Welcome to the Radical Personal Finance Podcast, Episode 5. I'm your host, Josh Rascheetz. Today's show is somewhat pompously entitled, "The Ultimate Guide to Spending Money. How a Smart Person Can Optimize Each and Every Buying Decision to Get the Maximum Utility Out of Their Money." Now stick with me, I know that sounds a little bit pretentious and somewhat pompous, but the show is designed to be a comprehensive view of all the interesting ideas that I was able to come up with to get more value when you make a spending decision.

Essentially what the show is, I've sat down, I've brainstormed every way that I could come up with to make smarter buying decisions. And hopefully by the end of the show, you'll have some ideas and some information that will be helpful to you. Now, as I start off here, I just want to clarify.

These are simply ideas, and it's possible that only one or two or three of them could ever be applicable to your life. I'm not assuming that any of them are applicable to your life. They're ideas that I think have value and can be applied in a lot of different circumstances.

So I also think that ideas, I personally love ideas. I love ideas because ideas have a tendency, once you think of them and understand them, to mate with each other and to get themselves in a situation where they pop out right at the time that you need one. So I may say something today about, I don't know, a smart way of buying socks and underwear, and a few years from now you may be buying a car and there may be an idea that's going to pop out to you.

So that's okay. So today's show is going to be, again, an overview of all the different ideas I was able to come up with, interesting questions to ask yourself when you're buying something. Now obviously these are a lot of questions. I'm not thinking that anybody would ever ask themselves all these questions, but think about them and apply them to different areas of your life.

And at the end of the show we'll talk about that. First though, before we get into the ideas, I want to get into the topic and the question of frugality. Here's my question. When is it okay for you to spend a lot of money? Frugality is incredibly important. I'm not the frugality police, but frugality is incredibly important.

It's important at the beginning stages of financial success when one is just getting started putting together their financial plan, just getting started earning money, making money and investing money. Every $10 you can invest at the beginning of your life has a huge potential future result. So frugality is incredibly important then.

I would argue that frugality is important later on down the road because the people who become wealthy are the ones who tend to practice these principles and they become a part of them. So frugality is important at every stage along life. Question 1. When is it okay for you to spend a lot of money?

I've got four answers to that question. Answer 1. Whenever you want to. I know it sounds a little bit unusual, but it's your money. You can do what you want to with it. So I'd say you can spend a lot of money whenever you want to because it satisfies something that's important to you.

Some random guy on the internet, it's not my job to tell you what to do with your money. It's your money. You earned it or it was given to you. You can do whatever you want with it. But obviously you're probably not here to hear me tell you that, but it is true.

Answer 2. It's okay for you to spend a lot of money when you've considered the opportunity cost of your purchase. What are you giving up with your choice? To me opportunity cost is the key. Each of us has a finite amount of time. Each of us has a finite amount of resources.

The things that we choose to do or not do with our time and with our resources are going to determine our choices. Excuse me, I guess our choices are what we're doing when we choose. Each time we choose to do something ourselves, our opportunity cost is what we could have been doing with the time that we gave up to do it.

Some people might find a task like mowing the lawn and they may say I need to hire that out because it's more valuable to me to spend the money on mowing the lawn than it is to give up the time that I have for it. Now on the other hand, the opportunity cost is also financial.

So if you spend money on doing something, you're giving up what you could be doing with that money otherwise. And this entire show practically is talking at times about what those costs are. But if you've considered seriously the opportunity cost, what the alternative use of the dollar would be in your situation and you're satisfied with that, go for it.

Then is it okay if you spend a lot of money? Answer three, I would suggest that if you're interested in being wealthy, it's okay to spend a lot of money when it's a small percentage of your wealth. Rich people consistently spend only a small percentage of their wealth. That's why they got wealthy and that's why they stay wealthy.

If you find someone that's spending a higher percentage of their, that's spending a lot more money than expresses a percentage of their wealth, I can promise you two things. Either number one, they're not wealthy and they're just spending out of income. So they're high income earners and they're not high, but they're not very wealthy.

Or I can promise you it's because they're not going to stay wealthy long. There are plenty of stories you can go on the internet and read about and there are plenty of stories of very wealthy people who became wealthy and then spent a lot because of foolish spending. Let me give you an example.

We often forget that rich people and wealthy people may actually be quite frugal because of the dollars involved. An example that came to me is the example of Paul Allen. Paul Allen was the co-founder of Microsoft with Bill Gates, very wealthy man. For some reason, I don't know, he always sticks out in my head because of the yacht that he owns.

Years ago I remember the yacht being in a lot of articles that I would read. It's this huge, fancy, expensive yacht. So I went and looked it up because I was interested in the numbers on it. So in 2003, Paul Allen bought a yacht named Octopus and this thing is incredible.

It's an ocean liner. It's got a helicopter pad, it's got a couple of swimming pools. It's huge. It's absolutely huge. He paid $200 million for it in 2003 and according to various news articles which I've read and I'll link to in the show notes, it costs him about $20 million per year to run.

So he paid $200 million for it, it cost him $20 million a year to run. Quite a lavish expense. I don't know what Paul Allen was worth in 2003 but I looked up on celebrity net worth and in 2013 as I record this, the website estimates his wealth to be about $15 billion.

I don't know if he was wealthier back then or less wealthy, it doesn't really matter. Allen's worth $15 billion and he pays $200 million for a yacht that costs him $20 million per year to run. Now, what I tried to do is I tried to make up an illustration and I don't know how much he earns.

I have no idea what his return is on his investments, on his businesses. I don't know if he works for earned income and has consulting projects. I don't know. But if I just make up a number and I say that he's taking a 5% income level off of his $15 billion portfolio, he has $750 million a year of income.

$750 million a year of income. $750 million a year of income every year and it costs him $20 million per year to run his boat. So if you run some percentages on that, it's really interesting. So what I did was I ran the percentages and I said what percentage of his net worth is caught tied up in that boat and the answer is 1.3%.

And I said what percentage of his net annual income does it cost him to run the boat and the answer is 2.6%. So the equivalent cost, let's break these down to smaller numbers. It costs him, if the equivalent cost of somebody who has a net worth of $2 million, so pretend you have a net worth of $2 million and therefore at 5% using my same numbers earns $100,000 per year from their investments.

It's like somebody in that situation going out and buying a boat which has a price tag of $26,000 and spending $2,600 a year maintaining it. Not that big of a deal now, huh? To me, I would think that's actually quite reasonable. If somebody has a $2 million net worth, $100,000 a year of income from their investments, they want to buy a boat that costs them $26,000 and then spend $2,600 a year operating it, go for it.

That's a reasonable number. It's actually quite frugal number. So my thought is make sure that your luxury spending or even your spending is a small percentage of your wealth if possible if you care about wealth. When you've seriously considered the best way to get the maximum utility out of your purchase and that's what this shows about.

If you've really considered and thought about the best way to get a deal and to stack on a lot of utility to each and every decision, it's fine. If you don't do that though, you find a lot of inefficiencies in your finances. But if you'll do that, you can make excellent, very efficient buying decisions that will stand you in good step.

So first some general tips. When you're making a buying decision, slow down. Most people's mistakes would, they would be able to coach themselves out of mistakes if they would slow down. Take time to research your choice. Think about your choice. Plan it out and consider the options. Research the alternatives that you could do.

Think if this really meets your needs. Plan the purchase out. Management consultant Brian Tracy who I've thoroughly enjoyed over the years listening to a lot of his audio and books, reading his books, has a rule which he applies to making investment decisions. And his general rule is, I think it's a good one.

He says, "Spend as much time investigating the investment as you spend earning the money that you're thinking of investing." I really don't think that that's ultimately possible. At the end of the day, it's not really possible to spend as much time investigating something as it takes you to earn the money.

But it's a good, I think it's a step in the right direction. If you're going to make a $10 decision, make it quickly. That's fine if it doesn't take you that long to earn $10. If you're going to make a $100 decision, slow down. If you're going to make a $1,000 decision, do it even slower.

$100,000 decision, make sure you take lots of time considering that decision, considering all of your options, considering everything that you can do to really make a quality decision. If you're going to buy something, buy it smart. Develop your buying skill. There's an incredible world of abundance available for those who know the tips and techniques about buying and who've developed methods of paying for things in such a way that they get more use for their dollar.

There's a world of scarcity for those who run out, plunk down a credit card and pay retail. So when you're making a buying decision, consider your method of payment to get maximum value. Here's some ideas that I came up with. Number one, can you pay cash and get a discount instead of paying with a card?

So when working with private individuals, sometimes ask yourself the question, "Can I pay cash?" Cash often, in the right circumstance, speaks louder than plastic does. So if you're buying a car from an individual on the side of the road, it's very possible that a few stacks of hundred dollar bills will get you a better deal than a credit card swipe or a bank check.

It's also possible that sometimes with services, if you're hiring services from a tradesperson, you may ask if you can get yourself a cash discount of some kind or if you're in a store. Just ask. Now the flip side of this, can you pay with some kind of rewards credit card instead of cash or a debit card in order to get more value for yourself?

So if you walk into your local big box store, it's very unlikely that you're going to be able to negotiate a cash discount. So why pay cash? Why not pay with some sort of paying mechanism that allows you to get a discount on the services with either rewards points or mileage programs or just a cash, straight cash back return?

I would love it if all stores offered cash discounts, but until they do, why not look out for yourself? Could you pay with a credit card instead of a debit card in order to get better consumer protection? So anytime you're buying electronics or something like that, strongly consider paying for those services with something like an American Express or some kind of platinum credit card.

American Express has a fairly generous warranty program that would save you money if you simply paid with that instead of a store warranty. They have a very strong return policy. So if the equipment breaks or you simply want to take it back, you take it right back. So things like that, if you pay with a credit card versus a debit card and that credit card has better protections for it, that may bring you out ahead.

It could also be smart to use a credit card instead of a debit card or cash or a check in a transaction where you're not quite sure what's ultimately going to happen. So assume that you're having a contractor work on your home or a service provider. It may be a useful way of protecting yourself to pay with a credit card if possible so that you'd have the ability to reverse the transaction if the work weren't done properly.

