My Frugal Miser - Looking Back at my 2010 Goals

It's hard to believe this is it. 2010 will be over in a few hours. For me it was a remarkably transitional year. I was substantially "self-employed" for the year as nearly all my income either came from rental properties or mystery shopping. Even though I did not earn as much as I did in the corporate job I left in 2009, I still made some progress.

I had 5 big goals for 2010:

1. Lose 26 pounds. This one I failed miserably. In fact, I've gained a few pounds this year.
2. Increase my net worth by $25,000. I underestimated my ability here as my net worth increased by more than twice that. A big part of this was thanks to the investment performance of my two retirement accounts, but I also managed to pay off more than $25,000 worth of debt in 2010.
   
3. Stick to a budget in key areas including food, gas and entertainment. I didn't do too bad with my budget. My goal was to spend less than $5 per day on food and I actually spent $4.98 per day ($1,816.21). For gas, I wanted to spend less than $125 per month. I'm elated to report that I also met this goal by spending $1431.86 on gas in 2010 ($119.32 per month). For entertainment, I spent $1,793.35. I didn't set a specific goal, so I can't measure this one easily. In 2009 I won a lot of money on two separate gambling trips, so I actually *made* money instead of spending money on entertainment. But, in 2008 my total spending on entertainment was $6,548.66 (over $2,500 on alcohol alone!), so I think I did okay this year.
4. Lose the Bimmer. That was easy. I ended up selling the car in the last week of 2009.
5. Consider moving. Well, I considered it. It's on hold for now. I savor the thought of bicycling along the boardwalk in Tampa every morning, living a carefree life. However, this will wait. My focus now is on opening my restaurant and making it a huge success.

Update on Opening the Restaurant

We're making good progress on getting the restaurant open. It's a fairly large space with seating for over 200 in 3 separate dining areas. The last tenant skipped out on the landlord so there's quite a bit of cleaning to do. Before we can get our business license the Health Department has to give us the okay to open. Before they will let us open we have to have hot water. Before the gas can be turned on to heat the water and power the cooking equipment we have to get approval from the city inspector. There were a few small leaks in the gas line that have to be repaired first.

Every day we make quantifiable progress. Yesterday, for example, we approved our corporate logo and ordered our outdoor signage. Today we hope to have the gas lines repaired and to get the okay from the city to turn on the gas.

We are trying to open on January 17th.

A Week in the Life of a Mystery Shopper

December 19th - December 25th...

I am now a very part-time mystery shopper. There's so much to do to get the restaurant open. Last week I shopped two high-end hotels. I earned $100 in fees and $946 in reimbursements.

Both hotels were in Atlanta and were for the same company. I really enjoy these shops and hope to continue doing them once I can start taking days off from the restaurant.

This week I probably won't do any shopping... maybe a shop or two if there's a bonus. I'll be analyzing my total 2010 mystery shopping results this week and will report that soon.

I'm Buying Another Rental Property

As if I didn't have enough projects going on right now, add to that another condo I am purchasing. This was a strategic purchase: a current tenant of mine wants to split up with her boyfriend. The boyfriend is someone I have known for more than 10 years, and drama aside, I'd love to help him out and make a little money while doing it.

I'm buying a small condo for... drumroll, please... $11,000. That's not a typo. It's less than 800 square feet with one bedroom, one bathroom, a decent sized living room and small kitchen. It's also not in a very desirable area, but it's not in the ghetto, either. Would I live there? Maybe not - but then again, if I was single I might. My partner would leave me if I suggested we move there, if that gives you an idea of the area.

I don't have $11,000 sitting in a bank account so I will access funds some other way. My bank offers a Simplified Line of Credit at 11.74%, plus a 3% fee to access the funds. That's not cheap, but it's uncollateralized and easy to access. Besides, I would pay it back in a matter of months.

I love a bargain. The condo was listed at $17,000 and last sold for $28,000 in 2004. The owner moved out several months ago and just wants to rid herself of it and the monthly association dues. I'm happy to oblige.

How Much Does it Cost to Open a Restaurant?

Our investor was generous to take a chance on our restaurant, but even with her funds, we have to keep an eye on our spending.

Our pre-opening budget is $50,000. The restaurant lease included a substantial amount of equipment but there is still a lot we need. For example, there is no range ($5,000), refrigerated case for cold vegetables and desserts ($1,500), plates, pots, pans or utensils (who knows how much), etc. Most of the inside of the restaurant is brick, but we do have to paint some walls to remove the 15 foot murals which were associated with the theme of our predecessor.

Our space is huge - about 4,000 square feet. Besides the full service kitchen, there are two main dining rooms and a bar from a bygone era (we won't be serving alcohol). There's also a second floor which covers half the area of the restaurant and is semi-exposed to the main floor. It features private dining for groups of 50, our office and another room which we are thinking about using as an employee lounge.

My business partner and I are "accruing" our salary until we see how much money is left in our budget. We have agreed to pay ourselves $500 per week during pre-opening, $1,000 per week for eight weeks after we open, and then a fluctuating salary based on cash flow.

So how much does it cost to open a restaurant? We're making it happen with $50,000, but that's just to get us to opening day. If business starts out slow, we have some additional capital to fall back on...but not much. To keep our costs low we are doing most of the grunt work ourselves. For example, I'm having a great time learning how to use a pressure washer to tackle build-up behind the equipment. Some of our furniture is mis-matched, but in a restaurant with nearly 200 seats and three dining areas, it won't be as noticeable. Still, an extra $50,000 would easily be spent if we had it.

Our goal is to be open on January 17th.

Putting the Rest of My Life on Auto-Pilot

Most of my friends and family chuckled when I told them I was opening a restaurant. Not because they thought it was funny but rather because I'm the guy that's always working on a new project. Guess it's the ADD in me rearing its ugly face. It's more than that, though. I'm just not a lazy person - I have to keep pushing myself day after day or I get bored.

The secret for me is being able to automate my life as much as I can. There's no way I could own and operate a restaurant, manage 7+ rental properties (more about that "+" later), write a blog, mystery shop, and deal with all the other responsibilities I have.

Here's how I do it.

Rental Properties

• The rental properties have the most potential to require my time, so I've worked hard to simplify things: Of my 7 leases, 1 still has 5+ years on its 7 year lease, 1 runs through the middle of 2013, 1 just did an early renewal for a year, and 2 just started on a 1 year lease. In fact, I only have to deal with one renewal in all of 2011.
• I've generally invested in my properties to keep them in solid condition, so I don't expect many surprises as far as maintenance goes.
• When an issue does arise, I have a short list of contractors I am loyal to. Since they know me and we trust each other, they will do the work without me being present and send me a bill.

Mystery Shopping

• I'll be very selective with my shops, particularly at first. I seriously doubt I'll do any restaurant shops since I'll be around food all day. But I'll probably do some gas stations (I'll be driving a lot). And, when I do start taking days off again (hopefully after 2-3 months I'll be able to work 5-6 days a week instead of all 7), I'll definitely seek out hotel shops since those are my favorite. What better way to switch gears and decompress than getting out of town for a night, even if it is a working vacation (I'm not good at taking "real" vacations when I can do some work at the same time).
• I'll have to consider whether I can continue to do speaking engagements at different conferences. I love doing it, and my audience seems receptive. I'll have to be careful about the commitments I make. Same with media interviews and responding to every single email I receive.

All That Other Stuff

• I've already started removing my email address from some lists. I spend way too much time on email everyday.
• I just serviced my car and will be sure to get a haircut a couple of days before we open. Fortunately, the cosmetology school I like to use for a haircut is less than ten minutes from the restaurant.
• I'm letting several magazine subscriptions expire.

Basically, I'm trying to get everything done that I can before we open. A side benefit to this is that some of the things I usually procrastinate about, like scanning documents (paperless office), are finally getting done.

A Week in the Life of a Mystery Shopper

December 12th - December 18th...

I spent most of my time at the restaurant last week, which left limited time for mystery shopping. I was able to squeeze in a little work. Last week I earned $130 in fees and $10 in reimbursements.

I limited my work to a special $60 project that required me to buy several gift cards and send them in - no worries as the work is for a reputable company. In addition I shopped one fast food restaurant, 3 gas stations and a payday loan store.

