Wilson Stadium during any one of the Bills’ 7 home games this season (1 is in Toronto). Try saying that about “Sports Crazy” Pittsburgh…where I was able to get a $20 ticket to a Pens game my freshman year because the city hated the team and had no interest. Also note the dramatic influx of Pirates fans recently. Just 2 years ago I was hard pressed to find a single Pittsburgh citizen that admitted they were a fan of the Pittsburgh Pirates.

I’m excited to see my generation be a part of the revitalization of this region. There are some really talented young people that are doing some great things. All it takes is for us to focus our energy in this region and we can see some awesome things happen. If you are trying to figure out the next stage of your life, try to make Buffalo part of it. How rewarding would it be to look back on your career and be able to say that you gave back to the region that made you who you are? If you are not from Buffalo…I apologize for the direct focus of this post. However, I encourage you to take this mindset to your own hometown. Everyone is always so quick to pick up and move on. They often forget where they’re from and the people and places that have defined their lives.

I’m excited that I know several people who are currently exemplifying the mindset above. I am personally working on a business that will result in a tangible revitalization of the region. The pride I have for Buffalo and the people here help to motivate me every day.

There is one Buffalo native who will be making a huge splash this week. Mike Baldo of Vergetone Productions will make a very exciting announcement in a couple of days. I plan to provide updates on this announcement and I encourage all of you to be part of it. Unfortunately, I’m unable to mention anything until it is official. However, I can assure you that this effort will exemplify the pride and talent of the region. Stay tuned for more details!

Bottom Line: Don’t ever forget where you are from and the people and places that made you who you are.

A Quick Student Loan Update:

The Frugal Tourist – Top 10 Inexpensive Things to do in New York City (Part 2 of 2)

As I continue with my countdown of the Top 10 Inexpensive Things to do in New York City, keep the comments and feedback coming. I’m interested in seeing and sharing the experiences of others.

#5 Staten Island Ferry

If you have ever been to Battery Park on a weekend or holiday and have seen the absurd lines for The Statue of Liberty and/or Ellis Island, you will appreciate this next tip. The Staten Island Ferry is a free ferry service that runs between Lower Manhattan and Staten Island. The main attraction of this ferry ride is that it takes you right past The Statue of Liberty…FOR FREE! The ferries run every 15-30 minutes and the 5 mile ride takes about 25 minutes each way. While this is a fairly popular attraction, the boats are pretty large and it is not difficult to get a good seat. On your way to Staten Island, you want to be on the right (or starboard) side of the ferry for a great view of The Statue of Liberty. On the return trip to Manhattan, the opposite applies. Meghan and I did this during one of our first weekends in New York and I was extremely impressed with how close we actually got to the historic monument. We took the ferry to Staten Island and immediately got on the next ferry for the return trip.

This may seem like a very cheap way to see the Statue of Liberty, but it really does provide a fantastic view and it is completely worth avoiding the hassles associated with the official Statue of Liberty/Ellis Island tours. The round trip takes less than an hour, it is free, and you do not have to wait in line at all. If there is one thing in New York that screams “I am a tourist”, its waiting in line for attractions like The Statue of Liberty. If you have not done the official Statue of Liberty/Ellis Island tours, you may want to check that off your list. However, I strongly recommend the Staten Island Ferry for a quick and relaxing way to see a pretty important American Icon.

[Another free ferry that takes you past The Statue of Liberty is the “IKEA Ferry” to Brooklyn. While it doesn’t get you as close as The Staten Island Ferry, it still provides a great view]

If it takes you a while to get to Lower Manhattan, you should try to fit in a few more activities to get the best “bang for your time“. Here are some other cool things to do while in Lower Manhattan:

• Check out One World Trade Center and the 9/11 Memorial – Its pretty exciting to see the progress that is being made on the lead building in the new WTC complex. It seems the crews do not stop working and their impressive progress reflects the same.
• Battery Park – Battery Park is a great place to hang out on a nice day. With great views of The Statue of Liberty and Jersey City, the Park is a relaxing retreat from the bustling city.
• Wall Street – While there really isn’t much to do here, a lot of people like to check it out and take some pictures. Home to the New York Stock Exchange, Wall Street is the driving engine behind America’s financial industry.
• South Street Seaport & Brooklyn Bridget – Keep Reading!

(Thanks to Sean Hamilton for suggesting the Staten Island Ferry as a great way to see the Statue of Liberty for free!)

#4 The High Line / Chelsea Market

The High Line consists of what used to be a highly utilized elevated railway that has been recycled for use as an urban park. Running from 12th street to 30th street in Manhattan’s Meatpacking District, The High Line offers a unique experience that many people are still not aware of. There really isn’t much to do once on The High Line, but I think its a great thing to do because of its uniqueness and because of the creativity that went into the idea. Its also pretty cool to walk above the bustling traffic of 10th Ave and the Meatpacking District. While the High Line itself is pretty cool (and completely free), I think its main attraction is the area its in.

The West Village / Chelsea has plenty of cool bars, restaurants, and stores to explore. I’m a huge fan of the Chelsea Market. The Chelsea Market is full of food vendors offering extremely fresh and unique varieties of meats, cheeses, produce, breads, and some ethnic specialty stores as well. Meghan and I like to try new meals using fresh and new ingredients. This makes the Chelsea Market a great place for an “all-in-one” shopping trip. I can’t say the Chelsea Market is very cheap, but given the quality of the ingredients, I think the price is entirely justified by the value. Just consider the amount of money you would spend on a restaurant meal and compare that to the amount you would spend at the market. The market will undoubtedly be the cheaper option.

Here are my top 3 vendors at the Chelsea Market:

• The Lobster Place – I don’t think I’ve ever actually made a purchase from this place, but I still love it. Its full of fresh seafood, sushi, and made to order lobster rolls.
• Buon Italia – We’ve made several purchases at this retailer. They have authentic Italian ingredients that would be difficult to find elsewhere.
• The Filling Station – The Filling Station offers a huge variety of different oils. This is a great place to pick up unique gifts for friends/family who like to cook.

(Thanks to Lizzy Young for the initial suggestion to give The Highline & Chelsea Market a try!)

# 3 – Brooklyn Bridge / South Street Seaport

If you read Part 1 of this post, you already know I love the Brooklyn Bridge. I repeated it here because its a great place to visit even if you don’t do so on a long run. Take a stroll out to the center of the bridge for a great view of the New York skyline. Obviously this activity is completely free. A lot of people don’t think of going out to the bridge at night. I strongly encourage you to do this. There are less tourists and the views are completely different.

The “City Hall” area in general is pretty cool because of its deviation from the modern New York City that a lot of people are used to. This area exemplifies the historical significance of the city and offers a more unique NYC experience than the traditional tourist attractions. Right below the Brooklyn Bridge lies an area known as “South Street Seaport“. This area, recognizable to many because of its iconic old ships, is buzzing with restaurants, street vendors, retailers, and pubs. Because of its location below the Brooklyn Bridge on the East River, the Seaport is an excellent place to grab a bite and a pint as a prelude to your walk on the Brooklyn Bridge. Meghan and I went to a restaurant called “The Paris Cafe” and we both loved it. Before it was a restaurant, The Paris served as a hotel and was frequented by historic American icons such as Teddy Roosevelt, Thomas Edison, and Butch Cassidy and the Sundance Kid.

The Seaport and the Brooklyn Bridge pair up to make for a great night out. There is plenty to do and its easy to get away with spending a small amount of money. In my opinion, this area is a “Must See” for your visit to New York.

