second place Archives — Paying for private school in the DMV area

Tag: second place

The Money Space Time Continuum

The Money Space Time Continuum

There is a mathematical model that joins space and time into a continuum. The physical manifestation of this truth is the rate of time observed depends on an objects velocity relative to the observer[1].

By NASA/Crew of Expedition 22 – Public Domain, Link

This theorem is also the basis for the original planet of the apes movies (must see!) where Charles Heston and his costars were flying really fast for a bit and when they return home, planet Earth had experience thousands of years where they experience only a few. And during that time difference the Apes took over. Not intuitive but that is how space-time works.

The Money Space Time Continuum is the similar and indicates that the lowest cost route is often also the fastest route to accomplish something. Cheapest should be slowest, and it often is, but not as often as one would expect.

Shoes In Space

Here is an example; I trod around the carpeted office space in dress shoes. I eventually found out that I was replacing low cost shoes every six months. So a switched to higher up front cost Allen Edmonds which are not only the greatest shoes in the world they also have a lower cost per use.

Being clever (or so I thought) I picked up a pair of factory seconds Road Warriors for a fraction of the cost of regular new shoes. Usually a factory second has some minor unbelievable small defect – like a small nick or tiny

caption

discoloration that only an expert can see.

Not in this case. These factory seconds squeaked. And I mean duck—honking-loud-all-day-long. I figured they just needed to break in. Weeks later I realized this problem was here to stay and it was starting to raise eye brows as work.

No problem – factory seconds don’t quite meet the high standard of the fine Allen Edmonds Shoe Company. They are low cost and usually still better than regular dress shoes but occasionally you will get a dud. Time to watch for a sale and drive to a shop to replace them. Their stores are really far from me so it was going to be an all-day affair that I was dreading.

Double Spend Problem Avoided

And then I remembered the Money Time Space Continuum. This theorem that I just made up (but others have observed and reported on) states that the lower cost solution is often faster. And the low cost option is to repair stuff. I rushed online to see if anyone else in the world ever had squeaky shoes and if so, did they invent a way to fix them? I am not the first and apparently the solution was to add baby, talcum or baking powder under the insert and where the leather touches. This does two things – absorb any moisture and lowers the coefficient of friction between contact points resulting in noise free movement. Being the proud owner of talcum powder I distributed it liberally in the all the hidden squeak zones. The next day I walked the halls of my office complex in Ninja like silence.

I save the trek to the store and the after tax hours of labor to pay for a new pair of shoes. Hours, stress and the environment impact saved by remembering the Money Time Space Continuum.

Before you have to take a bunch of time to spend a bunch of money – stop and consider alternatives. Often you will end up with time saving alternatives that keeps more cash in your pocket.

[1] “Space-time.” Wikipedia. October 05, 2017. Accessed October 09, 2017. https://simple.wikipedia.org/wiki/Space-time.

Knowing all of the work cycles can help you plan your finances

August 2, 2020 / G. Ruga / 0 Comments

“You must teach the people to labor with their hands and realize the dignity of work” – Mahatma Gandhi

There are distinct phases of ones work experience. These are surviving, trying, striving, diving, thriving. And being aware of which one you are currently in can help you better plan your finances to ensure you can still pay for tuition over time.

Surviving

When you first start working – or start a new job – you are working to survive. It’s a challenge to find the bathroom much less determine where to add value and understand the social norms of the new group. Mistakes are plentiful and humbling experiences occur daily, sometimes hourly.

Accept that this will happen and don’t worry too much about it.

Trying

Soon enough you will be part of a team and understand how things work. Here you can add real value. This is when you build some credibility. This is not the time for long vacations. Working extra hours and expecting to be less productive than folks who know the systems well is to be expected. Keep trying. You will get to the next phase.

Striving

Eventually, after what seems like a very long time (this can take a year or more) you will be striving. You will know enough to make significant contributions and know to do so without being told or asked. And your successes will actually outnumber your mistakes! Woot!

With striving comes more responsibility. It makes sense to give work to a busy person[1] who can get stuff done. You are now that person.

