Thursday, July 30, 2015

How to Save Money On SAT/ACT Test Preparation

Welcome!  Another round of financial literacy this fine Wednesday morning begins with a little trip down memory lane…

It was 1993 and I was a junior in high school.  I had made the decision to attend college, carrying a 3.3 G.P.A at the time.  I rode the bus to the main public library (M.L.K) in downtown San Jose several weekends prior to SAT test day, and read several of the free Kaplan workbooks that were available there.  You know, the ones with sample test questions that have the answers at the end.  I must have tried at least 4 or 5 sample tests, and the results were always the same for me.  Mediocre.  I had no idea what it took to score well on the SAT, other than being some sort of genius and knowing all the answers.  "You can't study for it," people would tell me.  "Either you know it or you don't."  Well that was a bunch of b.s.

Pic of me in HS.  Early 1994.

The first time I took the SAT I barely broke 900 (back when 1600 was a perfect score).  I was able to try again months later, but this time I had help preparing for the English component.  My English 11 honors teacher had given us commonly used SAT word lists to memorize.  (Remember, English is my second language so this was very helpful at the time).  I scored 1024 the second time out, and had enough on my resume to get accepted to several universities.  I opted for junior college instead, where the SAT or ACT for that matter, wasn't even needed.

Sometime around the late nineties, the business of test preparation started to become mainstream.  I was hearing about Kaplan Saturday classes, and private SAT tutors to help improve outcomes for teens.  The rich kids were the ones paying for these more so than the inner city ones.  With each subsequent year, the stakes (getting accepted) became more competitive, and the need to learn the tricks of the test was indispensable.  Look at things today.  SAT/ACT test preparation is a multibillion-dollar industry.  The number of test prep centers more than doubled from 1998 to 2012 to over 11,000 today in 2015.  What has not changed is who can afford to get a tutor, or take weekend SAT prep classes...that is still a fixture in American society: the "haves" can; the "have-nots" cannot.

The test preparation industry is a racket!  You know it, I know it.  Even if you can afford to get your teen a private tutor or classes, you are paying for a service that helps someone learn testing tricks at most.  These services aren't helping your teen actually get smarter!  That's what 11+ years of schooling was for.  Here's a quote from a tutor:

 Linsea Mohr. “As a tutor, I see myself more as a puzzle decoder. I just show students how to arrive at the answer the most expediently and then they fly solo.”

Here's a comment left at the Motley Fool's: The SAT Gamble: Are High Prep Costs...

There are tutors in NYC that can correctly answer 99% of the questions on the verbal section of the SAT just by looking at the answers as they know exactly how the College Board creates the test, and they are more than willing to teach you all the tricks. 

As an educator, my take is this:  If your teen wants to go to a top university, and you can afford it, then pay for the test prep service.  It is worth it in my estimation.  I would rather you, however, encourage your teen to do what I will be recommending next.

SAT & College Admissions

Stop being part of the racket! 

There is an alternative to this decision-making dilemma many folks are burdened by.  It's called a boycott.  There are many great institutions of higher learning where submitting an SAT/ACT is optional.  Many of you may not have known that.  Here is an ongoing list of all of the universities that don't require an SAT/ACT score: List.  *Note: Make sure you determine if scholarships require an SAT/ACT score.

Just two days ago, George Washington University, a private university in D.C. became one of the largest and most prestigious schools to ditch admissions tests.  Take that College Board!  This is a huge shake-up, not to mention, it is highly controversial in the world of education.  GWU did not do this to impact the test prep industry, of course, rather, it did so to encourage first-generation college applicants, minorities, students with learning disabilities, and women to apply.  In other words, they are following the latest research that claims a student's G.P.A. is more of a predictor of success, than is a score on a high-stakes test like the SAT.

Do you agree with this move by GWU?  Do you think other prestigious institutions will soon follow GWU's lead?  What will this mean for the test prep industry?

The cost of attending college begins to accrue in high school, not college, as many parents with good intentions shell out money for their kids to get SAT prep.  We are at the perfect place in time to stop being complicit in the crime of paying for expensive test prep services that do nothing more than help our children become test "gamers."  It begins with You!

Until next time!  C-los...out!  

Monday, July 27, 2015

Make Your Child's Hobby A Financial Literacy Opportunity

What's happening everyone!  Today I'm here to tell you how you could be possibly shortchanging your child's financial literacy development.

Interests.  We want our children to take something up, a hobby for example, because we know focusing on an activity is great for their brain's analytical development.  Whereas some children get absorbed by some things on their own, i.e., they don't need much in the form of parental motivation, other children need prodding.  We take them to specialty toy stores, science museums, the zoo, and in general, places we think would interest our children.  Eventually, these kids do find something they like and want more of.

I've seen kids that are Lego geniuses, capable of building the Star Wars Death Star with one hand tied behind their backs.

I've been impressed by children on YouTube video who play instruments (guitar, piano, etc.) like professionals.  No doubt these children started "playing" with their instrument of choice as toddlers.  Some kids like spending time in the garden with their green thumb mom or dad.

In the same way adults are asked to consider taking a "hobby" to the next level, so should children.  For example, I have a retired friend who has been building bicycles, like literally taking a bike frame and adding parts one by one until creating a masterpiece, for over twenty years.  He loves bicycles.  He rides them, and custom builds them for his family and friends.  Recently, he has started building custom bikes for people in his central coast CA community.  They are paying him for his skill and eye in finding great deals (on frames, parts, etc.) on Craigslist.  He has taken his hobby and turned it into a way to make extra money on the side.

One of my friend's custom built bike.

We give each other this advice all the time, right?  "Hey, you're really good at Salsa dancing...why don't you charge for personal lessons?"  Well, what about our children?  Why aren't we pushing them to dabble in business?  Secret Millionaires Club Learn and Earn is a site that treats children as fully capable people, giving parents the tools they need to take a child from hobbyist to entrepreneur.

There is so much more in terms of learning that could be happening within a child and his or her love of a certain activity.  It all begins with financial literacy conscious parents, however.  If you just let your kids play and entertain themselves with their hobby, they are missing a good half of all the learning that can take place.  Questions are the key.  Here are some questions that will get the cogs and sprockets moving in your child's brain:

1) Can you think of a way to turn your love of raising rabbits, building Lego structures, growing tomatoes, caring for your dog/cat, e.g., into a business?   Meaning, as a way to make money?

