Hi! Somehow this morning my internet savvy husband found your blog (I think back tracking where my blog visitors have come from, or something like that). I'm honored to be included in the list!
Yes, the Toddler Bandana Dress is simply two bandanas sewn together on the bottom of a pre-made t-shirt. Simplest dress in the world! I got the pattern off of ebay, and I have made several. http://janaysquilts.blogspot.com/search/label/bandana
Great post! It's perfect timing as both mine and my husband's cars will be paid off in a few months and we were wondering when we should move them to liability only.
I hope the article made it clear that the huge tax-free returns only accrue to people who actually use whatever they've stockpiled. If they turn around and try to sell it, not only does the hugeness vanish, but the tax-freeness vanishes as well. (You don't get these outsized returns running a wine shop.)
It's true that you could invest the money in something else, if you didn't invest it in wine, but that's true of every investment. Generally, you want to calculate the interest rate that applies to each investment individually and then compare them over some time period (a month or a year), rather than net out the interest rates up front and calculate the residue. If you had a CD that paid 6%, would you say that it only returned 1% because you could get 5% on a savings account? In that case, I guess you'd have to say that the savings account paid 0%, which would just be confusing. Better to calculate each return and then compare them.
Ok, so now that I bought the program. I thought I'd enter in a whole year of estimated income expenses based on my income frequency to see what the savings would be like.
I can't get the loan monthly payments to match up exactly but they are close enough such that the effect is minimal.
I'm paid biweekly and my wife is paid semi-monthly. On my spreadsheet, I simply average both of our earnings to be monthly so I come up with a monthly income and monthly expense for simplicity. From that, I get an extra monthly income of $621.80. I then apply that full $621.80 each month to the principal of the mortgage for 12 months.
For my situation, this approach yielded a savings of $27,239 in the first year alone of extra monthly payments.
I then went onto Equity Genie and enter a whole year of income/expenses but according to our pay schedule. I even pay some expenses twice by accident (an extra expenses $8100 by mistake). The program comes back and tells me I saved $55K in interest in my first year!!!
Makes a believer out of me for sure. I'll run another case where I use an average monthly income/expense for a more apple-to-apple comparison.
Poor Yong Yong! My heart goes out to him and you. I know what you were dealing with because my little peke, Emma, suffers from chronic nose wrinkle infections despite scrupulous twice daily cleanings. Our vet has mentioned this surgery as a future possibility, but stated it doesn't always work.
Just as Adam said, you are wrong. The serpentine belt IS constantly turning the pulley on the compressor, but unless the A/C is on, the compressor itself is not running. And it's not titled a compressor for nothing- it (as the name implies) compresses the refrigerant as part of the process of cooling the air in the cabin. As Physics 101 will show you, compressing any substance requires some amount of energy, which, in this case, the car's engine will have to create, resulting in increased fuel consumption. Try shoving the garbage in your trash can down and you will see.
These calculations are not quite right; it is a money savings, but not 33%.
First, look at the problem this way:
If interest rates were zero, you could either spend (using year = 360 days for round numbers, as Phillip did above):
$9/day for 360 days, or $3240.
The same number of bottles as 30 cases with a 15% discount is $2754.
So at *most* you can save 15% with this strategy of buying the 360 days at once.
However, if you consider that money has value over time ($5 now is more valuable than $5 later, because you can profit off the interest in the meantime) you won't be able to hit that.
The correct way to do the present value calculation is (in Excel, assuming a 5% interest rate)
=PV(5%/360,360,9)
=$3160.12
What this means is that the cost to you *right now* of shelling out $9/day for the next 360 days is only $3160.12, not $3240, because you can earn interest off of the money you haven't spent yet in the meantime. In other words: if you put $3160.12 in an account that earns about 5% annual interest compounded daily, you will be able to withdraw $9 a day for 360 days before the account is empty.
So the actual savings by buying all the bottles now? (3160.12-2754)/3160.12 = 12.85%.
I'ts still not a bad savings, as long as the storage of the wine (and the effort to haul home 30 cases) is worth the hassle to you. But it's not going to save you 33%.
A second way to look at it-
As said above, I can cover $9/day for the next 360 days by spending $3160.12 today (with 5% interest). If it's possible to save 33%, there must be some way to buy (or arrange to buy) 360 bottles of wine today for ($3160.12*(100%-33%)) or $2085.68.
Now for the question: will it *earn* you 33%?
No. For this to be true, I would have to spend $2754 at the beginning of the year, and end up with $3662 (133% of $2754) at the end of the year. Even if I drank no wine, and re-sold every bottle at retail, this would get me only $3240. Once you throw in the cost of selling the wine, you'd probably have little to no profit, getting you a very small return if anything.