# 2 – Top of the Rock

While I tend to prefer activities that are more unique than the traditional New York “tourist” activities, I do admit that I was thoroughly impressed with “The Top of the Rock” (The observation deck at the top of Rockefeller Center). One of the main reasons why I was so impressed with this attraction was because of the advantages I feel it has over the Empire State Building. The Empire State Building is almost an automatic attraction for any tourist’s first visit to NYC. If you are looking for a great view of Manhattan from one its famous skyscrapers, I encourage you to consider Top of the Rock instead. I’ve been to both Top of the Rock and the Empire State Building multiple times and I strongly believe the Top of the Rock is a much better way to spend your time and money. Below is a list of all the reasons I like the Top of the Rock better than or at least equal to the Empire State Building:

• Cost – After the service surcharge is added to the price of your Empire State Building Ticket, both attractions are about the same price: $23.00. In this area, I consider these attractions to be equally affordable.
• Time – Without a doubt, Top of the Rock has the advantage in this area. Because of its huge popularity, the Empire State Building takes can take up an entire morning or afternoon. On the contrary, Top of the Rock gets you up to the observation deck quickly so that you can take your time enjoying the awesome views. I think the total time to get up to the Top of the Rock was about 20 minutes for Meghan and myself. As for the Empire State Building, you will have to stand in line for awhile and go through multiple elevator lines. This can take can take up to 1-2 hours just to get to the observation deck.
• View – Surprisingly, I enjoy the view from the Top of the Rock much more than the view from the Empire State Building. Although the Empire State Building is currently the tallest building in New York, the Top of the Rock has a couple advantages. The first and most obvious reason is that you get to see the Empire State Building from the Top of the Rock! Because of the historical significance of the Empire State Building, its a real downer that you don’t get a view of it while on its own observation deck. The second reason I feel the view from Top of the Rock is better is because of its proximity to Central Park. You get a much better view of the park and the uptown neighborhoods from Top of the Rock
• Location – The Empire State Building is pretty much the only attraction in its area. On the contrary, Top of the Rock is steps away from Times Square, Central Park, and the Broadway theater district. Its a lot easier to string together a bunch of activities from Top of the Rock.

#1 – Times Square for New Years Eve

I implore you to forget everything you have ever heard about spending New Years Eve in Times Square while reading this post. I have done this twice so far. The first time, I did it the traditional way. I stood in the middle of Times Square for more than 8 hours. It probably would have been longer if we didn’t have the luxury of staying at a hotel right in the heart of Time Square. The second time, Meghan and I got extremely lucky to have discovered a loop hole that entirely takes the hassle out of spending New Years in the most popular destination in the world. This activity is without a doubt inexpensive. I have this activity listed as #1 because I think everyone should give this a shot. It was without a doubt one of the most memorable experiences of my life.

You have probably heard that spending New Years in Times Square is pretty exciting but that the time investment is not worth the 15-20 minutes of exhilaration. I do not dispute this thought at all. But what if you could experience all the excitement of Times Square on New Years after waiting for only 20 minutes? This is exactly what Meghan and I did. We definitely did not plan it this way, but I am very confident that anyone can replicate what we did and take advantage of this great experience. Here’s how it happened:

Because of its crazy popularity, parts of Times Square start to get blocked off to the public starting at around noon. As the crowds fill in, the NYPD block off more and more streets. The crowd fills all the way to and past the beginning of central park at 59th street (More than 10 city blocks). This is what leads to the extremely long wait times. If you want to get a good spot to view the ball drop, you have to get to Times Square extremely early. Meghan and I were not interested in this. Sure it would be great, but did we really want to spend an entire day standing? Not at all. So we thought we’d try something else.

Meghan and I like the Food Network and as a result we love to try the restaurants of the celebrity chefs that are featured on the network. One of our favorites is Bobby Flay. We wanted to have a nice dinner for New Years to celebrate the occasion and Meghan’s visit to New York. It just so happened that one of Flay’s restaurants, Bar Americain was located steps away from Times Square (52nd street). We decided to make a reservation for New Years eve and see if we could experience just a touch of the excitement surrounding the area. We made a reservation for 10PM and prepared for a great meal. Because 52 street would be shut down by 10PM, the restaurant issued us an access pass to get past the barricades and get to the restaurant. We got to the area around 9:15 or so and checked out what we could of the situation. It seemed clear that we would not be able to very close to Times Square. The side streets were blocked off between 6th and 7th avenues and they were only accessible for guests of local hotels or people with dinner reservations. So we decided we would have a great dinner and after we would try to see as much as we could.

We had an awesome dinner at 10PM and stepped out at around 11:30 or so. At this point we were on 52nd street between 6th and 7th avenues. We walked toward 7th Avenue (The main street full of people waiting to see the ball). 7th Avenue was blocked off by NYPD barricades…there was no way we were getting through. Meghan and I came to the realization that we wouldn’t be able to see the ball at midnight. So we decided we would just hang out and we would at least get to experience some of the excitement from being close by. We hung out in between 6th and 7th and finished some of our adult beverages that I strategically packed for the trip! At about 15 minutes to midnight we decided to walk back to the barricade to be as close to the action as possible. We couldn’t see the ball, but we could see the massive crowds. Within a few minutes we were surrounded by about 20-30 others who had the same idea as we did.

About 2 minutes later, I noticed the NYPD officers whispering amongst themselves. I had no idea what they were talking about, but i started to get curious. With about 10 minutes to go until midnight, the police officers addressed the crowd. They said, “When we pull the barricades, you have to walk. Make sure you don’t run”. Meghan and suddenly realized that these officers were going to lift the barricades and allow us to enter the Times Square crowds. About 1 minute later, that is exactly what happened. Following the instructions, we excitedly walked into the crowds and spent the last 8 minutes before midnight emerged in the excitement of the moment. We were able to experience one of the most sought after memories without the hassle of spending the entire day standing in a crowd of tourists. We continued to consume our adult beverages and had an awesome time as we saw the ball drop in plain view. We were extremely shocked at what happened and we could not believe what we just pulled off. It was definitely the best thing I have ever done while living in New York.

I feel that we got very lucky on New Years. However, I do not think this would be difficult to replicate. Taking a closer look at the situation, I am pretty sure the NYPD intended to lift the barricades for the small crowds. We saw the same thing happen at the other streets from about 49th through 55th streets. Groups of about 20-50 people flooded into the open intersection with about 8 minutes to go before midnight. It seems to me that this is something that happens every year. Therefore, I think this is a situation that you can take advantage of! All you have to do is make a dinner reservation at a restaurant between 6th and 7th avenues close to Times Square. You could also stay at a hotel in this area but that is far more expensive. Make the reservation for about 10PM, take your time for dinner, and then hang out at the 7th Ave side of the barricade. If all goes well, you will get access to Times Square and have a great experience on New Years!

Meghan and I seconds before 2011!

Bottom Line: New York is expensive; this is no secret. But if you are smart and do a bit of research, it is very easy to find unique and inexpensive activities to make great memories. These tactics can be used in other cities as well. Take the time to investigate and you will be rewarded with great times and a fatter wallet.

Thanks to those of you who have sent feedback and suggestions. I encourage you to comment if you have tried any of these top 10 or if you have some favorites of your own!

The Frugal Tourist – Top 10 Inexpensive Things to do in New York City (Part 1 of 2)

I feel very fortunate to have had the opportunity to spend 1 year living in New York City. It had always been a dream of mine to live in New York, and last summer, I was given that chance. As everyone is aware, there is a lot to do and see in New York. Everyone also knows that New York is one of the most expensive cities in the world. Putting those two points together, you might assume that it will cost you big bucks to experience some of the best NYC has to offer. I would have to disagree!

During the past year and through Meghan’s many visits, we researched and discovered some of the best inexpensive activities to see and experience New York City. Because we were both operating on extremely tight budgets, we tried to find activities that we could do for minimal or no cost. We were most definitely successful in our efforts as we filled the past year with great NYC experiences and memories. The purpose of this post is to share some of these inexpensive NYC experiences and provide some general guidelines for “Sightseeing on a Budget”. This is an area in which I plan to continuously improve. As several of my future goals include travel to various parts of the country and the world, I want to ensure that I minimize my out of pocket expenses while not compromising on the quality of my visits.