So on a credit card, when you buy and spend money on a credit card, it's extremely easy to do a chargeback. A lot harder though if you've paid cash or a check to ever get the money back. If you're paying cash back, forget it. If you're paying with cash, forget it.

You're never getting the money back. But with a credit card, you've always got a hook in the money where according to the terms of the card issuer, you can do a chargeback and get the money back. So consider that. That may be a valuable way to protect yourself. I would seriously consider that if I were having a service provider or a contractor do work for me.

Could you pay with a debit card instead of a credit card so that you feel the expense more emotionally and that you don't overspend? Many times people get upset at credit cards in the popular financial press because they feel that spending money with credit cards causes you to spend more money.

I've seen this go both ways and it depends on who you are as a person. For some people, spending money on a credit card is thoughtless and it's easy for them. So if they could switch to spending with cash or with a debit card, they would feel the money a lot more.

They would feel the money leaving their hands. On the flip side, some people just feel very, very careful about credit card purchases and debit card purchases because they show up on their tracking software if they track their expenditures and cash just seems to float out of their life. Consider what your spending habits are and consider what the best way to do it is.

But many times people could be served by paying with a debit card or cash instead of a credit card so that the expenses felt a little bit more fully. There is good research on this. I looked for the actual source studies and I couldn't find them. Commonly, you'll find if you go on the internet and start researching this subject, you'll find a Dun and Bradstreet survey which says that people spend a significantly higher amount on credit cards than debit cards.

I looked for the original study. I couldn't find it so I can't prove that but hey, the interweb says it's out there so let's assume it is. You also find fast food restaurants are often quoted that evidently some of the major fast food players, their average purchase size significantly went up when they started accepting plastic instead of cash for transactions.

That's why you can go to a fast food restaurant and there's no minimum purchase of a certain amount. You can just pay for the purchase using plastic. Now another question, could you pay with cash in order to have greater purchase privacy? So if you pay with plastic, whatever it is that you're purchasing is always on your record.

It's always available. Would it be wise for you to consider paying with cash in order to have an anonymous form of payment? I actually personally see more and more societies moving towards a cashless society in Europe. I can't remember, I was reading an article some months ago about one of the countries in Europe, maybe Denmark, that is very close to that, in that direction.

I don't think it was Denmark. Anyway, it doesn't matter. But this really concerns me because there should be a certain amount of anonymity with your purchases and cash is what gets you that. You're going to find in the future, the systems, my personal opinion, you're going to find that the systems are going to move more in the direction of electronic transactions as part of the overreaching growth of government and the more consistent tracking.

I'm not upset about it, it's just a fact of life. So realize that just like through over the last few months with the NSA release of Edward Snowden of the information of what the US government tracks and many European governments, realize that every single buying decision that you make, every product or service that you pay for is tracked and there's a record of it.

And so is every email that you send and so is every phone call. So when you start stacking those things together, there's a pretty compelling list of purchases that can be made. Was recently, just last night I was reading the discovery documents which I found online from the Trayvon Martin, George Zimmerman case.

And it's very interesting as part of the discovery documents that the attorneys were using, some of the documents were all of Trayvon Martin's cell phone records. Now these weren't admitted, the judge didn't allow these to be admitted in the court case. But I was reading, posted online every single text message that Trayvon Martin sent.

It's freely available. Realize that every single dollar that he spent was tracked as well. So consider, which should you pay with cash for greater purchase privacy? One little tip for you, if you need cash, you can always get cash out of the bank, you can always do ATMs, things like that.

If you ever need anonymous cash, the best way that I know to do that is simply to do cash back transactions when you're at a store. So if you're at a grocery store or a home improvement store or something like that, swipe your debit card and then get extra cash back on the side.

Probably a little bit more of a private way of getting cash out than going to the ATM every day. You've got stricter limits of course, but just pass that along in case you ever need that. Next question, can you barter for the service or the item instead of using currency for it?

So instead of paying with money, could you pay with something else? Could you trade something? Could you swap something? Could you trade services or an alternative product? I always enjoy going on Craigslist, on Craigslist they always have the trade section, I can't remember what it's called, but they have the trading section.

Do you have an old object sitting in your yard that you don't want or need anymore that you'd be willing to trade for someone else's object B that's sitting in their yard? You could join a barter network. So there are a lot of barter networks that are available. This could especially be something for businesses.

When you're setting up a business and you're building out, could you join a local barter or trade network and do business there? A couple of advantages, number one, this lowers your outgoing flow of currency, which is helpful when you're starting a business. It also allows you to have access to a specific market and specific customers.

So by joining a barter network you're automatically going to be part of that network's customers. And if you're the first person in your occupation or if you're a very small pool of occupations that can be extremely helpful. There are a lot of alternative barter currencies available. Famous ones such as the Ithaca dollar I think is up in Ithaca, New York.

It was started back at least 20 years ago now that the Ithaca dollar has been operating as a small local form of time banking. There are barter currencies that work in gold and silver. One I'm familiar with which I'll link to in the show notes is the American Open Currency Standard where it's a system of a barter network where the barter is done with gold and silver and copper coins which are assigned a token face value and that allows trade to be done within the network using the gold and silver coins as a commodity.

There are online currencies such as Bitcoin. Bitcoin is the most famous but there are plenty of online currencies. There's a dozen or two. And consider also that online currencies go that are transferable between national currencies so you can transfer between Bitcoins and US dollars. There are also online currencies that exist purely in the online world just like there are currencies that exist purely without any exchange to dollars in the physical world.

Be careful with tax issues. Barter income is not tax free. I found some interesting information on the IRS website that actually talks through the tax guidance for it. Basically it's treated just like any other dollar transaction. If you realize a profit then you need to declare that profit and exchange that profit and pay income tax on that profit.

Obviously I would imagine that it would depend on the transaction and depend on the business as far as how that's actually conducted. But be careful. Bartering is not simply tax free but it is an option. Does save you money if there's a lower outflow of cash out of your pocket.

Now obviously I enjoy the barter currencies and the time banking concepts but reality is that even things like babysitting is probably where this is more practical. Do you have kids? Do you pay for babysitting? Just swap babysitting services with another family. That could help save a tremendous amount of money.

Maybe instead of doing date night every week you do it every other week and one of your date nights is taking care of some of your other family friends kids so that they can go out. Things like that can have a tremendous impact as far as the dollars saved and they're fairly easy changes to make.

Buy with the lowest price and with the lowest cost. Always consider in making a buying decision price and cost. Now they're not the same thing and you have to consider them both. So the way I define it price is what you pay up front. Price is just simply the number that's listed on the price tag.

Cost is what the item or the service costs you over its lifetime. It may have a very low up front cost and a higher ongoing, it may have a low up front cost and low ongoing expenses or it may have a low up front cost and higher ongoing expenses.

The example that probably many of us have experienced would be something like buying inkjet printers. Inkjet printers have an extremely low price and they have a ridiculously awful cost. So the printer is basically subsidized by the company that's producing it and many printers require you to use their company's cartridges to fill it.

So consider both the price and the cost and consider, try to calculate what those numbers are going to be. And in some situations it may be right for you to buy the lowest price and in some situations it may be right for you to buy the lowest cost. But consider them.

One of the first things that I and probably many of you often look for is can you buy an item online instead of in a store? Online shopping has been an incredible help to the consumer in general. First you could save on sales tax currently that's in the process of changing in the US but I live in the state of Florida which has a standard 6% sales tax.

If I can buy a product online from a store that's not going to charge me sales tax that's an automatic 6% discount. That's substantial. You can get a lower price sometimes because the company has lower costs. So if you are a retailer and you're required to maintain a number of physical locations that comes with a high expense and that high expense needs to be built into the product price.

But sometimes an online store will often just have a lower price because lower internal costs. Also greater selection. So if you're shopping for pet supplies chances are you're going to find a substantially higher selection from an online pet company, pet store company than you are from the local grocery store where you buy your groceries.

So sometimes just simply by the greater selection you're going to be able to save money. And the selection comes partly because the company doesn't have to display the products. They can have loads and loads of products that just simply sit on a warehouse shelf. They don't have to be displayed in a beautiful store where you can see them all individually.

So consider, can you buy something online instead of in a store? Can you buy something used and still good? Many people often jump straight to buying something used. Many people don't. Stores like Goodwill, thrift stores, yard sales obviously are some people's secret source of great items. But I have a great near-multi-million dollar store near my house.

They've got a great Goodwill location that's just very close by. Anytime I need something I often check there first. Wine glasses would be an example. I've been buying wine glasses little by little. I go down there and many of them I don't like but there's lots of really fancy nice ones there.

I pick them up for a buck each. That's pure profit for Goodwill which they have their own business model of helping out people to build employment skills. But it's also a good deal for me. Dog bowls. My wife and I bought some dog bowls there at the Goodwill store for our puppies to eat out of.

A buck each versus the six or seven, sorry it was a buck for two versus the six or seven dollars at the local pet store. So consider, can you buy something used but still good? Can you buy something on sale? So another example would be always looking and buying off of sale prices.

One thing I do is when I shop for groceries, we generally shop for groceries based upon what's on sale and then simply learn to use what we bought. So instead of saying going to the store with a list of here are the vegetables that I want to buy today, we simply say what are the vegetables that are on sale, let's buy those and then let's figure out how to make menus out of them.

When you start doing that type of thing consistently, lot of savings there. So look for things that are on sale. Plan ahead for specific sales. If you know that there's something that you're going to buy, back to taking the time to think about it, a lot of times there are specific sales that are offered on a seasonal basis.

I've for a long time preferred to wear Brooks Brothers non-iron shirts. Those were my thing for a long time. Brooks Brothers has a sale basically twice a year when those shirts would go on sale. If I would plan ahead and buy those shirts when they're on sale, then there would be a substantial discount.

I've read about the Berkshire Hathaway discounts. Berkshire Hathaway is Warren Buffet's company. He owns dozens of companies in the umbrella of his parent company. Every year they have the Berkshire Hathaway annual meeting. During annual meeting, many of the products from many of the stores go on sale. So if I were living in the Midwest where Nebraska Furniture Mart, which is one of the companies that Berkshire Hathaway owns, if I were living there and I were going to do my furniture shopping, I'd be pretty sure to wait for that Berkshire Hathaway sale and figure out how to get a discount on it because of that timing.

