That’s right; it has taken us over six months to install the floors in our house (and it’s still not done).

It also saved us about $3,000.

According to a calculator I found at Home Wyse it would have cost me about $3,000 to have someone install 1,400 square feet of bamboo flooring. I never got a quote from an installer so I don’t know if that’s correct, but I assume it’s about right.

Now that I’m basically done, I’m ready to walk through the positives and negatives and see if we made a good decision.

The Positives of Installing Our Own Floors

The biggest positive is obviously the money. We are saving for a wedding and I literally don’t have $3,000 to pay someone else to do it. No matter how bad I may have wanted to pay someone, I simply couldn’t.

I also feel like I have over a 100% ROI on my floors when I try to sell the home thanks to all the savings I got from getting a great price and installing everything ourselves. Check it out.

• I found a GREAT deal on the floors and only paid about $1.83 per square foot, including taxes and delivery. The cheapest click-lock bamboo flooring at Lumber Liquidators is $3.79 per square foot not including taxes. If I go to sell my house I will say “new bamboo floors”. I won’t say “new bamboo floors that cost $1.83/sqft.” The future buyer is free to assume I paid $3-5 a square foot.
• Obviously I saved about $3,000 on installation, while I only paid about $3,500 for everything (including underlayment, transition pieces, etc.). That means I only paid 54% of what someone else would have paid with professional installation. I couldn’t find numbers specific to flooring, but these days you can expect to get 60% back from what you put in your house according to the Remodeling Cost vs. Value report. I’m guessing it will be more, but even at 60% I’m getting a 6% ROI.
• I feel more like a man because I know how to install floors. Seriously. It’s a pretty cool feeling.
• If I need repairs in the future I can do them myself. I didn’t just save money on the install; I saved money on any work that ever needs to be done on these floors.

The Negatives of Installing Our Own Hardwood Floors

Overall I’m really happy with how it turned out, but there obviously would have been a few positives to paying the $3k in installation costs. Here are the two biggest issues with being DIYers.

• It’s taking FOREVER! If I had paid someone to do it they would have had it done in a few days. We would have been enjoying new floors for six months. Instead, we still have half a master bedroom waiting on one more free weekend to get it done. There is a price to pay for convenience and sometimes it’s worth it. It wasn’t for me in this case, but it sure would have been nice.
• All the time spent working on floors could have been time spent making money elsewhere. I saved $3,000 but I might have made $5,000 if I spent all that time working on a side hustle idea. In reality I probably would have used that time to watch TV or surf the web, and even if I did try to make extra money there’s no guarantee I would have been successful. At the very least I could have written a few more posts for you guys. Sorry.

I’ll Only Do It Again Under One Condition

Overall I’m very happy to have done this myself because it saved us money and I learned something. However, it’s tedious work and I have very little desire to EVER do it again.

If I move into a new house and I need to put down floors then I will have one essential requirement for me to consider doing it myself: the boards had better be wide. Like REALLY wide.

The boards we used are 3.5 inches wide, which is about the average width you’ve probably seen in other houses. It takes 35 rows of boards to fill a room 10 feet wide with our bamboo flooring.

Imagine if we had bought 5 inch wide planks. That same 10 foot wide room only needs 24 rows of flooring. It would have reduced installation time considerably, and faster is better.

Readers: What’s the biggest home improvement project you’ve ever done?

I realize this is not a popular opinion. Talk to any financial advisor or even your parents or grand parents, and they will tell you that I’m an idiot and the stock market is not only perfectly safe, but it’s the key to being wealthy.

Of if you don’t want to talk to them, you can talk to Robert.

Robert is a reader of my blog and he laid out his argument for investing in the stock market in the comments. It’s the same argument you’d hear from almost anyone who holds a traditional view of the stock market.

At the end of Robert’s comment, he said “I welcome debate…” and I’d like to take him up on that offer. And just for fun, I’m going to use logical fallacies to demonstrate where his argument doesn’t hold water.

So get out your LSAT prep books and come with me on a journey of logically debunking a stock market traditionalist. All definitions of informal fallacies below come from Wikipedia.

