Savings Samurai – Nickel Ninja


Brian and Bo give you the tips and tools you need to make your dollars stretch further than the rest. The guys share sites to help save you money shopping online, booking travel arrangements, negotiating utilities, and grabbing a cab.

Brian’s Triple Threat Shopping Action Plan:

Threat 1: Online shopping – Make sure that you navigate through Ebates (click to sign up if you haven’t already) or to make your online purchases. Most stores are registered with both sites and offer cash back rewards for making purchases through their service.

Threat 2: Have a rewards credit card – Brian and Bo both use the Fidelity card that gives you 2% cash back on everything. Once you build up $50.00 Fidelity will automatically deposit that cash into your savings or brokerage account. Capital One has a QuickSilver card that gives you 1.5% cash back on everything. It does not offer as much cash back, but if you prefer to stay away from Fidelity it may be the way to go.

Threat 3: Bargain shopping and travel - Retailmenot has a ton of coupons for almost every website out there. Priceline is the best site that we found for booking hotels. Outside of shopping blind, you can really get a great bargain on a nice room. However, you do have the option to select the quality of the hotel. The downside is that you do not get reward points when you use priceline, if you are trying to build Marriott, Hilton, etc. points. Another great resource is which is an aggregation site that pulls prices from across the web to help you find the lowest price possible. We run most purchases through PriceGrabber so that we know where to go look during our initial research.

Bo’s tightwad tip of the week is AirBnB, which is a source to find housing while traveling where locals list extra rooms or entire houses that they are willing to rent out. It is often cheaper than a hotel, but there’s a good chance that the individual or family will be in the home during your stay.

Uber and Lyft are on demand taxi services that are leveraging technology to their advantage. With Uber the entire transaction can be completed via their app which is very powerful. The app is easy to use and the prices are set, which means no tipping. You can also find ratings for your assigned driver with the touch of a button. UberPool is coming soon and is another tightwad tool that utilizes cost-splitting by picking up others that share the same route.

The guys also give a shout-out once again, because the resource is just that good. It is a sight that allows you to compare prices in your area for all of your utility’s needs. Keep in mind that most utilities are negotiable, especially phone and cable service, which offers you the chance to drive the price down further. Also, keep your insurance premiums in check by shopping them every 2-3 years. Insurance companies seem to give new customers deals they are unwilling to allow to current customers. Sometimes it makes sense to actually switch your coverage to take advantage of the lower premiums.

Banks – What is there to say? Most brick and mortar banks are slowly replacing tellers with ATM’s and online banks have had a huge upswing in business the past few years. Online banks like Ally and FNBO Direct offer interest bearing checking and savings account.

Dollar Cost Averaging…The Discussion Continues


This week Brian and Bo dig into the dollar cost averaging discussion, and illustrate the pros and cons that DCA presents. The Dollar Cost Averaging strategy is fairly simple, it boils down to having systematic entry points into the market.

Investopedia defines dollar cost averaging as a technique of buying a fixes dollar amount of a particular investment on regular schedule, regardless of the share price. More shares are purchased when prices are low, and fewer shares are purchased when prices are high.

While domestic equity markets are consistently reaching higher highs and setting higher lows people are asking what our strategy is moving forward. The answer is still the same: make a plan, keep it simple, and make it automatic. Dollar Cost Averaging helps address these concerns in up and down markets. Additionally, dollar cost averaging is a great technique to use to stick to your plan so that you stay in game during bad markets when dollars are most valuable. It works especially well in markets that are a little more volatile, but that is not to say go and throw all your money in micro-cap emerging market holdings. You must keep transaction costs, diversification, asset allocation, and asset location in mind when executing this strategy.

Conversely, there have been more than a few research papers written on this topic, about as many people seem to like DCA as the amount of people that do not. Vanguard jumped on the train in 2012 with their research report, Dollar-cost averaging just means taking risks later. Their research is based around the fact that, historically, markets increase 2/3 to 3/4 of the time and they go on to use this data to convey that lump sum investing should outperform DCA during the same amount of time. Vanguard’s research also illustrates that lump sum investing outperforms DCA on an average of 2.3% on average over every 10 year cycle they included in their study.

If 2.3% less in returns on a 10 year basis is the cost of taking a portion of your portfolio off the table for the 1/3 to 1/4 of the bad time, it does not seem like too big of a price to pay. We like to think of it as insurance against down markets, specifically when markets are in their current condition. A New York Times article by Paul Sullivan in 2011 used a few lines to portray the biggest benefits of DCA, that the person who put money in slowly was still better off than the person who tried to guess the direction of the market.

Broken Dreams: What’s Going on in Housing?


Have you been waiting to buy or sell a house? Are you tired of renting and have been waiting to purchase your dream home? Brian and Bo give you their thoughts on the housing market so you can make sense of the current housing environment.

The guys first look at few explanations for the suppressed housing market we have experienced the past few years by analyzing an article by Paula Pant, 5 Stats You Need To Know About The Housing Recovery.

  1. New Construction Starts Are Apartment-Centric
  2. Unemployment For Young People Is Still High
  3. Sales of Existing Homes Are Bumpy
  4. Delinquencies and Foreclosures Are Returning to Normal
  5. Homes Are Still Undervalued, But Improving

Brian and Bo also look into an article from Tim Manni simply titled, Why Aren’t More Young People Buying Homes? Here is what they found:

  • A large portion of the buying audience is still absent – young, first time buyers.
  •  Young American’s are still in favor of home ownership. However, there are far fewer young buyers in today’s market than there were post-war baby boomers.
  •  In today’s market, purchasing a home requires substantial savings, long-term job income, a decent down payment, and limited debt.
  •  The trend is also different today than in years past as young buyers are coming to the table with more money and looking for smaller homes on smaller lots. Additionally, in recent years, townhomes have become very acceptable alternatives to single family homes.
  •  The demographic in personal decision making has changed with younger people, who are now mainly looking for ownership after starting a family and having children. A trait contrary to the baby boomers, which would opt for a small starter home at a younger age.
  •  Most young people today may not see a first home come into the picture until they are between 33-35 years old.
  •  Homes have become less of a financial investment in recent years and more of a use asset.

Up to this point, the guys only discussed the symptoms of the market. They continue by giving their thoughts on future interest rate environments and forecast how interest rates may affect the housing market moving forward. They look into the article, Why interest rates may stay very low for a lot longer, written by Tom Petruno.

The article touches on the world debt crisis and how it contributes to lower domestic interest rates. The author even mentions PIMCO co-founder Bill Gross’ estimate of the Fed’s rate being no higher than 2% through the end of the decade! It seems that the Fed is still gunning for major economic growth and willing to maintain suppressed rates if they see any sign of an economic slowdown. Additionally, the overseas central banks comprised specifically of the EBC and Bank of Japan have shown no signs of increased rates.

So, what did this mean for the future of domestic housing prices and interest rates? With no foreign pressure to increase domestic rates on the Fed, we should see the current trend continue, and we could expect thirty year mortgage rates from 4% to 5% for years to come, if all else holds equal. This means the marketplace for new loans could remain very affordable going forward, which would drive even more buyers to the market.

Check back next week, that’s right, next week, for a follow up on this topic as well as further discussion on strategies for entering and exiting the marketplace and how to make home ownership as affordable as possible.