2) How could you sell what you know how to do with your crafts, your baking, e.g., to others?

Have them do a brainstorm.  If they don't know what brainstorming is, teach this thinking exercise to them.  Make sure you tell them that there are no wrong answers in a brainstorm.  It's simply throwing ideas out there.  Who knows, they may actually come up with a viable idea for a business that with your help, can turn into a business plan.

Why did the majority of us wait until we were adults to start our first business?  Because we were never challenged to think about making money at a young age!  Our parents, though wonderful at providing, may have never encouraged the natural entrepreneurial spirit many children have.  And instead of having tried and failed at multiple businesses by the time we became adults, most of us had nothing in the tool belt of life experience to get underway in the world of business and money.

Being a serial entrepreneur begins at a young age.  The successful entrepreneurs of today started as children with a lemonade stand or a cookie sheet, you get the picture.  If this seems foreign to you, then use the great resource I've provided here today,, as a guide.  Don't shortchange your kids.  Expose them to business concepts at a young age!

Thanks for reading.  If you liked this post, make sure to subscribe and keep getting more like them in your inbox so you never miss out.  C-los, out!       

Friday, July 24, 2015

Make Your Kid's Allowance A Financial Literacy Opportunity

Welcome to another installment of CCM blog!  I am here today to talk allowances, the dough you give to your kid(s) for...

Location Allowance – An ECA Global Perspective |

Doing nothing OR
Doing their chores.

There are wealthy folk with good intentions out there that give their kids spending money because it is tradition to do so.  Their wealthy parents gave them "pocket money," and now they want to do the same with their own kids.  I'm talking people like the Hilton's, and the credit cards, plus spending cash they undoubtedly gave a young Paris as soon as she knew what money was for.  Because money is abundant, many wealthy kids grow up getting an allowance for doing nothing.  They ask, they get.  They're entitled.

The rest of us are giving kids an allowance for completing chores they've been assigned all week long.

Both of these reasons for giving kids money are not only wrong, but also bad for kids/teens.

Let me ask you this:  Are you paying yourself for doing chores?  When you, the parent, does the dishes or mops the floor, are you getting paid?  No!  So why should you pay your kids for doing chores?  Your children live in the home with you.  They are using dishes, producing garbage, stepping on the floors and carpets with their dirty shoes, just as much as you are.  Tell them:  "The chores we assign each other every week is about family cooperation.  These chores (doing the dishes, vacuuming, throwing out the garbage, putting the garbage cans on the curb, etc.) are so that we can live in a clean environment.  Failure to complete a chore will result in a loss of a privilege."

You decide what privilege your child will lose on account of forgetting or neglecting to do their chores.  Younger children will not want to lose their time on their tablet or computer(games).  Adolescents and teens will hate having their video game consoles put on ice or their smart phones taken away from them for a set period of time.

Why is it better to tie chores with privileges?  Simple.  When your kids begin to save their money from all of the allowance you have been giving them over time, they will not have the same motivation to continue to do chores.  They may think: Oh, I have enough money saved right now, I don't need to do my chores this week.

Money for chores is a bad tradition.  When your kids grow up and get a place of their own, will someone be paying them to do what's needed around the house?  No!  They will have relied for years on mom and dad to reward them for doing housekeeping essentials.  Some of these twenty-somethings have the audacity to call mom to come over and clean!  All because they never learned that chores are every household member's responsibility, without compensation.

You Want Your Kids to Experience Working for A Living

I can see why tying chores to money is easy to do.  Many parents want their kids to have the experience of getting a set weekly wage for a given amount of work.  Example: Vacuum once a week, throw out the garbage each time it's full, and do the dishes Tuesdays and Thursdays, and I will pay you $10/week.  Again, this is not how you want to do allowance nor how you should teach your kids about working for a wage.  No chores = loss of privileges.

Instead, tell your kids they have the ability to pitch a job to you.  Business owners depend on pitching their goods or services to new clients.  Consider your home a business, and your children freelancers who understand your business enough to pitch their services to you.  Encourage them to make detailed observations of what "your business" could use.  Could it use a window cleaning service?  How about a baseboard clean and paint touch-up service?  Does your backyard fence need to be sanded and repainted?  Encourage your child/teen to survey the backyard for potential areas that need servicing.

Then this is what I want you to do:

Have your child/teen write-up a quote.  It doesn't have to be complicated.  Tell them to:

1) Title their Quote.  Ex: "Quote for Cleaning Baseboards"

2)  Give you an estimation of how long they will take to complete the service they are proposing you need.  Ex: 1 hour, 1.5 hours, 2 hours, etc.

3) Give you a brief description of the service.  Ex: I will use a cloth, water, and some wood spray to clean all of the baseboards.

4) Give you a set fee (ex: $15, $20, $25, etc.) for their time.  Note: Do not let them quote you a per hour kids/teens will soon learn to procrastinate to charge more).  If you have more than one child/teen willing to offer you a quote of their own, ask if they would be willing to agree to work together and split the same amount of money.  Or you could make it a competitive setting and tell your kids you will select the quote that best works for your budget.  This way they know that in life, you can lose a job to a company that bids below your own bid.  Finally, be clear about quality of work.  Tell them that their bid is a contract of sorts and you will honor it; however, if they do a crappy job, make sure you tell them you will not be hiring them again in the future.  In other words, they create a reputation for themselves with each completed job. 

So now working has meaning.  It is not about a task that needs to get done every week (chores), but rather about going out and solving other people's problems for pay.  This may encourage some of them to go out around the neighborhood and see if lawns need mowing, or if Mrs. Jefferson, the retired widow across the street needs to have someone roll her garbage cans down the driveway for a couple bucks a week.  You see?  Another benefit of making freelancers out of your kids is that they'll think twice about blowing their hard earned money.  The best part is that any time they need money, you can now tell them to work for it! 

One last tip:

Start giving your kids chores as soon as possible.  By four they should have at least one chore.  Increase the number of chores as they age obviously.  Children can do a lot, so don't be afraid to pile the chores on.  Think about them farm kids milking the cows, driving tractors, etc.  They do chores before and after school.  You'd be surprised what a child can do without knowing any different.  The key is to start them young.

Thanks for being here and make sure to come back for our next episode!  C-los...out! 