An Argument from Ignorance (We Don’t Know the Future)

If you invest in a diversified portifolio for > 10 years (which is the target audience for this blog) then stock equities are your best way to build wealth as a young person. I agree stock picking is gambling. Market timing is gambling. Investing in the overall health of an entire index (US, international) is NOT gambling. You diversify your risk over a huge number of companies. You WILL see ups and downs, but overall you will see growth over the long term, particularly if dividends are reinvested.

This is a good example of an argument from ignorance. And no, I’m not saying that Robert is ignorant or stupid. An argument from ignorance is assuming that a claim is true because it has not been proven false or cannot be proven false. He says a diversified stock portfolio is best and I can’t prove him wrong because I don’t know the future.

I could say I think investing in Gold is the best way to build wealth as a young person. He would tell me I’m wrong. I could show that GLD is up 216% in the last 10 years and the S&P 500 is only up 75%. He could tell me that was a fluke and won’t happen over the next 10 years.

Gold is in red. S&P 500 is in blue.

I could say that I have a friend who needs investors for a start up that I think will make millions, and he could tell me that’s too risky. I could say I think the dollar is going to crash and I need to be in foreign currencies, and he could tell me I’m a wacko bird.

We are all ignorant of the future, so anyone can make a claim about the “best” way to build wealth in the future. It can never be proven wrong today; only when the future comes.

Imagine if we were having this discussion 10 years ago? People who listened to me about gold would be much better off than people who listened to Robert about the stock market. Clearly his “best way to build wealth” wasn’t truly the best way over the last 10 years, and I don’t think it will be in the next 10 years either.

A False Analogy (Paper is Not the Same as Rock)

You do also realize that your “safe” securities of gold and real estate are susceptible to the same market forces and speculation as stocks. They might be “real” things, but so are microsoft and apple and the share of ownership that I own in those companies.

Here is a good example of a false analogy, which is defined as an argument by analogy where the analogy is poorly suited.

Robert claims that because gold and real estate are similar to stocks in some respects, that they are just as “real” as stocks. While I will concede that gold and real estate are susceptible to market forces and speculation, I cannot agree that they are similarly tangible.

A share of stock is essentially a number in your brokerage account. Some people even take possession of stock certificates, but that little piece of paper is as tangible as it gets.

Shareholders have no claim on a company’s physical assets (that’s for bond holders). They have no claim on the company’s intellectual property. They have no claim on the minds of the people who work for the company. They just have a claim to a tiny fraction of a percent of “ownership” in the company, and whatever dividends the company decides to pay out.

A stock certificate is not inherently valuable. If the company goes under, the stock certificate is worth whatever someone is willing to pay for a fancy paper airplane.

On the other hand, a house and land are valuable because they offer someone a place to live. It doesn’t matter what happens to the stock market, the economy, or anything else. A house is valuable because it provides shelter. Land is valuable because it gives you a place to put a house.

Gold, I admit, may not have much practical value. You can’t eat it if you’re hungry and you can’t use it to keep you dry in a thunderstorm or warm in the winter. However, for at least 2,500 years it has been valuable and I haven’t seen anything to change that.

For thousands of years people have been able to use gold and silver to barter for or purchase things with practical value. I could be wrong, but I don’t expect that to change any time soon.

In gold and real estate, you own something tangible that is more valuable than a piece of paper. In stocks, you do not.

A False Dilemma (More than One Way to Skin a Cat)

The author should wholeheartedly acknowledge that this is not sound investment advice. The “thousandaires” this blog advertises to will stay “thousandaires” by following this strategy into their 40s 50s and beyond.

This is a great example of a false dilemma, also known as a false dichotomy. A false dilemma is when two alternative statements are held to be the only possible options, when in reality there are more.

Robert’s view is that thousandaires have two options. They can either invest in the stock market and become millionaires when they get older, or they can avoid the stock market and stay thousandaires.

In reality, there are many more options. You could invest in the stock market and go broke. You could also invest in the stock market and become a billionaire. You could invest 100% in gold and be a millionaire, a billionaire, or penniless. You could invest in Lending Club and get rich, or you could become poor. You could take a few thousand to the casino and leave with $1 million, or more likely you could leave with nothing.