So if you plan ahead, oftentimes things go on sale at times when...if you plan ahead and are able to buy them, you can get them when they're on sale. Consider things like travel. There's always seasons of travel. There's the high season and the low season and then they have what they call the shoulder season.

So if you're going to go to...well, each destination would be different, but look into the prices of where you're going and see if maybe you can travel in the shoulder season. So instead of going skiing in the most popular week, and I'm not sure when that is, a lot of times there's a couple of weeks in between the most popular weeks around the holidays or spring break that the prices would be substantially decreased.

So just think, can you buy something on sale? Could you become a shareholder or a member in the company? One interesting aspect on the Berkshire Hathaway conversation, when I was reading Warren Buffett's most recent annual report, I learned that you can get a discount on your car insurance if you're a GEICO member if you are a Berkshire Hathaway shareholder.

Now GEICO is...my insurance is not with them. I have no idea if they're a good company or not, but they advertise themselves as having substantially low prices. So if somebody has substantially low prices and if you call them up and tell them you're a Berkshire Hathaway shareholder, you can get an additional shareholder discount.

Now I don't know if you have to buy the shares that are Class A Berkshire Hathaway shares that are $100,000 plus. I don't know as of the time of the recording, $150,000, $180,000 a share. But maybe you can buy some of the fractional shares that are available in other classes or other forms of ownership.

But I've got no idea. But the point is research it and see if there's some sort of discount that you can get by becoming a shareholder or a member. I'm a member of USAA for my car insurance. So as a member of USAA, I'm entitled to a dividend back.

And basically, we'll talk about that in a minute. But that allows me to have my specific costs or whatever the actual company's costs are. It saves me a substantial amount of money for great car insurance and great service. Can you buy something that goes up in value instead of going down?

Is there something where if you changed which option you were buying, it would go up in value in the long run instead of down? So the example that came to me for this one is fancy wooden furniture versus cheaper furniture. Tom Stanley's book Millionaire Next Door, he talked about that millionaires' houses are more likely to be decorated or furnished with high quality wooden furniture.

I thought that was really interesting. I've read various articles over the years. I'll link to one in the show notes by Joshua Cannon about luxury furniture. I don't own any luxury furniture. I never have and maybe who knows, maybe I will in the future. But I was fascinated to find that there are brands of furniture out there which if you buy them and you buy them right and you buy them well, will actually increase their value over time.

Generally, they have at least a good past track record of doing so. So it might be worth considering. Could you spend more money up front, buy furniture that's likely to keep its value and then when you go to sell it in the future, instead of losing money on it, you wind up making money on it?

So if I were going to go for some middle of the road furnishings or I were going to go for some high end, I would consider going the high end if you had the cash to do it. Another example, if you have money, you can do this in a lot of different areas of life.

I don't know anything about watches. I'm not a watch guy but I would imagine if you buy a well-known brand that has a history and has an audience, you can watch the watches and you can wear that luxury timepiece for potentially decades and then if you decide to sell it, it's possible that if you buy it properly and you know what you're doing, it's possible that that timepiece may actually appreciate in value.

My understanding, I know Rolex is not one of the highest brands but it's one that most consumers recognize. My understanding is a 1980 Rolex is going to cost you a substantially similar amount to a 2013 Rolex. So that would be something to consider. Now the flip side is can you buy something super cheap that simply does the job instead of going middle of the road?

So back to my furniture example, I would imagine that the worst place to be as far as financially is middle of the road furniture like you get from Target or from, I don't know, insert local furniture store of your choice. That furniture is going to be nicer furniture but it's probably not going to have a high resale value.

So you could go on the high end and buy expensive furniture that's going to retain its value or you could go on the very low end. Ikea is very trendy, has a very low purchase acquisition cost so can that do the job for you? Now is it going to be cheap, more cheaply made?

Absolutely. But maybe in your situation that fills the needs. So think about can you go to the very high end and get a product that retains its value or can you go extremely cheap on the very low end, something that does the job instead of going with the middle of the road product that does the job maybe a little bit better but it's going to lose all of its value.

Can you buy something that has a high resale value? So this is back to cost. Consider the resale value of a purchase. My wife and I are expecting our first baby and as part of that, this may surprise you and I hope it doesn't gross you out but it's been really interesting.

As part of that we're planning on if possible using cloth diapers instead of disposable plastic diapers. A number of reasons for that, I won't get into all of them right now. Partly the health concerns of disposable diapers but partly the cost, that's not the full thing, there are a lot of other factors than that, mainly the health concerns.

But it's interesting if you actually look at the cost. I never would have imagined the resale value that exists with cloth diapers. A cloth diaper, one of the fancier brands that you buy is about 20 bucks each for a new one. The way they work and I won't get into all the different options and what not, you can do your own research.

But about 20 bucks each. Go on eBay, you'll find them selling every day, used diapers for 10 to 12 bucks each. I was surprised too. It's not the kind of thing that usually you consider as having a high resale value but these brands really do. They really do have a tremendously high resale value.

So you could, if you were doing an analysis on something like that, you could buy brand new, well run cloth diapers, use them for a child or two, turn around and at least in the current market, resell them for a substantial amount of money. So your amortized cost ends up being quite low.

Now what we've done is buy them used at a lower cost than the 10 or 12 dollars by being very selective about that and who knows, maybe we'll make a profit on them, I don't know. But most people probably don't want to talk about cloth diapers but I just was fascinated by seeing this little quirk in the marketplace that I wouldn't have expected.

Another example would be something like cars. So consider the lifetime cost of the car. Are you buying a car that has a high resale value? Now if you're buying something new, this would be very important. So if I were buying a car, a new car, I would strongly consider buying maybe a Honda or a Toyota or another brand that's known for having a higher resale value versus buying something like a Kia or a Hyundai.

I would try to exploit that and try to make sure that I had a car with a high resale value if I were buying it new. Now if I were buying it used, I would consider the quality and I would probably consider strongly buying the car with a lower resale value.

I recently bought a Hyundai minivan. What I learned when kind of shopping the market for minivans was that the Hyundai was several thousand dollars cheaper than the Toyota and the Honda were and I found that the quality ratings were substantially similar. I couldn't find any evidence that would show me that the quality of the Hyundai or the Kia minivan was anything really remarkably less than the Honda or the Toyota.

So I just went ahead and bought the cheaper brand that had the lower resale value and saved the money. But consider that in your buying decisions. Could you buy something just as good that's cheaper? So could you go with a store brand? I'd purchase the Target store brand razors instead of what I used to buy which was the Gillette Mach 3.

The razor companies have a very high opinion of their product in my opinion and charge a substantial amount. Well, I'd like to save money and so I started trying some of the different options and I found that the Target brand razors were delivered as good of a shave as the more expensive Gillette Mach 3 did.

I didn't sacrifice anything and I saved a substantial amount of money. Store brand groceries versus name brand. More and more across the country, store brands are incredible quality. If you're not one who shops store brands, try them. The reason that they're cheaper is because the store brand doesn't generally have all of the...it's often the same product, just packaged differently and the store brand doesn't have all of the advertising costs that the large packaged good companies have to get you to buy their product.

Try it. Substantial savings sometimes. We find that in shopping for canned goods, my wife and I find that buying the store brand is almost always cheaper still than buying the name brand option when it's on sale. So instead of having to wait for a sale, like I said earlier with waiting for sales, we just simply buy the store brand.

Can you buy something with lower ongoing taxes and fees? So consider the lifetime costs here of taxes and fees. One interesting thing, again I live in the state of Florida, if you have a boat in the state of Florida that has a hull that's older than 30 years, the state of Florida considers that to be an antique boat and doesn't charge you annual registration fees.

I didn't know that until I was talking to someone who told me that, but I thought that was fascinating. Now that's a 30 year old boat, but you know what? There are a lot of great hulls out there that are from decades ago. In fact, many times the person who was telling me about that had a sailboat.

That sailboat had a substantially lower, the sailboat was a great hull from years and years ago, but they simply made sure to choose one that was 30 years old plus and had no annual registration fees, no annual taxes. I thought that was powerful. Now I don't know if they do the same thing with antique cars, that would be cool, because if it were antique cars, you could stack buying the car at a discounted price, potentially buying one that could appreciate in value and have low ongoing registration fees as well.

So that would be a good, now I don't know if that's the case or not, it would be interesting to study, but it is there with boats. So consider, is there something like that in your area? Research it. Are there any special tax credits available? So if you're buying a car, a hybrid, are there any hybrid renewable energy credits available?

If you're buying an air conditioner, are there any kind of renewable energy credits, efficiency credits, things like that that are available to you? A few years ago there was the first time home buyer credit, which was an $8,000, if my memory is correct, a $8,000 government contribution towards the purchase of your new home.

If you were planning on buying a new home, as long as, maybe the price is inflated by that amount because everybody was doing it, but if you were planning on buying a new home, that was a substantial amount of money that you could consider pursuing. So always research and see if there are some tax credits available.

Interestingly, the tax credits, you kind of have to always study those for yourself, and that's one that's going to come into play if you're usually on the front end of a wave of people making similar decisions. The government generally uses tax credits to try to encourage or discourage certain behaviors.

So when there were tax credits available for hybrid cars, it was only for a certain number of vehicles sold under that type of model. So you've got to be an early adopter, but that can help lower your cost. Research it. Can you get the best deal by checking out the competition?

Try some sort of competition site or application for your computer or for your phone. There are a lot of versions of this available. Online shopping sites like Price Grabber, Google Shopping. When you're on your phone, sites like Shop Savvy or Amazon Price Check, these are wonderful. If you're sitting in a store, a local retail store, pull out your phone, pull up an application like Shop Savvy or Amazon Price Check, scan the barcode, and see what's available online.

You may still, or at other stores, you may still choose to buy it right there, but it's at least good to know that information. If you're buying things online, there are a lot of short-term deal websites. Check out Brad's Deals, Woot, DoD Tracker, Deal of the Day Tracker, Giveaway of the Day, and One Sale a Day.