I'm Opening a Restaurant (Part 3)

So what makes me think I'll be successful? I mean, everyone knows that new restaurants have a high failure rate. I believe this is because most new restaurant owners do not spend enough time planning upfront prior to opening and then responding to change after the doors open.

First, we will emphasize our unique positioning in the market: everything on our menu will be made from scratch. Nothing will come from a can. I expect this to lower our food cost but increase our labor expense since we will be spending more time on preparation.

Second, we will be frugal where it counts. Fixed costs - those expenses we have little control over changing - are the most important element of success after providing customers with wholesome, delicious food and legendary service.

• I negotiated aggressive terms on our lease. Frankly, the rent is so low that it's going to be hard for us to screw things up.
• Partners' salaries fluctuate with the cash balance. Both of us will be working managers. I anticipate working open to close, 7 days a week for the foreseeable future. Our goal is that we will pay ourselves a $1,000 weekly salary each, but my salary will range between $250-$2,000 per week depending on our bank balance.
• We will be conservative with other expenses as well. At least until we see how business goes, we aren't spending a lot of money on technology, benefits or other costs. We will buy a simple cash register, manage our own accounting and payroll, and not provide ourselves or other employees with additional benefits.

There are things that we won't be frugal with. We will never cut corners on food quality. That would be shooting ourselves in the foot. And, we will pay our employees what they are worth. If I have an employee who works twice as hard as the other employees, I believe he should be paid twice as much, or close to it. Retaining good employees will help grow the business.

I'm Opening a Restaurant (Part 2)

Our business was established as an LLC and there are three of us, each holding a 1/3 stake in the business. Here's the breakdown

• My silent investor put up the capital to get us off the ground. She gets 1/3.
• My business partner is in charge of the kitchen, including recipes, health code compliance and food cost controls. He gets 1/3.
• I am in charge of front end operations. I will manage the customer experience and the business side (bookkeeping, payroll, and other administrative tasks). I get 1/3.

We expect to open by the end of January. We will be open from 6 AM - 3 PM, seven days a week. Breakfast will be a traditional sit down, full menu service. Lunch will be served cafeteria-style (here in the south we call that "Meat and three"). We are located on a busy US Highway in a fast growing but primarily industrial area. Within five miles of our location there are lime quarries, pipe companies, large warehouses, and small offices. Although there are some residential areas around us, right now we have decided not to be open in the evenings.

I'm Opening a Restaurant (Part 1)

The last few months have been a really exciting time. My business partner and I put together our first business plan for our restaurant over two years ago. At the time we both were on a career track that we enjoyed. It was just a dream of ours to one day be our own boss.

I got a taste for what it feels like to be my own boss when I converted my first home to a rental property back in 2006. Seven properties later and I have a nice, steady stream of (mostly) passive income and I've learned how to (mostly) automate everything so that I don't have to spend too much time tending to my properties.

So, it's time for the next challenge. I am definitely taking a frugal approach to starting a business. There are two theories about what works.

1. At my old job, we spent tons of money during start up to raise market awareness and build our business. It worked just fine, but our founder had deep, deep pockets and was willing to invest a lot of money before the company ever saw a profit.
2. The other philosophy is to grow slow, watch your pennies, and never overspend. Had homeowners in the last ten years lived beneath their means by buying less house than they could afford, the housing crash would have been avoided.

I prefer the second option. More specifically:

1. For expenses that don't directly affect our customers, we will be lean and mean.
2. We will limit our exposure so that if the company fails, our personal assets are not at stake.
3. Our salaries will be coorelated directly to our cash balance in the bank.

My Frugal Miser - How Much Does the Average Person Spend on Utilities?

I often wonder how my spending on gas, electricity, water and phone compares to the average person. I like to think this is an area where I am pretty frugal. One fairly simple way I measure this is by comparing the meter reading for my power consumption with that of my neighbors. I haven't found a single neighbor who spends less than me on electricity.

In November, I spent the following for utilities:

$48.00 Electricity (I'm on the budget plan - the actual amount was $34.55)

$13.18 Gas (water and a "piggyback" heat system)

$32.45 Water/Sewer (our sewer rates are among the highest in the nation and have increased 329% since 1996)

$19.95 Internet (DSL light)

$65.33 Mobile Phone/Internet

Here are a few of the things I do to keep my utilities cost low:

• Several months ago I downgraded my DSL plan to the slowest available. I am still able to stream movies from Netflix without problems or interruption.
• I changed the Internet plan on my phone from the unlimited option as soon as AT&T offered it to me.
• I am mindful of the electricity we use, which I've talked about in the past. Here it is December and we still haven't turned the heat on. As I write this the weather outside is 44 degrees. Instead of heating the whole house we use an electric blanket and space heater to only heat the room we are in.
• Last (it's kind of gross), "if it's yellow, we let it mellow."

I am doing more research to see what the average cost is so that I can benchmark my usage. I found, for example, that the average household uses about 920 kWh of power in a month. While my household size of "2 + cat" is slightly smaller than the average, it's not by much. My average power consumption over the last 12 months has been 338 kWh, almost 1/3rd of the average. More to come...

A Week in the Life of a Mystery Shopper

December 5th - December 11th...

It was another slow week although I can live with what I made considering the work I did. Last week I earned $282 in fees and $152 in reimbursements.

I am now working full-time on the new business - and I promise, I'll tell you all about it any day now. Anyway, the shopping will be taking back seat to this venture. Being the Type A person that I am, I can't see myself giving up shopping altogether, and I don't have any plans to. Instead, I'll be focusing on the most lucrative opportunities or the ones which are most convenient. Certain gas station shops will come in handy. The commute to my new business is 45 miles each way. Ouch.

A Happy Moment

It doesn't take much to get me excited, but today is one of those days that I have a big smile across my face. Why? Well, this time last year I wasn't in the best of spirits. I was still stinging from a recent job loss and had just started a new job that paid 80% less and wasn't going to last. I had a mountain of debt and an almost $800 monthly car payment. I was selling airline vouchers left from my old job to raise cash.

But most pressing this time last year was my property tax bill. See, I don't escrow my taxes every month, so they all become due at the same time. Last year I owed a total of about $6,300 and I charged nearly all of that to credit cards. That would be a smart move except that the tax assessor charged a fee for me to use my credit card.

Fast forward to today, and I owe close to $9,000 in taxes (one house in particular I had just bought last year and the tax was just on the land, so the tax on it is about $1,800 more this year).

So why am I so happy? Because this week I managed to pay $3,136 in property taxes out of my checking account, fee-free. Yippee! Sure, that still leaves nearly $6,000 I have to come up with by the end of the year, and I'm sure I'll still have to charge some of the taxes to a card. But the fact that I've already paid over 1/3 without fees is something to celebrate. I wouldn't have been able to do that this time last year.

Oh, and the $800 car payment? I got rid of the Bimmer last December. Now I pay less than half that with plans to totally pay my car off in 2011.

2011 will be a turning point in my life.

December Goals

It's looking more and more like this business I've been alluding to will come to fruition. Of course, any time you are in the process of transition, it's harder to set measurable goals around life.


December Goals:

• earn $1,000 from mystery shopping (last month I earned $1,582)
  
• keep credit card/car loan debt under $40,000
• make measurable progress towards starting a business

I cut way back on mystery shopping in December. I don't see many opportunities, and with the holidays there probably won't be as many. Besides, I need to focus on launching my new business. I expect my debt levels to increase this month. Unfortunately, I haven't managed to put away the $9,000 I need to pay my property taxes and will probably have to pay them with a credit card. My goal is to keep it from increasing too much. Finally, while I can't exactly quantify what will get done, I do know I have to keep chugging along with the new business. Ideally that will include signing a lease and funding a bank account with our investor's funds.

Reviewing my November Goals

In November I managed to achieve two of my three goals.

November Goals:

• I earned $1,582 from mystery shopping (my goal was $1,500)
• My credit card/loan balance decreased, to $35,254 (my goal was $36,500)
• I did not pay any of my property tax bills (my goal was to pay two of them).