Anyone who tries to scare you into thinking there is only one way to be financially successful is not someone I recommend taking advice from. This world is too complex to be seen in black and white.

Retrospective Determinism (Hindsight is 20/20)

I welcome debate, but “I’m scared of the stock market” is emotional garbage. Data is key. The historical data says investing in a risk designed diversified portfolio over the long term outperforms other investments.

I could take this argument down relatively easily by just comparing the stock market to the price of gold. If you put $10,000 in gold in 1970, you’d have $409,217 today. If you had put $10,000 in the Dow Jones in 1790, you’d have $215,785.

But let’s pretend the stock market had been the best way to generate wealth over the last 43 years, as Robert suggests. That still wouldn’t mean the stock market is the only way to invest.

Retrospective determinism is the argument that because some event has occurred, its occurrence must have been inevitable beforehand. Robert is arguing that because the historical data shows that the stock market has gone up over a long period of time, that it MUST have gone up. Thus, it MUST go up again in the future.

The stock market is not required to go up. In fact, while we are seeing “all time highs” almost every day, these record highs don’t account for inflation. We are well below historical highs when you account for inflation.

The Stock Market Isn’t the Only Way to Build Wealth

After logically refuting all of Robert’s points, I’m ready to defend my position, which is the following:

I’m going to try to get rich by purchasing precious metals, real estate, and investing in my own small business ideas. In the meantime I’m going to work hard at my day job and do everything I can to increase my income.

I strongly believe that I can and will become very wealthy with this method. I also understand that other people may get better returns in the stock market than I can get with my method. I don’t think that will happen, but it is certainly possible.

People can get rich any number of ways, and at Thousandaire I like to write about some more non traditional ways to approaching wealth generation. If you don’t like it then feel free to stop reading, but do not tell me I’m wrong or I’ll lawyer you like I did Robert.

I don’t do any of that now. My fiancee and I both cashed out our Roth IRAs for the purchase of our first house. I sold every single stock I owned outside of my 401k for the down payment. Now when you exclude my 401k, I have exactly $0 invested in the stock market.

Your typical financial planner would probably say I’m crazy to have so much of my wealth tied up in my home, Lending Club, precious metals, and a lot of other things that aren’t equities.

I don’t care.

I don’t trust the stock market.

I have a substantial amount of money in my 401k, and that’s all in the stock market. That’s more than enough exposure to equities for me.

But why? People have been making money in the stock market for years. The answer (among many other reasons) can easily be found in my stock market experiment from last year.

Market Experts Don’t Seem to Know Very Much

Have you ever heard a financial advisor or an investor suggest that they can pick stocks better than anyone else? They usually offer very convincing evidence that shows they know how to make money best.

But if they are really that smart, why don’t they stop trying to invest your money, and just invest their own. If they are so confident in the stock market and their stock picks, they could just take out a loan, buy these great stocks, make boatloads of money, pay off the loan and be rich.

But it turns out these people probably don’t know any better than you or me.

Part of my stock market experiment was using the recommendations from “10 money managers, market experts and financial journalists” in this Forbes article. Surely these experts should be able to outperform amateur personal finance bloggers. They should DEFINITELY be able to beat a random selection of stocks.

Too bad they haven’t.

After 18 months, the “experts” portfolio has only returned 20.56%. Compare that to my random picks that have returned 29.16%, the personal finance Money Pros who have 41.15%, and my friend The Hoff who is getting 34.91%.

That tells me that the stock market is nothing more than a gamble. If amateurs and random picks can beat people who spend their lives researching and studying companies to invest in, how much “skill” can there really be?

photo credit: bransorem

My Stock Investment Theory = Wealth Preservation

As I mentioned before, I have a large amount of money in the stock market through my 401k. Unfortunately stocks and bonds are my only options, so I have to put them somewhere.

My goal in my 401k is not to beat the market. My goal is invest in the safest things I can find.