My “Top 10″ list is obviously subject to my personal tastes and preferences. I encourage you to leave comments or contact me if you have any additional inexpensive activities that you feel readers will benefit from. Enjoy!

Top 10 Inexpensive Things to do in New York City

#10 – Central Park

One of the most well-known of my “Top 10″ activities, Central Park is an obvious choice for a first time or seasoned visitor to New York City. For those of you who are not aware, Central Park offers way more than your typical city park. Taking up more than 840 acres of prime New York real estate and brimming with historic icons and landmarks, Central Park offers countless opportunities for visitors seeking a strong dose of NYC history and ambiance. Whether you are an active visitor looking for a venue for daily exercise or you are just interested in taking a relaxing stroll, the park has something for everyone. The park has far too much to offer for me to mention everything here. I will provide some highlights and leave it up to you to explore the rest. Official Central Park Website

Running/Biking/Roller Blading – The Park offers more than 6 miles of drives which can be used for any of the above activities. On Weekends and weekdays after 7PM the park is closed to automobile traffic. This allows for a safer exercising experience. Renting a bike is a great way to see a lot of the park in a short amount of time. Rental promoters often advertise bikes for $15/hour and are scattered throughout the park; many along the park’s Southern border at 59th street. Consistent with its reputation for attracting health conscious runners, the park is also home to the finish line of the New York City Marathon.

Strawberry Fields / Imagine Mosaic – Paying tribute to the late John Lennon, Strawberry Fields is located on the west side of the park between 71st and 74th streets. Just steps away from “The Dakota” apartment complex where Lennon was murdered, Strawberry Fields showcases a memorial known as the “Imagine Mosaic”. This site attracts thousands of visitors daily; All paying homage to Lennon and his efforts to bring peace to the world.

Belvedere Castle – This Central Park landmark bring visitors back to the 1800′s when the park was created. As the castle was constructed primarily for show, it has never served any functional purpose. Nonetheless, this a great site and an awesome place from which to see the rest of the park.

Some Additional Sites/Activities to Check Out:

Central Park Zoo, Tavern on the Green, The Lake, The Great Lawn, Summer Stage

#9 TKTS

Another popular item on a NYC visitor’s “To-Do” list is to see a Broadway show. While these shows are not in short supply, ticket prices can be quite steep. Lucky for the frugal, there exists a service known as “TKTS” to offer discount Broadway (and Off-Broadway) tickets to would-be theater goers. This program allows customers to purchase tickets on the day of the show at 20%-50% off the original ticket price. While the most popular shows (“The Lion King”, “Wicked”) do not participate in TKTS, most other shows do. Here’s how it works:

• You go to 1 of the 3 TKTS Locations (Times Square, South Street Seaport, and Downtown Brooklyn) the day you want to go to see a show. Locations have different hours depending on the day of the week. Check out the TKTS Website for the latest information. You should plan to arrive and wait a few hours before they open. When Meghan and I tried this, we went to the Time Square booth about 2 hrs. before they opened. This worked just fine. We went during New Year’s weekend so I’m sure it was a bit more crowded than usual.

• 15 minutes before the booth opens, they will post what shows are available and at what discounts. This will give you time to decide your 1st, 2nd, and 3rd choice for when you get to the window. One awesome thing about the Times Square booth is that they have very knowledgeable staff monitoring the line. These staff members can help you decide what shows to target depending on your tastes and the typical availability.

• Once the booth opens, the line moves quickly and you will have a chance to buy tickets at the window. You should have your mind made up at this point on what shows you want to see. You say the show and the # of tickets and that’s it! You get perfectly good Broadway (or Off-Broadway) tickets at a fraction of the price.

I thought this service was great! However, it does have its drawbacks which turn many people off:

• You have to wait in line – This was definitely not the best time, but I thought it was worthwhile. We were in Times Square which is an exciting place to hang out. Also, the TKTS staff members are pretty entertaining. Time went fairly quickly and we got great seats for a cheap price.

• There is no guaranty that you will get the show you want – This is true. However, you can check out the past week’s sales online. This will give you a good idea of what will most likely be on sale. In our case, our top choice was “Billy Elliot”. This show is pretty popular and was sold out the day we went to TKTS.  However, if you are like me, you aren’t too worried about getting to see your top pick. I would have loved to see “Billy Elliot”, but there are so many great shows that you are bound to find something you will like. We ended up seeing “Promises, Promises” and were completely satisfied.

If there is a show you desperately want to see, you might be better off using a different option for purchasing the tickets. However, if you are simply trying to enjoy the NYC Broadway experience, TKTS is a great way to go.

#8 Cheap Museums

New York is well known for its abundance of noteworthy museums. From the traditional American Museum of Natural History to the more risqué Museum of Sex, there are several great options for spending the day at a museum. One thing you should never do: Pay retail price for admission into a museum. There are so many ways to get discount tickets to museums, it is simply ludicrous to pay face value.

Ways to Get Discount Admission into Museums:

• Corporate Discounts – Many large corporations are considered “benefactors” of the large NYC museums. Therefore, employees of these large corporations are often considered “Members” of the specific museums. One obvious perk of being a “Member” of a museum is that you get discounted or usually free admission. Check with your employer to see if this is the case for you. You could also call the museum to ask if your corporation is a sponsor and if you will get any related perks or discounts. Even if you do not work for one of these corporations, one of your friends might. Employees are usually allowed to bring a few guests with them free of charge.

• Student Discounts – I understand that many of you are out of school, but that does not necessarily mean we are excluded from student discounts. For one, many of you probably still have your school ID that is either not expired or does not have an expiration date at all. Even if you don’t have a valid student ID, its possible to take advantage of student discounts. When Meghan and I went to MoMA, she simply told the girl at the front counter that she was a student at Duquesne. Even though she didn’t have her Student ID with her, the staff member gave her a discount. She quickly “quizzed” Meghan on where she went and what she studied just to make sure it wasn’t complete BS. But in the end, Meghan got her discount. Meghan is without a doubt still a student at Duquesne…so she was not lying at all. I will leave it up to you to determine how you would like to leverage this bit of advice. You should definitely take advantage of this if you are working toward your Masters or PhD. I’ve also seen museums give discounts for alumni of certain universities. The bottom line here is you should at least try to play the “student card” to get discounted admission into a museum.

• Discounts on Museum Websites – Museums are so eager to get visitors they will literally point you directly to their discounted admission. You should always check out a Museum’s website to see if there is any discount for visiting during a particular day or time. This is a quick and simple way to save some extra money.

Here is a list of popular Museums that are worth your while to check out:

American Museum of Natural History, Museum of Modern Art (MoMA), Metropolitan Museum of Art, Guggenheim Museum

#7 Free Festivals/Parades/Movies/Concert Series

New York’s omnipresent diversity lends it to countless festivals and parades throughout the year. While most of these take place in the summer, there is almost always something going on throughout the year. These festivals are great to check out as they usually come with free/cheap food and drinks. Most importantly, these festivals are a relief from everyday life and allow you to explore various cultures and try something new. In addition, there are a few movie and concert series that offer free General Admission to the public.

There are simply way too many festivals/parades and street fairs to mention here. I recommend entering the search term “New York City Festivals” for the time that you plan to visit. You are bound to find something unique that you can check out. Here are some popular festivals that I have attended, encountered, or heard good things about:

Feast of San Gennaro (Italian Festival), St. Patrick’s Day Parade, Village Halloween Parade, Big Apple BBQ Block Party

In addition to festivals and parades, New York also has something to offer for those interested in the arts. Most notably, the city puts on a free summer concert series known as Summer Stage. This 4 month long program features a diverse group of artists performing at more than 15 venues in all 5 New York burrows. The city does a great job of promoting up and coming artists while providing a venue for fans to discover underground talent. The city also sponsors several free movie showings throughout the summer. The “Free Summer Movies” section of the NYC Parks website provides a schedule of such events. For all those people frustrated about the additional income tax for being a resident of New York City (Believe me, I was one of them), this is what your taxes go toward. Go out and take advantage!