All these are in the show notes for you to reference. If you're not familiar with some of them, check these sites out. If you're trying to get a good price on something and you're not sure if it's a good price or if it's a good option, use a site like Decide.com, Huckster, Deal News, and Invisible Hand.

These sites will give you a listing. Then they'll say, "Yes, this is a good deal. Go ahead and buy," or they'll say, "You should wait." This is really worth considering. There are the daily deal sites like Groupon, Living Social, and there are a bunch of other ones as well.

Those are the well-known ones. Be careful. Oftentimes, you may wind up buying stuff you didn't know that you were going to need, but if you need something, that might be a consideration for you to do. I've linked to a couple of resources. Clark Howard, the radio broadcaster, his team keeps a really great list of these deal of the day and coupon sites updated.

I've linked to that in the show notes. He also keeps a really great list called his Free and Cheap List, which is along this same vein. I think it's really interesting to investigate. Can you find a coupon code before you check out? Anytime you're checking out online, just Google "company name coupon code" before you check out and see what pops up.

It'll take you to sites like RetailMeNot. You'll be able to look and see if there's just a quick and easy way to save 10% or get free shipping. Almost every single time that I buy something online, I can usually find something like that. It takes about two minutes to find a coupon code.

It saves a substantial amount of money and it builds up over time. Can you get a lower lifetime cost by paying more up front? Back to the idea of can you pay for a higher product that has a lower lifetime cost? My wife and I use Brita water filters in our house, considering switching to a type of water filter called a Berkey.

I think it costs a couple hundred bucks to buy new, but the lifetime cost of it is substantially lower than the Brita filters that we use. So each gallon of water, once you make that additional cost, is an extremely low price versus a very high price using the Brita filters.

Now you have to have the money to do it up front, but consider, it could be worth it. Could you use something like a straight razor instead of disposable? I have a friend who swears by his straight razor. This is the straight razor, the thing that looks like you're going to slash your throat at any time.

But you know what? It may be a substantial investment to get a good straight razor, but once you have it, that's the type of thing that is a lifetime purchase. So consider the cost of disposable options. Could you get a lower lifetime cost by using a reusable solution instead of a disposable?

Other examples would be, I always chuckle when I see them advertise the Swiffer mops. What's wrong with a mop in a bucket of water? Well, the Swiffer, you've got to buy the new little sheets for it, and you've got to buy the new little, I don't know, the accessories that go with it.

A mop, you don't. A mop is a one-time purchase. Could you use a dishrag instead of paper towels to wipe up your messes? Paper towels, disposable, ongoing cost. Dishrag, one-time cost plus laundry cost, which is negligible. Can you get the best deal by bundling or by unbundling? So investigate the options that are available.

Try, calculate what the triple play will cost you from utility providers. Do the math. Did a whole podcast, obviously, on save money on cell phones. The general consensus that IPDaily and I came out with on that is you're usually better by unbundling, but run the math. You never know.

Can you buy from a warehouse club or join a co-op of some sort? Costco, Sam's Club. Costco's maximum markup on their items is 14%. That's not that much. I don't know what Sam's Club is, but it's probably similar to that. If you're buying a lot of items, that may save you some money and it can be a really good option for you.

One of my favorites is can you buy wholesale instead of retail by becoming a distributor or a dealer? If there's something that you buy on an ongoing basis that's a consumable item, investigate to see whether you can become a distributor or a dealer of that item. I have a friend of mine who enjoys smoking cigars and ran a retail store.

What he did is he signed up to become a cigar dealer. Basically, all you need is what's called an EIN, an employer identification number, and you can become a dealer. So he bought all of his cigars, large numbers for his personal collection, he simply bought them at largely wholesale prices, which is a substantial discount from what you pay at the local cigar store.

He was able to accumulate a nice collection, would give them to his customers and friends, and buy them at wholesale instead of retail. I'll link to an article where online Joshua Kennan writes about how to do this. He became a wholesale rose dealer. He loves getting roses on an ongoing basis.

He simply set up a company and had one of the wholesale companies ship him the roses at a substantially reduced cost. So consider that. There are so many options available. If there's something that you buy on an ongoing basis that's consumable, usually, it's going to be the better option.

Think about how you can buy it wholesale instead of retail by simply becoming a distributor or a dealer. A little bit of paperwork will save you a lot of money. Research discount programs that are available to you. I'm a USAA member. USAA has discounts on car buying and things like that.

Mercedes-Benz. Could you become a Mercedes-Benz owner's club before you buy a new Mercedes-Benz? I really enjoyed, which I'll profile some of the ideas maybe in the future. Brad Wilson wrote a book called Get More, Spend Less. He profiled some of the options that are available for getting affiliate discounts on purchasing of cars or things like that.

Consider if there's research, if there's some kind of discount program that's easily available to you. A lot of times a few minutes spent with a web search will save you tens of thousands of dollars. Could you cancel a subscription and buy things one by one as you need them ad hoc?

Most subscriptions, many subscriptions are more than is necessary. We talked about this recently with the cell phone usage. By canceling an ongoing cell phone need and doing it prepaid, you get exactly what you need. This month I needed more time on my cell phone so I bought another $10 worth of minutes.

Well, that means my cost was $20 because I needed more than my usual $10 a month but that's less than the ongoing $40 or $50 that I would have been paying the other way. So could you cancel a subscription and just buy things little by little? On the other side obviously, could you start a subscription instead of buying things little by little?

If you always buy magazines at checkout, it might be worth investigating a subscription cost. Can you use the web to find forums filled with experts? Flyertalk forum has so much valuable information on how to get travel deals. Howard forums has so much information on cell phones. If you have a problem with your car, just type in the symptoms of your problem and the make and model of your car and you will find a forum filled with people that are experts on that car that probably have already asked that question.

Use the web to find the forums and access those experts. Can you buy in bulk and save? A lot of people do this anyways but consider, can you buy in bulk and save? I had to chuckle, I was at a truck stop recently and in the convenience store in the truck stop, they were selling bottled water.

So there was a display case of bottled water where the bottles were $2 for $2, so bottles were $1 each, $2 for $2 in the display case and they were refrigerated in individual servings. And right next to the display case, literally right next to the display case was a case of water, the standard, I think it's 32 bottles that come in a case for $5.

And I chuckled and I wondered how many people would choose to buy the $2. Now the $5 ones were not cold, I recognize that. But the convenience store would give you probably ice for about 5 cents a cup. So buy the 32 for $5 instead of the 2 for $2.

Could you research a discount for something that you already have? On your home insurance, have you gone through your home insurance with your insurance company, talk to them about all the discounts that you have. Can you get a discount for storm windows? Can you cut something by changing something out?

Do you have a safety device, smoke detectors, things like that. On your car insurance, have you gone through every discount that's available to you and made sure that you're getting all those discounts. And Florida where I live, the local power company, Florida Power and Light, will give you a savings on your electricity bill if you'll allow them to install a device that at peak times of usage, they can cut the power to certain heavy draw appliances.

So I have this on the air conditioning. That means that potentially in the hottest time of the summer, then they may temporarily on a limited basis, they may cut the electricity back from the AC. Well, often times it's not home during the day so it's not a big deal.

And even when they do it, it's not that much but it does save a substantial amount. So research all the expenditures that you're currently spending and look to see if there's a way that you could get a discount on an expense that you already have. Try to find a smart source of the funds for your purchase.

So most people forget about this but try to look and see is there a way that I can buy this with smarter dollars. Could I pay for this out of a tax advantaged account? So my standard example here that I think of and use a lot myself is a health savings account.

A health savings account is a wonderful account which you pair with a high deductible health plan and it allows you to put pre-tax dollars in and to spend the money tax free on medical expenses. Now there's a list of what medical expenses are available but that list is the IRS publication 502.

I'll link to it in the show notes. But in that publication you can see everything you can spend money on. That includes everything from contacts and contact solution to your deductibles and your copays at the doctor's office to everything to long term care insurance premiums. So these little things add up.

I work contacts and therefore contact solution is an ongoing consumption. Glasses you could say would be a good way of switching from that ongoing consumption to the contact solution. But anyway, I can buy the contact solution out of the health savings account and pay for it with pre-tax dollars.

That's a good savings. So consider if there's some sort of tax advantaged account that you can use. Can you pay for school out of some sort of account that allows you to pay for that? A 529 plan or a covered LESA, could that be of help to you? Consider if there's an account that's available to you.

Or could you pay for it out of a business account? We're going to in the future do hopefully some deep dives on some of business expenses but I'll tell you. There are two tax codes. One for individuals and one for businesses. And the really good one is for the businesses.

The government as part of national tax policy, the government is very interested in you establishing and running a legitimate business. So consider is there a legitimate business expense that is associated with your expenditure? If not, could you start a business associated with that? And then once you have that business, you have an opportunity where you can start to use those business purposes and those business accounts with knowledge of what the rules are and you can start to structure your life in such a way that you stack the functions.

So if you're going to take an out of town trip for a business trip and you need a personal trip as well, can you combine those two things under the business trip rules? If you have a little known rule, if you have business meetings on Friday and on Monday, according to my understanding of the IRS rules, you're allowed to stay the weekend even if you're not conducting business and that weekend is a deductible.

Your expenses for the stay of that weekend is a deductible business expense. So you may have meetings on Thursday, Friday, Monday and Tuesday but there you've got an out of town visit that you can enjoy personally on Saturday and Sunday. That's my understanding of the rules. Little things like that add up, add up big time.

Consider if you can pay for something out of a business account. Try to buy at the best time. Can you be, first of all, behind the times? So instead of being a leading buyer of technology, can you use the iPhone 4 instead of the iPhone 5? Can you wait a year to pick up the new product?

Instead of being on the avant-garde of, I think that means in the front, instead of being on the front end of hybrid cars when they're very expensive, can you come along a couple years later and pick them up when they're a lot cheaper? So simply by just being a little bit behind the times, it'll save you a substantial amount of money.

So consider, can you be behind the times? Can you buy off peak? Can you travel on the weekends or the holidays or in that shoulder season that we talked about? Or can you go to a region of the country or the world that's currently out of favor? It costs you a lot more to get to Europe right now from the US than it does to get to some other destination.