Wednesday, July 22, 2015

Make Back to School Shopping A Financial Literacy Opportunity

There's only a few weeks of summer vacation left!  If you're a parent with school-age children, you probably can't wait for school to re-open.  For one, you'll stop having to pay for childcare or supervision not normally an expense when school is in session.  If you stay home with a small child, the older ones have probably overwhelmed you to the point of insanity by now.  I'm on vacation, but not really, as I have both my children to parent daily, and this is hard work when the two of them are only 19 months apart.

Rehani (front) and Ajani (back).  They are digging for treasure.  The activity killed a good hour, but the immediate bath time that was necessary was a painful chore.

Today's post is not about the whining that parents often get into, especially with other parents.  Rather, it is about using this time to prepare your 5th grade to HS child for a financial literacy lesson on budgeting.

Think back at the times when you went on back-to-school shopping trips to the store/shopping mall with your mom or dad.  Who got to decide what would be purchased 85-100% of the time?  Not you! was your parents, the ones with the money.  You may have asked them for a particular trendy item, and only gotten a killer's look instead.  Back in my time, every kid in middle school wanted Guess overalls and Z. Cavaricci wear.  In high school at the start of the 90's, teens wanted anything Starter brand.  Expensive threads, let me tell ya.

Source. Z. Cavaricci.

The problem with parents being parents, controlling their finances by shopping for their kids each year they are in primary and middle school, albeit loosening their grip as kids become teens, is that this takes away an excellent teachable moment.  Kids and teens have something in common...they really get into back-to-school shopping.  Believe it or not, for some of them, this is the highlight of their summer vacation.  The excitement builds in them understandably.  They get to see their friends again and socialize en masse once more, and they want to look rockin' while doing it.

Budgeting can be introduced to children, adolescents, and teens without complaint of being "taught" something while on vacation.  By using your child's natural desire to want to be in the driver's seat come shopping time, you will seamlessly be able to impart a very valuable lesson about money to them.  Now let me share with you how you go about doing this.

Grades 4-5

When your child expresses an interest in wanting to select their shoes or clothes, etc., tell them that this year you have a finite amount of money to spend on all B2School stuff.  Teach them the definition of the word, finite.  Then tell them what total amount ($X) is and that this total amount is called, a budget.  Explain that you cannot go over this amount to them; it would be like losing in a game.

Then tell them that you will give them a portion of this budgeted amount ($Y) to make "buying decisions."  They get to decide what they will buy with their allotment.  Make sure they understand that that is all the money they get to make "buying decisions" with.  Do not give them any tips, like itemizing what they need prior to going to the store.  The learning will be maximized if they reach conclusions on their own.  Take them to the shopping mall, store, etc., and see what they do.  Do they buy one expensive item and then realize they have run out of funds too quickly?  Do they scrutinize each potential purchase?  Do they ask you for a calculator?  When all is done, have a conversation with them about the experience.  Ask them: 1) How did it feel being in control of the money?  2) What was the hardest part about sticking to a budget?  3) What could you do differently next time to make the experience less challenging for you?

One other suggestion: For kids grades 4-5, I would suggest you give them no more than $50 to control.  After all, you have to come to the rescue if they make mistakes and still get the things they need to be ready for school.

Middle School

Depending on their vocabulary, you can either mirror the suggestions for students in grade 4-5 above, or skip ahead to telling them they will get a $Y amount to make purchasing decisions out of the total B2School budget you have for this school year.  Tell them that you will buy whatever they didn't buy with their allocation, but with the caveat that you will not spend more than what remains of the total budget.  No bail outs.  For example, if they spent all their money on Nike shoes and didn't buy the pair of pants, shirts, and gym clothes they needed, now it will be up to you to do so, but with only the remaining portion of the budget.  So, in order for you to re-stock your child's wardrobe, you will need to go to discount or consignment stores now.  This may or may not embarrass them.  It's a toss-up depending on your economic situation.

Ask them post-shopping trip questions 1, 2, and 3 from above.  Middle school kids can be given a larger allotment, such as $100-$150, or no more than half of what you have budgeted in all for B2School expenses.

High School:

Teens claim they don't need you anymore, but of course they do.  They're not entirely wrong, however.  They do need full decision-making power when it comes to back-to-school shopping.  No teen wants their parent picking out their clothes, accessories, and shoes.  And you shouldn't be doing this, mom or dad!  You're hampering your teen's ability to transition into adulthood.  If they need a ride to the store/mall then fine; drop them off with their friends taking part so they are not alone.  Pick them up later.  Give them all of the budgeted amount for shopping.  Instruct them that they are to get whatever they need for school, their car, etc. and that there will be no bail outs!  If they forget to purchase a full tank of gasoline for their car, oh well...they get to take the bus the first two weeks of school.  If they didn't buy new gym clothes, then they get to wear the worn out ones from the previous year or get loaners from the school.  No bail out means no bail outs!

Teens won't need for you to ask them questions about their mistakes.  You can try, and maybe they will humor you.  The experience of being at the helm, and the consequence of their errors, will be enough pie in their face to reconsider the approach when tasked with shopping on a budget again.  

Don't give a teen more than $300 for back-to-school...they need to buy what they need using sales, and places like Ross/TJ Max.  This will help them become better consumers.  If they go to the premium store and blow their money on one or two things, again, no bail outs!     

Well, that about raps it up.  Thanks for being here today.  Don't forget to subscribe to CCM and get posts like this in your inbox 2-3 times a week.  C-los, out!

Monday, July 20, 2015

Keeping A "Side Chick" Is Both Wrong And Expensive

Before I get underway, let me first apologize to the women reading this for using the urban word for mistress, Side Chick, in this post's headline and the rest of this article.  It is not meant to be demeaning to women, I assure you.  Now onto some real talk here at CCM blog...the only financial literacy blog around that touches on societal issues tearing down urban communities.

Hip-hop and rap do no justice to the loyal man, the one who has been faithful to his girlfriend or wife throughout their relationship as a couple.  Lyrics instead glorify the player, the man with multiple women sex partners.  I have to admit, Def Jam's How to Be A Player (1997) made me want to be just like Bill Bellamy's character, Drayton Jackson.  I was in college at the time.  Smart, but stupid.

