joetaxpayer wrote:
. . .
- quote -

Ahh! Our local liquor purveyor offers full cases at a minor discount
AND the cases can't be mixed. Boo-hiss. However, our grocery store
(HEB) offers a 10% discount when you buy just 6 bottles AND those
bottles can be any label you like! Nice. We bought six yesterday and we
are allowing ourselves one bottle/week. If we consume one bottle a week
that ususally costs $12.00, that's a savings of $62/year ($1.2 x 52
weeks). Not a whopping amount but it's better than none! Now I just
have to make sure that $62 doesn't buy cheese.


======================================= MODERATOR'S COMMENT:
Please relate comments to financial planning.

"Elizabeth Richardson" <erichktn[at]worldnet.att.net> wrote in message
newsnGGg.673109$Fs1.508622[at]bgtnsc05-news.ops.worldnet.att.net...
- quote -

Well ... if we definitively knew the answer for that (and better yet: if
we had a cure for it) then we'd both be filthy rich in the "self-help"
industry wouldn't we.

The fact is, folks do it. A lot of folks do it. A lot more than you
think. Doesn't make it right, but it's a fact.

Elizabeth Richardson wrote:
- quote -

Who knows why, for sure. But they do. Material lust. Low self-esteem.
Various insecurities. All lead to things someone might not be able to
afford: brand new cars, too-large homes, over-priced clothing just to
compensate for not seeing their own self-worth.

"Afford" does mean being able to acquire what you need to first
survive, then save, and then have fun, yes?

For some, savings might not be in the definition of "afford." Once they
realize savings is part of the game, they need to cut out the needless
and over-priced stuff. This stuff can be as big as the leather couch
they sit on or as small as the Starbuck's latte they drink every
morning.

Some of us disciplined people, who are already saving, might want to
save even more, to retire say at 60, and identifying our latte factors
might be more difficult. This is where learning how to reduce costs on
what you buy helps (like the case of wine someone so nicely pointed out
for me) or cutting out some little daily purchase, like eating lunch
out. I don't need the wine, but I enjoy it, so I'll find a way to pay
less.

"Elizabeth Richardson" <erichktn[at]worldnet.att.net> wrote
E
- quote -

Well that would be a total misread of my personal situation.
I am an extraordinary athlete for my age, and by any
reasonable financial planning tool, I could spend a lot more
than I do each month. Besides, a gym would probably cost
more than the Breyer's, and I have found much better ways to
be athletic, incorporating a social life into those ways as
well.

John seemed to acknowledge that there is a place for
spending money on indulgences, hopefully with much
appreciation for these things. I agree.

- quote -

I think John was saying you'd be better off not eating the ice cream and
spending the money going to the gym.

Elizabeth Richardson

"bluecutie" <BlueCutie[at]gmail.com> wrote in message
news:1156091975.558377.28090[at]74g2000cwt.googlegroups.com...
- quote -

I read only the first paragraph of this article since I don't even
understand the premise. Why would someone buy things they don't need and
can't afford? I do buy stuff I probably don't NEED, but I can afford that
which I do buy. I'm already retired (at 60, DH is 51)and got that way by
saving and not spending frivolously.

Elizabeth Richardson

Wowie - a "grand Caffe Machiato"!!? I didn't know they existed! Thank
you Mr. Baras! I Love coffee! (Even toyed with the idea of getting a
Gaggia, a roaster, and grinder - but the warm-up time on the machine
put me off.)

Speaking tongue-in-cheek, my "latte" is called a "house" - and I sure
don't want one of those things slurping my machiato and munching my
sashimi. Finding such a well-mannered house is something of a difficult
proposition these days. Not to be too cycnical, but apparently some
folks have been economizing on "latte" in order to pay $200,000 more
than last year's list price for a "house" ... because their financial
planning opines it is "reasonable" to do so?

Where was I ...? Oh, yeah! Grand Caffe Machiato!

bluecutie wrote:
- quote -

What's wrong with fun topics? You don't think inflation, stock returns,
and investment debates are fun? Hmmm, maybe you get out more than the
rest of us geeks...