# 6 Running / Biking to See the Sights

One of my favorite things about living in New York was the ability to run literally anywhere and see some great sights for free. While I am not a biker, I imagine that this ability is amplified when your range is extended 10-20 extra miles. If you are not very active and you do not run/bike much, I apologize. But my experience with running all over New York was just too incredible to leave off this list.

New Yorkers and visitors are extremely fortunate as the city does a great job of respecting runners/bikers while providing venues for such activities. Running allows you to get up close and personal to many historic New York landmarks all in a short period of time. Its a great feeling to go out for a long run, get some exercise, possibly cure your lingering hangover, and see a great city all at the same time. My roomates and I would usually save our big runs for the weekends. Whether you take advantage of the pristine West Side Highway trail, or just simply navigate through the bustling streets, you are bound to find some exciting routes. Below are some of my favorite routes:

• East River Park to Central Park – While the “ERP” has nothing on its West Side counterpart, it was an incredible “means to an end” when getting from Ave A to Central Park. We would run up the East River, pass the United Nations Headquarters, cut in and cross Lexington, Park, & Madison, and touch the South East Corner of Central Park (Right near the Plaza Hotel). If we were really feeling ambitious, we would run around Central Park for a while or cut over to the West Side for the return trip home. All in all this run ranged from 7-11 miles depending on what we did after getting to the park.

• “The Horn” – The name is completely original and comes from the fact that this run brings you around the Southern Tip of Manhattan (The Horn!). We ran down the East River Park, past the Manhattan Bridge, Brooklyn Bridge, and South Street Seaport. As the Statue of Liberty comes into view, we round the southern tip (The Horn!) of the island. We then catch the West Side Highway trail and run up the Hudson for a bit. We get a great view of the progressing “One World Trade Center” and eventually run cross-town to get home. Sometimes we cut this run short before catching the West Side Highway and we get the unique pleasure of running right through China Town (This is without a doubt Tim Raschuk’s favorite part of any run)! This run has a huge range as we tend to improvise quite a bit once rounding The Horn. On average, I’d say this run is typically 7-15 miles.

• Williamsburg Bridge / Brooklyn Bridge – If you haven’t had the chance to run/bike across one of New York’s iconic bridges, I strongly recommend you do so as soon as possible. Because we lived in the East Village, we ran across the Williamsburg Bridge (over the East River) to Willamsburg, Brooklyn. While on the bridge you get a great view of Mid-Town Manhattan. Once in Brooklyn, you continue to see the skyline as you make your way south to the Brooklyn Bridge. The Brooklyn Bridge is the climax of this run. Not only does it involve a close to 1 mile long incline building up to its highest point, but you also get to run on one of the most historic bridges in the world. The bridge is filled with tourists, runners, and bikers all taking advantage of the landmark. The crowds can make things quite hectic but I feel that only adds to the fun. As you reach the mid-point of the bridge you are rewarded for your efforts with a fantastic panoramic view of the New York skyline (including The Statue of Liberty). We typically return home via Lafayette  Ave (which also includes a quick visit to China Town). This is by far my favorite run. We typically don’t deviate much from this route and this run clocks in just above 8 Miles.

If you are an avid runner/biker, I highly recommend taking advantage of all the city has to offer. If you are not a runner or you are just beginning, there are plenty of options for beginners. Feel free to contact me if you are looking for suggestions for interesting running routes in New York.

Related Note – Finding awesome running routes is by no means restricted to New York. We found amazing routes while training for a marathon in Pittsburgh as well. I’m currently exploring Hamburg, NY & Buffalo, NY in search of some great runs. I feel this is a great hobby to get into and one that will continue to reward you throughout your life. If you were “never much of a runner”, don’t think it’s too late to start. 3 years ago I couldn’t run more than 3 miles at a time. Through simple training and self-discipline I was able to build up my endurance so that I can take advantage of the countless rewards offered by running. I’ve run some great routes in New York, Pittsburgh, Buffalo, and Sydney…and I’ve seen some amazing things. I plan to continue to add to this list over the next 20 years.

 

That’s a wrap on activities 6-10. Please stay tuned for the second half of the Top 10 Inexpensive Things to do in New York City!

 

Sweat the Small Stuff – The Little Things that Make a Huge Difference When Paying Off Your Debt

Whether you have student loan debt, credit card debt, or no debt, it’s important to realize one simple fact: creditors want their money! In fact, they want their money so bad, that they offer a bunch of incentives for you to pay them back. Its essential to be aware of and act on these incentives to limit your debt and speed up your pay-off period. The one form of debt with which I have a ton of first hand experience is Student Loan Debt. Unfortunately, I learned a lot of what I know a little too late. There were many things I wish I had known 5 years ago that would have dramatically limited the amount of outstanding debt. Nonetheless, I have spent countless hours working with and researching student loans. This time has given me a very strong knowledge of how Student Loan creditors work. I have been able to optimize my re-payment plan so that I can meet (and hopefully exceed) my goal of being debt free by my 30th birthday. I plan to share many Student Loan tips with you here. If you don’t have any student loans, I still recommend reading. Chances are you will have some form of debt in the near future. Mortgages are very similar to student loans. In addition, It wouldn’t hurt to have this knowledge for if/when you have children of your own.

Subsidized vs. Unsubsidized Loans

While this is not necessarily a “trick” to limiting your student loan debt, it is very important to know the difference between these two types of loans. Depending on your financial and family situation, you are eligible for either a “subsidized” or “unsubsidized” loan. It is entirely possible (and very likely) that you will have a mixture of these two types of loans. Both are fine to have…but you need to know the difference!

The clock on a student loan starts ticking the second the money gets applied to your tuition bill. From that period forward, the creditor expects interest on the principle that was lended. At a basic level, the word “subsidized” refers to whether or not the government will pay your interest while you are in school. On an “unsubsidized” loan, you are responsible for paying all this interest. You will not have to pay this interest until after you graduate…but it will accrue each and every day after the date the loan was originated. With a “subsidized” loan, the government agrees to pay this interest for you. You will not be responsible for paying interest on this loan until after you are in the “repayment” period. Obviously, a “subsidized” student loans seems much more attractive. While you must consider interest rates, terms, etc. before making a decision on a loan, everything else being equal, a subsidized student loan is much more attractive than an “unsubsidized” student loan.

If you are in a situation similar to mine, you won’t have a choice as to which type of loan(s) you receive. This does not mean that you should completely ignore your loans until after you graduate. This was my biggest mistake; a mistake I regret but have learned a great deal from. During my first 2 years of school, I took out student loans for each of my 4 semesters from Citibank. These loans totaled about $90K after my grants and small scholarships were deducted. Each of these loans were private, unsubsidized loans. While I was in school, I completely ignored my loans and figured I would just worry about them after I graduate (which is exactly what I did!). This was a huge mistake. As these loans were unsubsidized, they began to accrue interest as soon as I took them out. That means that interest on these loans accrued for 4+ years from September 2006 – November 2010. By the time my loans were to go into “repayment”, I had over $10K in interest owed to Citibank. The way creditors work with accrued interest is as follows: If you have any accrued interest by the time you are to begin “repayment”, the interest gets “capitalized” onto the principle of your loan. In my case, the $10K in interest got “capitalized” and added to my principle. That meant that my original loans of $90K were now worth more thank $100K! I now owed $100K in loans and my interest rate was calculated against $100K instead of $90K…a big difference! I was lucky because these loans from Citi had the lowest interest rate of all my loans (about 4%). If the interest rate was even 1% higher, the principle on these loans would have increased a great deal more.