Myscha, glad to do companion pieces on the rising price of bread.
Jill, you're right that rising demand in Asia and elsewhere is a big factor in rising milk prices.
Good point, Kacie--I think part of the reason that I saw milk powder as so expensive was that I probably did my comparison when there was a sale on milk. If I'd done it when there was a sale on nonfat dry milk instead, I'd have gotten a very different answer. (On the other hand, it seems like milk is always on sale around here, whereas nonfat dry milk never is. Still, it's the price you actually pay that matters, not some theoretical "normal" price.)
Sunny, there are an incredible array of government programs to support milk prices, and cutting down on the supply is one way to do that. It's nothing new.
another reason for the increase is that US dairy cattle growers were actually paid to kill off cattle about a year (maybe 2) in order to keep milk prices high.
Your article got me thinking about the politics of dating - when two people end up having "relations" too soon it often burns out the whole relationship. There seems to be natural evidence that short term gratification and long term gratification are mutually exclusive. Does anyone know of a situation that short term maximization yields the best long term results?
continue from #21 and #22
Since i have asked for confirmation of my debt. would this restart the 7-year limit or can i continue to procrastinate taking action on this bill for another 6 months, for the debt tol fall off your credit report.
Powdered milk has gone up. But, I buy it at Aldi, where I can get a box to make milk at about a dollar less per gallon than if I were to buy regular milk. It saves just a little bit of money, but every bit helps.
In the manufacturing sector, we've been experiencing this for some time. Powdered whey protein prices started out around $2.50/pound at the beginning of the year, peaked around $7 back in August/September, and are now slowly coming down again but still holding at more than double where we began.
Considering that whey is a secondary product from making cheese and that the commodity market for milk went up about 1 month prior to when we started seeing the spikes, I'm surprised it wasn't noticed earlier. Please also keep in mind that the prices for milk are regulated by the government.
Another thing to add to your well written article - you failed to mention the growing demand in Mexico, Japan and China for domestic and EU milk which is diluting supply as well. I recall an article that Germany was complaining about the new increased demand to China, as it had the same effect there as we see here.
Also, when the spikes began to occur, another common refrain I heard from suppliers was that ethanol production was cutting into supply for feed - can't validate this or not, but it sounds nice.
Forgot to mention that i purchased a home two years ago and this dept was not in my credit report. i really had no idea of this dept.
#19 Subject: school debt in collection but never been called by school at all
If you feel deprived by eating on a small plate, get decorateive "sunken" large plates. The kind with a decorated side and a "sunken" solid-colored center. Most are Tuscan style. You will still have a large plate, but have a tendency to only fill the center and not the wide "border" and therefore eat small plate portions without feeling deprived.
i have an old school debt of 4,000. from 2001. about a month ago i got a called from a collection agency saying it was 4,100 + 800. two weeks after that i got another called from another agency saying that it is 4,100 plus 1,800 on collection fees. i called them and explained to them i was already working with another agency in regards to that. and that i was still waiting for an itemized bill from them. they said they now own the debt and because this is the second agency to own this dept the fees are higher. so i told her that it wasn't clear to me why i own the school 4,000 to begin with. so she said she is going to get me a itemized bill from the school. i don’t get why they took it from the one agency i was already working with to another and raised the fees. is there anything i can do to bring it down to 4,000?
today i tried to call the school. i left voice mail for couple of people in the payables department. In my defense...I have had the same home address for the last 10 years and the school has never tried to collect any money from me.
I hope so too. It used to make much more of a difference than it currently does as far as gallon per gallon. But the other uses and benefits make up for it, at least where we are. And of course, as you pointed out, prices may differ from place to place a bit. Hey, I've been thinking of a rising cost of bread post with strategies for coping. Want to do a similar set of companion posts on the subject? You with your kick butt data analysis and me with the ideas for coping on the home front? I'm in if you are . . .
Where do you get your facts my flower friend? Horizon milk is indeed an organic product and uses only organic dairy from small family owned organic farms. Just because it was sold means it abandon its founding principles. Not to mention false advertising and packaging aka lying in a highly regulated industry---not sure if you have heard of the FDA, but they tend to regulate commodity foods such as MILK.
Do your homework Miss Daisy.
The last time I checked, here in Champaign, the cost per gallon was almost identical for fresh milk and milk made from nonfat dry milk powder. I should check again.