That means investing in non-American companies (because I don’t trust the dollar). It means investing in raw materials as much as possible (because those companies hold real assets that are valuable no matter what the economy is doing).

I will never get rich from the stock market. Lots of people certainly will. Good for them.

I plan to get rich from working hard, getting promotions, and eventually having my own business somewhere down the line. The stock market won’t be a big part of the equation.

Readers: When you want to invest money, where do you put it?

My dad has been sick for over a year, but in the last few months he has gotten really bad. He has a tumor in his throat that is so big he can’t even swallow a sip of water.

I flew to see him on Tuesday and my sister is coming in town in just a few hours. After he sees my sister, we are taking him off everything but the pain medication.

He’s in so much pain it’s just better for him to go.

I’m almost 28 years old and this is the first time someone close to me has died. I don’t really know how to handle it (I don’t think anyone does), but I’m doing my best to be strong, particularly for my step-mom and my sister.

My step-mom and my father were married for something like 20 or 25 years. She is an angel and has treated him as well as anyone could possibly treat him. She is an incredible woman and I need to be strong for her.

My sister has a very strong attachment to my father and it is going to hit her really hard when he does pass. It’s going to be terribly difficult for her to even see him this afternoon. More than anything, I’m here for her.

As far as my dad, the man in the hospital is not my dad. I do love him and I’m here for him, but I have to remind myself every day that I need to remember my dad as he was when he is healthy. The dad I want to remember is the one that was fully of energy. The guy who played golf every day and loved to bet on sports. The guy who always told me that if I ever needed anything I could just call him.

If there is a silver lining in this whole situation, it is that I have been able to see my dad and spend time with my family before he dies.

This isn’t a “financial” post, but I do want to point out a few things that made this possible. I don’t actually have an emergency fund that I could draw on to buy a plane ticket to go be with my dad.

What I did have was a lot of airline miles. Instead of spending $400-500 on a plane ticket, I was able to get one for basically free because I have frequent flyer miles. Miles aren’t just for vacations and fun. My credit card miles helped me see my dad before he dies.

My sister didn’t have the money for a ticket so my step-mom bought her one. Then my dad got worse and she had to change her ticket. They were trying to charge her $400 to change it, but she told the airlines that my father is a veteran from the Vietnam war. American Airlines did a great thing and changed her ticket for free because of my dad’s service. It’s great to see companies honoring our veterans like that.

Finally, I’m able to take time off work because my company has a bereavement leave policy. When an immediate family member dies, my company gives me 5 days off to attend the funeral and grieve.

Money shouldn’t be an issue at a time like this. This is what emergency funds are for. If you don’t have one then I suggest you get one ASAP.

If you don’t have an emergency fund (like me), miles and credit card rewards points can be a life saver. I knew my dad wasn’t healthy so I was kind of saving my points for this trip. If you have a good rewards program and can avoid blackout dates, you can travel in an emergency without spending anything out of pocket.

This was really just me dumping ideas out onto my blog because it’s making me feel better, but my takeaway is this: Prepare for a family emergency before it happens.

I was saving up those miles knowing I would need them. My sister didn’t have the luxury to save miles and/or money, and she needed help. Imagine the stress she went through thinking she might not be able to afford to see her dad before he dies.

Thank you for your thoughts and prayers, and please send them to my sister, my step-mom, and of course my dad.

The White House issued a statement regarding this new proposal:

Under current rules, some wealthy individuals are able to accumulate many millions of dollars in these accounts, substantially more than is needed to fund reasonable levels of retirement saving.

How dare anyone try to save more than a “reasonable” amount of money for retirement!? The nerve of some people!

The proposal hasn’t been released yet so the details aren’t clear. What is clear is that the government is desperate for additional ways to tax the American people, and they have finally started turning towards retirement accounts.

Be Afraid of a “reasonable level of retirement saving”

A few months ago I posed a question: Is your 401k safe from the government?

I explained that part of the reason I took a loan from my 401k to buy a house is because I don’t trust the government to keep their hands off my retirement accounts.

