The Lesson I Needed to Learn by Dumping My Best Customer

Back to amateur photography for today – a duck swims on a turbulent, late winter day at Brazoria National Wildlife Refuge

I’ve learned enough to fill a book in my few years in sales so far. But as a slightly intelligent guy (that would be Mr. Albert Einstein) once said, “the more I learn, the more I realize how much I don’t know.” Recently I’ve been stressed out by a dramatic change in the dynamic of my relationship with my best customer. Previously, he had always been a good communicator and reasonably conscientious but most importantly of all, there had been a mutual respect bordering on friendship between us that I valued very much. We had done deals that were huge wins for both sides and had another in the works that would have been our biggest and best yet.

But recently, that deal was derailed. My customer ran into an unforeseen setback that was serious enough to pose a legitimate threat to the survival of his business. To make it all the worse, it was through no fault of his own. He experienced a substantial loss of commercial property as a result of an apparently random criminal act. Now, if you’ve ever dealt with a very large commercial insurance claim, you know what a nightmare it can be. In our industry, a few month turnaround is pretty typical in a situation like this. Given my customer’s financial position, waiting that long would have been devastating at a minimum. And if the insurance company had screwed him on the amount of the payout, it could have been game over.

I was not going to let him go down without a fight. Marshaling all the resources at my disposal, including my own efforts and those of people in our district office, I was able to get the insurance payout fast tracked – and that’s not all. At the end of the day, the customer got a payout so large it shocked everyone involved. And it happened in just over a month. Just like that, his business was in significantly better shape than it had been before what had looked like a terrible misfortune. It looked like things were going to be better than ever for him and I couldn’t have been more thrilled. But here is where the story takes a turn.

Suddenly awash with cash, my former favorite customer changed into a totally different man. His payments were no longer made reliably. The office ran into issue after issue with his account – simple things that had never been problems before and rarely are for anyone. On my end, it became very difficult to address any of this with him – or even to get him on the phone at all. The part that doesn’t make sense is that while more than enough to get my customer back on his feet, this insurance payout was nowhere near a life changing amount of money. It wasn’t like he had just won the lottery or anything. But nonetheless, once he had the money, it seemed that nothing else mattered and the relationship I had enjoyed so much was replaced with one of nearly nonstop frustration.

Through all of this, we had somehow managed to get our massive deal back on track. But whereas previously it would have been relatively smooth, it was now riddled with complications because the customer had ceased getting anything done at all on his end. Whenever I confronted him about what was going on, he was evasive and made vague excuses that usually didn’t make much sense – and again, that was if I could get him on the phone at all. I did the best I could to smooth everything over with the office while I tried to keep him from completely self-destructing. This went on for over a month but going into last week, there was still no end in sight and it was taking a significant amount of time and attention that I could have been dedicating to other activities.

Finally, I decided I had been chasing the ghost of what had been a very different relationship for too long. In this new version of it, I was treated like a tool that could be used when needed and tossed into a shed when not. And it wasn’t even producing anything. So on Monday, I resolved to conclude the deal, one way or another, by the end of the week. By Friday morning, I had made zero progress, and I realized I had had enough. I called the customer once more but there was no answer and his voicemail box, as had become the new normal, was full. So I sent him a text message that simply said “if you still want to do the deal, I need to talk to you today.” As you can probably guess, I never heard from him. And I have no intention of calling again. For most of the rest of the day, contemplations about how and why this relationship had gone so wrong were never far from the forefront of my mind.

But overnight, things crystallized and when I woke up this morning, I felt much better. I don’t know what is going on with my customer but it doesn’t matter. I’ve given him ample time and opportunity to explain it to me and he has refused to do so. And his actions have been very disrespectful in the process. For someone who is still engaged in a lifelong struggle against the scarcity mentality, it was very difficult for me to put not just a very lucrative deal, but a rewarding relationship, on the line. But I realize now that it was my only option. I couldn’t keep throwing good resources, in the form of my time, effort, and credibility with the office, after ones that had produced nothing but failure, when there was no sign that the situation would improve.

And this way, I am giving the relationship its only remaining chance to go back to its formerly mutually beneficial form. It is very possible that I will never hear from the customer again. Maybe the account will even go bad. If it happens, I will be able to say I did everything I could to avoid that outcome. If he does call me, I will tell him that while I will continue to service his existing account, I will not pursue any additional business unless three conditions are met. One, I need to hear a genuine apology for the way things have been recently. Two, I need to hear a coherent explanation. And three, I need an assurance that things will go back to the way they had been before – with the enforcement mechanism that if they get to this point again, we will be finished doing business for good. I’m not asking anyone for perfection. This is an imperfect world and a very imperfect industry. But I am demanding, not asking, for effort and basic respect. If we can’t operate that way, then we won’t.