Infidelity has been around forever, obviously, but in our modern era, being unfaithful to a lover has about as much negative stigma as stomping on a spider in public.  It seems as if people are more concerned with helping friends keep their extra-relationship affairs on hush, or as we'd say in the hood, the "down-low."  It's sad to see also that there are women out there willing to be a side-chick, almost as if they were competing for medals or something.  Take a look at this infographic: How to be a Side Chick.  There are actual steps!  This other article here helps women out: 10 Signs You're A Side Chick.

For eons, many (but not all) religions have attempted to keep men's desires at bay with moral penalty for violating the sanctity of couple-hood and marriage.  It works for God-fearing people, sometimes.  What about people who are not religious?  They couldn't care any less about being immoral.  They may consider sexually transmitted diseases, unintended pregnancy, and/or the "drama" that comes with the territory, as the only reasons to stay away from venturing out of their current love relationship with another person.  And yet this is still not enough.

I'm here to provide you men with a strong case for staying loyal: money.  Back in college, like most college males, I had a few, "hit and runs," so to speak.  These left me physically satisfied, but not spiritually.  They also left me damn near unable to pay my bills.  I had fun, but I also spent a lot of money, taking girls on dates.  With a steady girlfriend, you can actually discuss your finances, and determine how to both save money while in a relationship.

There are a ton of memes like this, ridiculing women mostly for being a side chick.  Makes a joke out of a serious issue.

My days of being Casanova ended right after college.  I got married.  I've shared on this blog about my getting divorced on multiple occasions.  What I haven't shared is how bad things were toward the latter months of my marriage.

I was considering cheating on my wife, getting on websites I shouldn't have been on, looking at get what I mean.  This was a low-point in my life.  Thankfully, I never actually began an extra-marital affair with a woman, choosing instead to file for divorce.  I look back at this time period in my life with pride.  I was able to keep my integrity as a man, and do what was best for me without compromising my (older, wiser man) ethical and moral standards.  If you're in a situation that is similar, friend, I suggest you stay strong.  Give couples' counseling a go.  If this doesn't work, then don't prolong the agony and don't try to make lemonade out of lemons in this case.

After my divorce I went back on the prowl, so to speak.  I took to bad dating habits, courting more than one girl at a time.  I had a nice $100K income, working as a school administrator, and thought...I can afford to be a player this time around.  Indeed, I could easily afford courting multiple women at a time.  I had rented out rooms in my home to fill-in the income stream left vacant by my ex-wife, and I had modified my home loan.  Truth be told, I was simply compensating.  I was unleashing the inner pain from this set-back (my divorce) onto the world, in a misguided attempt to heal the wound.  I was also spending too much.

Drinks are expensive at the club!  Filling-up on gas constantly is another expense.  Restaurant outings as a means of getting into a girl's pants also add up.  I know what you're thinking...Carlos, you gotta find the ones that pay for you, my man.  No thanks!  I'm not attracted to women with low self-esteem.

Now my committed gentlemen...I have a question for you?  Why do you need a side chick?  A) Is it because your main girl isn't fulfilling your needs?  Or is it B) Because you are truly non-committal, enjoy the feminine body, and made a mistake hooking up?

If you answered A and have a side chick, how is keeping one going for you?  Are you hiding your credit card and bank statements from your partner so she can't trace the money?  It's hard these days to keep money on the d.l.  Women can be like forensic accountants!  They can pick up your smart phone when you're not in the room and click on your banking apps.  Not to mention, your email inbox is also a tap away.  Having password protection is a dead giveaway, partner.  Stop your playing around.  Redeem and stop diminishing yourself, if not for your morality, do it for your wallet at least.

If you answered B, have the courage to break-up with your main girl.  Find women from here on out that are like you, non-committal, and don't play with feelings.  Prepare for a life of always courting, spending money as needed to score the next touchdown.  Making impressions on multiple first dates throughout your solo adventure will cost you a pretty penny.  I sincerely hope you are a multi-millionaire.

Men...the two most frequent things on our mind are sex and money.  So next time you think about the prospect of having sex with someone not your main, quickly flip the script and think about your money.  How much will it cost you monetarily to engage in these affairs?  I may not be able to sway you with morality and ethics, but perhaps will have better luck doing so painting a picture of the greenback in your mind when the illusion of another conquest hits ya.  Think with your money, not your...

C-los out!  Thanks for reading.  Don't forget to subscribe if you enjoyed this post and want more financial literacy my way.           

Wednesday, July 15, 2015

Why Minorities Need to Stop Pimpin' Their Rides!

The worst "investment" I ever made was purchasing a modified 1966 Corvair Monza for my 30th birthday.  I wanted a classic car something pretty bad back then.  And when I saw this bad boy on eBay, I fell in love.  It came just as you see it in the picture, with a molded spoiler and non-stock wheels/rims.  I paid $5,500 for the car and another $500 to have it shipped from Las Vegas to Oceanside.

I didn't have it inspected.  I didn't travel to Vegas to look at it.  I went off entirely on what the private seller stated in his eBay description.  I was very fortunate.  The car ran great.  The steering was horrible, however.  The car needed lower control arm and bushing work.  Once, one of the wheels fell off because the lugnuts holding it were not the right kind.  Luckily I was turning right, going very slow, so there was no damage.  I had to pay $300 to get it towed and fitted with the appropriate lugnuts on all four wheels to avoid another instance of this.

Of course, as soon as I received my "package," I wanted to make additional modifications.  I spent another $1,000 on a kick-ass stereo and sound system.  The trunk (front of the car) would open, and inside you'd see a subwoofer with cables leading to the interior and the 6-inch (front) and 12-inch (back) speakers.  After my divorce in 2007, I used the car to impress a few ladies, riding shotgun, on dates.  I kept the car until 2010.  My wife, Jessica, was the last "chic" who got a chance to ride my pimp mobile.

At the height of the Great Recession (2010), I had to raise cash for an engagement ring.  The Monza had to be sold.  I easily spent around $10K total on the car, and ended-up selling it for $3,500 to a private buyer from San Diego.  Unloading it was incredibly hard to do.

