Occasionally, not often, I travel on business and my employer pays my travel expenses including normal hotel charges.
Many people take advantage of business travel to stay in expensive hotels and dine in expensive restaurants. I make these occasions a win-win for me and for my employer by choosing Choice Hotels who’s well known brands include, Sleep Inn, Comfort Inn, and Comfort Suites. These mid-priced accommodations are generally less expensive than rooms selected by my colleagues; reducing the travel expense for my employer.
However, Choice Hotels has a “loyalty rewards” program they call Choice Privileges. I have a Choice Privileges account and every time I stay at a Choice hotel I’m credited with 10 Choice Privileges points for every dollar of invoiced cost (not counting taxes). So, a typical one-night stay at a Comfort Inn at $79 per night will earn me 790 Choice points.
In addition, Choice Hotels frequently runs promotions in which they offer 10,000 to 14,000 bonus points if you stay in three different Choice hotels within a 30 to 90 day pre-defined period. The catch with the promotions is that they must be different hotels, so when I have a two-day event scheduled I have to check out of one hotel and into another (sometimes across the street) in order to qualify for the bonus points.
It’s worth the hassle though. I’ve already taken a couple of free hotel stays by using some of my accumulated Choice Points and I now have enough in my account to cover the five day vacation Linda and I are planning for next month.
A win-win business travel situation for me and my employer allows my wife and I to eliminate the cost of accommodations from our vacation budget.
Link to Other Topics in the Special Report: Cutting Expenses
Friday, July 31, 2009
Friday, July 24, 2009
Unclaimed.org and Missingmoney.com
I really got a check for $192.
Back in 1979 I moved from Round Rock, Texas – just north of Austin – to Kokomo, Indiana – north of Indianapolis. When I hit the road leaving Round Rock and Texas behind, I stopped by the Savings and Loan to close out my small savings account. I don’t remember the exact amount but it was less than $100.
Unfortunately, it was a Saturday and the S&L was closed. So I drove north to Indiana thinking that I would return in a year or two and close the account then. In 1979, there were no personal computers; no on-line banking; and very little banking by mail. Banks largely kept “banker’s hours”.
Three years later I traveled back to Texas. As I drove through Round Rock on my way to San Antonio I stopped at my old Savings and Loan to close the account. With my “passbook” in my hand I walked up to the door and noticed that the name on the building was different.
That worried me slightly but I didn’t think it would make a difference. It did. The new owners didn’t take over the S&L’s business; they just bought the building. For the remainder of my time in Texas I kept my eyes open for another branch of the S&L and I looked for it the phone book. But, the old Saving & Loan was no where to be found.
In my mind, I wrote off the money as a mistake and a lesson.
Thirty years after I moved away from Texas my wife, Linda, heard a discussion on the Clark Howard radio show. The topic was finding lost money through the web sites “Unclaimed.org” and “Missingmoney.com”. I visited both sites and looked for my name in every state I’ve lived in. I found it in Austin, Texas and in Charlottesville, Virginia and I applied for both claims.
I’ve not received a response for the claim in Charlottesville, but two weeks ago I received a check for $192 from the Texas claim. It turned out to be the money I’d left behind at the old Savings and Loan plus thirty years of compounded interest.
Recovering $192 cost me 20 minutes and one first class stamp; one of the claims was made on-line and the other was mailed.
Link to Other Topics in the Special Report: Cutting Expenses
Back in 1979 I moved from Round Rock, Texas – just north of Austin – to Kokomo, Indiana – north of Indianapolis. When I hit the road leaving Round Rock and Texas behind, I stopped by the Savings and Loan to close out my small savings account. I don’t remember the exact amount but it was less than $100.
Unfortunately, it was a Saturday and the S&L was closed. So I drove north to Indiana thinking that I would return in a year or two and close the account then. In 1979, there were no personal computers; no on-line banking; and very little banking by mail. Banks largely kept “banker’s hours”.
Three years later I traveled back to Texas. As I drove through Round Rock on my way to San Antonio I stopped at my old Savings and Loan to close the account. With my “passbook” in my hand I walked up to the door and noticed that the name on the building was different.