So could you go to South America instead of to Europe? I'll tell you where the best travel deal is right now in the world, Egypt. Now I'm not sure most people aren't going to want to travel in Egypt right now, but a few years ago, Egypt was not that cheap to travel in.

But today, I guarantee there's deals left and right if you are one who's able to enjoy that style of travel. So can you travel to somewhere that's currently out of favor or travel in a time that's off peak? Can you buy something that's a little bit old but still good and repurpose?

Could you buy the day old bread? The day old bread can, my example is, you know, if you're going to buy fresh, if you're going to butter up a piece of bread, I would probably want to bake it fresh or buy it fresh. But if you're going to make some French toast and you're going to take that bread and cover it with eggs, buy the day old bread, save the money.

Can you plan ahead? So the best time to buy Halloween candy? The day after Halloween. Buy the Halloween candy the day after Halloween and save it for the next year. Buy your Christmas gifts the day after Christmas. If you, this last year my wife and I went shopping the day after Christmas and stocked up on all of the birthday gifts that would be needed for the nieces and nephews and have a big box full of them.

They're cheap the day after Christmas. They're not so cheap in March when you need them for the birthday. But by planning ahead, you can save a substantial amount of money. If you're on a road trip, buy your gas in the cheap states before you drive across the expensive states.

Can you buy at the right time or season? So buy your gardening stuff in the fall when the prices come down. Buy your car at the end of the month when the sales people are under pressure to make a deal. Buy your houses in a depressed market. Go back five or six years at the height of a real estate market.

That's not the time to buy a house. But a couple of years later, that's the time to buy a house. So look at what's happening in the market and consider the best time to make a decision. Buy a business when it's a tough time for the business. You can get a lot of deals if you're able to go against the flow and see the macro trends that are available.

Try to find the best source for your product or service. So if you're going to buy something, can you buy it from a local supplier? A local supplier that supports your values and supports your communities. Could you buy it from a company that has certain ethics or certain business practices that are important to you that you want to support?

For example, could you buy energy from a renewable source instead of just a cheaper conventional source? Or is there a company that treats its employees in a certain way that you feel better supporting with your dollars? Could you buy from a family member? If you're going to rent, could you rent from a family member?

I'll be frank, I always scratch my head a little bit as to why so many young people don't simply rent from parents and family members. Now I understand the whole get your wings and fly, but for years I've rented from my parents. I want to make sure that they receive the value of my rent dollars instead of some unknown person.

To me, I would rather support a family member instead of an unknown person. Could you buy from a smart place? Example here is Diamonds. Best place to buy Diamonds, at least according to my research right now, Costco. According to various, according to Consumer Reports, best place to buy Diamonds is Costco.

Remember, Costco has a maximum 14% markup and they have a well qualified, well regulated series of gemologists that will grade the Diamonds so you know the quality that you're getting and you got a maximum 14% markup. Compare that to going to Tiffany's and buying your Diamond there. You're going to get the same product for substantially better value and lower cost.

So consider that, consider the place that you get things like that. Do your research. Can you buy it used and still good or simply get it free? Can you buy something off of eBay or off of Freecycle? Interestingly earlier I mentioned the cloth diapers. One thing that I do and that my wife and I do is if we need something, often times we go on Freecycle and ask if anybody has it.

So with cloth diapers, just went on Freecycle and asked if anyone had it. We got a bag of about, I think something like 10 or 20 of them for free. That's a substantial value in the marketplace but the person was able to pass them on for free and that was such a blessing.

Right now I'm looking for some weights, like a weight set, a barbell set. Well, go on Freecycle and I haven't actually gotten any responses to this one but the first thing I did was send out an email on Freecycle. So, worth considering. Try to see if you can get it used and still good or simply just get it for free.

Can you buy from a company that has a lower built-in cost? So for example, can you bank with a credit union instead of a bank? This would be, this is extremely valuable. A credit union doesn't have stockholders that it has to make a profit for. So if you bank with a bank that is traded, either publicly traded like the big ones, Bank of America, Wells Fargo, SunTrust, these types of large banks that are publicly traded or that's privately owned, these banks are in the business of making money.

There's nothing wrong with that. That's awesome. But you're going to contribute to that profit. So is there a local credit union that is going to wind up providing the same service for you with a lower cost? If so, could you seek that company out? If there's a local credit union, you'll get higher rates of return on your savings and your deposits and you'll get lower costs for loans.

It's as simple as that. And the reason, if it's well run, and the reason is that the bank has to make a profit. The credit union does not exist to make a profit. It exists to serve its members. Could you buy from a mutual insurance company instead of a stock insurance company?

In insurance companies, there are different ways that they're structured. One is where they're structured in a mutual format where there are no stockholders. So there are property and casualty insurers. My insurance, my car insurance is with USAA. Every year I get a dividend check. And that dividend check is received and that's an amount of money that is received that is my refund for me on my premiums and it represents the insurance company's profit.

That's refunded to me every year. Could you work with, so that's different than another company that's in the business of making money and the only way I would be able to access that company's money is by owning their stock. Again, nothing wrong with that, but consider your choices. Could you work with some sort of co-op or collective instead of buying from a for-profit institution?

And there are all kinds of interesting versions of this, so consider it. Could you buy in a different state, a different region, or a different country in order to get a better deal? So can you buy something in a different state to save on sales taxes? There are lots of places where people live close to a state line and they'll go across the line to buy their goods in order to save on sales taxes.

Do the research. If you're going to make a big acquisition, that could be something that's substantial. Could you buy in a different region of the country where the demand or the price is different? An example is, recently I was reading an article talking about Subarus. Up in the Pacific Northwest and up in the North, Subarus are very popular and in very high demand.

So the prices tend to be a little bit higher. In the South, however, they're not so popular. So the company evidently, according to the article that I read, is working to increase their sales in the South and offering much better deals in the South. Well, if you live in the Pacific Northwest, now may be a great time to fly to Florida, buy yourself a car, and have an enjoyable road trip home for a lower cost than what you would have paid just to get the car back home.

So look to see if there's a different region or a different country. So as far as country, Mercedes Benz and BMW, I think, and some of the other German car makers have programs. I'm not sure if all of them do. I've read about some of them and I don't remember the names.

But some of them have programs where you can buy the car at their factory in Europe and then you can drive your new car throughout Europe on a European vacation. And then when you're done, you take it to the port and they'll ship it back to the U.S. for you.

That's a good way of building in a lot of savings if you buy direct from the factory. I guess it's not technically direct. It's going to be through a dealer. But you're saving because you're buying from the factory and then you've got a trip through Europe. Think about things like medical tourism.

Medical tourism is increasingly really a growing market. So if you've got an expensive amount of, a large amount of dental expenses coming up, and these are planned dental expenses, sometimes you can go to another country, have the work done at an equivalent value and equivalent skill level for such a substantial discount that your trip winds up being free.

There are countries in Asia, countries in South America that are specializing in this. It goes beyond just dental stuff as well. I've read an article of somebody who went to Mexico to have their baby because it was a substantially cheaper value than it was, a substantially cheaper price than it was in the U.S.

and had a very good experience. So consider that. Could you find some sort of waste stream to use? And these are all trying to find the best source of products. So is there a waste stream? Is there an off, a waste, I don't know what else to call it, a waste stream that's going out from a business or from a service nearby?

So the one that I use is can you order up a truckload of wood chips from the local tree company that has to pay to dispose of those things and was happy to drop them off for free? Or can you order up a load of manure for your garden from the local horse stable?

All these things are free mulch and you can use it and spread it out on your property instead of paying for it. If you need compost, the local municipal dump where I live has free mulch and free compost that is available. Can you find some sort of waste stream for other purposes?

Can you find food for your animals? Could you see a bunch of food that's consistently thrown away that's appropriate for your animals? Consider it. Could you get free bones for your dogs or free vegetables for your pets? I don't know. Consider it. Look for stuff for free on the side of the road.

You'd be shocked at the stuff that I often see for free and pick up for free. Get the absolute best product or service that you can find. Research the best value. Use resources like consumer reports. Even better, use online forums. You're going to learn more in an online forum about what's the best value in a specific area than just about anything else.

So look for the best value. Can you buy it for life? An example would be instead of buying a Teflon pan that you're going to have to be replacing in a year or two, could you buy a cast iron pan which could potentially last for three generations? Could you buy a vehicle that's going to last for a long period of time?

Could you buy a vehicle that's renowned for quality, a Toyota, a Honda, something like that, that's renowned for a long lifespan instead of the option that's just simply cheaper up front? Can you buy a product that you can repair? This is something that we don't think about much in a disposable society, but can you actually fix the product?

It may be worth it to buy something that you could take apart and fix if it broke rather than something where you have to scrap the whole thing and buy a new one. Could you buy a more efficient version? So could you buy the high efficiency appliance instead of the less efficient version?

Could you buy a product that has less processing, that's maybe lower on the value chain? Can you buy just straight, the example here is bagged rice instead of the rice that's microwave rice? You're going to get cheaper prices. Can you just buy something that hasn't had all the inputs put into it and get a much lower cost for it?

Try to substitute something else in order to get the best solution. So here are some of the ideas I came up with on this one. Could you easily do without and not experience negative consequences? Sometimes it's actually pretty simple to just simply do without. We often don't think of that though.

Can I just do without? Decide that I don't need this and it's no big deal. Just skip it. Skip the purchase. In a modern consumer society many people purchase things just purely off of impulse. They don't want to spend off the impulse instead of just simply consider if you could just do without this.

Can you completely eliminate the need for an expense? So you can optimize your commuting costs, that's true. But could you just live closer to your job? Is there a way that you can just simply eliminate the expense? Could you use what you already have and wear it out? Can you drive your car for an extra 100,000 miles?

Could you ride that bike for a little bit longer? Most of the time, much of the time the answer is yes. I had a car that I drove to 315,000 miles. I was so proud of it. And I actually know the person who owns it now. It's still going strong at 350,000 miles.

Things like cars, your best bet is wear them out and wear them out to the point where they literally have to be driven to a junkyard where they have zero resale value. Wear out your clothes. Wear things out. Once you've bought something, wear it out. Could you change your mind instead of your circumstance?