I decided to conserve cash instead of prepaying my tax bill. With all the uncertainty around my rental income - that is, until the last few days of November - I wanted to make sure I had cash on hand to pay bills.

A Week in the Life of a Mystery Shopper

November 28th - December 4th...

Once again I made very little from mystery shopping. I'm a little surprised since the first of any month usually offers several opportunities. I just didn't find much that got me excited - maybe I'm becoming a more discerning mystery shopper???

Last week I earned $90 in fees and $117 in reimbursements.

The reason I earned more in reimbursements than in fees is because several of the gas stations I did were reimbursement-only. The $10 in gas and $3 for coffee and a pastry was attractive enough that I accepted the job without a fee. For the week I shopped 10 gas stations, an office supply store and one restaurant.

Things are slow right now, but it's the perfect time for me since I am busy with some other projects. Fortunately all my rental properties are rented as my attention is now on the new business I am opening. Big announcement about that very soon, I promise.

As far as shopping goes, yesterday I traveled to another town to shop a testing center where I had to fail the GMAT. I also have 5 gas stations to do this week and a few simple merchandising jobs.

My Frugal Miser - November Expenses: $2,473

My expenses for November were reasonable with a couple of exceptions. While I did very well on fuel for the car ($3...thanks to shopping a lot of gas stations), I was a glutton when it comes to fuel for the stomach ($245...ouch!).






November Expenses

$255 Auto ($3 for fuel, $249 Depreciation, $3 for service)
$0 Clothing
$245 Food (both groceries and eating out)
$38 Entertainment (movies, gambling, alcohol)
$3 Gifts Given
$234 Household (supplies, etc.)
$100 Health Insurance
$0 Medical
$174 Interest on Debt (not including Mortgage Interest)
$20 Miscellaneous
$431 Mortgage Interest (primary residence)
$813 Mortgage Interest (rental properties)
$0 Personal Care

$10 Subscriptions
$0 Taxes
$179 Utilities
$0 Vacation

Total November Expenses : $2,473

Notes

• Household ($244) was a little high. I bought a new laptop computer mostly but not entirely with gift cards. I also paid my quarterly pest control bill, which I cancelled moving forward.
• I separate my mortgage interest by personal residence versus rental properties. I think this is an important distinction: the personal residence interest is an expense I should exercise control over moving forward when looking at ways to be frugal; the other is an expense that generates income.
• My goal for spending on food is $5 per day. This month I spent $8.17 per day. The largest expense I had was for Thanksgiving dinner with my mom but I did eat out a lot more than usual.

My Frugal Miser - November Income: $6,605

November was a decent month. Rental income was lower than normal because of some vacancies. One of the tenants I lost didn't pay the rent she owed for November. I received several mystery shopping payments from work done in earlier months, so my income was higher than it will be next month.


November Income
$2,558 Mystery Shopping*
$2,438 Rental Income
$1,610 Other Sources
$6,605 Total Income for November
*note that mystery shopping income will always vary from the monthly summary amounts I post. Here I report actual payments received (cash basis accounting) whereas in my monthly mystery shopping update I report the amount I earned for that month.

Notes:

• I offset Shopping income with Shopping expenses.
• One of my tenants paid their November rent in October.
• The category "Other Sources" includes non-recurring (or semi-recurring) income since I always seem to have a little something that doesn't fall into the other buckets.

Vehicles and the True Cost of Ownership: How Much is My Car Really Costing Me?

As a mystery shopper I have to be aware of my costs. Depreciation is the cost of using my car in a given time period. Instead of expressing the cost of my car as a one-time expense when I bought it, I spread out the cost of my car over its expected life. Depreciation does not include other vehicle-related costs like gas, maintenance or insurance. I separate those out and report them as they occur.

I determined that each mile I drive costs me $.0867 in depreciation. I ended October with 41,669 and at the end of November there were 44,544 miles on the odometer. I drove 2,875 miles. For November, my vehicle depreciation expense was $249.26.

This is the least amount of miles I've driven in a month this year, and my mystery shopping income was still a respectable amount. I attribute that to not taking any significant trips to shop as most of my work was local in November.

Update on Starting a Business

It's been a month since I alluded to a new business opportunity I am pursuing. It's been a busy month, but there's still more work to do. Here's what I've been up to:

• Site selection. We had second thoughts about the original location we had selected and spent most of November looking at alternatives. We are getting very close.
• Formalizing the business. The LLC has been formalized and I got the paperwork back from the Secretary of State. This is important because it means our name did not conflict with any other LLC in the state.
• Funding the Business. Our silent investor had some hurdles to jump through to access the funds. This has been the biggest obstacle thus far as we cannot sign a lease until there is money in the bank. Worse, the investor is only able to fund about half what we originally discussed. Not a deal breaker but definitely not the news I wanted to hear.
• Networking. I met with the CFO of the company I used to work at and he gave me some good advice. He also did a sanity check of my projections and overall he thought my calculations were reasonable.

I'm still holding back on revealing the business we are creating. I don't know why I think it's bad luck to do it now since I'm not usually superstitious. Here's a hint. It is a retail operation: we will be selling to individual customers, not businesses.

Frugal Landlord Update

I know I shouldn't count my chickens before they hatch, but tomorrow I am supposed to sign leases for both my vacant houses. There is also a third property - the one I tried to sell - whose lease will become effective tomorrow. I'm so excited by the prospects of once again having all my properties rented.

Even better, the turnaround time and the rent I am charging are both impressive. On the townhouse, I am charging $650 per month which is $25 more than the last tenant paid. It was vacant for two weeks. I'm most happy about the minor amount of work I had to do to get it ready to rent. The carpet isn't new and has a few stains. It should probably be replaced. But my tenant didn't say anything about it. Same with the paint. It's acceptable but not a fresh coat.

The second property is my condo. The last tenants were there for 18 months and paid $575 per month. They are paid through November (today they are cleaning the carpets and turning over the keys). The new tenants will be paying $625 per month and are moving in Wednesday. Absolutely no down time at all on this property.

I'll be making $75 more per month on the two properties, and have spent less than $200 on repairs. This is perfect timing as I was worried about my cash flow for December.

A Week in the Life of a Mystery Shopper

November 21st - November 27th...

For the second week in a row I made very little from mystery shopping. I'm sure the holiday is to blame. Last week I earned $204 in fees and $46 in reimbursements.

I only shopped on 3 days and shopped just 8 stores: 7 gas stations and 1 payday loan store. Six of the shops were bonused: I shopped 1 gas station for $30, 2 for $26, 1 for $24 and 2 for $23. It worked out well that I had a slow week because I spent most of my free time getting the townhouse ready to rent.

This week I have another property becoming vacant. This is the first time I can remember having two vacancies at once. It would have been three but fortunately I have new tenants moving in to the house I had been trying to sell. This is also my most expensive property so getting it rented is a big relief. Even better: the tenants signed a lease purchase option and the term is 29 months. The tenants can purchase the house at any time in the next 29 months (which is what I really want) but even if they don't buy the house, they are locked into a long term lease, meaning I don't have to shop the property out again for at least that long.

Cutting the Electric Bill - 6 Month Goal Results

It's hard to believe it's been almost six months since I set a goal to reduce my electricity usage by 20%. Technically, it's been a little less than 6 months but my goal was over 6 billing cycles, which is over now.

It was a HOT summer, and I didn't do well at all for the first four months. It wasn't from lack of trying: I set the thermostat to 81 degrees when I was home, and it was completely turned off during the daytime. I also made an effort to zap vampire energy by unplugging things like my TV when they weren't being used.

Here's how I did:

June 2009: 288 kWh

June 2010: 396

Difference: +108

July 2009: 431

July 2010: 428

Difference: -3

August 2009: 314

August 2010: 582

Difference: +268 (ouch!)

September 2009: 290

September 2010: 448

Difference: +158

October 2009: 264

October 2010: 203

Difference: -61

November 2009: 189

November 2010: 187

Difference: -2

RESULTS

6 months of 2009: 1,776 kWh used

6 months of 2010: 2,244 kWh used

Difference: +468 kWh ( over 26% increase)

My goal was to reduce usage by 20%. Instead it increased by 26%. That's horrible. What happened? Two things: According to Science Daily, 2010 was the fourth hottest summer on record. Second, in 2009 I worked full-time either in an office or on the road. In 2010, I was at home much more. When I wasn't out myestery shopping I was at home writing reports and looking for work.