Buying this car was easily the worst money decision I ever made in my life.  I'm here to warn all of you today, but especially minorities, that buying classic cars doesn't always turn-up profits, and that modifying cars, i.e., pimpin' them out, is a terrible waste of money!  How, When, and Why to Modify Your Car is an excellent article written in 2014 that provides the only four reasons why you should even consider modifying your car:

1.  You don't care about money
2.  You're not going to sell your car
3.  Your car was a lost cause to begin with
4.  You know what you're doing

" Don't expect to make money on a modification. This is probably the most important piece of advice that I can give you. Figure out exactly why you want to modify your car and act accordingly, but don't tell yourself the lie that you're making a good investment. Sure, it's possible that a new set of upgraded Bilstein coilovers are going to increase the price of your BMW, but it won't be comparable to what you actually paid for them. If you want to modify your car, go ahead, but don't delude yourself with dreams of raking in the profit because you bought some parts on eBay."    

I took things a bit further and searched: "Should I pimp my ride" on Google and got Should I Pimp Out My Car from Yahoo!Answers.  This was what I considered the best response:

"I've "pimped" out a few rides in my day and it always turns out to be a pointless waisted investment. I would advise highly against spending any more money on a vehicle than you have to. Besides, all of the money you spend pimping it out you could put a down payment on a nicer, more respectable car like a BMW or Benz. (which would be more appealing and comfortable to the opposite sex and any pimped out car) 

I bought a Scion when they first came out and Immediately dropped like $15K on pimping it out and put $4K down ride on top of that. So here I am with a low rider Scion with a ridiculous stereo set up that get's me a lot of attention when I could have put that $19K as a down payment on a brand new Nissan 350Z or BMW 330ci and had the same payment! "

Exactly!  With the money you shell out swapping parts, you could have easily purchased a better ride, homie!  Like a Benz or Beamer.

Advice for young minority men:

Okay my young Black, Latino, and Asian homies...I know you love the Fast and the Furious series, Lowriders, making videos of yourself "ghost riding your whip" for YouTube, drifting around corners with your lowered Mazda, and being able to get that tail with your pimped out ride, but...

1.  You're wasting time (working on your ride) and money that could be put to better use such as taking college courses at the local junior college and getting a trade or career.  You could be putting that income into a investment Brokerage account so you don't have to live with your moms for the rest of your life.  There are so many options!
R.I.P. Paul Walker

2.  You could buy a better car if you don't want to do #1, and attract classy ladies instead of the groupies.  No self-respecting professional woman will ever want to marry a man who spends all of his money on cars.  Unless the man happens to be the owner of a dealership!

3.  You could avoid being profiled by the Po-po if you didn't tint all of your windows, blast your stereo, or look like cast members of the Fast and Furious on the road.  Ever hear of probable cause?  Just think, you being of color, and on the road with a modified (fast or slow) vehicle is an invitation for the boys in blue to stop and harass you.  Maybe even search your ride and catch you ridin' dirty!  Don't believe me?  Check the article below out:

Cars Likely To Get You Pulled Over

4.  You could save your own life.  Having a modified fast car makes drivers more willing to speed or race.  Many young men die each year doing illegal street racing.

The economics of owning a car are awful.  A car depreciates as soon as you drive off with it.  The Kelley Blue Book value of your vehicle is hardly what you'll end-up getting from a buyer, private or dealership.  Why?  Everyone is out there attempting to get a deal.

Minorities, do yourself a favor and do not be swayed by your partners or friends into getting into the car modification hobby.  Make your communities proud and strive for economic prosperity instead.  Save your hard earned money and put it to work on something that is constructive for you, learning a skill or getting an education.  I am by no means perfect, and made a mistake buying a classic car in 2010 that I still regret to this day, for I could have increased my net worth even more buying more stock at the start of the bull market.  Instead of three rental properties, who knows?--maybe I'd have four?

 Thanks for reading!  Share this article with your homies, cousins, whoever you feel needs this advice.  C-los out!     

Monday, July 13, 2015

Why Becoming Wealthy is More Difficult Today than Becoming Rich

Source: NY Times Syndicate.  Circa 1973, Donald Trump with his father, Fred.  Donald Trump's grandparents were German immigrants, leaving Germany prior to the start of WW1.  Donald Trump's mother, Mary Ann McLeod, was, ironically, an immigrant from Scotland.  

Trump is a loose canon helping to swing my Latino-Mexican-Immigrant Moderate vote toward the left.  Not what the Republican party wants to hear, as I imagine there are many like me who would vote Republican.  Seeing only Jeb Bush stand-up to him out of an entire party of leaders and potential presidential candidates is really disappointing.  Hearing a few of them agree with Trump's generalized comments on Mexicans is even more disappointing.

Trump, unfortunately, does have something to do with the remainder of today's blog post.  You see, Trump is a Baby boomer that came of age as an investor during a Golden era, the good money times of the late 20th Century.  This is when knowing how to invest wasn't as easy as getting on a computer and reading scores of blog articles, seminar advertisements, free eBooks, etc.  This is when there were fewer books on investing to check out at the library, and when a small segment of the U.S. population would buy the Wall Street Journal.  This is when stocks were actual pieces of paper you kept in an actual portfolio/briefcase.  In 1990, my old-fart pre-Algebra teacher brought his stock certificate portfolio to class and showed us all what owning shares looked like.  Got me thinking I wanted to be like him one day.  And what do you know...I am a teacher and I do own stocks today!

Unless you are willing to speculate, make serious bets on a few companies, and risk everything, stock investing will not make you a full-fledged member of Camp Wealthy one day, as is Trump.  Sorry, most of us end-up joining the ranks of Camp Rich this way.

Becoming wealthy today is far more difficult.  Why?  As I alluded to earlier, knowledge of investing has saturated all of the available information channels.

People are paying to learn from gurus at seminars or via a series of online videos they have access to; they're paying for personal phone calls or video chat conversations where mentoring is involved.

And this is bad.  It's bad because it creates inefficiencies that, unlike the stock market, where inefficiencies and more players are welcomed by the pros, make profiting extremely difficult to do in other investment arenas.

If Trump where to be a young Millennial today, would he become a billionaire using real estate as his wealth creation vehicle?  He would of course say, yes.  Sure, he had a father, Fred, that owned a successful real estate company, The Trump Organization, to get his hands on after college.  But let's make him into a hypothetical Millennial today, without a rich dad to springboard him into the elite wealthy.  Would he end-up a billionaire?  Hell no!