While some people agreed with me, others suggested it was unlikely at best. Still others worried about my own mental health. A few of the responses included:

“I don’t see something like this ever happening in our lifetime unless the country was taken over or there was some global crisis like nuclear war or something like that.”

“After… telling us that the sky is falling and our retirement accounts will ultimately belong to someone else, I like a previous reader will bow out and refrain from visiting this blog.”

“I think you’re getting a little close to the edge, Kevin. Please don’t fall off!”

In November I was crazy for thinking the US government would go after private retirement accounts. Less than six months later we are already seeing proposals surface.

It worries me (and it should worry you too) that the government feels it has a right to determine “reasonable levels of retirement saving.”

photo credit: Alex

Today it’s a $3 million cap on IRAs. But if that passes, why not $2 million? It still sounds like anyone with $2 million in an IRA is super rich. Then why not $1 million? Or $500,000?

And why stop with IRAs? People shouldn’t have $3 million in a 401k either. That’s not “reasonable”. Let’s cut that to $1 million or $500,000 too.

Why should some people get to retire with millions in the bank while others have to work part time jobs until the day they die? That’s just not REASONABLE!

If the knuckleheads in Washington think they know a reasonable budget for an individual or family, maybe they should look at how messed up their own budget is and realize they should back off!

Make Your Voice Heard

If you think it is reasonable for someone to reap the benefits of working their ass off and saving money, then you’re going to have to make your voice heard.

People who spend every dime they make as soon as it hits their pocket don’t deserve the same retirement as someone who chooses to save as much as possible. That’s not reasonable at all.

If this (or any other legislation to limit retirement savings) ever makes it to the floor of Congress, make sure to contact your Senator or your Representative and let them know that responsible financial planning deserves to be rewarded.

If you’d like to read more about how the proposed law might impact your personal finances, check out this great article at Seeking Alpha.

Readers: Does this proposal and/or White House statement change your attitude towards retirement accounts?

What if I told you that a corporate recruiter from a $10 billion dollar publicly traded company contacted me about a job simply because I had expressed interest in learning a particular skill? Check out this email:

Last year I was looking for a promotion at work and I wanted to get into the mobile development space because I knew it was booming. Unfortunately I didn’t have any experience there. I joined Meetup groups in my area to try to learn more about it, but then found a new job in a different department and stopped my quest for mobile development knowledge.

However, my Meetup account is still active and this was in my profile:

I am very new to android development. I just downloaded the SDK a few days ago and walked through a tutorial to put an app on my ASUS Transformer Prime. I want to learn more about android development…

If you aren’t a technical person, those three sentences mean I know next to nothing about android programming. If there were an android development class at a college, I’d be on the first or second day of class.

And yet, a recruiter from a $10 billion company saw that bio and contacted me about a job. How crazy is that!?

The Opportunity in Mobile Development is Ridiculous

There are people with bachelor’s or master’s degrees and years of relevant work experience in different fields, and they might struggle to even get a recruiter to call them back after submitting their resume.

In the mobile development area, simply stating that you have done a web tutorial on the topic and want to learn more gets a recruiter contacting you!

So now that it’s clear being a mobile developer is basically a guarantee of a job, how do you actually learn to be a mobile developer?

Learning to be a Mobile Developer is Fast and Cheap!

The nice thing about mobile development is that it’s very new. Very few colleges even offer courses in mobile development, much less a whole degree program for it. Yes a computer science degree will help, but isn’t necessary to be a mobile developer.

photo credit: ashkyd

If you want to be a mobile developer, many high paying jobs will probably just require you to know how to program on mobile platforms. Some may want a college degree as well, but I find it hard to believe many companies would pass on a skilled mobile developer because they don’t have a college degree.

So you probably don’t need a degree, but you will definitely need skills. Where can you learn such a specialized skill? On the internet of course. Here are a few websites where you can learn on your own.

Team Treehouse – I saw an ad for this website on a youtube video and decided to give it a try. Holy crap, this thing was the best tutorial I’ve seen for a beginning mobile developer! I do know some programming, but I’m pretty sure anyone could make it through these courses no matter what their background. You can try it out free, and if you like what you see it will cost $25 a month to get access to everything. They also have a 30 day money back guarantee.