I'm going to continue my goal of reducing usage by 20% each month. Even though these last 6 months were discouraging, I know it helps keep me focused if I have a goal in mind.

Cutting the Electric Bill - November Bill

Back in June I set a goal to reduce my electricity usage 20% over the next 6 months.

In November 2009 I used 189 kWh of electricity over 28 days, which is 6.75 kWh per day. In November of this year, I used 187 kWh over 30 days, which is 6.23 kWh per day. I reduced consumption by just 2 kWh, but my bill covered two extra days this year.

This is the second month since June where I reduced electricity usage. I can attribute this solidly to the fact that I had a goal in mind. I haven't used my heat yet, even though there have been a few cold nights already. If I did not have a goal to achieve, I would have used the heat earlier this month. The low for the past several nights has been in the lower 40s, but no heat for me. Instead, I have an electric blanket, an afghan, and have been wearing extra layers of clothes.

My total bill for November was $34.55.

This marks the end of my six month mini-goal. Tomorrow I will go over the results and set a new one.

A Week in the Life of a Mystery Shopper

November 14th - November 20th...

Last week was slow. I earned $238 in fees and $256 in reimbursements. Monday was the only full day - I did 13 gas stations, 2 doughnut shops and a truck shop. The rest of the week I did a smattering of restaurants, business verifications and retail stores. Saturday I checked into a hotel shop.

Mystery shopping companies rush to fill all their shops before Thanksgiving each year, so this week will probably be incredibly slow. It works out really well though as I will be rehabbing one of the two vacant rental properties. The second property won't be vacant until Sunday but I don't expect to have much work to do before it can be rented again. I'm also still working on starting the new business. Progress on that is dreadfully slow but we are moving in the right direction.

It should be an interesting week

This week my business partner and I have committed to finding a location for our new business. On the one hand, I wish I had more mystery shopping lined up. Knowing those checks are coming adds some security to my finances. On the other hand, I can't lose focus of the big picture. Going into business for myself should be much more rewarding than working for (or through) others.

I completed most of the mystery shops I had for this week yesterday. Yup, in one day I shopped 16 sites. I have two assignments for today, a couple restaurants tomorrow and a hotel this weekend. Unless I find some opportunities for decent money, my plan is to focus on our new business.

Things may be quiet around here this week...

A Week in the Life of a Mystery Shopper

November 7th - November 13th...

Another decent week. Last week I earned $510 in fees and $223 in reimbursements. Nearly all of that came from 5 days (Monday - Friday). It was a plain Jane week so no need to go into much detail. I shopped mostly gas stations but also a few restaurants and a handful of other retailers.

On Saturday I checked into my first Freeman Group hotel. Freeman Group is notorious for late, late payments (like taking 6+ months to pay their shoppers in some cases). Because of this I've always avoided them. Recently, their new CEO sent out an email promising they would no longer tolerate such inexcusable practices. Late paying (small) companies are generally the result of one of two things: 1) a free spending executive or 2) an addicted one. Let's hope that someone either was removed from the checking account or went through a successful rehab program.

I'll be sure to note whether I am paid promptly by Freeman. It looks like they shop a major working-class hotel group. Will be nice to add them to my repertoire if everything works out.

Just When Things Were Getting Better...

My new tenants at the house I tried to sell are moving in December 1st. That's the good news, particularly since this is my most expensive property.

Alas, the good news stops there. I just found out I am losing two tenants this month. Even worse, one of the two has told me she won't be able to pay the already late November rent.

The first loss was somewhat expected as the tenants told me 6 months ago they wanted something bigger. At first I was going to work with them to buy another property, but when my other house didn't sell, the funds I expected to have for a new property never came.

The second loss is both unexpected and unfortunate. On the one hand, this tenant has had problems paying me on time for the last year, so I've even considered terminating her lease on my own. On the other hand, she is a low maintenance tenant, which is why I worked with her on her financial issues. Besides having to replace the air conditioner recently (which probably makes up for everything else when I think about it), I haven't had to spend any money maintaining this house in the two years she has been my tenant.

Of course, with this second property I will most likely have some deferred maintenance issues to deal with. While it's nice to not hear from a tenant for two years about problems, that also means there's probably some things inside that have to be fixed.

I suppose I should revisit my financial goals for November. The next few months are going to be a challenge.

November Goals

It's difficult to set goals when you aren't sure of what to measure. My business partner and I expect to have the funds in place this month to start our own business. I don't want to overburden myself with mystery shops since 100% of my focus will be on this business after we receive funding from our investor.

Despite the difficulty, if I fail to plan, I plan to fail. Let's see if I can meet these three objectives:

November Goals:

• earn $1,500 from mystery shopping (last month I earned $2,017)
  
• reduce credit card debt and car loan to $36,500 (9/30/2010: $37,779)
• pay 2 of my 8 property tax bills

That last goal alludes to the obligation I am most worried about right now. By the end of December I have to pay almost $9,000 in property taxes. Last year I ended up putting the taxes on a credit card - bad move but there was a lot of uncertainty then with my recent job loss and I was trying to close on the purchase of my last rental property.

Reviewing My October Goals

Finally a month to be proud of! In October I managed to achieve all three of my goals.

October Goals:

• I earned $2,017 from mystery shopping (my goal was $2,000)
• My credit card/loanbalance decreased, to $37,779 (my goal was $38,500)
• I completed my dejunking goal by removing 30 items of clutter from my house.

Setting goals works - on October 31st I was short of my Mystery Shopping goal. Even though I felt like being lazy (hey, it was a Sunday!), I got off my behind and did enough work to beat this goal.

My Frugal Miser - October Expenses: $2,801

In addition to being a great month for income, I managed to keep my expenses low in October as well.






October Expenses

$490 Auto ($100 cash to a driver I bumped into, $103 for fuel, $272 Depreciation, $15 for service)
$14 Clothing
$111 Food (both groceries and eating out)
$44 Entertainment (movies, gambling, alcohol)
$13 Gifts Given
$11 Household (supplies, etc.)
$107 Health Insurance
$0 Medical
$274 Interest on Debt (not including Mortgage Interest)
$0 Miscellaneous
$433 Mortgage Interest (primary residence)
$816 Mortgage Interest (rental properties)
$0 Personal Care
$0 Taxes
$216 Utilities
$271 Vacation

Total October Expenses : $2,801

Notes

• Due to poor planning I spent more on fuel than I had to. My gas station shops are scheduled out - by me - over time and I miscalculated when I would need gas.
  
• I gave $100 to someone who's car I bumped into. Since he was in front of me, it was automatically my fault, even though he did something totally illogical and then blamed it on "that's the way we do it in my country." I started to explain to him the laws of the road in the United States but figured it was faster and cheaper to give him some cash for the inconvenience.
• The vacation expense is from the Miami trip.
  
• I separate my mortgage interest by personal residence versus rental properties. I think this is an important distinction: the personal residence interest is an expense I should exercise control over moving forward when looking at ways to be frugal; the other is an expense that generates income.
• Spending on food was lower than my $5 daily goal at just $3.60 per day.

A Week in the Life of a Mystery Shopper

October 31st - November 6th...

Wow - it was a great week. Even better, I didn't do a single shop last weekend - by choice. I rarely take a day off but I was feeling like I needed a little "me" time. This flexibility to decide when you want to work is another great benefit of being a full-time mystery shopper.

Even with the shortened week, I earned $728 in fees and $246 in reimbursements. Full disclosure: part of my earnings came from my periodic merchandising route, which is what I consider to be mystery shopping's red headed stepsister. It has its ups and downs.

My mystery shopping adventures took me through a number of scenarios. I shopped two grocery stores, earning $24 in fees and $20 worth of free groceries - and, no narrative to report! I ate more boneless chicken wings than I care to admit, and I dined on grilled tilapia via a route of three highly bonused seafood restaurants.

I visited gas stations. Lots of them. My garage smells like fuel. It's to the point that my dreams are about dirty rugs and dusty ventilation fans in a restroom that smells like death. I can't buy gas anymore without checking to see if there are paper towels stuck in their holder at the pump, even when I'm not on a shop.