Example here is I'm fascinated with RVs. Someday I'd like to have a nice RV I enjoy. I think it would be really fun, especially intrigued by truck campers that go on the back of your pickup truck. But the question is, is it really about having the RV or is it really about taking the trip?

I can have a lot of fun with a tent in the back of my car. It doesn't cost me any money. And just set up a stove. More than I need the RV. So I can and do adjust my mind. It's not about having the gear. It's about simply having the experience and the experience.

If you're camping with kids, your kids are going to have just as good a time sleeping in a tent as they are going to be sleeping in a $100,000 RV. So could you change your mind instead of your circumstances? Can you adjust your real goal? If you want to take a road trip to South America, that's one of my things, can you just use the car that you have?

Is that the goal? Is the goal to take the trip? Or is the goal to have a super cool vehicle that you spend lots of money on? Either is fine. If you're into the super cool vehicle, awesome. But a lot of people, if they would just simply go, you can do the trip in what you have.

Everywhere in the world they drive cars. Can you just do without something? On the car thing, do you need a fancy roof rack or not? Many people buy an expensive fancy roof rack and sometimes you just don't need one. I watched someone, you could buy a fancy roof rack to put your surfboards on.

You're in Florida where I live, you could see that. The other day I saw somebody who took two Fun Noodles, purchased for about 50 cents from the local discount store, threw them on his roof and strapped his surfboard onto that. So can you just do without or substitute something else?

Can you make or grow it yourself? Could you grow some of your food? Can you make something yourself instead of buying something? Could you repurpose something else? I was watching a friend recently, a friend has some chickens, they turned a dresser that was old and worn out into a chicken coop and then added some screening around it.

But the dresser drawers is where the chickens stay and the main structure became the structure for their chicken coop. That's a valuable thing to do, just repurpose something. Can you increase your internal strength so that you don't have to keep up with the Joneses? Are you strong enough to chart your own path?

This one's free, go to the library and get some books on building your internal self-image. But can you chart your own path instead of having to keep up with everyone else just simply because you're stronger as a person? Can you buy something one time instead of an ongoing expense?

So if you are someone who going to movies is really important to you, could you put in a really nice movie theater into your home that you love being in instead of going out to the movie theater every week or two? Can you just pay for it one time and have the ongoing expense be a lot lower?

Or flip it out, are you someone who you're not going to go that much but you're putting in an expensive theater that you're not going to use that much, just go to the movies instead of putting in a nice one. So flip it, consider your actual needs. Could you buy a business that's associated with something instead of paying for the something?

You probably aren't going to, this one, but I know a friend of mine who bought a golf course. He's a golfer, he golfs his own course now, he still golfs other courses, but now he's in the business, he's taken his love of a business and turned it into an income, his love of a sport and turned it into an income stream and now other people pay him to golf on his course and it really wasn't that expensive that he did.

I won't go into any more details but it's kind of interesting. Could you buy something that's more concentrated? Could you buy shaving oil instead of shaving cream or something that has more of the good stuff? Could you change your habits? Simply associate your habits, we talked about with cell phones, do you need to talk on the phone in the car or can you talk at home where the cost is cheaper?

I've used for years a dictation service, that dictation service is a great service, the one I use is called Copy Talk, it's a great service but an ongoing monthly subscription. I was able to find a new solution using Dragon on the computer and just simply by changing my habits instead of doing stuff from my cell phone in the car, I was able to record my notes in front of the computer, it saves a substantial amount of money.

Could you increase your skill instead of buying yourself a solution? So a lot of times you have to buy solutions for things that you're not skillful in. An example would be if you need some sort of financial tracking software, there's lots of free versions out there but let's say you're going to pay for something like Microsoft Money or Quicken or QuickBooks or something like that, could you simply learn to run an Excel spreadsheet?

It's probably already on your computer, if it's not use an open office, open source version and replace the buying decision with increasing the skill. Can you use the library instead of buying books, magazines, e-books, etc.? My library has a wonderful website and they have an option where I can go on there and I can request books to be sent to the one that's very near my house, actually about a quarter mile, a third of a mile away from my house.

So by anytime I'm going to buy a book or I'm interested in something, I just pull up their website, hit reserve, they'll send that book to that library for me. I can do it right online, right when the impulse strikes and I'm giving into my impulse of getting a book but I'm not paying for it except with my taxes.

So consider if either that tip is useful for you with your books and magazines and things like that or if there's some other way that you can take that idea and use it with something else. Can you do things yourself instead of outsourcing them? So can you mow your lawn yourself instead of hiring it done?

Can you clean your pool yourself instead of hiring it done? Can you do your taxes yourself instead of hiring it done? A lot of times by simply doing things yourself, you can save a substantial amount of money. Now on the flip side, can you outsource something instead of doing it yourself and save a substantial amount of money?

It's possible that you could learn to do your taxes yourself and if your situation is very simple, you probably should. But if you have any complexity whatsoever, perhaps a good tax advisor could save you far more than they cost you. You might be able to do your own legal work but perhaps having a good attorney work for you is going to save you far more than it costs you.

You might be able to do your own financial planning but perhaps hiring an advisor may save you more than it costs you. You might be able to pull your own tooth but perhaps hiring it done would save you more than it costs you. So this is going to depend on your complexity and going to depend on your situation.

So consider both sides of that. Consider doing something yourself instead of having it outsourced or consider simply hiring a business to do something for you or hiring somebody to do something for you instead of doing it yourself. Can you combine and repurpose two things? Example here is a friend who uses boats and a few years ago he wanted to repower his boat and add some new outboard engines to his boat.

Now, I don't know, those of you who aren't boaters, outboard engines can be a substantial investment, $20,000 to $30,000 plus for a large powerful outboard engine and his had two. What he did was he bought an extra boat that had better engines on it, took the engines off of his boat, put them on the new boat, flipped the engines out so he had the better engines off the one he bought for the boat that he wanted to keep and then resold the boat.

And he basically had, he didn't want to sell the boat for the total cost but his cost of the new engines was substantially cheaper than what it would have been otherwise. So consider that. Could you have a junker parts car that you buy and then put those parts in or could you find some way to do this with other items?

Maybe you're not a car or a boat person. But I thought it was such a great idea. Buy a boat for the engines, take the engines off of it, put your old ones on there and then resell the thing and it was a lot cheaper than going out and buying the new engines a la carte.

Can you substitute for something better? Can you take money that you would spend on college tuition and spend it on global travel tuition? My personal opinion, you're going to learn a lot more traveling for a year than you are in a college classroom. So it might be worth it.

Could you use new technology instead of old? Could you use a virtual classroom for college instead of the physical classroom? Is there some kind of new technology that you could use? Can you do a Skype meeting or a GoTo meeting instead of needing to get on an airplane and travel someplace?

Worth considering. Could you choose different hobbies that are by nature less expensive than others? So could you choose consciously to enjoy and find fulfillment in gardening instead of racing cars? And could you choose to get your adrenaline and enjoyment out of gardening? Something that makes money for you if you're eating your own food instead of something that costs you a substantial amount of money.

Or maybe can you just make a switch to mountain biking instead of racing cars? I knew somebody who was very wealthy and I talked to them about their wealth strategy and they didn't have one. Didn't have a strong financial plan, didn't have a strong wealth strategy. But I asked them about his lifestyle and his lifestyle was, his hobby was mountain biking.

Not that expensive to throw a mountain bike on the back of a car, even a really nice one. A lot cheaper to be a mountain biker than to be into driving big giant 4x4s across the country or racing cars at 100+ miles an hour. Can you enjoy reading instead of movies?

Little things like that make a big, big difference. Can you use something instead of owning it? So can you use land or use a community garden instead of having to buy yourself land or buy yourself a house that has what you need in it? Can you live in an apartment instead of owning a house?

Sometimes you're going to have lower costs there. Can you optimize in order to eliminate an expense completely? I actually already touched on this one but on my notes I imagine you can completely optimize your efficient, develop an efficient commute. Could you just live right next to your job? If I were working at McDonald's, I guarantee you I would be living close to my job.

Sometimes maybe just by cutting out a commute you could save yourself a substantial amount of money. So consider there's some way that you can just simply eliminate an expense instead of buying that expense. With your lawn, could you xeriscape your yard instead of paying someone to cut it? Can you build something yourself?

Can you make your own furniture instead of buying it? Can you build a bunk bed for your kids instead of spending for one? Can you use a cheap technology instead of an expensive technology? A lot of times there's simple and inexpensive solutions available and there's expensive and complex solutions available.

Two that I'm interested in, one is my house in Florida is currently poorly insulated and it seems like the best insulation that I can do is this spray foam insulation on the underside of the roof deck. And I'm considering doing it but man is it expensive. One alternative idea that I've read about that I'm interested in trying and seeing if it works is to set up basically a sprinkler system on your roof that during the day when it's hot it pours water on the roof and soaks the roof and then it uses evaporative cooling to achieve the same goal that the spray foam insulation could achieve.

I don't know if I'm going to do it, I don't know if it works, but it's a good example to me of an inexpensive technology of using something like that instead of the expensive technology. I recently was looking at some articles on an urban homesteading blog about using what they call Oya's for irrigation.

Oya's is just an unglazed clay pot that you stick down in the soil and fill it with water and then because it's unglazed the water gets out of the pot over time and keeps the roots of your plants wet and your roots can get the water from it. Could you do something like that instead of an expensive color heads?

Look for the cheap and simple before you look for the expensive and complex. Can you replace maintenance intensive versions of things with low maintenance? So I mentioned lawns. Do you have to have a very high maintenance lawn or can you figure out a landscaping system that is less maintenance?

Can you change the style and be a trendsetter instead of a follower? I had to chuckle. I don't know if you've heard it. There's a rap song. I don't even know what the name of it is. I just had to laugh when I heard it. It's quite popular now where the entire song is about the good deal the guy got on his clothes from Goodwill and about how the fact that he wears his grandfather's clothes from Goodwill and that's his style.

Now I'm not really into the song. I thought it was pretty funny to listen to, but consider what the guy was doing. Can you be out in front changing the style and you're the one who sets it? Can you be the one who's buying clothes from Goodwill and not being the style instead of following everyone else?