Latte factors, are they all they're cracked up to be? How much is it OK
to spend on these things? 3% of our (my wife's and mine) expenditures
are on eating out (or getting take out), 0.03% are for lattes (and the
like), and 0.3% on magazines (and books)*. Our real "latte" is vacation
travel, 8%, yikes!

But is any of this too much? I don't know, and don't know how I would
go about figuring out the answer. Instead, I "pay myself first." I
have a savings plan that dictates how much I want to save each year.
With that money put aside, the rest I can spend unconstrained by a
budget on any particular line item (the only constraint being that I
don't take on consumer debt).

In the event that we get ourselves into the situation where our spending
is cutting into the savings plan, I'm not going to get much relief by
going after the lattes or the books. That's just noise. Even dining
out is not terribly significant. But vacations and other high
percentage items invite real savings (if needed). So drink your latte
and be happy!

-Will

*in reference to a previous thread, these are percentages of total
outlay, not percentages of income

"bluecutie" <BlueCutie[at]gmail.com> writes:

- quote -

I haven't read it. I have seen Kiyosaki talk and read a
few columns of his and, to be lots less nice about it than
the other fellow who responded to this, I think the guy
is a dangerous quack and you'd probably be better off
reading the comics than reading him. At least reading
the comics you won't be tempted to do things which are
dangerous to your savings and net worth.

Go to groups.google.com and search the archives of this
newgroup for more commentary both about Kiyosaki and
some of the specific things he says.

My first suggestion for most folks is Personal Finance
for Dummies by Eric Tyson. After that, there are many
others from the inspirational to the technical to the
academic, but that's the single best starting point that
I know of. If you want more specific suggestions (ie.
"how do I get started in buying investment properties?")
ask away - there are folks who hang out here who either
invest in or work in many different areas of finance
and they can give you great specific and useful suggestions.


--
Plain Bread alone for e-mail, thanks. The rest gets trashed.
No HTML in E-Mail! -- http://www.expita.com/nomime.html
Are you posting responses that are easy for others to follow?
http://www.greenend.org.uk/rjk/2000/06/14/quoting

bluecutie wrote:

- quote -

First, I tend to read excerts before commiting to a book.

http://www.twbookmark.com/books/34/0...erpt10368.html

This didn't really leave me wanting to read more. My undergrad is
electrical engineering, with a Masters in Finance, and then some more
learning after that. Kiyosaki's style isn't one that I find interesting.
To each his own.
For what it's worth, this is my suggested reading list;
http://www.joetaxpayer.com/book.html

Have you read Rich Dad, Poor Dad? If so, what are your thoughts on the
content? Hubbie started reading it last night. He says the
writing/style is somewhat redundant. He hasn't read enough to have an
opinion on what it says yet.


joetaxpayer wrote:
- quote -

"John" <john.corey[at]gmail.com> wrote
- quote -

John, my comment on owning a stock whose products I buy was
tongue in cheek. Hence my use of the the word "rationalize."
Of course I'd be better off, strictly by the financial
numbers, buying a cheaper version of the fundamental
product. (OTOH, I think there is something to be said for
keeping a pulse on the products or services of a company in
which one owns shares. Unilever happens to make a number of
products with which I am familiar through occasional use.
It's also part of my diversification plan.)

I understand Warren Buffet is a Coca-Cola addict and
simultaneously owns a pile of its stock. He could save
beaucoup bucks if he switched to that gosh-awful generic
stuff. ;-)

Elle,

This is not directed at you per say. It is just that you provided the
example.

Note that someone who eats a product made by a large multinational
feels they are re-investing in their position in the parent company if
they hold the stock. Hence people can rationalize almost anything if
they wanted to do so. The friction and leakage between a purchase of
Breyer's Ice Cream and the performance of Unliver is very high (the
purchase matters little to the stock position). If you are going to buy
ice cream anyway you might as well buy it from a company that you
somehow own. You could earn a better return by not eating the ice cream
and saving the money.

As a human being and not as an investor...

There is something to be said for a Latte or other emotional treat. We
just have to recognize that we are making a choice, that we have
received value from the choice and that the value is worth it in the
end. We marry for love, we eat for pleasure and to fuel our lives. How
the possible savings might matter if we eat less might be secondary.