I did several other shops, including a gourmet chocolate store at the mall, three clothing stores, a copy store, business verification at a mortgage company, cookie store audit, internet car inquiry, and two telephone bank shops.

This week? Busy, but probably not like last week. I have to do at least 22 gas stations, one grocery store, a few restaurants and a merchandising job.

My Frugal Miser - October Income: $7,942

October was a solid month. I found a young couple who signed a lease purchase option on the house I was selling. They are moving December 1 but in October they made the first of 3 small non-refundable deposits. I like lease purchase options because the tenants take better care of the property and, hopefully, will make an offer to buy the house in the next couple of years. I also received the forfeited earnest money check from the original buyer who could not line up financing.


October Income
$1,039 Mystery Shopping*
$5,597 Rental Income
$1,307 Other Sources
$7,942 Total Income for October
*note that mystery shopping income will always vary from the monthly summary amounts I post. Here I report actual payments received (cash basis accounting) whereas in my monthly mystery shopping update I report the amount I earned for that month.

Notes:

• I offset Shopping income with Shopping expenses. In October, I did quite a few shops that will be paid in November. Thus, this amount is artificially low.
• One of my tenants paid their November rent early.
• The category "Other Sources" includes non-recurring (or semi-recurring) income since I always seem to have a little something that doesn't fall into the other buckets.
  

Vehicles and the True Cost of Ownership: How Much is My Car Really Costing Me?

As a mystery shopper I have to be aware of my costs. Depreciation is the cost of using my car in a given time period. Instead of expressing the cost of my car as a one-time expense when I bought it, I spread out the cost of my car over its expected life. Depreciation does not include other vehicle-related costs like gas, maintenance or insurance. I separate those out and report them as they occur.

I determined that each mile I drive costs me $.0867 in depreciation. I ended September with 38,531 and at the end of October there were 41,669 miles on the odometer. I drove 3,138 miles. For October, my vehicle depreciation expense was $272.06.

A Week in the Life of a Mystery Shopper

October 24th - October 30th...

I had a great week last week. I earned $665 in fees and $205 in reimbursements. Most of my earnings came from two sources. First, I completed several gas station audits. Second, I completed a route of 10 fast food reward shops that were heavily bonused. I also did quite a few retail shops.

This week begins an easy round of gas station shops. I am signed up to do 50 in November - that's $300 in fees and $250 in free gas.

Starting a Business - How a Frugal Miser Does It

Last week my business partner Chris and I had a conversation. He is concerned about my Type A personality and how it will affect our business. That got me thinking about a lot of things.

There's a time to frugal, and a time not to be.

In my personal life, I go out of my way to keep my expenses low, low, low. I mean, how many people do you know that unplug their refrigerator and freezer when they go out of town to save electricity? In business, there are some costs that can be minimized and others that can't.

1. If the expense doesn't contribute to our core focus, it can be cut. For example, I have to figure out how we will be doing payroll. I plan to choose the absolute best value package. That doesn't necessarily mean the cheapest package. What it does mean is I'll be driving the Chevy, not the Cadillac.
2. For costs that can help us increase our revenues, I'll make the necessary investment. For example, happy employees will treat customers better. I'm not looking to cut costs by treating my employees like they can be replaced at any time. I plan to pay my employees a fair wage, and incentivize them with spot bonuses when they do a great job, and quarterly bonuses when the company does well, among other things.
3. Another cost I'm not looking to cut is quality. Our product will be the best it can be - no shortcuts.

So how does a frugal miser cut costs? I have several ideas. We will turn the thermostat completely off when we leave every day. No reason to heat or cool an empty space. Also, we will be very selective about advertising. Often times I wonder just how effective some mediums of advertising can be. I imagine ambulance-chasing lawyers do well by advertising during daytime courtroom dramas. The tort-heavy/trigger happy demographic they seek is the audience that is at home during the daytime watching TV while everyone else is out working. But a dentist advertising on a highway billboard? Every time I drive by that ad I wonder how many new patients it takes to pay for it. Then I wonder why the dentist isn't getting new patients the way most dentists do: through referrals (which, as a side benefit, doesn't cost much more than the cost of treating your customers right to begin with).

Being a frugal miser means cutting out all the fat. You never slice into the muscle - that would hurt!

Clutter Roundup: Final Update

At the end of last month I set a goal to declutter my home. Specifically, I wanted to remove 30 of my possessions in October. Earlier in the month I reported that I had sold 10 items. I wanted to post my final progress report:

Yesterday I gathered up 20 things. Some of the 20 things are pictured to the left: a Josh Groban DVD (sold on Half.com - I sold one other DVD a few days ago), souvenir Coke bottles, coffee cups, an old iron, phone books, 2 pair of old shoes and a couple of heavy shirts. I also am selling a small desk that I've hated since the day I bought it. I learned a lesson about buying cheap furniture: what good is it if it's too uncomfortable to use?

It's a good thing my goal required me to do this by the end of the month or it wouldn't have happened! But, I'm really glad it did. I earned a total of $162.78 from the items I sold, and my spare bedroom has never looked more...spare.

Starting a Business - So Much to Do

Yesterday I alluded to a new business I am hoping to start. While I've explored what it would take to do this, and indeed, I worked at a start up technology company for 7 years so I saw a lot in the early days, I've never had to deal with the details.

My business partner and I got serious about this business a month ago when two things happened. First, he lost his management job unexpectedly when a major client pulled a project representing over half his company's revenues. Second, we found an investor. Funny thing is, our investor had been lurking in the shadows for quite some time.

I mentioned persistence yesterday. Set your mind to something, be laser focused, and ignore the naysayers. Our seed money can be attributed to our persistence. That investor could have stepped up at any time. It was our unwavering desire to do this that convinced our investor we could turn this into a successful investment.

I don't want to spill the beans just yet about what I'm doing. There's one more obstacle that I want to overcome before officially announcing anything. For now, let me tell you some of the things we have been working on:

• Site selection. After looking at several potential sites, we have identified a site we think will work. Next step is negotiating a lease.
• Formalizing the business. We will establish an LLC. The paperwork will be filed to make this a living business any day now.
• Creating a budget. I have created an exhaustive set of scenarios in Excel using variables such as revenues, fixed and variable expenses. My goal is to be able to plug in our expected revenue amount and let Excel tell me what we can budget to each line item expense and then estimate our profit or loss.
• Creating our product. No hints just yet. Well, maybe a little one: We are entering a somewhat commoditized market with a unique offering. We have a lot of competition, but none of our competitors will be doing exactly what we are doing.
• Networking. I have a small network of people I trust and can bounce ideas off. For example, the CFO of the company I used to work for (the start up I was at for 7 years) is meeting with me in a few days to review my plan and offer feedback.
  

Crazy Week

This has been a busy week in a busy month. I like busy. First off, mystery shopping has picked back up a little and I've had a few 14+ hour days. I am really happy to see the pace back to where it was earlier in the summer. It should continue through mid-November as I have already signed up for more than 70 shops and merchandising jobs over the next 2-3 weeks.

If that wasn't enough, I expect to have a major announcement soon. One of my lifelong dreams has been to operate my own business. While mystery shopping does put me in charge, it's not quite what I mean when I say I want to run my own business. It looks like I have found an investor and business partner to execute on an idea I've had for several years. More on this soon.

Nothing takes the place of persistence.

A Week in the Life of a Mystery Shopper

October 10th - October 16th...

I earned $464 in fees and $235 in reimbursements last week. Most of my work was with restaurant shops though I also completed a couple business verifications, a payday advance and an office supply store. On Saturday I started a round of gas station audits and completed 8 of 32 visits I am doing over a four day period.

This week I am doing the remaining 24 gas audits and a few retail stores. I hope I will be able to pick up some bonused shops this last week of the month.

Cutting the Electric Bill - October Bill

Back in June I set a goal to reduce my electricity usage 20% over the next 6 months.

In October 2009 I used 264 kWh of electricity. In October of this year, I only used 203 kWh. I reduced consumption by 61 kWh, a 23% reduction! Finally a month where I reached my goal. However, just as I blamed a hotter summer on higher bills over the last few months, I know the mild weather is the reason my bill was so low this month: I've neither used the air nor the heat.