The main lesson learned from my situation is that you should pay off your accrued interest from unsubsidized loans while you are in school. Even if you cannot pay off the full balance, it is a good idea to get into the habit of paying a little bit per month. Anything that you can do to minimize the amount that is “capitalized” at the time of repayment will help.

Obviously you do not have to worry about this issue when you have subsidized loans. The government handles the interest for you so you are all set. It still wouldn’t hurt to pay these off a bit early…but it is not necessary.

Interest Rate Reductions

I mentioned before that creditors love to get paid. Discover credits their record profits to a decrease in defaults against loans they have provided for education and real estate (I feel like they owe me for this!). Because they love to get paid, they want to do everything they can to encourage full and timely payments. One very common way to encourage this from their debtors is to offer interest rate discounts for customers who set up automatic payments. A decrease in your interest rate is a great way to speed up the pay-off time for your loans. All 4 of the loan companies I use offered an interest reduction of 0.25% for enrolling in automatic payments. I enrolled as soon as I could.  My 11 loans with interest rates ranging from 3.50% to 7.75% currently cost me $17.69 per day in interest. That is over $6,400 per year. If I didnt take advantage of the interest rate reduction my interest per day would be $18.68…a dollar more. Extrapolate that over a whole year and I am saving about $365 in interest each year.

Once your loans enter the “repayment” phase, you are obligated to pay a certain amount to your creditor on a monthly basis. This is known as your “minimum payment”. It is extremely important to pay this every month. Your credit can be devastated by a string of missed payments on installment loans such as student loans. Because you will pay this minimum payment on a monthly basis, it is a great idea to sign up for your creditors “automatic payment” system. This is for 2 reasons: 1. You are going to pay the minimum monthly anyway, so you mine as well get paid for doing so 2. Automating your banking is always a great idea. You should work to limit the amount of time you spend dealing with your banking. The simple task of paying your loans manually (even if it is electronically) takes time. That is time that you should be spending finding a way to make more money!

“Random” Principle Reductions

Creditors know their customers are more likely to pay them back if they are satisfied with the services of the loan company. For this reason, loan companies often offer “random” principle reductions to keep their clientele happy. I have 2 loans through Discover. These loans bare the highest interest rates of all my loans at 7.75%. I was on the phone with Discover for a random admin item and the woman on the phone asked if I had enrolled in the “principle reduction graduation award”. I had not heard of this ever before. It turns out, Discover decided to offer a principle reduction of about 2% for all their clients who graduated from college. Because I had indeed graduated from CMU, I was most definitely eligible. All I had to do was send in proof of graduation. I did this within 10 mins…and last month I received a credit of over $500 to my loans that carried the highest interest! I got a reduction in my overall loan balance simply because I graduated. This was awesome and helped to keep me ahead of my July 6, 2018 schedule (Notice the sharp decrease in the Student Loan Snapshot). You should ask all your creditors if there are any current promotions that will limit your principle. A lot of these promotions will be poorly advertised…so they can be hard to discover. It takes 5 minutes to get on the phone and ask. That 5 minute phone call could save you over $500!

Taking Advantage of the “Snowball” Payment

When it comes to paying off interest baring debt, it is always a good idea to pay off more than your minimum payment. In most cases, student loans are scheduled to be paid off between 10-20 years (more often than not it is 20 years). That means that if you continue to pay the bare minimum each month, it will take you this long to be debt free. Student Loan creditors are NOT ALLOWED to penalize you for paying off your loans early. If you can find a way to do so, this is an excellent idea. The sooner you pay off your principle, the less you will end up paying in interest. When it comes to paying off your loans early, it is important to realize one fact: A little can go a long way. This is because you can take advantage of one awesome feature of debt pay-off: The Snowball Payment!

The first step in paying off more than is required by your loan company is to calculate how much you can afford to pay each month. I currently have minimum payments totaling $1,232.52 per month. I have gone through my budget and I have decided to allocate $2,025 per month to my student loans; an additional payment of $792.48. After deciding how much you can spend each month on reducing your debt, you need to decide where to spend it. If we follow the rule of the Snowball Payment, you should always allocate your extra money toward you loan with the highest interest. It is important to eliminate this principle as soon as possible. For me, my highest interest loans reside with Discover Student Loans. Even though these loans had a relatively low initial principle ($27,800), the interest rate of 7.75% makes them very expensive. Each month, I pay my minimum payments to all loan companies, and then I pay an additional $792.48 to Discover. This drastically reduces the pay-off time for my Discover Loans. However, the pay-off time for my other loans remains the same…for now. The beauty of the Snowball Payment is that after my Discover Loans are paid off, I can allocate my additional payment to a different loan company. Also, because I no longer have a minimum payment with Discover, I can allocate EVEN MORE to my Snowball Payment. This is where the term “Snowball” comes from: The additional payment you make continues to increase over time.  This means that the rate of reduction of my overall loan balance will continue to accelerate as I keep eliminating high interest loans.

The Snowball Payment can be a little difficult to grasp at first…but after thinking about it and running the numbers, it should make complete sense. If you are interested in a “Debt Reduction Calculator” please let me know. I have an excel tool that allows you to enter your loan information and the maximum you will pay each month. It then calculates your monthly payment schedule and the size of your snowball!

Current Payment Allocation

Payment Allocation After Paying Off Discover (Notice Snowball Increases!)

When it comes to Student Loans there is a lot to wrap your head around. Please let me know if you have any questions about the tips provided above. I also plan a follow up post that will dive a bit deeper into some of these points.

Bottom Line: Become extremely involved with your debt so that you can find ways to lower your payments and/or speed up your pay-off time.

Business Update

Things are really starting to ramp up as I recently changed my geographical home to really kick things off. I hope to have more specific updates within the next month or so. For now, I wanted to take a bit of time to mention an up and coming company that can provide a strong strategic advantage to small businesses looking for unique and effective marketing. Simplage.com is a company that creates short videos to simplify your business’s message. These videos can then be distributed through social media to increase brand awareness and create a buzz around your product or service. The videos are short, to the point, and easy to understand. I recently used Simplage to create a video for my up and coming business. They were awesome to work with and they have delivered a product that I am sure will help to grow my business. Simplage founder, Chris Young, is a very sharp entrepreneur and a great person to do business with. Chris was accessible during the entire production process and he was very quick to satisfy my requests for our project. The overall production time was less than a month and I am very satisfied with the result.

In addition, Simplage uses the talents of Vergetone Productions founder, Mike Baldo . Mike is an extremely talented music producer, engineer, songwriter, and performer from Berklee College of Music in Boston. He has joined forces with Chris to form an “A-Team” for producing high quality and highly effective media. If you are starting a small business or currently work for a company that could benefit from a “Simplified Message”, I recommend that you contact Simplage to see how they can help. Feel free to mention my name!

Snapshot of Current Student Loan Balance

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“Unbelievable” – Credit Cards, Charge Cards, & Grandma

I’ve received quite a few questions about credit cards lately. Since I’ve done a bit of research on this topic, I’ll provide some basic insights here. You may know all of this info already…if so, my apologies!

When to get a Credit Card

Short Answer: Right Away!

Long Answer: It is never too early to start building your credit. This is exactly what you do when you sign up for a credit card. Many people are hesitant about getting a credit card because all they hear/read about is the overwhelming number of Americans who have outstanding credit card debt. There is no reason to worry about that. It is as if people think credit card companies somehow force you to not pay your bills on time. If you practice basic budget management and you are aware of where your money goes, you have nothing to worry about. Having a credit card, using it, and paying it off regularly is a great way to build your credit with very little effort. After all, you have to spend money anyway, you mine as well build your credit while you do it. Do some basic research, check out the insights below, and choose a card that is right for you…immediately.