The actual investment logic to dropping fun items is we tend not to see
the connection between the behavior and the long term effects. We have
lost touch with the pleasure and the behavior is habit rather than a
treat. Hence we continue to buy the latte but no longer see it as of
real value or a treat. It is not special, just part of the routine.

Many of us would go to the gym if we understood the long term value.
Daily decisions leave us doing something else instead. The same with
how we spend money on the small things and miss how simple changes
could provide almost the same benefit (magazine example being a good
one).

Granted it does not appear to make any sense to suffer for one's full
life so that you can leave a larger estate compared to enjoying every
moment of one's life to the fullest as you never know if there will be
a tomorrow.

Elle wrote:
- quote -

Elle wrote:
- quote -

No, I haven't heard of that book. It sounds like something I would get
a kick out of.

- quote -

Sweet! Seriously, making something you're not willing to change work
for you instead is a great approach. I'll have to remember this.

"joetaxpayer" <joetaxpayer[at]nospam.com> wrote
Re the 1996 book (updated recently?): _The Millionaire Next
Door_:
- quote -

Nice excerpt to which one may send people!

I think this book definitely belongs on your recommended
reading list. Maybe put it in the "Recreational Section."
:-)

Elle wrote:

- quote -

A good excerpt from that book;
http://www.nytimes.com/books/first/s...=1&oref=slogin

I may add this to my recommended reading list.
JOE

Good article. Have you heard of the book _The Millionaire
Next Door_? It came out in the last ten years. It has real
life anecdotal stories that are an elaboration of the type
of tales in the article below. It was written by a couple of
professors, if memory serves, who back up the stories with
financial figures and commentary. You might get a kick out
of it. One can put it on the nightstand and read a story (a
few pages) a night in it.

My "Latte factor": Breyer's Ice Cream. Nothing else will do.
If I gave it up, the savings over five years would amount to
over $2200 ( = approx. $7 per week, increased annually by 3%
inflation, with a conservative 5% annual return).

A couple of years ago I found a way to rationalize my
purchases: I bought a chunk of Unilever (Breyer's owner)
stock.

"bluecutie" <BlueCutie[at]gmail.com> wrote
- quote -

bluecutie wrote:
- quote -

The first step I recommend to people is that for three months they write
down everything they spend. Down to the penny.
I did this, myself, quite a long time back, and found, as you did, that
eating out can add up. I would also grab a magazine every time I went to
the store. For many people, suggesting they read the magazines at the
library is a bit much, but suggesting they subscribe to the tittles they
like is a savings of well over 50%.
The eating out, when a social thing, is part of life and I still never
say no to a lunch out with a friend, but the takeout food cost can be
cut back.
Taking a page from Andrew Tobias' book, I'd suggest you find a merchant
who offers a case discount. If you drink a case over 6 week's time, a
10% discount turns out to be a huge annualized return on the money
'invested' in the cases.
Each person's revelation on the tracking exercise usually uncovers a mix
of a) wasted spending, b) pleasant luxuries working people deserve to
have, and c) the things (like your wine) that I can find savings without
sacrificing even the exact label (Yellow Tail Shiraz is about $6, but
the math is the same for $6 or $60 a bottle). Whatever items the child
uses at this stage of his life you can likely get in bulk or at a
discount, and see the return in both the money saved and the time saved
in not running out for one or two items.

JOE

I hope this isn't too fun of a topic to be posted here. My opinion is
that hearing what others identify as their "latte factor," can help
some of us identify ours and increase our savings.

See http://www.msnbc.msn.com/id/14377894/ for the article.

My husband and I are not big consummers. However, before we had our
daughter 3 months ago, we did go out to eat a lot. We cut back for some
months at a time, but we always strayed from eating in eventually.

Now, we order in on Friday nights from a deli. All other nights, I cook
or we have "fend for yourself" nights (also know as "cereal night" or
some other easy meal that leaves more time for, say, researching
personal finance issues).

Now that we're paying for daycare, not eating out is a must. I want to
identify some other latte factor we have, but I'm having trouble. Maybe
it's the 2 bottles of Yellow Tail wine we buy each week?

What is your latte factor?