Could you use technology to bypass limitations? There's a singer I was reading about the other day. I think his name was Alex Day. The young man has just simply done a brilliant job of building up a following on YouTube and has never had a record label and has never paid for any of that stuff.

He's just done it all on YouTube himself. I subscribe to some guys called the Piano Guys. Same type of thing. They put all their music on YouTube and have all their views there and that's their primary recording system that bypasses all of the record, all of the establishment. Can you self-publish a book and put it on Amazon for Kindle download?

Lots of people are doing it. It's a lot cheaper and it bypasses all the cost of all those things. Can you learn the details of what you need to do from a library book instead of paying for advice because you're uneducated? So can you go and study something? Can you learn about taxes or learn about another plumbing or something?

All this knowledge is available from you. The world's knowledge is available from an internet connection and from a library. You probably have both of those already in your life. Can you simply eliminate something instead of paying someone else? So can you again zero-scape your yard instead of doing landscaping?

Can you design something to be working passively? So can you develop a water efficient property instead of having to water your lawn? Can you develop the structures and the contours of the property where the water gets retained in the soil instead of you having to go out and turn on your sprinkler every day?

This is something where I'm fascinated by and really interested in and at some point maybe we'll do a show about these types of things. But just design it. Can you design your property to be productive instead of without a lot of maintenance instead of being an energy sink? So can you plant fruit trees instead of ornamental trees?

Can you repurpose wasted space? Can you put solar panels up on your roof to heat water or to give you electricity? These types of things could save you substantial money because you take an ongoing cost and you turn it into something that's a one-time cost. Well now, instead of having to constantly take money and run it through the tax system where you pay income taxes and ongoing utility taxes and pay for something every month, maybe you can take something and turn it into a one-time cost that you can lower your income from and still enjoy a high lifestyle.

Can you replace the expert and become the expert yourself? We talked about this already but can you just simply learn about something instead of having to hire an expert? Or can you simply hire the expert for a small amount of time and save yourself lots and lots of money?

There are a lot of examples but there are so many things when people do their own taxes or their own investments or things like that, make many, many mistakes. An example would be an expert would immediately say you always put your income producing assets into your retirement accounts. You own your bonds in your retirement accounts and you own your stocks in taxable accounts if you have those.

And an expert would know that immediately but many people haven't thought about that. You put your corporate bonds inside of your taxable accounts and you hold your muni bonds out of it. Teach you how to buy the right class of stock for your situation. So could you hire an expert just for a little bit of time that would help you?

Consider that. Consider can you do it yourself or consider can you hire an expert. Next, what if you made money on the deal instead of it costing you money? So can you get something for free and then resell it? Can you turn an expense into an income stream? The free and then resell it, I've had people offer me stuff.

A friend of mine had some floor mats for his car. He said sure I'll take them. They were for a specific brand of car, actually for a Land Rover. I knew somebody that had a Land Rover, asked if they wanted them and was able to resell them to him and was able to get some income off of it.

Turning an expense into an income stream, there are all kinds of great new ideas that are coming out. There's an idea called Park at My House, link in the show notes, where people park their car at your house while they travel. So instead of them paying a much higher cost to park at the airport, to park at your house, you rent out your driveway and have income from it.

There's a new idea that's being tested out called Flight Car. And the idea is that you can rent your car out while you travel instead of paying to park it. So you fly, this company arranges for a rental of your car while you're gone and you receive income for it.

Obviously there's challenges associated with that but what a cool idea. Flight Car. Can you rent a spare room out on Airbnb? If you have a spare bedroom, rent it out for part of the time. Or maybe you have a back, a little mother-in-law shack behind your house type of thing.

Incidentally, you can collect up to two weeks of income for the rental of your personal house and that income is received completely income tax free in the US tax code. So can you do a house swap while you're on vacation? I'll link to an article Mr. Money Mustache wrote about what he did doing this, renting his entire house out while you're on vacation.

What a cool way to finance a vacation. What a cool way to take something that most people have as an expense and turn it into an income. Can you pull income from something that's just simply usually an expense? It used to be that less now than in the past but in the past you could find companies that would pay you to wrap your car with advertising while you're driving around.

And these companies would pay you a fee based upon the amount how much you drive every day and what your car is, what kind of car it is and they'll give you a wrap for a local company and that car becomes a rolling advertisement for them. So there's an expense that you usually have that you can now create an income stream from because you put a billboard on your land.

I always think about the landowners that have land next to highways and I wonder what the rents they receive on the billboards they put out there on their arm. I'm sure it's not a ton but I'm sure it's better than nothing. Maybe it pays their property taxes or something like that.

There are people who've tattooed logos on their body for pay. There's a guy who started, I'll link to all this in the show notes, there's a guy who wears a t-shirt for pay. And so I think it's Iwearyourshirt.com or something like that. And he allows people to send him their shirts and he wears them for pay.

This same guy, his former name was actually Jason Sadler. Currently his name is jasonheadsets.com. So he auctioned off his last name. He put up a website called buymylastname.com and auctioned off his last name. And headsets.com bought his last name for a year and so he's officially changed his name and everywhere he goes it's jasonheadsets.com.

Interesting idea. Can you rent an extra room in your house or build an apartment behind your house to rent out? There are a lot of times where maybe someone has a little bit of land, could you build just a small garage apartment and rent it out for several hundred dollars a month?

That can be substantial over time. The point is that consider if there's something that you have that's currently an expense or where you have space and figure out if there's a way to get paid for it. Could you buy an RV for your business and then wrap it with your business name for the advertising?

Can you turn an expense into an income stream by using your inside knowledge? So for example, if you're into wearing expensive name brand clothes can you buy them at good deals from consignment shops and then resell them when you're done with them? Instead of it being an expensive hobby it becomes either a cost neutral or maybe even a cost positive endeavor.

Books, I've seen people do this with books that are into books. Can you turn your hobbies into money? So if you are into something like scuba diving, that's awesome, it's a hobby. Could you become a part time instructor at the local scuba diving club? Well this would allow you to number one earn a little bit of extra income, number two be around the scuba diving environment and you would have opportunities to dive with your students where you're being paid to dive.

You'd also have opportunities to now where if the club has a boat I guarantee the instructors use the club property and are able to go out and do their own dives from time to time. They're able to use the club equipment without necessarily paying a fee for it each and every time.

So could you take a hobby like that and turn it into an income stream? You could probably do the same thing with hang gliding or flying and become a flight instructor. I know a lot of people who are around aviation work as flight instructors and it allows them to get time in the airplane and get paid for it or have discounts on services.

Could be worth pursuing. Now those may not be your hobbies but is there some way that you could apply that same thought process to your own hobby? Could you buy something in bulk and then resell part of it? So I'm interested in getting some grass fed beef. Well in order to do that I kind of have to buy a whole cow.

So could I buy, this is a question I'm asking myself, could I buy an entire cow, turn around and distribute parts of it and charge people something for my time and effort of doing this and then wind up with a lower cost or maybe no cost for my share of the meat just simply by doing the work.

There are lots of things where people could maybe arrange something like this. Buy something in bulk and then resell it. Can you eliminate the expense of something completely? So instead of, you know, can you store your stuff on Craigslist? It's one of my favorite things. I can't remember where I first heard that idea or maybe I made it up.

I have no idea. But instead of paying for a storage unit which holds your stuff, why don't you just sell your stuff? Have it on Craigslist. Other people buy it and if you need it you go back on Craigslist and you can find someone else selling the stuff right back to you.

So store your stuff on Craigslist. Can you buy it there if you need it there? So when you're traveling instead of having a big bag full of all the stuff that you might need, just take a little bag and buy it there if you actually need it. You'll save on baggage fees and just the straight up hassle.

Can you increase your skill when using something? Example would be if you've got to have an expense, could you learn to increase your skill with handling it? Could you learn when you're driving to drive more efficiently? I'll link to a video on this guy on YouTube, a really interesting video.

The video is called the Mad Max Hypermile. Everybody drives this big old pickup truck and gets 20-30 miles per gallon out of it. Now it's pretty extreme but remember we're studying the extreme to learn and to back up to what we can do today. Can you learn to, if you're going to travel, can you increase your travel skill and learn how to work through frequent flyer programs and get deals and discounts?

So use the expenses that you're already going to have and pay for things efficiently. Can you take care of what you already have instead of replacing it? Even if you get something for free, can you just take care of your stuff? Eliminate the expense of replacing something by being gentle with it, by caring for it.

Is there an alternative to buying something? Can you rent instead of own? If you need a pickup truck twice a year, can you just rent one instead of going out and buying one? If you enjoy going out on the boat a few times a year, can you rent a boat or join a boat club or simply charter a boat?

If you once a year take an out of town road trip and you need a reliable car to take you across the country instead of an older car or a bigger car to take you across the country, can you just rent one? It might be worth considering. Or flip it around, can you own instead of rent?

So are there things that you can do instead of leasing something, can you buy it inexpensively? Instead of leasing your cable modem, can you buy one? So always consider, is it more cost effective to rent instead of own or is it more cost effective to own instead of rent?

Can you carpool or can you share? Can you carpool on a ride? Can you share a ride? Can you share tools instead of buy them? Can you borrow your neighbor's tools instead of going out and buying all your own and in exchange you lend him the specialty tools that you have?

This can be applied in a library concept. Can you get your kids toys from the toy library? Instead of buying new toys for them every few months, can you go to the toy library and swap out their toys? If there's not one in your town, start one. Start a tool library.

The library concept is such a great concept, it could be applied in so many different areas. If you need to borrow money, borrow money in an intelligent manner. So can you do intelligent financing? Most people, many people, when they go out and buy a house, they kind of automatically say, "I'm going to take out a 30 year mortgage." But what if a 30 year fixed rate mortgage isn't right for you?

And I'm not saying that it is or isn't, just saying, think about it. So many times, maybe it would be better for you to do something like a 5/1 adjustable rate mortgage or a 7/1 arm. Most people don't stay in their houses for 30 years. Why overpay on interest for the first 5 or 7 or 10 years of a mortgage when you're not going to stay there for that long?