Things to Consider When Choosing a Card

Company- The basics are Visa, Mastercard, American Express, & Discover. All major cards offered by banks use one of these companies. By far, the most widely accepted cards are Visa and Mastercard. My experience has shown that AMEX comes in 3rd and Discover in 4th (although their recent advertisements say otherwise). It is great to have a card that is accepted everywhere. However, there are only a handful of cases where a vendor does not accept your card. I have an AMEX and I use it for everything I can. I’d say about 10% of the time I need to use my debit card b/c a vendor does not accept AMEX.

Another thing to consider is whether or not you have any large purchases or expenditures thatyou will be able to put on your credit card. For example, our MGMT company for our NYC apartment allows tenants to pay with AMEX (probably the only positive I can throw toward “Magnum Management” or “PVE Associates” or whatever those low lifes call themselves). Because they accept payment by AMEX, I charge over $4,000 per month for rent alone. Tac on my additional everyday purchases and I have a ton of AMEX points by the end of the year. I split these points up among my roommates and everyone was able to get at least $100 value from AMEX points. $100 isn’t bad when all you had to do was pay your rent regularly. In fact, its actually better because you don’t have to mess around with sending checks to your landlord.

To sum up this point, the credit card company you go with doesn’t matter too much. Think about what rewards you want and if any large purchases will only accept a certain type of card.

Charge Card vs. Credit Card

This was something that was very confusing for me in the beginning. The truth is, charge cards are different from credit cards. The differences are small…but they are worth noting. The main difference is that charge cards require you to pay your balance on a monthly basis. On the contrary, credit cards give you the option of paying monthly. If you do not pay your full balance on your credit card, you get charged interest until you pay it off. Another difference worth noting is the annual fee and the monthly credit limit. Check out the chart below for more details:

In my case, I was almost forced to get a charge card because my limit on a credit card would not have been enough to pay rent. I was able to charge over $6,000 per month on my charge card with no issues. If you do not have any major purchases that would force you to go over your limit, I recommend getting a credit card. This is mainly because most credit cards do not carry annual fees. That being said, I think the most important factor that should be considered is the rewards you get.

Rewards

Pretty much all credit/charge cards offer some kind of rewards. If the credit/charge card you are looking into does not offer rewards…do not get that card! I’ve seen 3 primary categories of rewards: 1. Points 2. Miles 3. Cash Back. There are also some perks that go with having certain cards…but these are very minor compared to the actual rewards. Your choice in a rewards program depends completely on what you want to get in return for using a certain card. Some people love to travel. If that is you, I recommend getting a card that partners with a hotel chain or an airline. These cards allow you to accumulate miles/points that can be exchanged for free flights and/or hotel stays. Being a consultant, I have a lot of these points already. I’m debating whether to diversify or to go over the top with unbelievable travel perks!

Other people just like to get free stuff. In this case, I strongly recommend getting a card with cash rewards. Cash rewards are undoubtedly better than “reward points”. The reason for this is simple: Cash gives you more options on how to spend your money. A very popular rewards program is AMEX Membership Rewards. I’ve had this for a year and I am not very happy with it. The reason is simple: At a basic level, you get 1 point for every dollar you spend. That point is worth NO MORE than $0.01 when you convert it into some kind of reward. The best deal you can get with these points is a gift card to a popular retail store. ie) 10,000 rewards points gets you a $100 gift card to Barnes and Noble. This sounds pretty cool…but compare it to getting cash back instead. Most cash back programs give back 1% OR MORE That means you are getting the same or better conversion rate than AMEX and you get to spend your money on anything you want. The membership rewards are even worse when you use them to shop online at sites like Amazon. The conversion rate here is closer to $0.006.

Use your Credit/Charge Card Whenever you Can

If anyone knows my Grandma Mary Anne, you know she is perhaps the nicest, cutest, shortest, most wonderful person on the planet. That is why I got angry when she told me the following story:

Grandma Mary Anne was in the grocery store one day. When it came time to cash out, she put all her items on the belt and prepared to pay…(As a side note: Why is it that grandma’s always feel the need to pick up groceries like milk, bread, eggs, etc. It is as if there is a standard basket of goods that they must stick to if they want to stay in some special “Grandma Club”. This need to buy these specific items gets intensified when bad weather is on the way. If I am ever on the phone with my Grandma and she hears that NYC/Pittsburgh is getting bad weather, she makes sure to remind me to pick up milk, bread, and at least a dozen and a half eggs. Not sure why that is…but I get a good feeling inside when I see the snow outside and I realize that I have 3 items that surely CANNOT be combined to form any kind of substantial meal! Regardless, I appreciate the advice Grandma and I love you dearly!)

…back to the story. Grandma was about to cash out, and she made a smart decision to use her credit card. After all, Grandma is extremely frugal and she knows where all of her money goes. She has no need to worry that she will miss her credit card payment and be forced to pay interest. In addition, she realizes that she does not necessarily possess the physical ability to fend off thieves (although she recovered at least 3 times faster from her double knee replacement than my cousin Holly or I ever recovered from numerous knee surgeries). For that reason, it is not a good idea for Grandma to carry much cash on her. So she decided to use her card and be done with her shopping trip. It was at this time when Grandma overheard a woman behind her saying while shaking her head, “Can you believe she is using her credit card for groceries. Unbelievable”.

I struggled to understand exactly what was meant by the word “Unvelievable”. Did she mean that it was unbelievable that Grandma was so smart to use her credit card? Did she mean it was unbelievable that Grandma carried a credit card in the first place? (After all…some people are just more comfortable with cash). She didnt mean those things. She meant that it was unbelievable that my Grandma cannot use her own cash to pay for groceries.  What is sad is that this person was severely mistaken. I attribute this to yet another ignorant member of society who decided to repeat things she heard on a day time talk show. This person most likely saw a story about how America is in debt and how we need to stop using credit cards. Because she was unable to think for herself, she decided to assume that all people who use credit cards use them because they are making purchases they cannot afford. She fails to see that savvy credit card users take advantage of FREE FINANCING and get paid via rewards/points/cash for doing so.

This story bothered me…but it is nothing new. You need to realize that if you budget your funds appropriately, there is nothing wrong with using your credit card for every single purchase you can. Like I said above, if you are going to spend money anyway, you mine as well get points/solid credit for doing so. Sorry you had to go through that Grandma…I wish I would have been there to give that woman a lesson in personal finance as well as a lesson on respecting her elders!

So What Should You Get?

There is no doubt that your personal preferences will drive your decision. However, here are some cards I’ve researched, used, or know a bit about:

American Express Gold Card (My Current Card) – Not too bad…but not worth the annual fee. I get basic rewards on this….which aren’t that special. The annual fee is $95. They market that you get access to special events and such…I haven’t really used this feature much. I will most likely move off this card. One huge positive for AMEX…impeccable customer service. This can mean a lot to some people.

Bank of America Cash Rewards – A very popular cash rewards card. You get 1% cash back on all your purchases plus more for special purchases. I’m pretty sure your “cash back” is simply allocated toward your credit card bill…which is the exact same as them writing a check.

American Express Starwood Rewards – A great card if you like travel. This card is connected with Starwood hotels and allows you to get points and miles. I learned about this card from Ramit Sethi. Ramit runs a very popular blog that I am sad to say is much better than mine! Check it out: I Will Teach You to Be Rich

Capital One (Cash Rewards) – Don’t know too much about this but I have a few friends that have it. Pretty sure they give back more than 1% cash on many occasions. Worth investigating further.

Feel free to reach out to me directly with any specific questions. I will leave you with a few snapshots of my personal finances (Spending charts are YTD):

 

 

     

 

 

The Ultimate Goal

How many people do you know who truly enjoy what they do for a living? Do you really enjoy what your profession? I think the true test for this question is to ask yourself a different question while at work, “Is there something I would rather be doing right now?” I’m not suggesting that you have to be happy every single minute you are at work. However, it makes sense that because we spend so much time working, we should be genuinely happy while doing so. Is that not the true purpose of life? To be happy? To enjoy yourself? This is one point I am most passionate about. I will not believe a person who says there is another purpose to life.