Having said that, I'm with you on the advantages: Powdered milk is compact, it keeps well, and there are many cool things you can do with it. It's just not the bargain it had been for the past 30 years. Hopefully, it will be again, once the supply and demand issues get sorted out.
Hi Philip. As usual, a very thorough post. All I know is, I can still whip up the powdered stuff for a tad more than two dollars a gallon. I stopped even shopping for regular milk when the price went over three dollars a gallon a while back. Now, I definitely agree with you that the price of powdered milk has risen. Quite a bit, in fact. So it's not quite as much cheaper as it used to be. However, I'm still saving money on the per gallon cost when it comes to baking. However, there are other issues that I think make it a valuable frugal alternative as well, including the use of the product to make a variety of baking ingredients as well as a concentrated soup substitute. Not to mention the fact that I don't need to run back and forth to the store on a regular basis to restock my dairy supply (gas costs), and it's much lighter to transport. Now, I realize not everyone lives out in the boondocks like I do, but the back and forth running was a huge issue for me when I lived closer to civilization too. Guess we disagree a bit on this one, huh? I hope this makes for a lively discussion, either way. Have a great week.
We give to dozens of charities and our gift is matched by my workplace. That match really has inspired me to give more. Those that I particularly love have a connection to my children:
--Smile Train: My oldest son had bilateral cleft lip and this charity fixes clefts for free for poor children
--PFLAG: Two of my children are GLBT so I give to work that builds a just world for them
--UNICEF: As a 12-year-old, my daughter was moved by the plight of Afghani girls without education and gave all of her Christmas money to UNICEF - and talked her brothers into giving their money as well. We now give every year.
--Solar Cookers International: This nonprofit provides solar cookers to women in refugee camps. This donation expresses our values for women's empowerment, children's health, and environmental issues.
We also give to some organizations that are NOT 501(c)(3) tax-deductible because they are working to build a world more in tune with our values, such as Friends Committee on National Legislation (bringing a Quaker peace perspective to national politics), and HRC (seeking the same rights for gays and lesbians that other U.S. citizens enjoy).
Hi! Somehow this morning my internet savvy husband found your blog (I think back tracking where my blog visitors have come from, or something like that). I'm honored to be included in the list!
Yes, the Toddler Bandana Dress is simply two bandanas sewn together on the bottom of a pre-made t-shirt. Simplest dress in the world! I got the pattern off of ebay, and I have made several.
http://janaysquilts.blogspot.com/search/label/bandana
Thanks again, great list!
~Janay~
Cool. I'll start moving forward with resource links and strategies for working around the increase. I think this'll be fun!
I've never heard of this one. I'll have to check it out. Thanks.
Great post! It's perfect timing as both mine and my husband's cars will be paid off in a few months and we were wondering when we should move them to liability only.
I hope the article made it clear that the huge tax-free returns only accrue to people who actually use whatever they've stockpiled. If they turn around and try to sell it, not only does the hugeness vanish, but the tax-freeness vanishes as well. (You don't get these outsized returns running a wine shop.)
It's true that you could invest the money in something else, if you didn't invest it in wine, but that's true of every investment. Generally, you want to calculate the interest rate that applies to each investment individually and then compare them over some time period (a month or a year), rather than net out the interest rates up front and calculate the residue. If you had a CD that paid 6%, would you say that it only returned 1% because you could get 5% on a savings account? In that case, I guess you'd have to say that the savings account paid 0%, which would just be confusing. Better to calculate each return and then compare them.
Ok, so now that I bought the program. I thought I'd enter in a whole year of estimated income expenses based on my income frequency to see what the savings would be like.
I can't get the loan monthly payments to match up exactly but they are close enough such that the effect is minimal.
I'm paid biweekly and my wife is paid semi-monthly. On my spreadsheet, I simply average both of our earnings to be monthly so I come up with a monthly income and monthly expense for simplicity. From that, I get an extra monthly income of $621.80. I then apply that full $621.80 each month to the principal of the mortgage for 12 months.
For my situation, this approach yielded a savings of $27,239 in the first year alone of extra monthly payments.
I then went onto Equity Genie and enter a whole year of income/expenses but according to our pay schedule. I even pay some expenses twice by accident (an extra expenses $8100 by mistake). The program comes back and tells me I saved $55K in interest in my first year!!!
Makes a believer out of me for sure. I'll run another case where I use an average monthly income/expense for a more apple-to-apple comparison.
Poor Yong Yong! My heart goes out to him and you. I know what you were dealing with because my little peke, Emma, suffers from chronic nose wrinkle infections despite scrupulous twice daily cleanings. Our vet has mentioned this surgery as a future possibility, but stated it doesn't always work.
