Archive for March, 2013

I was catching up on the pf blogosphere and read a few interesting frugal ideas.   The thing that caught my attention was the inordinate large amount of time these people seem to have on their hands.   Perhaps I live in a different world because I work for a giant corp that keeps me busy 50 to 60 hours per week then I’m working on two MBA degrees on top of that then of course I have an active family involved in community services, sports and other activities.

When frugal people suggest things like make your own soap, make your own soda, go to three different grocery stores and calculate the per unit cost of everything you buy…really?  If I buy 40 items at a grocery store, calculating the unit price of EVERYTHING becomes an exercise in wasting time to save a few cents.

For me, and it seems too few people in the pf blog world, I try to do things that give me the biggest bang for the buck.   Because I’ve been pursuing two MBA degrees, I’ve already gotten a promotion and decent raise (my employer is probably fearful I’ll move on) so they took preemptive action to keep me.   Additionally, I’m constantly looking at investment opportunities.   If I can score a 3% return on a 100,000 investment  after a couple of hours of research then I’ll make an easy $3,000.   This one investment opportunity (perhaps a stock or option trade) will automatically pay for all the frugal  things in one easy swoop (dish soap, soda, rags, etc).

I can already here the detractors though….(using Droopy voice)…”it doesn’t matter if you make $3000 in a few hours because if you’re spending $3001 dollars on stuff every few hours you’ll go broke.”   Well if you’re stupid, you will go broke no matter what you do but that seems to be a cheap excuse for not trying harder and achieving more.   There seems to be a fundamental lack of ambition in these groups of people and it bother me greatly.  Which would you choose?

Spend two hours researching an investment or spend two hours making soap.

Spend two hours learning a new language you can leverage overseas for a firm or spend two hours making rags by cutting up old t-shirts.

Spend two hours collaborating starting a business or spend two hours clipping coupons.

Am I missing something here?  Which of these choices will lead to vastly more amounts of money in your pocket?   There is a fundamental opportunity cost in everything we do and that whole thought process seems to be broken in the frugal mentality.  Why?

I just don’t understand it…

I was reading Money Beagle’s sad story about not being able to find a roofing company to rebuild their roof.   Just this week, I’m getting a brand new roof installed on my house.    Fortunately for me however, I have had great success because I drafted a 4 page list of specifications I wanted on my new roof.

I’m posting a copy of the bid letter I sent out to various contractors I found on Angie’s List in my area.  Perhaps it will help others, sorry the word numbering formatting got messed up when I copied and pasted the doc into WP.   I only selected those contractors with many positive reviews then checked the Better Business Bureau for complaints.   Please note that these specifications are for my roof in the area I live in and you need to do your own homework on the best materials/type of roof for your living conditions.   It makes no sense to install radiant barrier if you live in an area with little sun as an example.   While I sympathize with Money Beagle I also see the roofer’s point of view.   The roofer is going to have to spend hours explaining to the client what kind of roof he/she could get and with 3 to 5 other bidders it makes no sense for the man running a business to waste that time!  I know that sounds counter-intuitive but I spend at least 10 hours researching my own roof.  If I use a rough estimate of $100/hour for labor of my time x 10 hours then I’ve already invested $1000 in my roof selection before I’ve even selected a roofer!

If the roofer has 100 people calling him and he needs to invest 10 hours per client, he’ll go broke in no time.  Why is anyone really surprised by this anymore?  We used to get our gas pumped for us at gas stations and we now all do it ourselves.   We used to have an operator connect our calls but now we dial it ourselves.  This is what our society is all about now – do the leg work yourself and have a vendor provide the finished solutions.

I had the entire 20 year old roof removed and installed radiant barrier, new decking, new underlayment and new shingles.  Total cost is $13k and the work has been exceptional.

Roof Replacement – Request for Bid

The following request for a competitive bid to replace the roof of residential property located at XXXXX  (“the property”) is being solicited to licensed roofing contractors.   The following criteria are requested to be incorporated into your bid.

Bid deadline is February 28, 2013.
Bid award will be no later than March 3, 2013 or sooner.

Home owner available for site visit and inspection of property as scheduled in advance by contacting  XXXXXXX at XXX-XXX-XXXX to schedule time for site visit.

PAYMENT:  Payment will be made with American Express Credit Card on a pro-rated basis.  *Home owner will be happy to procure and stage all materials needed for roof replacement.

BID PROPOSAL:  Roofing contractor can bid on a labor only basis or labor and materials basis provided contractor provides itemized material listing and bills of lading during work activity daily and/or weekly.
1 Contractor Selection Criteria
The roofing contractor should be licensed to operate in the State of XXXXXX and provide copies of the following documents:
General Liability certificates from Roofer’s insurance company
Workers compensation certificates
Be in good standing with the Better Business Bureau
2 Scope of Work
The scope of work will consist of the complete roof replacement of  “the property” and incorporate requirements of the items listed in sections 2.1 thru 2.15 below:
Roofing contractor will complete all required city, state and home owners association (HOA) permits & forms.
Roofing contractor will be responsible for ALL required inspections.
Roofing contractor will provide list of ALL suppliers with name, phone, fax.
Roofing contractor will provide list of ALL materials and bills of lading used in the roof replacement of the property.
Roofing contractor will assure that ALL materials for roofing should meet ASTM E-108 Class “A” rating or better for fire and ASTM D 3161 for wind.
All nails used in roof replacement should be stainless steel or galvanized stainless steel nails.
Roofing contractor will replace ALL roof decking
Roofing contractor will utilize 3/4″  (23/32)  plywood or better for roof decking, No OSB will be accepted!