Tony Hsieh, CEO of Zappos.com, broke it down simply (paraphrasing): Ask yourself what your true lifelong goals are. They can be anything (ie, paying off debt, traveling, having a family, running a marathon, etc). After establishing your goals in your mind, ask yourself “Why?”. You might come up with answers like “To obtain financial freedom, to see the world, to be physically fit, etc”. After you have answered the “Why?” question, ask yourself “Why?” again. “Why do I want financial freedom?”, “Why to I want to be physically fit?”, etc. As you dive a little deeper, you will come up with another answer to your “Why?”. You keep repeating this process of asking yourself “Why?”. The point here is if you ask yourself “Why?” enough times, there is no doubt that you will eventually say, “To be happy”. There is no way you could go through this exercise and end up at a different answer.

Now that we have established that everyone’s ultimate goal and purpose in life is to be happy, doesn’t it make sense that we should all try to maximize the amount of time we spend being happy? A lot of people will justify not being happy during a period of their lives as an “investment” so that they can be happy later in their lives. This is a perfectly legitimate argument. Everyone must use this argument at some point in life. I’ve said in previous posts that this is what we all must do. This is the equivalent of “paying your dues” in life. What I would argue is that the percentage of our lives we must spend “paying our dues” is drastically over estimated by society.

Think of the stereotypical working American: This person goes to school from age 4-21. Up through this point their main goal in life is to “Get a Job” (or perhaps to pursue more school and delay the job search). Once they get a job they get excited about all the money they will make. In this excitement they begin to save for retirement through their 401(k). They also set their sights on getting a promotion. This promotion becomes their new focus in life. They are in a constant state of “If only I could get that promotion”. The problem with this mindset is it does not stop. Once they get the first promotion they set their sights on the next promotion. They are in a constant struggle to gain an advantage in this perilous struggle that is the “rat race”. This struggle does not stop. In fact, it intensifies. This person continues to climb the corporate ladder…through his 20’s, through his 30’s, through his 40’s, through his 50’s. All the while this individual continues to dream about the day they get to cash in on all their savings and retire. Once they retire, they won’t have to work at all. They will have enough cash to live a financially independent life at age 59 1/2. They can do whatever they want! They’ve worked hard and they deserve it!

Sounds good right? I disagree….they deserve more! I think the problem with the above scenario is that the proportions are severely skewed. Think of how much of a person’s life is invested into reaching that “dream” of retirement. From the age that a child begins school, society instills what it feels to be the track for a successful life: Go to school, get a job, save money, retire. The average working American will spend more than 75% of his/her life working so that they can enjoy the remaining 25% (you could argue that these proportions are even more skewed). This doesn’t make much sense to me. Additionally, throw in the fact that the value of your time will likely decrease as you approach the age of retirement. Think about all the things you want to do when you retire. Will all those things be possible? I am confident that I am in better physical health now than I will be when I am 60. I doubt I will be able to travel as much as I want to when I am 60. I would rather be happy now instead of waiting until I am 60. I better start working on this…

One thing is for sure: There are plenty of people who love what they do. There are probably several people reading this and saying “Not me, I like what I do”. And I believe it. I know several people that absolutely love their professions. They don’t think of every day as “work”, but instead they think of it as “life”. If you are one of those people, Congratulations! Whether by choice or by luck, you’ve figured it out. You are making the most of your time working. You are able to enjoy each and every day while obtaining the benefits that you will receive later in retirement. However, I would urge everyone to do a deep self assessment on this topic. Be honest with yourself. Think about how much time you spend at work and how much of that time you are smiling. If you feel it is inadequate, do something about it.

Assuming that you are unhappy with work or your career, it comes down to one simple choice. I am currently struggling with this choice now. I feel I have to do one of the following:

1. Find a profession that will make me happy every single day
2. Spend less time working

Right now I am in the midst of acting on both of these options. I feel I have found a profession that will make me happy….and I will ultimately go with option 1. That profession lies within entrepreneurship. As I continue to work on the initial stages of my business, it becomes more and more apparent that this is what will make me happy. I have a need to create…and that is what I plan to do. I am also working on the second option at the same time. During my short career as a consultant, I’ve spent too many days working long hours and not being happy. I’ve come to realize that so many of the things I am responsible for are extremely inefficient. That is, my responsibilities take longer than they should. Lately, I have identified several opportunities to improve my efficiency and ultimately cut down on my work hours. I plan to act on these opportunities in the coming weeks and months. I am not trying to slack off in anyway. I am simply working to create systems and processes to increase efficiency and cut down on wasted time. I would say I am in a state of transition between the two options above. This transition may last a few months, and it may last a few years…I can’t quite tell at this point.

Take some time to reflect on your personal situation. Like I said, you could be completely happy in your current state. If so, feel free to ignore this post. But it is more than likely that most people can identify at least one way to bring more happiness into their lives. I urge you to act on this sooner rather than later. Don’t wait to achieve the utopia of retirement. You can be happy now…and you should be. After all, happiness is the ultimate goal shared by all.

Bottom Line: Reflect on your life and identify tangible ways to increase your happiness

Further Reading (Books that echo these thoughts):

“Delivering Happiness: A Path to Profits, Passion, and Purpose” – Tony Hsieh

“The 4-Hour Workweek” – Timothy Ferriss

“The 80/20 Principle” – Richard Koch

 

One Simple Way to Improve Your Life

It’s no secret that I’m all about setting goals. I’m a firm believer in the notion that you can’t gauge your success unless you have a clear idea of exactly what it is you’re trying to accomplish. You should have long term goals for the major aspects of your life (finances, career, relationships, etc). Here are some of my long term goals:

• Buy a house by early 2012
• Pay off all debt by July 6, 2018 (30th birthday)
• Own a profitable, sustainable business by Age 25 (Hopefully I can speed this one up!)

I’m aware that setting long term goals is not a new and revolutionary concept. Every self help / personal finance book I have read over the past few months has emphasizes the importance of setting long term goals. It wasn’t until a few months ago that I took goal setting to a brand new level.

I’ve mentioned how you should treat small, everyday actions as “investments”. Every time you work out, you are making an investment in your long term health. Every time you call/visit with your parents, you are making an investment in your personal relationships…etc. I took this concept of every day “investments” and paired it up with goal setting. I thought if I have long term goals that I am working toward, I should be able to identify the intermediate actions that will help me accomplish them. I should be able to determine what actions or “investments” I must make on a daily basis so that I stay on track to accomplish my goals. Here is what I decided to do:

**Every day (usually before going to bed) I would identify 3 actions/mini goals that I would accomplish the following day. Each of these actions would map directly to one of my long term goals. Basically, I wanted to ensure that every single day, I would go to sleep knowing that I’ve improved my life in at least 3 ways. That means that every day I wake up, I’m a better, more improved person than the previous day (This morning I definitely didn’t feel like a better person than I did yesterday…I’ll blame my brother for that as he talked me into going out last night!)

I’ve been doing this for the past few months and I absolutely love it. Not only does it keep me on track to accomplishing my long term goals, but I have a great feeling each night as I go to sleep knowing I had a productive day. The best thing about the 3 actions you complete is they do not have to be very difficult or time consuming. The mere act of planning out your next day will help you organize your thoughts so that you can be productive and stay on track to meeting your goals. Here are some samples of “3 Actions” I’ve had over the past few months:

Monday 3/28/2011

1. Read at least 30 pages of “Think and Grow Rich”
2. Complete automated excel tool for tracking global resources (IBM related)
3. Spend at least 1 hour doing online market research for personal business

Saturday 4/9/2011

1. Read at least 30 pages of “The Millionaire Next Door”
2. Run 8 Miles
3. Build automated “Net Worth” function into personal budget tracking tool

Tuesday 4/19/2011

1. Call New York DOS to check on “Application for Authority”
2. Finalize web forms for Zoho CRM. Embed into website to check functionality
3. Make “snowball” loan payment to Discover Student Loans

As you can see, there is nothing complicated about the activities listed above. However, I find that having the structure of 3 distinct goals helps me to be productive each and every day. I am confident that if I complete the 3 simple daily tasks, I can go to sleep a better person than when I woke up that morning. I strongly recommend giving this a try for a week. This is a very simple way to organize your life and focus on being productive. Of course the first step is to make sure you have a clear picture of your long term goals…you can then create daily tasks that directly relate to your long term goals.