Everyone is a real estate flipper and investor these days.  My father-in-law, Travis, who made millions investing in real estate, rehabbing and reselling, and turned even higher profits from building developments, told me there were times he'd go to the courthouse steps or title company foreclosure auctions...walk up and see maybe one or two other people there.

Today, you may be at an auction where there are a hundred people there, all willing to bid.  And many of them don't know what they're doing!  They never checked the home they were thinking of buying, talked to neighbors to extract additional intelligence on their target property, etc.  Just plain blind bidding, squeezing true investors out of potential deals with their ridiculous up-bidding, making retail purchases out of wholesale ones.  See 12 Tips on Buying a Foreclosure...


Continuing, in the 70's and 80's buyers had to make 20% down payments and actually qualify for mortgages!  And interest rates were higher.  The Housing boom of the late 90's and early 2000's allowed too many unqualified borrowers to get in on a home with almost nothing down, and when they defaulted, there was no equity (they weren't in the home making payments for very long) for an investor to come to the rescue, so to speak.  The margins are tight out there for an investor to risk his/her capital on something that could surely end-up being a negative.  And the competition for foreclosed homes with $100K in equity or more is fierce!  Real estate, in sum, is not the wealth building machine it once used to be.

Start-ups/Non-Information Product Companies/Inventions 

With RE no longer a surefire way of building wealth quickly, there leaves very few alternatives.  Let's talk gurus, first.

Gurus out there are building their wealth offering information products, like a series of videos, seminars, trainings, etc.  They made their money in real estate, the stock market, writing best-sellers, and they want to convince you to follow in their footsteps.  All you have to do is buy their information products they created to teach you, of course, and you'll be on your way.  Many of them want you to start an online business where you sell your own information products or consulting services.  Ramit Sethi is one such Guru.  Selling someone else's products with an online store is also an alternative.  I prefer the method, Steve, at champions.  Still, these ways of generating income will not make you wealthy; they will make you rich.

You want to be wealthy?

  • Learn code.  Create a tech product (program/App) that you can build into a company.  Sell it for 50 million or more.
  • Invent a product that catches like wildfire in any given retail segment, and use the proceeds to create a company that continues to design other consumable products.
  • Buy a small profitable company at a discount, use the free cash flow to buy other companies and leave capable managers running them.  Take the free cash flow from all your companies to buy other profitable companies, and stocks of value companies with competitive moats, and repeat the pattern about 60 times successfully!  This is the Warren Buffett wealth creation strategy.
  • Get in on the ground floor of a start-up, get your hands on some shares, and work your butt off so that private equity funds growth all the way to IPO.
  • Go to Wharton, Stanford, or Harvard and major in Business.  Go work for a major corporation.  Climb the ladder until reaching CEO.  Get paid millions to run the company.
  • Stand out!  Don't do the same thing over and over and expect results.  Don't copy what others are doing.   

The 21st Century has narrowed the trail to becoming wealthy, but expanded the trail to becoming rich.  This does not mean becoming rich is easy.  With more players all trying to do the same things, build a massively followed blog, a successful online niche business, a well-known consulting service, etc., there is an over-supply of offerings, resulting in too many options for consumers.  The career, combined with frugal living, saving, and conservative investing is the long way home to riches.  We're living in a Spartan era, despite the Romans (Zuckerberg, Buffett, Icahn, Slim, Boone Pickens, etc.) getting all the media attention.  Tech is to both blame and celebrate for this.

And Trump would have no chance in hell of becoming the wealthy loud-mouth he is today were he to be a young Millennial without a rich father.  He grouped 90-95% of Mexican immigrants and Mexican-Americans (some with roots as far back as the Alamo and CA missions), with 5-10% of any typical large U.S. ethnic group.  He insulted the memory of my grandfather, Jose Gomez, a farmworker and farmhand who lived in the U.S. (Colorado, California, Washington) during the depression until 1954.  He insulted my late Uncle, Mario Gomez, a U.S. born Mexican-American who worked hard to become a teacher in the Coachella Valley until cancer took his life prematurely in the 80's.  He insulted me, and all of my family, and what we've accomplished in just one generation!  He insulted millions of others like me and my family.

For that, he loses my vote and all other Republican candidates not named, Jeb Bush, who I'm still on the fence about.  Republican leadership: I represent the vote you need and want.  But you constantly let me down in one area: Race relations.  Ann Coulture...Donald Trump...Sara Palin...Rush Limbaugh...making it hard for Republicans to get the full Black or Latino vote.      

Saturday, July 11, 2015

Saving Water & Money with Drip Irrigation Around Your Home

I took the kids to the Home Depot with me. 
Hey there!  If you live in CA, by now you may have noticed all of the lawns around your neighborhoods going brown.  Around mine, several neighbors, some living in decked-out houses even, have let their lawns go.  Here in San Diego County, we're only allowed to water after 6 p.m., twice a week, Tuesdays and Saturdays and no more than 10 minutes per watering station (sprinklers).  At first, I didn't take the notification seriously.  Then someone snitched me out…most likely this one lady we got always meddling around with nothing better to do.  I got a letter in the mail telling me "a neighbor" reported I was violating the watering code.

I adjusted my watering days and station times on my sprinkler timer and thought all was good and dandy.  Then I got a second letter in the mail.  I thought: What the crap!  How can this be?  I went back to the timer on the wall in my garage and realized the problem…I had not checked the day of the week.  Doh!  My timer was a full day ahead.  No wonder.

I have a gardner named, Joel (from Oaxaca), who comes twice a month to mow my lawn and prune shrubs and plants around the house for $55.  It's great service except he never checks my sprinklers.  He can turn them on manually with the valves outside, but he normally skips this and moves on to his next house.  I've talked to him about it already, now that I'm on summer vacation.  When you're working you neglect many things.  In ten years in my home, I've fixed one broken sprinkler, and several sprinkler heads, that's it.  I've seen my concrete being watered many days, and just didn't think much of it.  How much water are you losing to poor sprinkler set-up?

This lawn sprinkler on a riser watered flowers on a 2 ft by 2 ft ground space in front of a column by the entrance to my home.  The flowers died.  Even if I put a vertical growing vine or something, I'll lose water to the cement.  I can take out the riser and put in a sprinkler that rises with water pressure.  Or…I can do what I did: Cap it, mulch the dirt and forget about water being wasted. 