One frugal measure: I unplugged the refrigerator while I was in Miami last week. We intentionally used up almost all our food before we left. Our neighbor stored the few things we had in her refrigerator.

My total bill for October was $36.19!

November will be a tougher month to beat. Last year I used 189 kWh over 28 days, or 6.75 kWh per day. I used 7.25 kWh in October this year, so I need to find other ways to cut electricity since the A/C was completely off and even the fridge was off for several days. What else can I cut? This will be difficult!

Clutter Roundup: Update

At the end of last month I set a goal to declutter my home. Specifically, I will remove 30 of my possessions in October. I wanted to post my first progress report:


Yesterday I sold 10 groups of things to one of my tenants. I earned $132 by selling, among other things, a 13" LCD TV, large suitcase, painting (which, by the way, a previous tenant had left behind), and various office and kitchen supplies. I am surprised I was able to earn so much from old possessions I do not need. This motivates me even more to comb through my stuff for unnecessary belongings.

A Week in the Life of a Mystery Shopper

October 10th - October 16th...

I had a great time shopping south Florida last week. I didn't earn as much in fees but did not expect to. I earned $216 in fees and $1,203 in reimbursements. I shopped four hotels, seven restaurants and a grocery store. I merchandised one retailer and did a "blind check" of my local drive-in. The blind check is where you anonymously count customers so that the actual count can be compared to the reported count. This keeps the theater companies honest. The trip to the Miami area was wonderful and I am itching to put together another trip.

Another benefit from last week worth mentioning is that I earned enough Hilton Honors points for two free room nights at a Level 1 Hampton Inn. Combine those points with what I already have and I can smell a vacation in 2011 to somewhere tropical.

This week I have a handful of shops scheduled until Saturday when I have several gas station audits beginning.

I just found out one company that shops quite a few hotels - and pays a fee- has a new President who is determined to turn the company around. Previously I was concerned the company would go out of business (their Payables exceeded 270 days according to some shoppers). I might take a chance on them now. It's possible the new President also injected some cash into the business, or maybe they had cash all along and it was just a poorly managed company - who knows.

Thoughts from Miami

My shopping/vacation is going well. I've completed five of the six restaurant shops and two of the four hotels. Later this morning I will finish the third hotel and then tonight I check into the last one. The last shop is reimbursement only but the shop is much easier than the ones that pay me a fee.

scene from an overcast Biscayne Bay, taken from my hotel balcony

Much of my time has been spent working but it's the kind of work I really don't mind. I write my reports in the room. Wednesday night/Thursday morning I did much of my report sitting on an 8th floor balcony overlooking Biscayne Bay and the Miami Beach skyline. The actual work - eating, walking around a resort - that's not hard. The hardest part for me is keeping up with names, particularly when the employee doesn't even have a name tag and I have to ask for their name while not revealing my identity. I've gotten used to that now so I never worry about blowing my cover.

There's also some fun. I hunted down some sites from Dexter along Ocean Drive in South Beach. That's my favorite show - too bad I have to wait for the DVD of each series to be released. I also had my picture taken on the steps where Versace was killed. Later today we are going to drive by Enrique Iglesias' house - at least I think I have his address.

I've always thought you should integrate your passion with your work. It's not that hard to do when I am afforded opportunities such as these. Have a great weekend!

More About My Frugal Vacation

So just how does one go about putting together a low-priced vacation? Here's how I did it:

• Air... I booked the trip a couple months ago without knowing exactly what I would be doing. I knew a couple companies I shop for have hotels in the area but had no idea whether I would find an opportunity since the shops weren't posted until the last 10 days of September. My companion pass on Southwest expires at the end of October so I wanted to take one last trip while it was still valid.
• Hotels... I knew ahead of time the day hotels would be posted on the job boards. I still had to keep an eye on my email since I wasn't sure what time of day they would post - these shops go fast so you have to be vigilant. I selected four hotels. This became the basis for my trip and I built everything else around where I was sleeping for free. While multiple brands are shopped, I purposely selected four Hilton-branded properties to juice my Hilton Honors account - I anticipate earning enough points to get two more room nights free at a less expensive property like Hampton Inn.
  
• Food... Now that I knew where I would be, I looked for food. I wanted meals for two, and since I did not want to be spending a ton of time writing reports, I narrowed my search to alcohol compliance shops. I picked up six of these.
• Car... The only out of pocket expense remaining was a car rental. Not satisfied with the list of rentals at the airport, I looked for off-airport agencies so that I could avoid all the fees you have to pay when you rent from an airport location. I found an Enterprise location one mile from the airport, called and asked them if they could pick me up. That wasn't an option, but they did tell me they regularly have customers take a taxi from the airport. This will save me $65 off the total rental, less the $20 or so I will spend for a cab.

My partner's birthday is tomorrow. I wonder if we can find any freebies?

Taking Another Mystery Shopping Vacation

This is what I dreamed of when I heard about mystery shopping: living a lifestyle I wouldn't be able to afford on my meager salary, paid for in exchange for evaluating the places I visit. A free vacation - all by mystery shopping!

I am spending four nights in South Florida. Each night is at a different Hilton-branded hotel either in West Palm Beach, Fort Lauderdale or Miami. In addition to the free meals included with my hotel stays, we are shopping six casual dining restaurants. These are alcohol age-verification shops, where the most important aspect is whether we are carded when we order a drink. They are 90% easier than regular restaurant shops that require timings, evaluating the quality of the food, service and cleanliness, etc. All these require is a PASS or FAIL on whether we were carded, whether we were asked to join the frequent customer program and if we were told about food specials. I am reimbursed $35 for food and drink and paid an $8 fee.

Two of the hotels pay a fee, and all offer complete reimbursement of my expenses including lodging, valet, food, drinks, etc.

A Week in the Life of a Mystery Shopper

October 3rd - October 9th...

Last week was another slow one. I earned $375 in fees and $292 in reimbursements. Fortunately the work was not very hard. I shopped 8 gas stations which prevented me from having to buy any gas. I also picked up some new jobs that turned out to be fairly straightforward. I did a simple evaluation of a TV at two electronics stores. Each paid $12 and took about 15 minutes to shop and 5 minutes to report - NO NARRATIVE! I also shopped two mattress stores, a bus terminal, several tellers at two banks, got an oil change, ate at several restaurants and bought my mom a new purse for Christmas - at no cost to me.

The reimbursements last week were especially nice, and most of the work was simple - my kind of shop.

October Goals

I have decided to take the rental property I had for sale off the market and rent it. The first purchase fell through and I need to monetize the asset, even if that means renting it out for a while longer. By year end I have to pay almost $9,000 in property taxes and I need all the cash I can get my hands on right now.

I also will be exploring an opportunity to open a business with my best friend. His mother-in-law could help fund our start up costs. This is something we have discussed for years. He lost his job at the beginning of the month so the timing for both of us couldn't be better.

Below are my tangible goals. In addition to the three things listed below, I hope to identify a business opportunity and to have the vacant rental property occupied by the beginning of November.

October Goals:

• earn $2,000 from mystery shopping (last month I earned $1,864)
  
• reduce credit card debt and car loan to $38,500 (9/30/2010: $39,999)
• successfully dispose of 30 items as part of my October dejunking goal
  

Reviewing My September Goals

I mostly moved sideways in September. I guess that's better than falling behind.

September Goals:

• I earned $1,864 from mystery shopping (my goal was $2,000)
• My credit card/car loan balance decreased, to $39,999 (my goal was $40,000)
  
• I created my 2011 Capital Expense budget.
  

I achieved two of my three goals. Once again I had a slow month for mystery shopping. I tried to get to $2,000 (my goal) but even that is less than I made earlier this year. This really is hard work. It isn't challenging work (which would be nice every now and then), but it takes a lot of effort for little pay. What makes it so hard isn't the actual shopping but instead it's the hunt for work, training for each job and the paperwork involved in submitting my reports.

My Frugal Miser - September Expenses: $2,525

Fortunately I kept my expenses low in September. Even though my income was lower than normal, I still spent less than I earned.