Bottom Line: Spend 5 minutes each night to identify 3 distinct actions you will complete the next day. These 3 actions should map directly to your long term goals.

Business Related

I think one of the key differentiators that our company will have when we truly come to market is our use of business systems to automate processes and convey a consistent message. I’ve found that the key to these business systems lies within cloud based computing and “business apps”.  As far as I can tell, the best company for this is Zoho. Zoho has a bunch of free business apps that allow small businesses to automate everyday processes. The most useful app that I have found is Zoho CRM. For those unfamiliar with marketing lingo, CRM stands for “Customer Relationship Management”. This basically takes into consideration the entire process of dealing with a customer from the initial contact, through the sale, and through the post sale (and hopefully repeat sale). Companies clear out huge amounts of their marketing budgets to allow for adequate CRM systems. Zoho’s CRM tool is free. And best of all, its all cloud based. That means, instead of downloading and/or installing software onto the machines of all your managers/employees, all you do is give employees a username/password and they can access the entire CRM system by clicking a hyperlink. This is revolutionary. I know that none of my eventual competitors are using systems like these. I’m confident that if I can strategically utilize apps like Zoho CRM, I will have a distinct advantage. If you have a small business, or you are thinking of starting one, start playing around with Zoho and Zoho CRM.

Stop the Noise!

If there is one thing that severely limits the potential of this country’s up and coming generation it is the omnipresent feeling of entitlement and incessant complaining.  It seems that everyone is in a hurry to blame financial hardships on some external force that they cannot control. Many people know I like to joke around with sayings such as “With the housing market the way it is…” or “In this economy….”. It is as if statements like these are playing on repeat every single day. People use these excuses to complain about their current situation…failing to acknowledge the fact that they are in complete control of the decisions they make and the financial situation they are in. My advice and my plea is for everyone to Stop the Noise! Stop complaining about external issues and focus on making personal choices that will help you take control of your financial situation and eliminate your dependence on macroeconomic factors. All this complaining is just noise to me. It serves no purpose and it needs to stop! Make a “To-Do” list of things to stop complaining about. I encourage you to include the following in that list: Gas prices (It’s amazing how people go crazy over a $0.05 price difference. That $0.05 equates to less than a dollar on each fill), The Housing Market, The Economy (most people complain about this without being able to tell you exactly how it effects their personal situation), Rent Payments, Mortgage Payments, Student Loan Debt, and Credit Cards. Realize that you have choices, educate yourself on making the right choices, and Stop the Noise!

Work Young, Work Hard

One factor that undoubtedly contributes to this feeling of entitlement is that kids simply are not working as much or as young as they used to. If you are around my age, ask your parents when they got your first job. My Dad got his first job when he lied about his age to get a paper route at age 11. It seems that times were extremely different. Kids were expected to work as early as possible so they can learn the importance of hard work and the value of a dollar. I guarentee kids work less than they used to (The exception here is Gary “The Generator” Jenner… who we all know started working for Wegmans at age 9). I know several people who got their first job after graduating college and entering the real world. The problem is that these kids feel entitled to their lifestyles and don’t understand how to work for their own living when they are forced to do so. Of course there are exceptions. There are those who didnt work much as kids but their parents still succeeded in teaching them the value of working hard for your lifestyle. Its just that this increasing trend of kids working less is contributing to the overall feeling of entitlement shared by most of the country.

Why Credit Card Companies Hate Me

To me, the most annoying complaints that exists today are those about credit card companies increasing rates and/or fees (Listen to me complain about complaining!). Nobody forced you to get a credit card. More importantly nobody physically restricted you from reading the agreement you signed when you got your card. This agreement tells you exactly how and when the credit card company can adjust rates. Keep in mind that credit cards provide access to FREE FINANCING. You can use other people’s money for every day purchases! Also keep in mind that CC companies are just like any other business…they need to make money! Its as if people in America feel entitled to receive free money and then complain when CC companies ask for it back. These companies want you to miss payments so that they can charge you interest…but they can’t force you to do so.

I say credit card companies hate me because I do exactly the opposite of what they want me to do…I pay my bill on time. I budget exactly what I will spend and therefore have money to pay it off when the bill is due. I get the convenience of the card and all the points that come from using it. I encourage you to do the following: Instead of hating credit card companies, take the free cash, pay your bill on time, and make them hate you!

Consider you Financial Situation part of your Education

I said earlier that I won’t complain about my student loan debt and I never do. That’s because I started thinking of my student loans as a learning opportunity. I am convinced that taking out over $150K in loans will be the most valuable (and most expensive) lesson of my life. Was the degree from CMU worth the 150K? Sure. But the most valuable aspect of the loans are the lessons in budgeting, financing, asset allocation, opportunity cost of cash, and self discipline that I am forced into. There will be a day when I pay off the entirety of my student loans (right now I’m targeting 5/1/2018…2 months ahead of my “Debt free by 30” schedule). That day will be the conclusion of my education…and one of the proudest days of my life. I will look back at the 10 years of debt and the invaluable lessons I learned. The best part of these lessons is that I will be able to pass them on to my future children. When it comes time to discuss colleges I can provide insight into the cost of education and the implications of carrying a massive amount of debt upon graduating.

I also don’t complain because I realize it was my decision making that got me into this situation. I knew fully well that I would have to take out loans to go to CMU. I could have easily taken an alternate route and went to a less expensive school. I am willing to take responsibility for getting into my current situation…and I’ll be happy to take responsibility for getting out of it.

Where’s my Bailout?

The day before I left to study abroad in Sydney, I went to breakfast with my parents and my girlfriend at a simple diner in Boston, NY. This was in the spring of 2009 when much of the country was still figuring out how to react to the financial crisis. I overheard an extremely ignorant man complaining about the economy and how his financial situation is tough. He referenced the difficulties of the big 3 auto companies and his disagreement with the government bailouts. After continuing this rant for several minutes he finally pulled the line, “Where’s my bailout?”. Trying to contain my anger with this statement, I proceeded to internally profile this man. I came to the following conclusion:

This man works hard for his paycheck and feels that he is restricted to whatever profession he is currently in. He feels he does not have the power ot chose his life and he is probably in his “chosen” line of work because he was “forced” into it by his family. He most likely watches a minimum of 4 hours of television per day…the majority of which is the local news. While watching this local news one night he heard the term “bailout” and discovered that the government was writing checks to the General Motors. He decided this wasn’t fair. He thought “I have problems just like GM has problems…why isn’t anyone helping me?”. He decided to be clever and come up with the “original” spin on the bailout and start saying “Where’s my Bailout?”. My guess is that this man says this at least 5 times a day to exemplify how clever he was in coming up with it (chances are he didn’t even come up with it. He probably heard it from someone at work and decided to tag it as his own). He goes on saying this statement each and every day…all the while failing to realize he has no idea what he is talking about. He also doesn’t realize that unlike GM, this man hasn’t provided the driving engine of the American economy for the past 75 years.

This man gets access to “bailouts” just like the rest of us…they’re called credit cards. The problem is he was too ignorant to realize his past choices led to his situation and he feels entitled to assistance and/or sympathy from society. Don’t be like this man. Be honest to yourself, work for what you get, and Stop the Noise!

Bottom Line: Don’t complain. Don’t contribute to the overwhelming feeling of entitlement shared by most of America.