That worried me slightly but I didn’t think it would make a difference. It did. The new owners didn’t take over the S&L’s business; they just bought the building. For the remainder of my time in Texas I kept my eyes open for another branch of the S&L and I looked for it the phone book. But, the old Saving & Loan was no where to be found.
In my mind, I wrote off the money as a mistake and a lesson.
Thirty years after I moved away from Texas my wife, Linda, heard a discussion on the Clark Howard radio show. The topic was finding lost money through the web sites “Unclaimed.org” and “Missingmoney.com”. I visited both sites and looked for my name in every state I’ve lived in. I found it in Austin, Texas and in Charlottesville, Virginia and I applied for both claims.
I’ve not received a response for the claim in Charlottesville, but two weeks ago I received a check for $192 from the Texas claim. It turned out to be the money I’d left behind at the old Savings and Loan plus thirty years of compounded interest.
Recovering $192 cost me 20 minutes and one first class stamp; one of the claims was made on-line and the other was mailed.
Link to Other Topics in the Special Report: Cutting Expenses
Sunday, July 19, 2009
Cutting Expenses – Introduction
You can cut your household expenses without destroying your lifestyle. You can make room in your budget to put money away for retirement; for emergencies.
There are easy things you can do to reduce your expenses and free up cash for saving and investing. The links below will take you to very specific things that my wife, Linda, and I have done or are doing. You may not want to do them yourself – but they work.
Additional links will be added as additional topical posts are added to the blog.
Links to Other Topics in the Special Report: Cutting Expenses
Airline Flight Vouchers
Choice Privileges
Cutting Your Bills Down to Size
Flexible Spending Accounts: Part 1 - Saving Money with Flexible Spending
Flexible Spending Accounts: Part 2 - Calculating a Safe Contribution
For My Next Car I Paid Cash
Going Out on the Cheap
Mortgage Refinance
Paying Less for Books: Part 1 - Patience and Making a List
Paying Less for Books: Part 2 - Money Saving Tactics
Renting Cars for Road Trips - Part 2
Renting Cars for Road Trips - Part 1
Shell MasterCard
Tankless Waterheaters
Timeshare Sales Pitch Weekends
Unclaimed.org and Missing money.com
There are easy things you can do to reduce your expenses and free up cash for saving and investing. The links below will take you to very specific things that my wife, Linda, and I have done or are doing. You may not want to do them yourself – but they work.
Additional links will be added as additional topical posts are added to the blog.
Links to Other Topics in the Special Report: Cutting Expenses
Airline Flight Vouchers
Choice Privileges
Cutting Your Bills Down to Size
Flexible Spending Accounts: Part 1 - Saving Money with Flexible Spending
Flexible Spending Accounts: Part 2 - Calculating a Safe Contribution
For My Next Car I Paid Cash
Going Out on the Cheap
Mortgage Refinance
Paying Less for Books: Part 1 - Patience and Making a List
Paying Less for Books: Part 2 - Money Saving Tactics
Renting Cars for Road Trips - Part 2
Renting Cars for Road Trips - Part 1
Shell MasterCard
Tankless Waterheaters
Timeshare Sales Pitch Weekends
Unclaimed.org and Missing money.com
Friday, July 17, 2009
Inflation Protection – Part 7 – Summary
Inflation is coming. It might be next year or the following year but it’s coming. You “get ready” for inflation by moving money into assets that increase in nominal value as the currency inflates.
Assets that have proven successful in protecting wealth from the ravages of inflation in the past include:
• Gold (and silver) – bullion, coins, jewelry, ETF’s, mutual funds and gold mining stocks; I invest in a precious metals mutual fund.
• Oil (and natural gas and coal) – ETF’s and mutual funds, and the common shares of refinery, exploration, oil service, integrated oil companies, limited partnerships, and royalty trusts; I invest in the common shares of exploration, integrated oil companies, and partnerships. The key for me is consistent and growing dividends.
• TIPS (Treasury Inflation Protected Securities) – bonds, ETF’s, and mutual funds; I invest in a TIPS mutual fund.
• Consumer Staples – ETF’s and common shares; I invest in the common shares of consumer staples companies with consistent and growing dividends.
• Commodities (agricultural products and minerals) – ETF’s mutual funds, and common shares; I invest in the common shares of one mining company.