With my father-in-law's help, I finally got around to doing a detailed analysis of all of my sprinklers and found shoddy work done at the time I bought my home by whoever the builder hired to do the development's irrigation.  Talk about idiocy!  Why would anyone put lawn sprinklers on 12-inch risers to water flowers at ground level close to the water source?  Builders don't care about your lawns.  They have these irrigation guys put sprinkler heads with one slit so the water reaches out far enough, but the lawn just in front of the sprinkler gets the least amount of water and eventually dries up.

You have to be the one to go around inspecting everything when buying a new home and builders know you will care the least about your yard's irrigation network.  I mean who has time to inspect X number of stations with X number of sprinklers at each station?

Algae growth on my stucco!  Not good.  A 1/4 sprinkler was watering the side of the house.  I capped it.

My father-in-law and I took note of all of the sprinklers we would cap (already the riser variety), the sprinklers we would take out, put a riser/coupling on and cap, and the risers we would place a manifold on to feed tubing lines to drip irrigate plants.  I have 5 watering stations with multiple sprinklers for each one and stations 1, 2, and 5 are positioned at watering lawn.  We only replaced the sprinkler heads on these with the dual (over/under) slits to water both short and long range.  We converted stations 3 and 4, watering flowering plants and shrubs, to drip irrigation.

Riser sprinkler I put an 8-line manifold on with tubing.
Still need to finish mulching and hide the lines underneath.

The job took us three days as we ran into some problems along the way.  The most annoying problem was running out of parts, and having to make a store run again and again.  The most strenuous part of the job was fitting the tubing into the manifold outlets and onto T's when splicing was necessary.  We used a trick and heated the tips/ends of the tubes to make them easier to wiggle-push them in far enough.

Getting the tube inserted as far in as possible was a pain in the behind!  Even for a skilled Mexican like me.  Ha!

Project Costs:

I took three separate trips to the Home Depot and spent $72, $41, and $16.  I bought two tools (a PVC pipe cutter and a sprinkler nipple extractor) I needed which are considered non-consummables, i.e., I can continue to use these tools for a long time provided I keep them in good condition and indoors.  So my grand total was a mere $127.  This will save me plenty of water and from wasting money watering the concrete.  The plants will be more lush and beautiful too!


I'd love to give you a breakdown of how many units of water I'm saving, but I just put the drips in and it will take several months of comparing usage from last year for the same months.  I can tell you this: the best way to conserve water is to remove and cap sprinklers.  Look around your home and see where you can conserve.  Don't be overzealous: Start out with one sprinkling station so as not to get in over your head.  Buy a couple more parts than you think you'll need so you don't run out midway through your project and have to return to the store.  If it turns out you didn't need a coupling, cap, etc., you can always save it for the next area of your home you convert to drip.

Your plants will thank you for giving them a concentrated source of water, you'll feel good about not being wasteful, and most importantly, your water bill won't kill you each month. 
 Thanks for reading!  Subscribe to CCM blog if you liked this post to always get my latest write-up.  See u next time!

Thursday, July 9, 2015

3 Survival Skills You Need to Pay for Your Children to Learn

Well hello there!  Thanks for being here.  Today I have an interesting post about certain survival skills you should pay (or will need to pay in some way) for your children to learn.  I realize many of you are riding the frugalist wave, and would rather not pay for many things you feel are not necessary; when it comes to your children, certain expenses are necessary.

1.  Swimming Lessons.  I learned how to swim the old fashion way.  My dad taught me.  While still living in Meoqui, Chihuahua, Mexico, my family would go to the Rio San Pedro on hot summer days to cool off.

Learning how to swim there would pay off later; our first place in America (circa 1983) was a one-bedroom apartment in San Jose, and the complex had a pool.  We swam in it like everyday it seemed while it was open, sometimes without parental supervision.  No lifeguards were present either.  It's a miracle no one drowned.

Many of us were taught how to swim by our parents or relatives.  After attending my first swimming lessons last week at the YMCA for Ajani (2) and Rehani (3.7), I've come to realize I don't know enough about swimming to teach someone else, my children especially, the true art of this survival skill.  My wife, Jessica, and I are spending a mere $32 (Ajani was free) for a two-week class at two times per week (30-minute sessions) and so far the instructors have taught me a thing or two about teaching children to swim.  We'll be paying for more sessions for sure.

You may know how to swim, but when it comes to teaching your children, just pay up for lessons people, even if you don't live near a body of water.

Too many teenagers in this country die each year because they never learned how to swim.  Now here's something else you should pay for if available: a class on water conditions for rivers, lakes, and oceans.  It's not enough to be a strong swimmer, recognizing the dangers before getting in the water may save your young adult's life one day.

2. Riding a Bike. stink at teaching your kids how to ride a bike.  You'll get them through the initial stages, overcoming fear, and then learning the basic skill, but then many of you stop there, believing your mission is complete.  If I had a nickel for every time I saw a kid riding his/her bike to school (I have been driving to school the past 14 years so I know) without a helmet, not wearing gloves, on the wrong side of the road, etc.  There are more cars on the road then when you and I learned how to ride a bike!

I'm a cyclist.  Been riding a road bike since early 2007.  There's not a ride I take where I don't avoid getting hit by car at least once with my heightened safety senses, anticipating what idiot drivers will do, like block the bike lane, come out a street for a left turn and not see me coming, etc.  Once you teach your child to ride a bike, do not let them ride to school without first taking them to a bicycle safety course.  The class may be free or it may cost you a bit, but it is more than worth it to pay.  Also, shell out the money for a good helmet ($40-$80) and not a cheapo one.  These protect your child's brain!  Buy your kid bike gloves ($11-$20) too.  The first body part that contacts the ground usually is an open hand...abrasions!

Helmet, gloves, and a fine tuned machine...don't forget to take your kid's bike in to the bike shop for a mechanical inspection.

3. Driving Ed Lessons/Driving School.  Similar to riding a bike, you can be a great driver yourself (most likely you're over-confident) and teach your teen how to drive.  If you've ever gotten a ticket, you're probably not fit to teach your young adult to drive.  Sorry.  You'll spend just enough time with them to learn the skill, take their test, and get their license.  You'll then feel like you've done your job as a parent.  Wrong!  Teenagers are horrible drivers!  