September Expenses

$294 Auto ($50 CREDIT [reimbursement] for service, $51 for fuel, $293 Depreciation)
$0 Clothing
$108 Food (both groceries and eating out)
$243 Entertainment (movies, gambling, alcohol)
$0 Gifts Given
$0 Home Repair
$88 Household (new phone, Blu Ray player, etc.)
$107 Health Insurance
$54 Medical
$78 Interest on Debt (not including Mortgage Interest)
$0 Miscellaneous
$436 Mortgage Interest (primary residence)
$820 Mortgage Interest (rental properties)
$10 Personal Care
$0 Taxes
$197 Utilities
$102 Vacation

Total September Expenses : $2,525

Notes

• Thanks to mystery shopping, I spent $51 for fuel even though I drove over 3,000 miles.
• I was reimbursed the $50 I paid to Pop-a-lock in August by the roadside assistance service provided by my insurance.
  
• I separate my mortgage interest by personal residence versus rental properties. I think this is an important distinction: the personal residence interest is an expense I should exercise control over moving forward when looking at ways to be frugal; the other is an expense that generates income.
• Spending on food was lower than my $5 daily goal at just $3.60 per day.

My Frugal Miser - September Income: $3,722

The contract on the property I was selling fell through, which means another month of no income for that home. It was a tough month, made even tougher by an unexpected expense. For my rental properties, I've always deducted the expenses I have in a given month from the total income rather than separating the two (which probably makes more sense). The new unit, combined with the vacant property, really hurt me in September.


September Income
$1,555 Mystery Shopping*
$1,176 Rental Income
$991 Other Sources
$3,722 Total Income for September
*note that the mystery shopping income will always vary from the monthly summary amounts I post. Here I report actual payments received (cash basis accounting) whereas in my monthly mystery shopping update I report the amount I earned for that month.

Notes:

• The new A/C unit cost $2,600 and the vacant property would rent for $1,100/month.
  
• The category "Other Sources" includes non-recurring (or semi-recurring) income since I always seem to have a little something that doesn't fall into the other buckets.
  

Losing Weight Will Save Me $.67 Per Day

I know I'm overweight, but now I realize it really is costing me money. I've been lucky thus far to have virtually no health-related problems besides the occasional cold. However, I am still paying a price for overeating - or I'm about to, anyway.

Since I lost my job last year I stayed on my old employer's health plan via COBRA. It's been subsidized through some plan Obama passed for those who are unemployed through no fault of their own, so I had no reason to switch.

Last month I received notice that my subsidy was about to end. Facing a $300 monthly insurance bill, I decided to shop around. I settled on a high deductible plan from Humana. The first $5,000 in annual health care expenses are paid directly by me, and I can fund a Health Savings Account to cover my out of pocket expenses for tax advantages. When I was filling out the application, I was originally quoted $80 per month. But when I received the approval email, the rate had changed to $100 per month.

The reason I was given for this change was "Body Build." Interested to know what I needed to do in order to eliminate this premium, I called Humana and found out that I weigh about 10 pounds more than the maximum they allow for my height. I know I need to lose a lot more than that.

Humana told me that if I can lose the weight without the aid of prescription medication or surgery, and keep it off for one year, they will remove the "fat penalty" from my account. One more reason for me to get in shape!

A Week in the Life of a Mystery Shopper

September 26th - October 2nd...

Last week was mediocre. I earned $427 in fees and $107 in reimbursements. Most of my work came from shopping or auditing gas stations. I took a chance on a couple of mobile phone stores. The fee was $15 each, which I considered fair for 15 minutes in store and another 15 minutes of reporting. I also did a handful of one-off merchandising jobs.

In my report last week I said this past week looked "dreadful". While it's not one of my better weeks, it certainly was better than I thought. Lesson learned: be persistent and optimistic.

Persistence is key to success. For example, I was about to give up on a special project that required me to schedule an inspection with the contact. No one would call me back ("Hi, I'm calling to schedule your inspection, when would it be convenient for you?" - I wouldn't call back, either!). Rather than give up, I decided to take my chances and just show up. Each visit took 15-20 minutes and paid $21. I wasn't about to give up that easy. It worked: I was able to complete 4 of the 6 inspections.

Vehicles and the True Cost of Ownership: How Much is My Car Really Costing Me?

As a mystery shopper I have to be aware of my costs. Depreciation is the cost of using my car in a given time period. Instead of expressing the cost of my car as a one-time expense when I bought it, I spread out the cost of my car over its expected life. Depreciation does not include other vehicle-related costs like gas, maintenance or insurance. I separate those out and report them as they occur.

I determined that each mile I drive costs me $.0867 in depreciation. I ended August with 35,152 and at the end of September there were 38,531 miles on the odometer. I drove 3,379 miles. For September, my vehicle depreciation expense was $292.96.

My Frugal Miser - 2011 Capital Budget

One of my three September goals is to create a Capital Expense budget for 2011. I am happy to report I am finished with my planning for this and it is ready to be implemented. The hard part was figuring out what to include in the budget, how much each of my major annual expenses are, and what they might be in the future.

In 2011, I need to allocate $2,000 per month toward future expenses. I will deposit this into my ING Orange Savings account and allocate it as I incur the expenses.

So I'm sure you are wondering what expenses I am including:

• $521: First, something new I am doing is setting aside 10% of my monthly gross rental income (currently $521 per month when all properties are occupied) for expenses associated with my rental properties. This would include new carpet or HVAC replacement - two major costs I incurred recently and wish I had planned for - and other large expenses such as new appliances and repairs.
• $417: Second, I am setting aside $417 per month ($5,000 per year) to fund my Roth IRA.
• $910: Third, $910 will be deposited each month to cover those pesky expenses I dread: property insurance (for 8 houses), car insurance, fire dues, car tag and pest/termite control (again, 8 properties).
  
• $152: Last, to make it a nice round number, I will add a $152 monthly cushion just to be safe. My initial thoughts are that I will use this to fund a Health Savings Account. I currently have COBRA under my old employer's plan but am about to switch to a high deductible plan.
  

So, how do I come up with $2,000 per month? Fortunately, most of this is money I am already spending. I just haven't planned for it before. I'm just adding a little discipline. I HATE surprises, so really I'm doing this so there are none. I mean, wouldn't it be perfect if your personal finances really were on auto-pilot? This is the direction I am headed. I just have to have enough gas in the tank to get me to my destination.

The Book That Changed My Life

There's one book I can name that changed my life forever. Originally published in 1991, Don Aslett's Not For Packrats Only is a simple book that explains WHY clutter is such a bad thing and then gives tips on how to rid yourself of it. When I first read it as a teen, I had mounds of stuff under my bed. My closet was so full that I could barely close the door. Searching for something I hadn't used in a while took hours sometimes.

This book takes you room by room through your house, asking the question "What's the worst that will happen if I get rid of 'X'?" It's a refreshing read and helps you boil things down to their essence: is this thing helping me reach my life's goals?

Clutter Round Up: 30 Things in 30 Days

Last December I had a goal of eliminating 100 possessions in 31 days. I didn't reach that milestone. After some reflection I realize it was too much for one month. I've decided to try again in October.

Why the obsession with clutter? My mom was (still is to an extent) a packrat. I remember her addiction very well because she usually brought my brother and me along on her shopping trips. Then, it was our responsibility to keep the house clean. All those purposeless knickknacks, loads of laundry, and "stuff" to work around were a pain. I had started to follow in her footsteps until I read a life changing book, one that changed my lifestyle forever.

In October I will eliminate 30 unneeded items from my house. I will follow the same rules I set for myself last December:

• If I bring something new into the house, I have to eliminate an additional item above and beyond my goal of 30 things.
• Regularly consumed items do not count. I can't eat my way out of 30 canned goods or scrub myself out of 30 bars of soap.
• Similar items may be bundled. For example, if I throw away 4 dishes, I will count that as one item, not 4.
  
• Items can be sold, trashed, donated or otherwise given away. In other words, as long as the item no longer belongs to me, it counts as disposed of.

A Week in the Life of a Mystery Shopper

September 19th - September 25th...

Last week was mediocre, and would have been even worse had I not picked up a few merchandising jobs that others had canceled. For some reason mystery shopping has been slower.

