Archive for November, 2011

How Much Do You Value Your Time?

timeIt is important to put a dollar amount on your time. Obviously your time’s value is going to vary based on factors such as how much time you have, how much money you make, what you do in your free-time, etc. Never-the-less it is important to put a dollar value on your time.

Why is this so important? Its important because it will help you find a balance in saving money and living. Let me give you an example. For example, you find out gas is $.30 cheaper per gallon 10 miles away and it takes you 30 minutes round-trip to get there. You have a 12 gallon tank and get 30 MPG. Your savings, $3.60 – $2 of gas = $1.60 in savings (ignoring the wear and tear on car), but at the cost of 30 minutes. This would put the value of your time $3.20 an hour. Now to some people, that savings of $1.60 is vital, but to others – when you put a pencil to it, its quick to see how worthless those savings really are.

Putting a value on your time can also be important when applied to things like buying a house or rental. Do you value your time at $5 an hour? Well I can tell you if I value my time at $5 an hour, I probably put about $5,000 of time into my houses rehab (remembering that is BELOW minimum wage, do you know how to survive on minimum wage?). If you want to own rentals – make sure you put a dollar value on the time you spend rehabbing, finding a tenant, cleaning up, and maintaining on your property.

So what does this all boil down to? Maybe some of your decisions would be changed if you put a dollar amount on your time, maybe they wouldn’t. Maybe extra time with your kids or wife or working on a hobby would be better than saving a couple bucks.

You have to draw the line somewhere.

Downsizing Your Home to Live With Less or No Debt

small-house-togoI have personally become a very big fan of people who are opting into smaller housing options to live frugally. Something about actively deciding to live blow your means is a powerful mentality. That being said, some people have taken small housing completely too far. Shipping container housing, mobile cabins on trailer as full-time housing, etc. Many of these extremely cheap housing alternatives do not even have plumbing. Now don’t get me wrong, I’m all for sacrificing, but plumbing has a fairly high dollar value to myself. Furthermore many of these individuals do fairly questionable things to make sure they don’t have to pay taxes on their structures, and many of them flat out hide and lie about their occupancy rate (some counties have limits to how long you can reside in some of these small housing options.)

So where is the balance in finding a smaller home? Is there a formula for what is acceptable like  (per person) x (square footage)? Sadly there is not. Although I cannot give you a magic formula for the size or price of a home, I think you should have no problem assessing  your family’s needs and honing in what is the minimum.

When I look at this alternative living style, I see a few ways to make small and cheap housing viable.

1) Find very cheap land in the middle of no-where and build a cheap structure.

Downside to this? You have kids or plan on having kids, good luck with schooling. Now if you plan on home schooling your children in the middle of no where, that’s a personal decision – but for many that’s not very viable. You plan on living there until you have children? Well just a quick head’s up, that structure you just built in the middle of no where is probably would about 0 to 40% of what you put into it. You also have to remember building structures is expensive, and getting utilities to your structure can be painfully expensive. Some people have started using solar panels and alternative methods of energy and water, but usually these alternatives are fairly capital heavy. This method of going out in the middle of no where also tends to be viewed as the “more granola” way of approaching cheaper housing.

2) Find a very cheap existing structure and rehab it.dilapidated-house

Seems like a relatively straight forward plan, but finding a cheap existing structure in a good location can be near impossible. We have nearby cities in Cincinnati that have 1000 – 1200 sq foot homes for $30k or less, but they usually tend to be a little questionable and/or crime ridden.

Normally you are going to have to settle for poorly kept properties in good areas, but don’t forget those repairs can be costly. Also remember that people almost always under-estimate repair costs. Make sure you factor in something for your time as well (unless your time is worthless).


This whole discussion is relative as well. Maybe you currently live in a 500k house and your idea of downsizing is to a 300k house. It’s hard to say what is right for your family, but with the way things are with employment and the housing market, many people are searching for a new lifestyle. A lifestyle without the worry of a giant mortgage and the burden of needing to sell your home. To the people who explore these options, I applaud them.

A great site to checkout is for more examples of tiny housing alternatives.

More to come on this trend.

November 2011 IPO’s–Zynga and Groupon

zyngaThere are two notable IPO’s coming this November, that are worth the time to investigate. Zynga, the maker of Farmville, CityVille, and Mafia wars (along with other titles) are expected to have an IPO sometime around Thanksgiving. The amount that Zygna is trying to pull in – a Cool $1 billion. Not to shabby for a company who’s games have the graphics of a similar to a Super Nintendo game. Make no mistake though, Zynga has become a core part of Facebook and traffic to their games is only getting higher.

Currently Zynga has 232,000,000+ active users and generated revenues of $850 mil in 2010. The company has over 2200 employees and actually is making a profit. The questions yet still to be answered are: Is Zygna a fad that will decline and will Zygna have any more home runs. Most of Zygna’s revenue comes through in game purchases of their virtual goods and not through advertising, so the goal here is to keep people playing. This is sure to be a volatile stock in the next few years (for good or bad).

The symbol for Zynga will be : ZNGA.

images (1)Next we move onto Groupon, a facilitating online retailor who is not the only one trying to capitalize on people looking for deals and retailers looking to sell. Groupon’s IPO is most likely going to clock the company’s value in at around 10 to 12 billion dollars, which is mind blowing for a service based deal site. The site does have an Alexa rating (rating of activity and popularity on the internet) of #312, but does this company really have something that competitors do not? I can understand how this company has room to grow, but I’m skeptical of this valuation. I would love to really see the books and get a feel for the company, but as it stands – I’ll be avoiding this IPO.

Get ready to see these stocks in the news this month.

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