You should pay for a driving school to teach your teenager how to drive.  These schools and their instructors are up to date on the latest driving laws.  They will know driving tips you may not have in your repertoire, like always looking to your left prior to entering an intersection even with a green light to anticipate red light violators.

Driving Ed classes may be necessary in your state.  Most are around $20 for online versions.  Driving school sessions are around $250.  You should also find the local Sheriff's department and see if they offer a free "scare" class on driving, the type you'll need to be present for where they show images of dead teens who died while texting, doing something they shouldn't have been doing while driving.  The high school I worked at used to offer these to students and two San Diego Sheriff Deputies were the presenters.  I've worked with thousands of teens over fourteen years at the high school level...they don't think!  Trust'll need a battery of different people telling your teen about the dangers of driving to get them to begin to take it seriously.  Don't make them pay for this stuff on their own, with their part-time job money.  They won't want to do it.  Just fork over the cash already!

Lastly on driving...if you can get your child to learn to drive a stick shift, then give yourself more great parenting points.  You never know when your son or daughter may be in an emergency need to drive an older vehicle for help or to get away.  If it's stick and they only learned automatic, then what?

It's okay to be frugal on most things, but when it comes to survival skills for your children, just spend the cash, people.  If you want to go further than the three above, here's a great resource by Primal Survival.  I have cotton tails foraging in my backyard.  I may have to teach Rehani and Ajani how to set a trap (we'll let it go obviously) but the lesson is important.  

Tuesday, July 7, 2015

Are Pets A Waste of Hard Earned Money?

What is happening everybody?

No, I'm not in the doghouse for writing this post with Jessica, my wife, being the ultimate cat lover.  Here's a tidbit about us...Jessica would not move in with me after a year of dating unless her cat, Tiska (a Tabby) came along.  This feline hated my guts!  I mean, I couldn't even step inside Jessica's place without her hissing at me.

Tiska today taking her seemingly 4-hour nap on my side of the bed, of course.

I could never walk barefoot for fear of Tiska taking a vicious swipe.  She was so damn protective too.  Once, I had to go to Jessica's home to pick-up something I had left behind that I needed...can't even remember what it was; I didn't have keys to get inside Jessica's place, a two-bedroom attached unit in the backwoods of Vista, CA.  Jessica gave me permission to go through the window, simply by removing the warped screen.  Tiska met me on the ledge from the inside...A Mexican and cat standoff.  My hands were scratched-up something bad before I gave up and left defeated.  Tiska was, and still is, a serious guard cat.

Today, Tiska loves me...well, she lets me pet and grab her.  She'll also climb on top of me and lay her fat butt down on my lap.  Did I mention I have cat hair allergies?  It's not so bad anymore.  Tiska must have improved my immunity response over the years.

This post isn't all about Tiska the crazy cat, a cat that once royally kicked the crap out of a Pomeranian named, Nicky.  Jessica and her older sister, Brandie, thought it would be a good idea to introduce the two to each other in our upstairs loft where Tiska was hiding at the time.  I told them both it was a bad idea.

This was Nicky before the fight...

this was Nicky after Tiska got through with her:

No...this post is about Tiska, Garfield, Snoopy, Bronco, Mr. Whiskers, etc., and the financials of keeping a pet.  Check this PDF on Various Pet Care Annual Costs.  These are first-year expenses, after you initially purchase your pet.  A large dog breed will run you almost $2K, year-one.  A bunny will cost you just over $1K per year.  According to this chart, having a cat will cost you also around $1K for your first year.  Doesn't sound too bad, $83.3 per month.  Unless something happens!

A couple years ago, Tiska tried to attack a bird on the other side of the sliding glass door to our yard.  She chipped her right fang instead.  The vet charged us over $300 for meds to keep her from getting an infection.  Then there was the time Tiska got out (she's a house cat).  My wife was distraught for days.  About a week later, Tiska conveniently finds her way back to our backyard.  When we get a hold of her, she's visibly beat-up, ragged, and ready to come back inside.  Jessica found that one of her hind paws was bleeding, no doubt from a cat fight.  Another visit to the vet.  They cleaned up the wound, injected antibiotics, killed the fleas. and gave us more meds.  Total cost, $750!

A Long-Term Monetary Committment

Pets can live several years.  Just like humans, dogs and cats are living longer.  Count on a decade of minimum costs to keep a pet humanely, plus the added costs as they get geriatric.  You could be spending $20K easily on Fido over the course of ten years.  What about the time you have to spend with them?  Cats are very independent, but dogs are needy.  Any time you devote to a pet, you are not devoting to making money!  You can leave for a short (less than five day) vacation with a cat...if you load up their food tray and leave the toilet seat up.  But a dog?  Forget about it.  You'll need a pet sitter or a pet motel.  Pets become balls and chains attached to your ankles.  Cleaning up the cat litter box, or the newspaper in the bird cage, feedings...these are all time sucking chores.

Here's a great article on Forbes about The True Costs of Owning a Pet.

I know you love your pet.  I, lu, lu, lu, luv Tiska too; it was hard to say, okay?  I, however, have already talked with Jessica about making Tiska our last pet.  Pets are expensive to keep, and with two children, there's really no point to having a pet.  That didn't come out so right.

Tiska staying away from Ajani, Circa early 2014.

What I mean is, I guess it's okay to keep a pet if you don't have children, for the companionship.  And having a pet so your children can learn responsibility, about life and death, is probably a great idea too.  However, don't keep a pet if you are finding yourself money short at the end of the month, or you are living paycheck to paycheck.  It's monetarily irresponsible of you.

Are Pets A Waste of Hard Earned Money?

The answer to this question depends.  If you are buying or spending on senseless items like luxury beds, clothing, expensive treats, going to grooming spots to beautify your mascot, or getting your pooch a stroller, then yes, you are absolutely wasting your money.  If your pet is a companion and friend, and you're not pampering your pet, then having a pet is totally not a waste of money.  There are many emotional and health benefits that come with having a mascot.  They are enjoyable, lovable, and non-judgmental members of your family, or your loyal confidant if you're a single.  Yet, whether you have children or not, pets will divert money and time away from your financial goals, and thus you should not buy one without putting in serious thought.  We don't need more animals abandoned.

Thanks for reading, friend.  If you liked this post and want to get more like them (and three free eBooks), don't forget to subscribe to this blog! See ya later, alligator.