Mike McKisson

The New York Times story about portion size was interesting. My wife and I don’t eat out nearly as much as we used to, but here is a tip we developed to combat the large portion sizes.

We would ask our server for a take home box before the food ever made it to the table. As soon as the meal arrived we would stash half of it in the box and save it for a meal the next day. You don’t eat too much and your $14 pasta now covers 2 meals now making it $7 per meal.

Just an idea that has worked well for us.

viv

Ah, but in the case of Ms. Mitra, she’s an associate at the Carlyle Group in NYC (you can Google her), Princeton grad, and probably makes a LOT of money, being a top-tier investment banker. Granted, if she had just said “I love to shop, and I’m good at finding things I love,” it wouldn’t have made her look quite so vapid.

Remember your I-love-shoes girl? The one who spent a lot of money on shoes just because they made her happy? Same deal.

bficker

Ramit, first off I love your blog. I have found your explanations easy to understand and even easier to put into practice. I do have one complaint though. The Real Estate link above was obviously very biased. I am a 24 year old Real Estate agent and would NEVER recommend people using their personal residence as an investment tool. The examples the article uses could be applied to an sector of investing: buying at the wrong time, buying in the wrong area (or sector), over paying, cashing out and using the proceeds for fun instead of investing. If somebody cashed out their stocks or any other type of investment to pay off debt or take a trip, the consequences are the same. That fact is, it all comes down to personal responsibility. I have seen people make hundreds of thousands of dollars in only a few years using the type of leverage you can only get in real estate. If someone is irresponsible, they will fail in any investment strategy, not just real estate.

Ryan

But I should point out that it’s great articles like the “richest people in America” that keep me coming back to this site, not emaciated New York fashion queens. Thanks Ramit.

Ryan Johnson

Ramit, thanks for the post.

A few points about the Yahoo link on why your own house isn’t a retirement nest egg.

•The financial calculations don’t measure the cost of ownership vs. the cost of renting. Sure you have all those costs owning but you would also have lots of costs renting. All landlords pay taxes, insurance, repairs, etc so those costs get built into your rent.

•Buying vs. renting should be more of a decision of seeing how much house you can get for similar rent and mortgage payments. Right now in most markets you can get much more renting, but that isn’t always the case.

An excellent article (NYT though so gated) is http://www.nytimes.com/2007/04/11/realestate/11leonhardt.html?ex=1180238400&en=0287e490faf1ccea&ei=5070
Do try the tool that let’s you compare buying vs. renting.

•The real danger is buying more home than you need or can afford in the assumption it will go up. Whether buying or renting, how much you spend is much more of a lifestyle choice. Where you can really help in your retirement is using the extra money you would have spent buying or renting a larger house to save for retirement.

Keep up the posts, Ramit.

S

As I looked at the “Richest People In America” article, I was struck by the look in the people’s eyes — happiness.

Thanks for sharing, Ramit.

My411Financial

It surprises me that with all the negative things going on in the world that people are more concerned with how much their purses cost. At some point peopel are going to have to wake up and realize that the day will come when the gravy train will stop and if you haven’t done anything to prepare for your future you will be suddenly on the losing side of life. Most of the people that I deal with have already run themselves into the ground by the time that I become aware of them. I usually refer them to a very good financial website that many people have had luck with. It is http://www.My411Financial.com They deal with bad credit, foreclosure, bankruptcy, debt consolidation, credit reporting, loans and they even have a section for frugal living for people who are trying to get back on the right track and just need a soft place to land. I would rather have a few possessions and lots of money in the bank than a lot of junk and no money. But that is just me.

Sanjay

Leveraged sell-out has an post on mitra. Hilarious.

http://www.leveragedsellout.com/2007/05/fwd-a-suitable-girl/

Michelle Singletary(washpost) and Clements(wsj) are two of my favourite finance writers.

Enrique

How about the boys spending $10,000 for a T.V? Isn’t that nauseting too?

Sara

I think some people are missing the point of the Real Estate article. Certainly some people who know what they are doing can do very well in real estate investment, no matter what the market is like. THIS article is about how a house is not guaranteed to be a good investment. I am 24 and a lot of my friends are chomping at the bit to buy a house, even if there’s a good chance they’ll move in a few years, or there’s no way they have 20% down, or they have to use an ARM to afford the payment. A lot of people assume buying is better than renting if you can afford the monthly mortgage payment, but that is definitely not the case. So few people take into consideration closing costs, maintenance, and the possibility that (OMG) the house might actually depreciate with the recent market turn.

Tia

here’s another rich guy…check out his blog: http://www.richestpeopleinamerica.com

Shawn

Ramit, I have been using the Schwab Investor Checking Account for about two months. So far it has been a really positive experience. Here are my observations so far.
- The ATM fees are reimbursed at the end of every month.
- The bill pay feature also works really well.
- Quirks include:
– You have to establish a brokerage account to open the investor checking account
– Money transferred from other banks to the Investor Checking account lands in your brokerage account, and you have to move it to Investor Checking yourself
– The bill pay feature handles payments a bit differently than my other bank. For example, when you select a pay date in the Investor Checking Account, Schwab sees that as the date that the check should arrive at the enitity you are sending it to. My old bank used the pay date as the date that the check was to be mailed.
– Logging in is also a bit strange. You have to log into the brokerage account to get to your bank account.