Roofing contractor will install Radiant barrier as part of the roof replacement and bid should incorporate labor cost for this activity.
Home owner prefers Enerflex ($289 per 1000 sq ft roll) radiant barrier materials for roof replacement

Roofing contractor will install synthetic waterproofing underlayment (W.R Grace Tri-Flex Xtreme preffered by home owner)

Roofing contractor will assure adequate ventilation is considered when replacing roof.
Roofing contractor will install ALL new shingles
The home owner prefers
GAF Lifetime Timberline Natural Shadow Weathered Wood Shingles $30/bundle (general estimate)
Home Depot Model # 0603737 Store SKU # 775940

Number of bundles per 100 sq. ft.   3
Number of pieces per bundle     21

Roofing contractor will install ALL new flashing with preferred material to consist of stainless steel or copper in all areas including
Chimney (replace all)
Vents (replace all)
Soffits (replace all)
Drip edge (replace all)
Ridge vents (replace all)
Galvanized Steel Drip Edge Flashing is preferred on roof edges.
Roofing contractor will remove Guttering System however is NOT required to re-install system.  Home owner will retain gutters.
Roofing contractor will replace ALL Fascia but only Soffits as needed.  For clarity
Replace ALL fascias
Replace sofffit as needed
Roofing contractor will facilitate ALL disposal and removal of ALL refuse and discarded materials on a daily basis
Note: Home owner will retain guttering system.
Roofing contractor will provide ALL lien releases from all parties (e.g., sub-contractors, material suppliers, consultants) involved in roof replacement and must be submitted before final payment.  Homeowner desires to limit suppliers to one or two suppliers if possible to facilitate this request.   Homeowner will be happy to source ALL materials.
Roofing contractor will adhere to appropriate safety protocols and standards in conducting all work activities on premises.

The good folks over at did a summary of the change in cost of fast food from some major chains from 2002 to 2013.  It’s interesting that this hasn’t been reported in major news outlets because I think it’s big news on the rate of inflation.

By now if you ever tune in to see any type of federal reserve hearing, you’ll often hear Ben Bernokio (fed chairman) pat himself on the back for keeping inflation low but just look at these numbers!

Fast Food Inflation

Store Chain Item 2002 2013 Variance Yearly Variance
McDonalds Big Mac 2.39 4.19 75% 6.85%
  Cheeseburger 0.89 1.19 34% 3.06%
  Quarter Pounder 2.29 3.39 48% 4.37%
  Filet of Fish 1.89 3.99 111% 10.10%
  Small French Fries 1.09 1.49 37% 3.34%
  Medium French Fries 1.39 2.29 65% 5.89%
  Large French Fries 1.59 2.49 57% 5.15%
Average         5.54%
Taco Bell Crunchy Taco 0.69 0.99 43% 3.95%
  Bean Burrito 0.69 1.19 72% 6.59%
  Burrito Supreme 1.69 2.59 53% 4.84%
  Chicken Quesadilla 1.89 2.89 53% 4.81%
  Mexican Pizza 2.39 3.19 33% 3.04%
Average         4.65%
Burger King Chicken Sandwich 2.59 4.29 66% 5.97%
  Double Whopper 2.99 5.79 94% 8.51%
  Whopper Meal 3.39 6.19 83% 7.51%
  Shakes (Small) 0.99 1.99 101% 9.18%
  Shakes (Medium) 1.29 2.49 93% 8.46%
  Shakes (Large) 1.79 2.99 67% 6.09%
Average         7.62%
Single 2.25 3.89 73% 6.63%
  Double Burger 3.25 4.69 44% 4.03%
  Triple Burger 4.29 5.89 37% 3.39%
  Baked Potato 0.99 1.29 30% 2.75%
  0.99 1.59 61% 5.51%
  1.19 1.59 34% 3.06%
  1.39 1.89 36% 3.27%
  Chili (Small) 0.99 1.49 51% 4.59%
  Chili (Large) 1.79 2.29 28% 2.54%
Average         3.97%
All Stores Average         5.44%

On average, the cost of fast food has increased 5.44% year over year since 2002.  How many of you got a 6% raise every year for the last 10 years?   Why?  Because that’s what you would need to earn to keep the same level of fast food purchasing power than you had in 2002.  Minimum wage in 2002 was $5.15 and hour and today it is $7.25 and that’s a 41% change over that time period but only 3.71% per year on average.   Do the math, if fast food prices are averaging at 5.44% per year and you’re on minimum wage at a growth rate of 3.71% you’re falling behind 1.73% every year!

Personally, I don’t eat fast food too often but I am always shocked by the cost when I place an order, it is usually never less than $8 or $9 for a single meal!   You may be saying the same thing…”What do I care about fast food” but the real problem is that it applies to everything else!  IF basic food staples are going up this much, how much do you think everything else is going up as well?

Many have chosen to not eat out anymore because the cost has gone up and they can’t afford it however the real problem is fractional reserve lending, a federal reserve and US Treasury policy of printing endless money.   You won’t see this reported on government statistics because there are so many useless hedonic changes in the numbers that they don’t mean anything any more!