The Frugal (AKA poor) Sailor

[Mike OReilly]

Originally Posted by Kenomac

So does that mean I'm being frugal, or am I one of the evil rich with a points card like you?

We're being frugal, in part by exploiting the less affluent and less powerful. It's how our system now works.

As Mel Brooks so aptly put it: "It's Good to be the King"

https://youtu.be/StJS51d1Fzg

[brownoarsman]

Originally Posted by Mike OReilly

in part by exploiting the less affluent and less powerful. It's how our system now works.

Until tax season anyways, when we get exploited right back! 🤗 [Okay, okay, mods. Feel free to delete as we are touching on politics...]

Sent from my Nexus 5X using Cruisers Sailing Forum mobile app

[Caribbeachbum]

Originally Posted by brownoarsman

... this is basically free money (as long as you pay every month).

It's not even a tiny bit free. I own two restaurants. I must price everything to account for the most expensive credit card rates. Every other merchant in the world who accepts credit cards does the same thing.

You get two percent back, but you would have spent three-four percent less to begin with if your card (and others like it) didn't exist.

You're not being subsidized by those who pay cash. Instead, I just get up to five percent more margin on what I sell to them. You're not riding the system, you've been conned by it. Obviously, you are not alone in that.

It doesn't trouble me that people love their rewards cards. It troubles me that they believe they're getting anything for free. A rewards card is a way to pay a dollar more than you otherwise would have so you can get 2 cents back at the end of the year.

Not that things are going to change or anything, so you might as well keep spending on the rewards card ....

--

[boatman61]

Originally Posted by Caribbeachbum

It's not even a tiny bit free. I own two restaurants. I must price everything to account for the most expensive credit card rates. Every other merchant in the world who accepts credit cards does the same thing.

You get two percent back, but you would have spent three-four percent less to begin with if your card (and others like it) didn't exist.

You're not being subsidized by those who pay cash. Instead, I just get up to five percent more margin on what I sell to them. You're not riding the system, you've been conned by it. Obviously, you are not alone in that.

It doesn't trouble me that people love their rewards cards. It troubles me that they believe they're getting anything for free. A rewards card is a way to pay a dollar more than you otherwise would have so you can get 2 cents back at the end of the year.

Not that things are going to change or anything, so you might as well keep spending on the rewards card ....

--

Glad I'm not the only one that see's this..

[brownoarsman]

Originally Posted by Caribbeachbum

Not that things are going to change or anything, so you might as well keep spending on the rewards card ....
--

This is precisely it; the system is what the system is, so get it if you can. As consumers, you are unlikely to change the system unless you advocate for congress to do something.

A lawsuit has actually now been won that will allow vendors to impose surcharges up to 4% on mastercard/visa credit cards in states covering 60% of the US population, but few vendors have shown any willingness to do so at the risk of upsetting their customers (if the rich are the ones with the big points cards, they are also the ones spending the most money on them, and no one wants to lose that business).

It's also not like cash is free. The Treasury has to print it and make sure it's not counterfeited, storing large amounts of cash in stores or on people is also not good. Are those costs 2% of every transaction? No, but insurance is never cheap!

Sent from my Nexus 5X using Cruisers Sailing Forum mobile app

[boatman61]

Ahahahahaaa.. there ya go.. walking happily on into complete bondage and lack of freedoms..
Up until the 80's every week a little brown envelope would land in my hand.. cash wages to do with as I pleased.. spend, save or hide under the mattress.
Then came the Government ******** about all these security vans trundling around were a temptation for crooks and to blame for rising crime.. so wages were then only paid into bank accounts so everyone was compelled to get an account or access to one.. or lose their job.
Today one cannot really do anything without a bank account.. get a job, rent a flat, buy a plane ticket etc etc.. how blithely the people tenderly laid their nuts into the central bankers hands.
And.. you can be switched off at the click of a key.. ahh.. sweet liberty..!!