Geekman

The following is an email I sent to Ramit about one of the links he has in this post. Ramit asked that I post it as a comment here so that everyone who visits could read it just in case they might find it of interest. The full content of that email follows.

—

Hello Ramit,

Let me start off by saying I’ve never written to a financial blogger before but a recent post of yours got so far into my head that I just had to reach out to you. I’ve been reading your site for a long while and I really enjoy it, so much so that it’s become one of my daily reads. You’ve helped me a great deal over the last six months or so by pointing me to interesting articles and, of course, writing some fine articles yourself. However, an article you recently linked as being “The single best article on why real estate is not the great investment people think it is.” has caused me to break my silence and write you this email. I’ll understand if you simply throw this long, boring and possibly rambling email in the trash, but after reading the article twice I feel I need to point out a few things to you that bother me about it.

To start off, I agree that while the average homeowner might like to think of their home as an “investment” the author is correct to point out to these people that the home a person lives in for 30 years should not be called an investment. However, where I disagree with the author is in almost everything else he says in the article. To wit; the author doesn’t explain the difference between INVESTING in a home and OWNING a home so that his audience can actually change their point of view and actually become investors instead of owners.

Let me try to explain.

The author first makes the assumption that you (the general you, not you in particular) are buying a home as an investment, but then the author turns around and says that you’re going to live there for 30 years, which defeats the idea of investing. When you invest in a home you are either renting it out for more than the monthly outlay or you’re “flipping.” If you’re flipping then your ownership timetable should be as short as possible, usually less than 12 months, because the longer you hold a property the more you have to pay which lowers your potential for profit. The true real estate investors motto is, “Buy to rent.” or “Buy it, fix it and sell it.” not “Buy it, live in it for 30 years, sell it and pray it’s enough to retire with.”

Not once does the author explain this important difference between investing and owning within the article.

If the author were to explain to the owners who thought their home was a long-term retirement vehicle this difference (investor vs. owner) then maybe the article would have merit. But as it stands I feel that the author is only planting fear and misinformation about real estate investing to his readership. This article seems to deliberately confuse the two concepts, or at best unintentionally misuses them, and thus continues to confuse the homeowner and/or novice real estate investor into equating buying a home with investing in a home.

Even the authors examples are hopelessly biased. The article states almost from the beginning that most people only live in a home for seven years, but afterwards EVERY example given is dependant on the homeowner staying in the same home for 30 years. So, which is it? 7 or 30? Investor or owner? It almost seems that with this article the author is actively attempting to scare people away from buying a home in the first place by making home ownership as unattractive as he possibly can.

Using the authors’ math on the average cost of home ownership makes sense on the surface, but ONLY if you’re going to live in the home for the entire term of the 30 year mortgage. That makes you an owner, not an investor. Where is the cost analysis of the investor who buys a depressed property, fixes it up for a (relatively) small sum and then sells it at a profit less than a year later? Or what about the investor who buys a rental unit and then rents it out for more than the cost of the mortgage and monthly upkeep?

Obviously, an investor would never pay 30 years worth of home ownership costs, which means the investor CAN make a tidy profit by selling if their home DOUBLES in price after 3 to 5 years (according to the “30 Years Of Home Price Increases” chart.) Admittedly, some locations don’t appreciate as well as others (Houston), but any savvy investor would realize this and invest in only those places where they felt they could get a good return on their money.

Furthermore, I take issue with the authors insinuation that by purchasing a home and becoming an OWNER (not an INVESTOR) you will suddenly be unable and/or unwilling to invest in retirement accounts, IRAs, stocks or bonds for the next 30 years. As if you, the new homeowner, would suddenly be unable to do anything with your money except make your mortgage payments each month.

And finally, this article is written by a man who has published a book on how to make money INVESTING in the RENTAL real estate market. Of course he wants people to rent instead of own. How else will he make money?

I’m sorry for rambling on like this, and I hope you won’t ban me from your site for it, but I really do value your insight into the world of finance and needed to point out why I took such an issue with that article that you seemed to like so much. To make it fair, I’d be very curious to hear your thoughts on one of my favorite real estate investment books, “Find it, Fix it, Flip it” by Michael Corbett (http://www.amazon.com/Find-Fix-Flip-Millions-Estate-One/dp/0452286697/ref=pd_bbs_sr_1/104-1144467-9261559?ie=UTF8&s=books&qid=1174109014&sr=8-1).

Or you can just tell me to shut up.

Best,
GeekMan

Charles Schwab Bank Checking Account: 4.25% Interest Rate - savingwithme.com

[...] more competitive because there is another large brick and mortar company joining the race.  Ramit introduced an attractive new checking account from Charles Schwab.  Again, another competitor to the high [...]