Udemy – I used Udemy to learn some javascript and php, and I really like the courses from Mark Lassoff. They were good for a beginner like me, and I was able to follow along and see exactly what he was doing. These are great because once you buy the class, you have it forever (instead of a monthly subscription). You can learn Android and iOS here, as well as just about anything else you might want.

Mark Lassoff has an Android course for beginners for $99. There are also cheaper options such as Android App Development by Example for only $29, but I’ve never used that instructor so I don’t know if it’s good or not.

I’m sure there are plenty of other websites where you can learn to program. Just make sure you learn as much as possible and start coming up with ideas for apps. One or two internet courses isn’t going to make you an expert. But if you spend 3-6 months really studying hard and building apps then I think you have a shot at a job.

You may not have a computer science degree, but if you go into an interview and tell your interviewer to whip out their smartphone and download your app, that just might get you the job.

Maintain a Portfolio

If you want to become a mobile developer, you should maintain a profile of everything you have created. Get your apps out in the marketplace when they are nice and polished. It doesn’t matter if you make money from them; it just matters that they work, they look nice, and people can find them.

Try to build a few apps that do completely different things. If you build one maze game, another puzzle game, and a third word search game, that’s not going to impress corporate recruiters much unless they want a game developer. Build a game, a shopping list, and a news reader app. You will learn much more, and it will show potential employers that you have a diverse skillset.

A High Paying Job is There for the Taking

How many times in your life are you going to come across an opportunity to get a high paying job without even needing a college degree? Probably not many.

Five years from now the market will be flooded with college grads that have “Mobile App Development” degrees. Eventually it will become like many other jobs where there are tons of qualified applicants and you will need education, experience, and serious skills to get a great job.

This is an opportunity of a lifetime for anyone who is sick of making $35,000 a year. You could easily double that as a good mobile developer.

Readers: What’s stopping you from learning a new skill (not necessarily mobile development) and earning more money?

I was told that I would hear from them in 7-10 days if they were going to charge me for any damage. It has now been over three weeks since I handed over the keys and I haven’t heard a word from Toyota.

I logged onto my Toyota Financial Services account and it says, “This account has been closed…”

Looks like the end of the lease wasn’t so bad after all!

How to Ensure You Aren’t Charged

When you turn in a lease, you have to look at the car as if it isn’t yours. Understand you were “borrowing” it from the dealer and they want it back in the same condition as you received it. I have two suggestions based on what I did.

1. Make sure to have your car inspected before turning it in. Either by an independent agency or just go to the dealer and have them take a look. This will tell you what you need to fix before returning the car.

2. Don’t try to trick them. They gave me two keys when I bought the car. I lost one. I could have just given back one key and hoped they didn’t notice or care, but I would have risked getting charged for a new one (and dealerships charge way more than independent shops).

I had a shop give me a new key for half of what the dealer would charge, and turned it in with both.

I also got some scratch repair stuff from Auto Zone and rubbed out some of the more noticeable scratches. This only cost about $15 bucks and may have saved me hundreds in body work.

I spent over $250 preparing that car to be turned in. They could have charged me a few thousand for a new key and some body work. I’d much rather pay $250 and not give them the chance.

I’m In the Clear No Matter What

At this point I don’t even care if they were to contact me and ask for money. I wouldn’t pay if they did.

fist pump by theogeo

The car hasn’t been in my possession in over three weeks now. If there’s a dent or a scratch that I caused they should have contacted me earlier. If they do ask me for money, it’s probably because some damage was caused after I turned it in and they are trying to screw me again like they tried to do before.

If they’ve been holding the car for three weeks, they are responsible for anything that happens to it. That’s the bottom line.

I certainly hope they don’t call me, but if they do, I’m not gonna pay for anything.

This Doesn’t Change My Opinion on Leased Cars

Despite the fact that I won’t be paying up for damages, this has not changed my opinion on leased cars. I won’t do it again.