How is Yong Yong doing now?
I play the game for fun with the hopes one day I might be a Millionaire and never have to eat mcdonalds again...lol
Just kidding..Im lovin it!!
Just as Adam said, you are wrong. The serpentine belt IS constantly turning the pulley on the compressor, but unless the A/C is on, the compressor itself is not running. And it's not titled a compressor for nothing- it (as the name implies) compresses the refrigerant as part of the process of cooling the air in the cabin. As Physics 101 will show you, compressing any substance requires some amount of energy, which, in this case, the car's engine will have to create, resulting in increased fuel consumption. Try shoving the garbage in your trash can down and you will see.
These calculations are not quite right; it is a money savings, but not 33%.
First, look at the problem this way:
If interest rates were zero, you could either spend (using year = 360 days for round numbers, as Phillip did above):
$9/day for 360 days, or $3240.
The same number of bottles as 30 cases with a 15% discount is $2754.
So at *most* you can save 15% with this strategy of buying the 360 days at once.
However, if you consider that money has value over time ($5 now is more valuable than $5 later, because you can profit off the interest in the meantime) you won't be able to hit that.
The correct way to do the present value calculation is (in Excel, assuming a 5% interest rate)
=PV(5%/360,360,9)
=$3160.12
What this means is that the cost to you *right now* of shelling out $9/day for the next 360 days is only $3160.12, not $3240, because you can earn interest off of the money you haven't spent yet in the meantime. In other words: if you put $3160.12 in an account that earns about 5% annual interest compounded daily, you will be able to withdraw $9 a day for 360 days before the account is empty.
So the actual savings by buying all the bottles now? (3160.12-2754)/3160.12 = 12.85%.
I'ts still not a bad savings, as long as the storage of the wine (and the effort to haul home 30 cases) is worth the hassle to you. But it's not going to save you 33%.
A second way to look at it-
As said above, I can cover $9/day for the next 360 days by spending $3160.12 today (with 5% interest). If it's possible to save 33%, there must be some way to buy (or arrange to buy) 360 bottles of wine today for ($3160.12*(100%-33%)) or $2085.68.
Now for the question: will it *earn* you 33%?
No. For this to be true, I would have to spend $2754 at the beginning of the year, and end up with $3662 (133% of $2754) at the end of the year. Even if I drank no wine, and re-sold every bottle at retail, this would get me only $3240. Once you throw in the cost of selling the wine, you'd probably have little to no profit, getting you a very small return if anything.
Thanks for all the good comments.
Myscha, glad to do companion pieces on the rising price of bread.
Jill, you're right that rising demand in Asia and elsewhere is a big factor in rising milk prices.
Good point, Kacie--I think part of the reason that I saw milk powder as so expensive was that I probably did my comparison when there was a sale on milk. If I'd done it when there was a sale on nonfat dry milk instead, I'd have gotten a very different answer. (On the other hand, it seems like milk is always on sale around here, whereas nonfat dry milk never is. Still, it's the price you actually pay that matters, not some theoretical "normal" price.)
Sunny, there are an incredible array of government programs to support milk prices, and cutting down on the supply is one way to do that. It's nothing new.
Thanks again, everyone.
another reason for the increase is that US dairy cattle growers were actually paid to kill off cattle about a year (maybe 2) in order to keep milk prices high.
Heard a report about it on NPR back then.
Hrmph.
I'm sure this comment was meant to be funny and tongue-in-cheek.
DO NOT ACTUALLY TRY THIS! The battery may explode or cause a fire, melt, or cause serious burns.
Your article got me thinking about the politics of dating - when two people end up having "relations" too soon it often burns out the whole relationship. There seems to be natural evidence that short term gratification and long term gratification are mutually exclusive. Does anyone know of a situation that short term maximization yields the best long term results?
continue from #21 and #22
Since i have asked for confirmation of my debt. would this restart the 7-year limit or can i continue to procrastinate taking action on this bill for another 6 months, for the debt tol fall off your credit report.
Powdered milk has gone up. But, I buy it at Aldi, where I can get a box to make milk at about a dollar less per gallon than if I were to buy regular milk. It saves just a little bit of money, but every bit helps.
In the manufacturing sector, we've been experiencing this for some time. Powdered whey protein prices started out around $2.50/pound at the beginning of the year, peaked around $7 back in August/September, and are now slowly coming down again but still holding at more than double where we began.
Considering that whey is a secondary product from making cheese and that the commodity market for milk went up about 1 month prior to when we started seeing the spikes, I'm surprised it wasn't noticed earlier. Please also keep in mind that the prices for milk are regulated by the government.
