Buy Used

One of the best ways to save money and keep it in your community is to buy used. This can be done with everything from automobiles, furniture, power tools, lawn equipment, hand tools, bicycles, camping gear, sports equipment, construction material and just about any other kind of hard good and even some soft goods like clothes. Buying used means that you’ll enjoy a 30-90% reduction off of original price and if you use a local thrift store or buy from a private party virtually all of that money stays in the community.

Let’s look at automobiles as an example. The minute you drive a new car off the show room lot it loses 20% of it’s value. That’s 20% that goes directly into the pockets of the wealthiest people in the country. On a thirty thousand dollar auto that’s $6000. So what do you do? You buy used. You want a new car. Don’t buy one. Instead buy a car that has less than 10,000 miles on it.

Let’s take an example. Say you want to buy a Chevrolet Malibu. To buy the LTZ model new you’re going to pay about $30k. If instead you spend that $30k on a used car you can get a 2014 Chevrolet Equinox, a 2011 Audi Q5, a 2009 Dodge Challenger, a 2006 BMW M5, or a 2009 Corvette. By buying a car that is one to five years old you upgrade your ride and keep a bigger portion of those dollars in the community.

Now there are some drawbacks to this, like the warranty will have less time on it or the car could have been in an accident. So you’ll have to do your due diligence. When you buy from a dealer or a private party have the car checked out by an auto body person and an auto mechanic that you trust.

Also, if you use a local dealer rather than one of the manufacturer’s franchises; more of your money will stay in the community, many times the shop rate is lower than the franchises and the customer service is often more personal.

How to Save a Million Dollars

Screen Shot 2016-05-25 at 6.17.37 AM

Here we have how to save a million dollars using Dinkytown’s Future Value Calculator. All of these scenarios use 5% interest compounded monthly with weekly deposits. What changes are the amounts of the initial and weekly deposits.

Time: 40 years, initial deposit: $190, weekly deposit: $150, Future Value: $1,000,006

Time: 30 years, initial deposit: $373, weekly deposit: $275, Future Value: $1,000,004

Time: 20 years, initial deposit: $533, weekly deposit: $557, Future Value: $1,000,001

Time: 10 years, initial deposit: $1981, weekly deposit: $1472, Future Value: $1,000,000

Naturally the future value will change if you change the other numbers but this is a good baseline to start with. The trick is to find a good solid investment that’s going to give you that return on a consistent basis. That’s where your Community Financial Institution comes in. Generally they have investment advisors that can help.

Once you have the plan all you have to do is save the money.

Supporting Local Business

Supporting local business means not giving our hard earned cash to the one percent. To do that we need to know who the one percent are and what companies they own. Today we focus on Monsanto. Hugh Grant is CEO of Monsanto. According to Forbes his total annual compensation is $26 million and five year cumulative compensation is over $157 million. Here are the products Monsanto makes. If you want to keep your cash out of Hugh Grant’s pockets, don’t buy these products.

Next on our list is Warren Buffet. Forbes puts his net worth at $66.4 billion. Here are the companies he either owns outright or is invested in through his investment company Berkshire Hathaway.

warren_buffett_holdings

But we also need to become aware of alternatives for those products. I found this video on my Facebook feed. It’s about a guy out in Lone Pine California who makes guitars. He’s not an alternative for Warren’s or Monsanto’s products but if you could use a guitar you might look up David Lorah. Just a thought.

Micro-greens and RDA

The RDA, recommended daily allowance of vitamins A, C, E and K can readily be obtained from three homegrown micro-greens. These micro-greens are Dijon Mustard, Daikon Radish and Opal Basil. RDA was taken from the nutrient recommendations found on the National Institutes of Health website. The nutritional composition of the micro-greens was taken from a study done by Zhenlei Xiao in 2013. Following are tables which will show how much micro-greens are needed to fulfill RDA by age and gender:

Dijon Mustard

VitaminA_RDA dijon_mustard

VitaminC_RDA

Daikon Radish

VitaminE_RDA daikon_radish

Opal Basil

VitaminK_RDA opal_basil

video from Peaceful Desert Homestead shows you step-by-step how to grow micro-greens.

A Doctor Visit of $27.42

I was out bush-wacking the other day and scratched myself on a rusty piece of barbed wire. I didn’t remember when the last time I had a tetanus shot was so I decided to go to the doctor. This is the cost of my shot, tetanus_bill $223.00. Suffice it to say I was mildly shocked when I received the bill. Ever since my wife contracted cancer, the insurance company dropped her and she died without insurance, I haven’t been a fan of either the medical profession or insurance companies. So this article might be a little biased. That being said I thought I would take a look at what it costs to become a doctor, set up a practice and payoff both the cost of schooling and become profitable in private practice.

According to bestmedicaldegrees.com the cost of education ($187,000) and lost potential income ($229,216) while in medical school, your average doctor is in the hole $416,216 by the time s/he finishes medical school. That is a sizable amount of debt. Yet, when you look at the previous bill it looks like my doctor is receiving $137.00 for what was 8-12 minutes of face time. If all my doctor had to do in a day was have face time with his patients then he would be making $685 per hour or $1,424,800 per year if he restricted himself to a forty hour work week. But, doctors have other duties than face time with patients so that million four is a little high.

According to a study done by the  New England Journal of Medicine, of a Philadelphia family practice, these additional duties include: telephone calls, prescription refills, email messages, as well as lab, imaging and consultation reports. Still, with all of these other duties physicians were able to visit 18.1 patients per day. After operating costs and paying support staff MedPage Today reports that better performing practices generate $242,142 of revenue per physician. If that was the total cost of starting up a private practice a physician could retire his debt and make up for the potential wages he lost by going to medical school in 1.71 years. But there is the cost of setting up the practice itself, which according to Medical Economics can be as much as $100,000. So we need to add that onto the $416,216 making the total cost of setting up a private medical practice of $516,216.

Taking the cost into consideration, at $242,142 of revenue per year your average doctor can become profitable in 2.1 years. So how does that compare to your average start up. According to Business Sales Center, using the cash flow method the average value of a company is four times annual sales. That would value the average private medical practice at $968,568. So that $516,216 cost of setting up a medical practice has brought that fresh graduate a 53% return on his investment. That’s pretty good. But that type of return has a cost to the patient. In my case $223 for a tetanus shot.

When we look at the average value of a business, using the cash flow method, at four times annual sales, the assumption is that a potential buyer can retire his investment in four years. Looking at the cost of a medical practice in this manner, assuming that a recent graduate could recoup his investment ($516,216) in four years the annual revenue s/he would need to generate would be $129,054.  Now, if we divide that number by 4,706, which is the number of patients a doctor would see in a year if he saw 18.1 patients per day for each of the 260 work days in the year, then the cost of an office visit should be $27.42. That’s a long way away from the $223 I spent for a tetanus shot. I wonder what health insurance premiums would be if office visits cost $27.42 versus $223?

This article, aside from being a pet peeve of mine, hopefully encourages us to eat healthy and exercise regularly so that we can minimize our interaction with the medical industrial complex and keep more of our hard earned cash to ourselves.

Jim Sea holds a Masters in Divinity, a Masters in Social Work, has been a registered investment advisor and a residential real estate broker.