[Kenomac]

Originally Posted by Caribbeachbum

It's not even a tiny bit free. I own two restaurants. I must price everything to account for the most expensive credit card rates. Every other merchant in the world who accepts credit cards does the same thing.

You get two percent back, but you would have spent three-four percent less to begin with if your card (and others like it) didn't exist.

You're not being subsidized by those who pay cash. Instead, I just get up to five percent more margin on what I sell to them. You're not riding the system, you've been conned by it. Obviously, you are not alone in that.

It doesn't trouble me that people love their rewards cards. It troubles me that they believe they're getting anything for free. A rewards card is a way to pay a dollar more than you otherwise would have so you can get 2 cents back at the end of the year.

Not that things are going to change or anything, so you might as well keep spending on the rewards card ....

--

So what you're saying, is that the cash customer is the one paying the highest price at your restaurants, as opposed to the points card paying frugal customer who will ultimately receive a 2% return on his bill.

[thinwater]

Originally Posted by Cheechako

Your homes have gained 5-7% in value in 30 years? I've had homes that doubled in 2 years.

Sure. I've seen big short term gains. For one thing, it depends on which year you pick.Second, these houses were not picked to flip or specifically for investment value, but rather were picked because they were in good condition, where I wanted to be, and where I wanted to raise a family. I moved when I needed to, not when the market suggested.

One point is that long terms gains in the 5-7% range are very attainable (I added it up and I averaged 7%) and that housing, in general has outpaced inflation. My main point is that debt is for investments, not needs. Education can be classed as an investment, while a car or boat certainly is not.

If I had rented for 35 years I would not be semi-retired and cruising at will. As it is, I have enough... if I am reasonably frugal, which is in my nature anyway.

[Mike OReilly]

Originally Posted by Kenomac

So what you're saying, is that the cash customer is the one paying the highest price at your restaurants, as opposed to the points card paying frugal customer who will ultimately receive a 2% return on his bill.

That's one way of putting it. The other is that the cash customer is subsidizing points card users (and indeed, all credit card users). Of course what he's really saying is that everything costs more due to the high fees credit card companies charge merchants. If we stopped using credit cards, in theory the price of everything would come down. Of course, much like using CF vs the old Usenet, that ship has sailed. The convenience and versatility of CCs is too much to give up.

In Canada we have a debit card system called Interac. It is a nonprofit interbank network which processes debit transactions at a fraction of the cost of credit card merchant fees. I believe Interac charges merchants a flat fee of around 20 cents per transaction. Basic credit cards charge 2%, and as Caribbeachbum said, it can go up to 5% for these points cards.

I can be frugal by using my points cards as long as I pay it off every month and ensure the benefits outweigh the annual fee cost (if any). Of course, most people don't pay them off, which is exactly what the CC companies bank on. Added to this the higher cost of everything due to the fees merchants must pay, and I think Caribbeachbum is correct.

[weavis]

Just so you know.
Credit cards are the banks backbone of profit. 3% clear.
Not sound a lot?
It is..
Sound as a pound and cash to boot.

[Caribbeachbum]

Originally Posted by Kenomac

So what you're saying, is that the cash customer is the one paying the highest price at your restaurants, as opposed to the points card paying frugal customer who will ultimately receive a 2% return on his bill.

Correct.

But everyone is paying a premium for those rewards cards. You're just putting your own money aside to get a small piece of it back later. In the big picture, you've been conned.

To be fair, unless everyone abandons these cards permanently, you might as well use yours, otherwise you're paying the same premium but getting none of your money back.

I guess that's the even bigger picture. Kind of a tragedy-of-the-commons scenario.

-

[Cheechako]

Originally Posted by thinwater

Sure. I've seen big short term gains. For one thing, it depends on which year you pick.Second, these houses were not picked to flip or specifically for investment value, but rather were picked because they were in good condition, where I wanted to be, and where I wanted to raise a family. I moved when I needed to, not when the market suggested.