Another thing to add to your well written article - you failed to mention the growing demand in Mexico, Japan and China for domestic and EU milk which is diluting supply as well. I recall an article that Germany was complaining about the new increased demand to China, as it had the same effect there as we see here.
Also, when the spikes began to occur, another common refrain I heard from suppliers was that ethanol production was cutting into supply for feed - can't validate this or not, but it sounds nice.
Forgot to mention that i purchased a home two years ago and this dept was not in my credit report. i really had no idea of this dept.
#19 Subject: school debt in collection but never been called by school at all
If you feel deprived by eating on a small plate, get decorateive "sunken" large plates. The kind with a decorated side and a "sunken" solid-colored center. Most are Tuscan style. You will still have a large plate, but have a tendency to only fill the center and not the wide "border" and therefore eat small plate portions without feeling deprived.
i have an old school debt of 4,000. from 2001. about a month ago i got a called from a collection agency saying it was 4,100 + 800. two weeks after that i got another called from another agency saying that it is 4,100 plus 1,800 on collection fees. i called them and explained to them i was already working with another agency in regards to that. and that i was still waiting for an itemized bill from them. they said they now own the debt and because this is the second agency to own this dept the fees are higher. so i told her that it wasn't clear to me why i own the school 4,000 to begin with. so she said she is going to get me a itemized bill from the school. i don’t get why they took it from the one agency i was already working with to another and raised the fees. is there anything i can do to bring it down to 4,000?
today i tried to call the school. i left voice mail for couple of people in the payables department. In my defense...I have had the same home address for the last 10 years and the school has never tried to collect any money from me.
I hope so too. It used to make much more of a difference than it currently does as far as gallon per gallon. But the other uses and benefits make up for it, at least where we are. And of course, as you pointed out, prices may differ from place to place a bit. Hey, I've been thinking of a rising cost of bread post with strategies for coping. Want to do a similar set of companion posts on the subject? You with your kick butt data analysis and me with the ideas for coping on the home front? I'm in if you are . . .
Where do you get your facts my flower friend? Horizon milk is indeed an organic product and uses only organic dairy from small family owned organic farms. Just because it was sold means it abandon its founding principles. Not to mention false advertising and packaging aka lying in a highly regulated industry---not sure if you have heard of the FDA, but they tend to regulate commodity foods such as MILK.
Do your homework Miss Daisy.
The last time I checked, here in Champaign, the cost per gallon was almost identical for fresh milk and milk made from nonfat dry milk powder. I should check again.
Having said that, I'm with you on the advantages: Powdered milk is compact, it keeps well, and there are many cool things you can do with it. It's just not the bargain it had been for the past 30 years. Hopefully, it will be again, once the supply and demand issues get sorted out.
Hi Philip. As usual, a very thorough post. All I know is, I can still whip up the powdered stuff for a tad more than two dollars a gallon. I stopped even shopping for regular milk when the price went over three dollars a gallon a while back. Now, I definitely agree with you that the price of powdered milk has risen. Quite a bit, in fact. So it's not quite as much cheaper as it used to be. However, I'm still saving money on the per gallon cost when it comes to baking. However, there are other issues that I think make it a valuable frugal alternative as well, including the use of the product to make a variety of baking ingredients as well as a concentrated soup substitute. Not to mention the fact that I don't need to run back and forth to the store on a regular basis to restock my dairy supply (gas costs), and it's much lighter to transport. Now, I realize not everyone lives out in the boondocks like I do, but the back and forth running was a huge issue for me when I lived closer to civilization too. Guess we disagree a bit on this one, huh? I hope this makes for a lively discussion, either way. Have a great week.
We give to dozens of charities and our gift is matched by my workplace. That match really has inspired me to give more. Those that I particularly love have a connection to my children:
--Smile Train: My oldest son had bilateral cleft lip and this charity fixes clefts for free for poor children
--PFLAG: Two of my children are GLBT so I give to work that builds a just world for them
--UNICEF: As a 12-year-old, my daughter was moved by the plight of Afghani girls without education and gave all of her Christmas money to UNICEF - and talked her brothers into giving their money as well. We now give every year.
--Solar Cookers International: This nonprofit provides solar cookers to women in refugee camps. This donation expresses our values for women's empowerment, children's health, and environmental issues.
We also give to some organizations that are NOT 501(c)(3) tax-deductible because they are working to build a world more in tune with our values, such as Friends Committee on National Legislation (bringing a Quaker peace perspective to national politics), and HRC (seeking the same rights for gays and lesbians that other U.S. citizens enjoy).