The next car we buy will be a used car, and will hopefully already have some cosmetic damage so that we can get it at a discount. I will never lease a car again and stress myself out about if I’ve kept it pretty enough for them at the return date.

The good news is I don’t have to worry about paying money to Toyota, and the company has partially restored my faith in them as an honest business (although I will NEVER go back to the dealer who tried to screw me).

Readers: Have you ever expected the worst and been pleasantly surprised with a company?

My company gives a 100% 401k match for up to 6% of your contributions, and then gives an extra 2%. The only thing is I don’t get the match every paycheck. The company contribution builds up over an entire year and is deposited in my account in one lump sum at the end of March.

That day was yesterday for me, which means my net worth got a huge boost!

401k Employer Contributions are Tax Free

When you contribute to your 401k, that money goes in tax free (unless it’s a Roth 401k). You will not pay taxes on that money until you take it out for retirement or the government changes the laws.

photo credit: Tax Credits

It’s the same when your employer contributes money for you. If they want to put $5,000 in your 401k, you get all 5,000 bucks! Get out of my pocket Uncle Sam!

If I were to ever look for a new job, one of my biggest concerns would be the 401k program. I get essentially an 8% match, which as far as I’m concerned is just an 8% raise over and above my annual salary. That’s crazy good and not many companies can match it.

Employer Matching is the Only Reason I Use My 401k

While I do love the 401k matching my company offers, I don’t really love the 401k for lots of reasons.

• My investment options are limited (not enough Australian and Asian options)
• I’m afraid the government might raid 401ks when they really need more money
• I hate having money tied up for so long
• I plan to retire on income, not savings

It would probably take me until I was well into my late 50′s or 60′s to retire on savings alone. I don’t wanna wait that long.

I’ve said it many times before, but I’ll say it again. If I can create enough passive income to pay for my life, then I’m going to do it and quit my job. As long as that passive income is steady then I can use that to live and don’t have to work.

With all that being said, I still can’t pass up a 401k where I’m getting such a great match. Heck, I could withdraw all my money out of my 401k and still come out ahead after taxes and penalties thanks to my employer’s contributions.

Readers: Do you have a 401k? Does your company match? If so, do you get a match every paycheck, or once a year like me?

If you’ve ever been to one of those parties, I hope you didn’t show up empty handed. It’s always nice to bring a small gift, and a bottle of wine is usually appropriate (assuming they like wine and aren’t recovering alcoholics. Definitely don’t bring booze to a recovering alcoholic).

Tag and I have a recurring weekly invite to my Aunt and Uncle’s house for dinner every Sunday. When we go, we always bring a bottle of wine as a thank you for the invite.

So if you’re like me and you bring wine as gifts, or if you’re like most people and you drink wine, I’m going to tell you why wine is a better investment than the stock market.

Buying Wine in Bulk Saves at least 10%

At almost all the grocery stores in Dallas, you can buy wine at the regular price or if you buy at least 6 bottles then you’ll save 10% on your wine purchase.

For years I would buy a bottle of wine on the way to Sunday dinner and pay full price. It finally hit me that if I put up an initial investment of six bottles then I will make less trips to the grocery store and I’ll save 10%. Then you consider my 2% cash back credit card, and I’m getting a 12% return from buying wine.

Oh, and don’t forget about inflation. If the price of wine goes up a month from now, I’ve already bought at the lower price, which means I could save even more money.

There’s also the added benefit of having a bunch of wine in your pantry. I think wine gets better as it ages (although maybe $10 bottles of wine don’t count). It’s also nice to know that if some terrible earthquake or terrorist attack hits, I can ride out the storm with some comforting drinks.

A Normal Stock Return is 7% a Year

If you talk to any financial advisor and ask what return you should expect to get in the stock market, and they will tell you around 7%. If they are a bit more aggressive they might say up to 10% but I doubt you’ll ever see anything higher than that.

And remember that 7% is what they hope for. It could be 10-15%, but it could also be negative 20%. A 7% return is seen as a “good” year.

I just showed you that I get a 12% return on investment from buying wine. That blows even aggressive stock market investing out of the water.

Are you rethinking your investment plans yet?