There are other ways to hedge against inflation. The important thing is to choose a strategy you believe in that that fits your personal risk tolerance.
But remember, inflation is coming – get ready.
Links to the Inflation Protection Special Report
Part 1 - The Need
Part 2 - Gold
Part 3 - Oil
Part 4 -TIPS
Part 5 - Consumer Staples
Part 6 - Commodities
Part 7 - Summary
Assets that have proven successful in protecting wealth from the ravages of inflation in the past include:
• Gold (and silver) – bullion, coins, jewelry, ETF’s, mutual funds and gold mining stocks; I invest in a precious metals mutual fund.
• Oil (and natural gas and coal) – ETF’s and mutual funds, and the common shares of refinery, exploration, oil service, integrated oil companies, limited partnerships, and royalty trusts; I invest in the common shares of exploration, integrated oil companies, and partnerships. The key for me is consistent and growing dividends.
• TIPS (Treasury Inflation Protected Securities) – bonds, ETF’s, and mutual funds; I invest in a TIPS mutual fund.
• Consumer Staples – ETF’s and common shares; I invest in the common shares of consumer staples companies with consistent and growing dividends.
• Commodities (agricultural products and minerals) – ETF’s mutual funds, and common shares; I invest in the common shares of one mining company.
There are other ways to hedge against inflation. The important thing is to choose a strategy you believe in that that fits your personal risk tolerance.
But remember, inflation is coming – get ready.
Links to the Inflation Protection Special Report
Part 1 - The Need
Part 2 - Gold
Part 3 - Oil
Part 4 -TIPS
Part 5 - Consumer Staples
Part 6 - Commodities
Part 7 - Summary
Friday, July 10, 2009
Inflation Protection – Part 6 – Commodities
Commodities generally trend upward with inflation. They are especially risky, however, because they are very sensitive to supply and demand imbalances.
Precious metals and fossil fuels such as gold and oil are special classes of commodities - I discussed them in previous posts. Some manufactured items, passive integrated circuit chips for example, are sometimes called commodities. But generally a commodity is a direct agricultural product (think wheat, corn, and cattle) or a mineral (think copper, aluminum, and iron).
As with oil, you can invest in commodities through futures contracts, a contract to take delivery of a specific amount of material on a specific date. Futures contracts are for pros. Unless you are a commodities professional or you run a farm or a mine – stay away from them.
A more reasonable way for an individual investor to get involved in commodities is to buy the stocks of agricultural or mining companies. Shares of limited partnerships and trusts for mining and forestry companies are also available on the stock exchanges. And, finally there are ETF’s (exchange traded funds) that specialize in commodities. Commodities provide inflation protection at a higher risk than other strategies.
I own common stock in one mining company, Southern Copper (ticker PCU), and shares in one mining trust, Mesabi (ticker MSB), for my own account. MSB is a steady high yield dividend payer. PCU pays a dividend that varies wildly with fluctuations in the price of copper. And, although copper fell along with everything else recently, I expect it to go back up as demand in China increases.
Still, I consider PCU my riskiest inflation hedge as well as potentially the most rewarding.
Links to the Inflation Protection Special Report
Part 1 - The Need
Part 2 - Gold
Part 3 - Oil
Part 4 -TIPS
Part 5 - Consumer Staples
Part 6 - Commodities
Part 7 - Summary
Precious metals and fossil fuels such as gold and oil are special classes of commodities - I discussed them in previous posts. Some manufactured items, passive integrated circuit chips for example, are sometimes called commodities. But generally a commodity is a direct agricultural product (think wheat, corn, and cattle) or a mineral (think copper, aluminum, and iron).
As with oil, you can invest in commodities through futures contracts, a contract to take delivery of a specific amount of material on a specific date. Futures contracts are for pros. Unless you are a commodities professional or you run a farm or a mine – stay away from them.
A more reasonable way for an individual investor to get involved in commodities is to buy the stocks of agricultural or mining companies. Shares of limited partnerships and trusts for mining and forestry companies are also available on the stock exchanges. And, finally there are ETF’s (exchange traded funds) that specialize in commodities. Commodities provide inflation protection at a higher risk than other strategies.