In the striving phase you are fairly secure but you must continue to work hard.

Diving

Inevitably, though, a simple task will be given to you which has hidden career danger. It seems routine but little do you know that it is difficult, high profile and has huge impact. And you will screw it up.

Here you will be diving. How you behave – not what you contribute- will determine what happens next. Do you point fingers or accept where you made mistakes? For items out of your control do you shared lessons learned with others in the organization? Or do you talk about people behind their backs and make excuses rather than find a way forward?

You may not be employed at this end of this phase and need a new job. And that is OK. Either way you should act with integrity, be rationale and search for ways to contribute. Curiously, taking time away from the work place makes sense. Your judicious use of leave and finances stored up in the past should now give you some flexibility to get away to get perspective. And it signals to your employers that you this is a bit much. When colleagues are dishing it out they sometimes forget all the stuff you are actually doing for the team. Moreover, your emotions may be so charged at this point that extra activity will actually be detrimental. Take some time.

Thriving

If you do well in diving – and build people up around you instead of tearing them down – the next phase can be thriving. Here you have the time in organizaiton, have proven yourself to be a team player and have learned some very difficult lessons that make you much more efficient.

A presumably lighter load is now easier to get done. You work harder and find satisfaction in doing the right things the right way.

Successes build up and compound. Distractions for activity without results will start to appear. Carefully control your fear of missing out and focus on contribution[2] instead. Pulling some of your financial reserves to repair something major you have been ignoring is good to do during this phase. And active community involvement is great here as it helps prevent burn out and boredom – and reminds you of where other folks are in this cycle.

Keep these phases in mind and don’t inflate your life style in good times

Be careful though – these phases bounce around. You could be back diving or surviving without warning – a mistake, a transfer, a new job or simply a change in the economics of your particular field can put you in a different phase over night.

It follows that it makes sense to keep emergency savings, stay in touch with former companies and coworkers and always work hard to provide value. If you are aware of these phases you won’t assume thriving (and the income bumps that sometimes goes with it) will always be the case. This in turn should help prevent you from home and car upgrades to align your lifestyle with your rising – and perhaps temporary – income. Instead, stay the course and realize there will be dips and valleys. Be satisfied to build up reserves and peace of mind. Your goal is to pay tuition, not travel the world. Be satisfied with doing that and then make hay while the sun is shining.

[1] Imagaes, Paul Harizan/Getty. “Why It’s Smart to Ask a Busy Person for Help.” Science of Us. Accessed September 02, 2017. http://nymag.com/scienceofus/2015/03/why-its-smart-to-ask-a-busy-person-for-help.html.

[2] Mickos, Marten. “Focus on contribution.” School of Herring. November 16, 2015. Accessed September 02, 2017. http://schoolofherring.com/2015/11/16/focus-on-contribution/

Half priced cars ! On sale now! And every day!

May 1, 2017 / G. Ruga / 0 Comments

An introduction to mispricing

Use the economic concept of mispricing. to reduce your costs and free up more money for tuition.

Mispricing occurs where sellers out number interested buyers for a particular item and where the item is able to be repriced lower based on that demand imbalance.

The example usually comes up in relation to financial assets such as stocks, bonds, real estate and so on but applies to consumables as well.

An Example: Mispricing in the stock market

Charlie Munger executed this perfectly in the 2009 financial panic as described in an article in Bloomberg News.

“By diving into stocks amid the market panic of 2009, Munger reaped millions in paper profits for Daily Journal. The investment gains, applauded by Buffett at Berkshire Hathaway’s annual meeting in May, have helped triple Daily Journal’s own share price. While Munger’s specific picks remain a mystery, a bet on Wells Fargo probably fueled the gains, according to shareholders who have heard Munger, 89, discuss the investments at the company’s annual meetings. “Here’s a guy who’s in his mid-80s at the time, sitting around with cash at the Daily Journal for a decade, and all of a sudden hits the bottom perfect,” says Steve Check, an investment manager based in Costa Mesa, Calif., who has attended the publisher’s meetings since 2004.