One point is that long terms gains in the 5-7% range are very attainable (I added it up and I averaged 7%) and that housing, in general has outpaced inflation. My main point is that debt is for investments, not needs. Education can be classed as an investment, while a car or boat certainly is not.

If I had rented for 35 years I would not be semi-retired and cruising at will. As it is, I have enough... if I am reasonably frugal, which is in my nature anyway.

Do you mean 5-7% a year, rather than 35 years?

[Kenomac]

Originally Posted by Cheechako

Do you mean 5-7% a year, rather than 35 years?

I think he means 5-7% on extremely good years, but has left out the part about the housing bust years when the market fell by 5-20%.

In southern New Hampshire, we purchased a $550,000 home with 50% cash down in 1989, but had to the sell it in 1992 during a big crash for $310,000. Today the same house is worth around $700,000. To some, that would seem like a huge increase, but in reality there are enormouse carrying costs for that 5,000 square ft home. Taxes over $10,000 per year even back in 1992 and interest rates early on in the 10% range. The annual expenses always exceeded any annual increase in value over the past 30 years.

Unless one is in the real estate rental business and having other people basically pay the house payments and taxes, most peple are only fooling themselves when they believe their home is a great long term investment.

[Dockhead]

Originally Posted by Kenomac

. . . Unless one is in the real estate rental business and having other people basically pay the house payments and taxes, most peple are only fooling themselves when they believe their home is a great long term investment.

Residential real estate can be a superb investment, and that is usually down to location, supply and demand. Commuting distance from Washington, Inc. is one of a number of locations which have increased greatly and consistently in value -- the government being the most reliable growth industry in the U.S. Certain parts of the Bay Area being another, due to severe supply restrictions. The best residential real estate investment of all, is to buy the worst house (or apartment) on the best street in the best neighborhood in a thriving city.

This is a play which is almost fool-proof, at least in the longer term. That's because you stay on top of two trends -- one is that cities grow as people move to them out of smaller towns, and the other is that the rich always get richer, and so their neighborhoods get larger and more expensive, out of proportion to everyone else's neighborhoods. If you can manage to live where the rich people do, even if it's in a hovel, you can't lose. In fact, the hovel will increase in value out of proportion to the other houses in the neighborhood.

I own a couple of rental houses in an intown neighborhood which I bought in the late '80s in the expectation that this neighborhood would be like the next Dupont Circle and really take off. I was wrong -- the neighborhood got better, but the center of life of this city moved North. But still, increased by about 500% since then, going up and down in value at various times, stagnating at others, but long term, it's a 5x and still growing. Meanwhile, the 90% mortgages were inflated away long ago and paid off by the tenants. That was a good investment.

My primary residence, in Europe, bought with all cash and no mortgage (because by this time I was starting my own business and didn't want to take the risk that I couldn't pay the mortgage in case I had an interruption of income), has increased in value about 7x in a shorter period of time, so even without leverage, that was a good investment, too. My lake house, on the other hand, was a disaster, built at the peak of the market before the 2008 crisis, and the way it's looking now, will never recover its value in my lifetime. But with no mortgage I can afford to be philosophical about it.

Many people are convinced that real estate is a guaranteed good investment -- because their own house went up so much in value, and they were forced to make the investment because they needed a place to live. If they hadn't bought their houses, they would have consumed their extra income and wouldn't have any assets. But that's a quality of our behavior, not of the asset class itself.

In Germany, most people rent their houses, and invest in the markets. This also works, and there is much to be said for keeping separate what you live in, and what you invest in. What you need to live in, is not automatically a good investment.

[picklesandjesse]

Of course, this depends on location. In my case, the wooded back yard is more zen than the marina, the park a few miles away rivals any anchorage.

I guess I like dirt too. I'm good with that.[/QUOTE]
Have to agree here. After 5 months in Europe on this Contessa 28 we go back home to Australia in 10 days. Will get to see and feed the beautiful parrots that visit each morning and evening.
Rented the property to an 18 year old girl for only $250 a month on condition that she feeds the birds and maintains the garden.
What could possibly go wrong ??!!