I own common stock in one mining company, Southern Copper (ticker PCU), and shares in one mining trust, Mesabi (ticker MSB), for my own account. MSB is a steady high yield dividend payer. PCU pays a dividend that varies wildly with fluctuations in the price of copper. And, although copper fell along with everything else recently, I expect it to go back up as demand in China increases.
Still, I consider PCU my riskiest inflation hedge as well as potentially the most rewarding.
Links to the Inflation Protection Special Report
Part 1 - The Need
Part 2 - Gold
Part 3 - Oil
Part 4 -TIPS
Part 5 - Consumer Staples
Part 6 - Commodities
Part 7 - Summary
Friday, July 3, 2009
Inflation Protection – Part 5 – Consumer Staples
The broad stock market has not done well when inflation was higher than 5%. Some companies, however, thrive under high inflation conditions; companies with “pricing power”. These companies raise their prices as their labor and material costs increase. They are, therefore, able to maintain or even increase their margins.
Because consumers are unwilling to delay these purchases, companies that produce consumer staples such as food, toilet paper, shampoo, toothpaste, and pain relievers are generally able to raise their prices with inflation. The stocks of consumer staples companies tend to outperform the market because their profit margins are relatively secure and their earnings and dividends go up along with the general inflationary trend - or even faster.
Many firms are unable to raise prices without triggering a significant fall in demand for their products; the broad stock market, consequently, lags behind the consumer staples companies. Automobiles, home appliances, restaurants, home electronics, and books are examples of products consumers are willing to delay buying when the price goes up. Companies producing these “discretionary” items are squeezed. If they raise prices, volume goes down. If they don’t raise prices margins go down.
Many firms experience the volume-margin squeeze. That’s why most mutual funds, including index funds, generally do poorly in an inflationary environment.
Today some ETF’s (Exchange Traded Funds) specialize in consumer staples companies. I’ve never bought them because I don’t trust their stock picking. If a company makes consumer staples it’s included in the fund regardless of the soundness of the underlying business.
I prefer to buy shares of individual consumer staples companies with a track record of paying and increasing dividends. My favorite consumer staples stocks are Proctor & Gambol (PG), Johnson & Johnson (JNJ), and 3M (MMM). I own shares in all three companies.
The common shares of good quality consumer staples companies can be expected to keep pace with inflation whereas the broad market indexes do poorly when inflation is high.
Links to the Inflation Protection Special Report
Part 1 - The Need
Part 2 - Gold
Part 3 - Oil
Part 4 -TIPS
Part 5 - Consumer Staples
Part 6 - Commodities
Part 7 - Summary
Because consumers are unwilling to delay these purchases, companies that produce consumer staples such as food, toilet paper, shampoo, toothpaste, and pain relievers are generally able to raise their prices with inflation. The stocks of consumer staples companies tend to outperform the market because their profit margins are relatively secure and their earnings and dividends go up along with the general inflationary trend - or even faster.
Many firms are unable to raise prices without triggering a significant fall in demand for their products; the broad stock market, consequently, lags behind the consumer staples companies. Automobiles, home appliances, restaurants, home electronics, and books are examples of products consumers are willing to delay buying when the price goes up. Companies producing these “discretionary” items are squeezed. If they raise prices, volume goes down. If they don’t raise prices margins go down.
Many firms experience the volume-margin squeeze. That’s why most mutual funds, including index funds, generally do poorly in an inflationary environment.
Today some ETF’s (Exchange Traded Funds) specialize in consumer staples companies. I’ve never bought them because I don’t trust their stock picking. If a company makes consumer staples it’s included in the fund regardless of the soundness of the underlying business.
I prefer to buy shares of individual consumer staples companies with a track record of paying and increasing dividends. My favorite consumer staples stocks are Proctor & Gambol (PG), Johnson & Johnson (JNJ), and 3M (MMM). I own shares in all three companies.
The common shares of good quality consumer staples companies can be expected to keep pace with inflation whereas the broad market indexes do poorly when inflation is high.
Links to the Inflation Protection Special Report
Part 1 - The Need
Part 2 - Gold
Part 3 - Oil
Part 4 -TIPS
Part 5 - Consumer Staples
Part 6 - Commodities
Part 7 - Summary
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