The stock market profits were first disclosed in a May 2009 Daily Journal regulatory filing under the heading, “Liquidity and Capital Resources.” The section outlined how the publisher was sitting on about $9 million in gains after spending $15.5 million buying common shares over six months through March 31 of that year. The results kept getting better. By the end of September 2009, they had appreciated to almost $48 million.

“[1]

The five steps to benefit from mispricing

To execute a mispricing purchase you first must recognize one and then be able to act on it. This requires a number of elements to be in play at the same time:

Patience
Cash
Analysis
Flexibility
Willingness to purchase an unpopular item in scale

We use the mispricing approach for our own benefit on vehicle purchases.

Early on we were striving to get the “best” instead of “good enough”.

Flexibility

So we went with a popular vehicle at the time, a Toyota 4runner. These were popular and expensive and we used the only mispricing technique we knew about at the time which was flexibility. We purchased a new 4Runner from the left over trucks from the previous model year. The $45,000 vehicle only cost us $40,000. We didn’t get the color or exact features we wanted but we saved $5000. Woot! And that popularity was not unfounded. We had the car 14 years and it is still on the road today.

Product is Currently Unpopular

For the next vehicle we got a little better at finding mispricing. The SUV boom was well under way and hatchbacks were unpopular and considered no longer cool. When we actually looked at the features they delivered enough mass and safety features to be safe, better gas mileage and all the functions of a full size SUV (that we needed). They were simply unpopular compared to the monster truck models of the day.

We combined the unpopular feature with the late model technique and got a Subaru Forester for $20,000. This was half the cost of the previous car purchase. Woot! $20,000 saved! These cars have since become popular again as more and more folks figured out the many benefits of these mid sized sport utility vehicles so mispricing affect is largely gone (on this model). We were in style again, at least for a while.

Cash, Analysis and Patience

For our most recent purchase we added analysis and patience to the mix and to further benefit from mispricing. Many cars are rated by reliability. And they if aren’t rated top tier for reliability they really suffer in the used car market. People don’t want to own something that wasn’t best for reliability when purchasing something used. But when you do the analysis a middle tier rated car is actually more reliable than cars of the past.

We saved $30,000

We combined flexibility, our reliability analysis and the unpopular status of middle tier to watch, wait for and eventually obtain a used Volvo wagon for $12,000 dollars with very low miles. Woot! $30,000 saved! The battle wagon doesn’t have a lot of advertisments

In summary

The market (us buyers and sellers) occasionally misprices goods and servies and assigns artificially high prices to the best and artificially low prices to the runner ups. You can discover and use this mispricing if you conduct the analysis, are flexible, patient and willing to select something currently unpopular (not easy as it sounds) that meets your particular needs. Just do your homework to make sure it is actually mispriced and not low cost for a reason you care about.

What about you? Have you benefited from temporary mispricing conditions?

[1] https://www.bloomberg.com/news/articles/2013-07-25/berkshire-hathaways-charlie-munger-shows-a-golden-touch

Be ok with second place

January 12, 2017 / G. Ruga / 1 Comment

There seems to be a built in mechanism in most of us to want the best of everything. What is the best car at the best price? Where is the best place to live? Reports are written and millions in advertising spent to help you get the best. And given that you earn enough income to consider private school you are probably (over) trained to analyze, sort, prioritize and select the optimal solution as part of your work life.

Stop trying to optimize at home. To pay for private school, for many of us, this is the route we take. Sure, measure, but often second, third or fourth place is just fine. Indeed, you don’t even need the best private school – just a school that fits for your child. And that may be your local charter or public school.

Add the phrase “good enough” to your lexicon and your life will get a lot simpler and you can focus your resources on the things that matter most to your family.

Lt. j.g. Aaron Lanzel takes second place at the Armed Forces Cross Country Championship with a time of 39:32. Source: Wiki Commons

Paying for private school in the DMV area

Tips and tricks for sending your child to private school for Washingtonians