Never Invest Small Amounts of Money in Stocks

It’s obvious that  a small guaranteed return on investment is much better than a small potential return on investment. If you only have a few hundred dollars to invest, you are much better off buying something you know you’ll need when it’s on sale.

Some people will say, “That’s not investing! That’s spending!” Those people would be wrong. Buying a brand new car and getting a “good deal” is spending money. Buying the necessities of life that you’ll buy anyway, but doing it at a lower price due to a large purchase, is investing a sum of money now to reap returns in the future.

In fact, I strongly recommend buying a lot any food item you eat regularly if it’s on sale. If you buy a box of Rice Krispies every week at $3.50 a box, and today they are selling for $2.50 a box, go ahead and buy 10. That’s a 28.5% guaranteed return. Heck, you might want to buy as much as you can store (and will eat before the expiration date).

I’m not saying you should avoid the stock market entirely. I’m just pointing out the indisputable truth that buying food in bulk or on sale is a guaranteed return on investment, and it gives you a little more food in your pantry in case of an emergency.

Readers: Do you save money by buying lots of food or beverages when you can get a bulk discount?

While I’m just hoping the AC units survive so I don’t have to replace them, I had a unique opportunity to do something about the windows.

I had a company knock on my door and offer discounted windows in exchange for my home being a “marketing home”. That means they are going to market their product in my neighborhood and tell people to go look at my house for an example.

I got a competitor’s quote and this program is legit; I’m definitely getting a great deal! I’d tell the price and specifics, except part of my participation in the “marketing home” deal is that I don’t disclose the price.

So how am I paying for brand new energy efficient windows when I’m trying to save up for a wedding?

I’m Using a Balance Transfer on a Credit Card

One of my credit cards that I don’t use (and haven’t used for years) offered me a balance transfer at a 0% interest rate until January 1, 2014. There is a 3% balance transfer fee and they send me a check directly.

Let’s pretend I’m spending $5,000 on new windows and will take a balance transfer for that amount. The 3% fee means I’ll owe $5,150 when I pay back the loan, and then I’ll pay 6.99% APR on any balance left over after January 1st of 2014.

I hope to have it paid off before I pay any interest, but 6.99% is a low enough rate that I’m not opposed to paying interest on a small balance, especially when you consider how much money I’m saving in energy costs (which will be way more than the interest at 6.99%).

How I’m Saving Money on This Transaction

The great thing about a balance transfer where it’s more like a cash advance (they send me a check) is that I can put the purchase on a credit card and get rewards, then just use the balance transfer to pay off my credit card. I have a card that gets 2% back on all purchases, so I’ll get $100 in rewards when I pay for these windows.

photo credit: Helga’s Lobster Stew

That effectively makes the balance transfer fee only 1%, or $50. So how am I going to save $50 over the next 9 months? Easy. According to a University of Minnesota study I will save at least 23% of my cooling costs with these new windows. Considering how expensive it is to cool homes in the Texas summer, I think we are talking about at least a few hundred dollars a year.

I can also get a $200 tax credit for installing new windows from the federal government according to the Energy Star government website.

Finally it’s important to consider the increase in my home’s value. Angie’s List says I should get at least a 70% return on investment for new energy efficient windows, but that’s for people who are paying full price. When you consider the fact that I’m paying much less than a non marketing home would have paid (remember I did comparison shop and this really is a killer deal), I could see a 100% or more ROI when I go to sell.

Spending Money Never Saved So Much

I’m getting 2% of the purchase price back in rewards, saving hundreds of dollars in energy every year I live in the house, getting a $200 tax credit, and raising the value of my home by about as much as the cost of the windows.

That’s what I call a darn good deal!

This definitely isn’t our forever home, so we will be looking to sell it in the next few years after all our renovations are complete. I do fully expect to get all this money back when I go to sell.

Now I just need to find someone who is willing to buy a house with a 25 year old AC unit!

The windows get installed next Monday, so I’ll post pictures when everything is finished.

Readers: Have you ever done home renovations that saved money on electricity and/or drastically increased the value of your home? How did you take out a loan to pay for them?