Now, you need to read the fine print, you need to be careful as rates may adjust for you. But many people could save a substantial amount of money by pursuing a different financing strategy. Or if you're going to borrow on a fixed rate mortgage, could you borrow on a 10 or 15 year mortgage instead of a 30 year mortgage?

There's a substantial spread in interest rates between 10 or 15 year mortgages and 30 year mortgages. And the reason, at least as far as my research, has largely to do with the default rate. People are much more likely to default on a 30 year mortgage than on a 10 or 15 year mortgage.

So because of that higher default rate on 30 years, that's built into the cost of the loan. Well, if you're not going to default, and if you can afford the payment, shorten up the term of that loan and save yourself a substantial amount of interest. If you need to borrow money, can you do it with unsecured financing instead of secured debt?

So can you borrow off of something where, for some reason, something happened beyond your control and you weren't able to make the payments, the debt is not secured by property. It's unsecured credit card debt or unsecured personal loan instead of attached to a house or attached to a car that could be repossessed.

This would be an example just in a practical application. I struggle sometimes to understand why people put additional debt onto their house through the form of a home equity loan or a home equity line of credit instead of doing unsecured debt on a credit card. Well, there can be reasons to do both.

The house may have a better interest rate. You may be able to borrow the money at more favorable terms. But there also may be reasons to do it unsecured instead of secured. Can you get non-recourse loans instead of recourse loans where if you do default on it, then if you do default on the loan, the lender is not able to come after you for the balance.

Can you be careful with your assets and make sure that you build wealth and assets that aren't attachable or that aren't judgment proof? The state of Florida where I live has a very generous homestead exemption where if you were to be sued and were to be forced to declare bankruptcy, you could retain the entire value of your house with no dollar limit as far as the value of that house.

So it would make a lot of sense to have a paid off home and borrow on other property instead of on your personal home. Also IRA funds. IRA funds generally, depending on IRAs and 401(k)s, generally protected in bankruptcy court. So it wouldn't make sense to borrow against a 401(k) in many examples if you were worried about things like that.

Now, it may make sense if that's where you needed the money, but consider it. Can you save for something? So save money. Set up an automatic savings fund, an emergency fund or a travel fund or a car maintenance fund or an insurance fund. Save the money. Pay your insurance on a six month or once a year and get the difference and then just you set aside the money instead of doing it every month.

Can you use other people's money, other people's time or other people's resources instead of your own? The real estate industry made the OPM words famous, but it's still very, very applicable. So can you use and leverage somehow other people's money, other people's time or other people's resources? That's what business people do.

That's the whole point and nature of business. Can you substitute other kinds of capital instead of financial capital? So instead of spending money on something, can you have social capital? By the fact that you have a lot of friends, you can borrow something from them. That's social capital. Can you substitute knowledge?

So for example, if you need a weed eater, are you able to fix the weed eater for a friend of yours and you borrow the weed eater and fix it and return it? I know I'm stretching a little bit with the examples, but think about how this could be applied to your situation.

Look for ways, for example, student loans. Could you repay your student loans with some of the government debt forgiveness programs instead of paying them back yourself? Run the calculations on that kind of thing. Run the calculations and see if there are programs available for you. If you have student loans, can you work for it as a teaching program, there are medical programs.

Look to see if there's a program where instead of you paying back your student loans, the government will forgive the debt for you. I wish the program weren't there, but it is, so why don't you use it? Can you set something up where, for example, there's a website called You Promise where they'll pay back your student loans with a percentage of your expenditures if you buy through their portal.

So can you buy things that you would buy anyway, but buy them through You Promise and have them pay back your student loan based upon that rate? Can you start a business doing things you want to do anyway? If you're into cars and you would be spending a lot of money on cars, start a car racing business and have the racing be your business.

Excellent tax planning and also fun and you may make a bunch of money. If you love to fish, start a fishing charter or a fishing guide service. Be smart about where you place assets. So if you have an expensive car and a personal car, you should always put the expensive car into your business where you can depreciate it as a business expense instead of into your personal world.

Also the higher ongoing expenses could be paid for with deductible dollars instead of non-deductible dollars. So consider where you place an asset. Be intelligent about it. If there's a hobby that you're into, why not start a business? If you were a yoga fanatic or a piano teacher, why not start a yoga business?

If you start a yoga business, now your cost for your training classes and your retreats now become a deductible business expense instead of a personal expense. If you're into music, start a band, record music. Now you can write off your band touring and your travel. Do you think the big recording artists pay for the cost of all of their travel expenses out of their personal checkbook?

Absolutely not. It comes out of the business checkbook. So think about if you can do the same thing. There's no reason why the rules are the same for you and for them. Run your band in a business like manner and it'll help you. A piano teacher can deduct the cost of a piano.

A performer can deduct the cost of getting to their performances. So if you have skills and things like that, consider how to leverage your skills and your abilities and leverage the tax code. Can you find some kind of angle, loophole or exception that you can exploit? Could you get someone to pay for your college education by working at the college?

Can you work at a job that'll reimburse you for college expenses or work at the school where you're studying? That's super valuable. Can you work at your kid's school instead of paying the tuition straight up or have your spouse work at your kid's school? Could you play the system?

This example is not going to apply to everybody, but if you have kids that are going to college, let's say that you have some money. One aspect of the college financial aid system right now is based upon your income. So there's a form that's called a FAFSA, a free application for federal student aid.

That's a need-based number that the government says, "Disclose to us your financial situation and we'll let you know how much money we think you should be able to contribute towards your kid's college." Well, if you're planning on taking some time off, why not take a couple of years off, a year or two off?

Take a little mini-retirement, travel with your kids, do some work on a personal project, drop your income down to extremely low level. You'll qualify your kids to qualify for more financial aid based upon higher financial need. I've never done this, don't know all the rules on it, but it seems like it could be an option.

Look into any kind of student loan forgiveness program or mortgage indebtedness forgiveness program. The HARP program that came out, I think it was HARP 2 that was actually somewhat effective where you can write off some balance of the money that you owe. Look into those types of programs. Maybe there's some kind of pricing anomaly.

Right now, as I record this in July of 2013, I've been hearing about all these great lease deals that you can get on certain cars, especially electric cars. My understanding is that you can lease a Nissan LEAF right now for about $200 a month. $200 a month total lease cost.

That's pretty substantial if you're commuting costs and you switch some of your gas costs over to electric costs. That's a subsidized cost. Sometimes companies will want to get their products out there so they'll basically develop these programs and they're subsidizing the cost of you getting the value. They're subsidizing it so that their products get out there and you get the deal.

Finally, look for a way to stack all these ideas and stack these functions together. I love the concept of stacking functions. It's a permaculture concept. Basically, try to figure out how many things you can do with one decision. Multi-purpose would be better than single-purpose. Figure out how to combine multiple functions in one thing.

Examples I came up with, these were just off the top of my head. I don't know if these things are applicable. You can figure it out for yourself. Think about how you can combine these ideas. For example, could you join the Mercedes-Benz Owner's Club or figure out a way to get into that club that would allow you to get a discount on the car?

Could you negotiate the price of that car aggressively with various dealers and with the factory based upon the region that you're shopping in and shopping on the internet and shopping on a telephone? Could you buy the car in Europe and pick it up at the European factory system so that you're going to drive it across Europe?

Do you have a reason to be in Europe on business anyway so you can buy the cost of the ticket to get there through your business, which turns some portion of your trip expenses into a deductible expense? You pick up the car in Europe and travel across Europe on your European vacation driving your own car.

Could you buy those tickets through a business credit card and then later have the miles available to you in your account? Could you get a discount on that airline ticket by doing online research for what the best airline deal is right now? Could you go at a time when the price is substantially depressed because you're going on the shoulder season?

Now you have your own car to drive throughout Europe, so because you have your own car you can travel to the places that are difficult for all the tourists to get with public transportation, which means you may get better deals and have a good time and then when you're ready you drop the car off at the port and fly home.

So I don't know if that's possible or not, I've never done it, probably won't ever do it, but think about things like that because is there a way that you could stack all those functions together? Could you, you need a college education, so could you get a job at the university where you are interested in going to school and because you're getting a job there the university will fund your tuition and they will pay for the cost of your tuition.

So instead of you having to come up with money you are being paid for work. Could you live at the university where you have lower expenses because you're living in university housing, you have discounted tuition, because you have university housing and you're next to your job and your classes you don't need an expensive car to drive while you're there so you have lower ongoing costs, you have more time freedom because you're in an academic environment and you're studying for academics and you have low income tax rates which allow you to save a substantial portion of your money.

And then could you take advantage of any university study abroad programs or swapping deals they have where you could go and either be a student or be an employee at a study abroad system and work living in another country for an experience but still working somehow in your prior country of residence where perhaps the wages are higher.

I don't know but I'm sure someone has put together some really interesting functions like that. If you need an appliance for your house can you find a very energy efficient washing machine and can you buy it used from the scratch and dent store and can you use either negotiate a cash discount or can you use a rewards credit card where you have an additional protection from the rewards credit card and can you pay for it from a local dealer who is making their income in the local economy.

Look for ways to find these types of ways and stack all these functions together. So that's my list. I guarantee that there are a few hundred more ideas that you may have and that you can come up with. Put the ideas in the show notes. Today's episode, episode five, go to Radical Personal Finance and look for episode five.

So put these ideas in the show notes and see what you can come up with. Most of all look for efficiency. Think about eliminating an expense completely. Think about optimizing an expense if it's something that you decide is worth it based upon your goals. Again, I wouldn't expect that these ideas, hardly any of them probably will apply to your life.

There may be things that apply to my life. But I think that the way of thinking about it can be extremely valuable for you. There are ideas in here which you can use. You can find these loopholes in your own planning and you'll be able to use these ideas in here for your own situation if you look for it.

These ideas are scalable. Let them mate with each other in your head and think about with the decisions that you have to make, think about how you can stack the functions and find some sort of way to get way more value for your money than many other people do.

With that, this has been another episode of the Radical Personal Finance Podcast. I hope you've enjoyed it. Shoot me an email, drop me a comment, let me know how I can make the show better for you. Thanks so much.