One of the larger projects I do is being moved to a different company, and from what I can tell the requirements will make this a much less desirable job. I do notice a trend where companies that use mystery shopping programs look to cut costs as their top priority - above and beyond ensuring quality work. What I mean is, the laws of supply and demand ensure that lower paying work will be done by lower quality workers. Lower pay inevitably needs to lower quality. It's hard to figure out why these highly paid C-level employees don't understand that.

Last week I earned $398 in fees and $101 in reimbursements. I shopped 6 gas stations, 9 restaurants, a storage facility, check cashing company, and 3 electronics retailers. I also merchandised four retailers and completed two business verifications.

This week looks dreadful. I have a couple of merchandising jobs and audits lined up. At the end of the week (first of the month of October) I have a few low-paying jobs selected.

Cutting the Electric Bill - September Bill

Once again I failed to reduce my electric bill. I guess I found some comfort when my favorite meteorologist called the Summer of 2010 the second hottest on record. I did some digging around my financial archives to see if I set an unrealistic goal. I'm not ready to concede that I did - as long as the TV is on at night along with the A/C, I have room to improve. Truthfully, I have made only a small sacrifice in order to reach my goal of cutting my bill by 20%. That sacrifice feels like a major one: the thermostat is completely turned off during the day, and set to 80 or 81 degrees at night. Shouldn't this alone have helped?



First, a look back at how much I spent in prior years:

• 2006 average monthly electric bill: $62.92


• 2007 average monthly electric bill: $56.58


• 2008 average monthly electric bill: $97.75 (ouch... I had a roommate who used the A/C too much that summer!)


• 2009 average monthly electric bill: $36.33 (note: hot water converted to gas)


• 2010 average monthly electric bill: $38.50

My September, 2010 bills was for 448 kWh (14 per day) - a reduction from August but much higher than last year. In September 2009 I used 290 kWh (9 per day). To reach my goal I should have only used 232 kWh, about half of what I actually used.



I don't want to give up even though it's futile to think I will meet my 6 month goal. At least having this goal in my head keeps me aware of lights that are on or TVs that aren't in use. I may need to adjust my goal moving forward...

My Frugal Miser Looks Back: Have I Made Progress?

One of the primary reasons I started this blog was to hold myself accountable. It's easy to create goals and resolutions. The hard part is achieving them. I suspected that if I set goals, published them, and then, hopefully, people read those goals and tuned in to see my progress, I would have a greater obligation to take my goals seriously.

The question is, "Has it worked?" Yes and no.

• In 2008 I spent on average $7.48 per day on food, even though I traveled extensively for my job and my meals were reimbursed while I was on the road. So far this year, I am averaging $4.89 per day. I have reduced my food budget by 35%.
• In 2008 I spent $2,529 on alcohol. Okay, okay... I used to drink way too much. So far this year I have spent $302.
• At the end of 2009 I owed $63,415 in credit card debt and car loans. Today I owe $41,152. Since the start of the year I have paid off $22,263 in credit card and auto debt.
• In December I decided to eliminate 100 items of "clutter" in 31 days. While I failed to finish my goal of 100 things, I did eliminate 41 items or clusters of items (for example, "books" were classified as 1 item even though I got rid of several books.
• I have yet to lose any weight. This is my greatest personal struggle.

All in all I know I have accomplished more because I am publishing my goals for the world to see. Thanks for helping to keep me on task!

Happy Birthday to My Frugal Miser (Year in Review)

Today marks the 1 year anniversary of My Frugal Miser. Happy Birthday to me! It all started here: Let's Get Started. I started the blog after losing my corporate sales job of nearly 7 years. Originally as it's name implies, My Frugal Miser was intended as a blog about extreme frugal living. I certainly would like to think I've shared my thought and ideas about how to live a good life on less. Some of my more popular frugal living posts include:

• Warren Buffett is a Frugal Miser ... how one of the world's wealthiest individuals still lives frugal today. For example, he still lives in the house he purchased in 1958 for $31,500.
• About the Spartan Student... this is an inspiring blog a found about a Duke University grad student who is living out of a van parked on campus in order to avoid debt.
• Eating Like a Frugal Miser... this year I am to spend $150 per month on food. I think that's extremely generous. In this post I explain how I manage to eat in nice restaurants on a budget, and (mostly) avoid ramen noodles when I eat at home.
• Take a Sailor Shower... one of my personal favorite tips involves reducing water and natural gas costs. It just makes sense to bathe this way since you get a nice lather from the soap when the water isn't on.
  

My Frugal Miser has evolved into a mystery shopping blog, with a heavy helping of frugal living thrown in for good measure. In fact, the most visited page on this site is Can Mystery Shopping Be a Full-Time Job?

Tomorrow I will look back at the progress I have made over the last year. I thought going into this that publishing my goals might help me with accountability. But did it? Stay tuned...

A Week in the Life of a Mystery Shopper

September 12th - September 18th...

I am satisfied with my earnings from last week. The hours were long but not crazy like they have been before. I had one day where I worked 21 hours (6 AM until 3 AM the next morning) and the last six of those hours were sitting on the couch doing paperwork. The web site for one of the my merchandising companies kept crashing and that slowed me down considerably. All the other days were very reasonable.

Last week I earned $888 in fees and $240 in reimbursements. Much of this work was merchandising. I have a regular route of 20 stores that I merchandise a DVD display. It's decent work but the company has reduced its frequency to about every 7-8 weeks. Then, I picked up 7 extra stores that the regular merchandisers canceled. I also completed a special 20 store merchandising project - each store took less than 5 minutes but the pay was low. I merchandised two other stores and did a competitive price audit at a fast food restaurant. I shopped 31 gas stations, a car wash, 6 fast food restaurants, 3 casual dining establishments , a payday loan store, and three other retailers. In case you're counting, I visited 92 different establishments last week.

This week will be slower, but I'll do my best to cobble together enough work to stay busy. I've picked up a few merchandising assignments that other people canceled. Reliability in the world of shopping and merchandising is incredibly low.

Mystery Shopping Tip: How to Avoid Being Identified

Yesterday I told you about a husband and wife shopping team who got caught doing their shop. Whenever I talk with other shoppers one of their biggest fears is being identified while doing the shop. If you are identified, you don't get paid for your shop. Most of the time you won't even be able to shop that location again - although, for chains, most companies will let you shop the other locations still.

It's easy to become paranoid. You are completing a "scenario" which has been assigned you, and likely you are playing a role that isn't natural to you. This alone is reason enough to fear you will be exposed. Guess what? Even if employees are looking for the mystery shopper, there's nothing to worry about. You are just another customer and they probably deal with dozens of unique transactions every day.

Here are a few things I do to avoid getting "caught":

• My mobile phone is my best friend. It is my timing device and the place where I often capture notes. Sure, it might be rude to text a friend while the cashier at the burger joint is serving you, but trust me, a lot of people do it. When you are recording times or jotting down names and descriptions, employees will think you are being just another distracted customer.
• For low volume restaurants which require a drive-thru and inside transaction, I act completely normal. Maybe in the drive-thru I will wear a hat and glasses, maybe not. Most of the time I do not try to disguise myself. If the cashier recognizes me from eating inside first, I'll tell them my boss or my roommate wanted me to pick us something.
• Don't overact. Say as little as possible. For example, if the cashier in the above scenario recognizes that I also ordered inside, I will give them a polite but simple explanation and then shut up. Remember, it's none of their business. Have you ever caught someone telling you a lie? It's usually when they ramble about when a simple answer would suffice. Same with scenarios. If you are touring an apartment, be prepared to answer questions, but don't overdo it. Don't be too elaborate. It's okay to say "I'm not sure" when you are asked a question about your preferences.
• Finally, be confident. Act like a regular. This means ditching "um's" and "you know" and "like" and other annoying vocal distractions. A confident shopper looks like a regular customer to an employee.

I get a kick out of the stories I do hear about shoppers who are exposed. Some have even had the audacity to cause a scene when poor service is given. The LAST thing you want to do is cause a scene. Just continue with the shop, knowing your report will be used to address these problems.

Act normal - chances are good you won't be exposed.