For too long, I tried to save a previously great relationship that was already dead. But I have finally accepted that fact and begun to act accordingly. And the result? I feel like a huge weight has been lifted from my shoulders. I have most likely lost the opportunity to make a large bonus, and likely subsequent ones. But there again, that opportunity had already been very likely gone. And even if it hadn’t been, it doesn’t matter. There is more to every single decision I make in life than money.

Respect is the real issue. I wanted my customer to continue to give it to me but by doing all I could to protect him from the consequences of doing the opposite, I wasn’t giving it to myself. It was the wrong message to be sending to him but more importantly, I was hurting myself in a very profound way. After a long hibernation, symptoms of depression have crept back into my life recently. Looking back, the timeline matches up almost perfectly with the disintegration of this relationship. I can’t control another person’s actions, but I can certainly respond more effectively than I did in this case. I fully expect that now that I have identified the real problem and taken steps towards correcting it, those symptoms will go back where they came from.

This may seem obvious to many of you, and I will admit I’m a little disappointed with myself as I type it out and realize I should have figured it out sooner. But for me, this has been a reasonably difficult, and thus valuable lesson. It could easily be applied to many scenarios – not just the specific one I’ve described. If you run into a situation like this one, learn from my mistake. You can’t expect respect from other people if you don’t give it to yourself first. I lost sight of that this time. But having had this experience and deconstructed it, it will be much easier to avoid repeating it in the future.

Welcome Aboard, Jean-Marc!

Midtown Park – Image courtesy of Jean-Marc Buytaert

I completely glossed over this with yesterday’s post but I have an exciting announcement for Health, Wealth, Power. We have a new addition in the form of wonderful pictures taken by fellow Houstonian Jean-Marc Buytaert! In addition to being such a top shelf bowler that he was recruited by one of the better teams in a drinking/bowling (note the word order) league, Jean-Marc is a phenomenal photographer – and he seems to find himself in a ton of interesting places all over the world. After seeing enough of his work come across my Facebook feed and being blown away, both by the fact that someone was posting something other than their kids, memes, or political crap, and even more so by the fact that the pictures were incredible, I approached him about contributing to my fledgling personal finance/philosophy blog. We’re all very lucky he said yes because going forward, we will have eye candy like the picture above to enjoy.

I understand this is something Jean-Marc is currently doing as a hobby but that he has eventual aspirations of going pro. If you would like to see more of his work or to contact him about a potential project, you can visit either of the following:

Instagram

Facebook

If he gets enough exposure out of this deal, I’m hoping he will stick around so check him out!

The Importance of Outlook – How I Still Struggle with the Scarcity Mentality of My Past

Navajo Bridge, Grand Canyon – Image courtesy of Jean-Marc Buytaert

Howdy folks! I just got back from a couple days on the road and I’m exhausted. But I wanted to write a quick post about something I wish I had handled better today. I ran into a setback. I didn’t do anything wrong to cause it and no one else did either. It was simply bad luck and it will wind up costing me around $300 when the dust settles. The nature of the setback isn’t important and that’s not what this post is about. Instead, I want to discuss my reaction to the setback and why outlook is so important.

I didn’t have an easy childhood. While we didn’t live in poverty or anywhere close, we were squarely in the lower middle class category, with emphasis on the lower part. Money was a dirty word as far as I was concerned – a word that usually meant I couldn’t have something I wanted. At the time, it felt like a terrible burden. Today, I look back and see how lucky I was. I learned that if you want something, you have to work for it. And I learned that if you have something, you had better not waste it. I’m sure those harsh, but invaluable lessons have played a huge role in allowing me to get to where I am today. A lot of kids who seemed luckier than me at the time missed out on these lessons until later in life and if the statistics have anything to say about it, it cost many of them dearly.

But my successful mindset isn’t without its costs. And today’s situation was a great example. When I realized I was going to lose $300 and there was no way around it, I was furious. As I mentioned, there really wasn’t anyone at fault for what happened, so I automatically directed my rage at the same person who usually gets it – myself. For about an hour, I was in a terrible state. And unsurprisingly, Houston’s trademark rush hour traffic didn’t help. Luckily, business hours were over, or my rotten mood could have destroyed a deal and cost me significantly more money. But a bad attitude can cost so much more than that. If you allow that kind of darkness a regular place in your life, it can cost you relationships or even your health. It certainly contributed to the failure of my marriage and there is plenty of time left for it to do the latter in my case as well. And yet, even after having paid so much, I still don’t have this under control.

But there is still hope for me. After brooding for a while and cursing the traffic a little more than usual, I was able to use perspective to get beyond it. $300 would be a real problem for many people. It might mean having to choose between paying one bill or another in many cases. This could start a downward spiral that could be difficult to pull out of. But for me, this is an afterthought. Hell, I’m so fortunate in life that $3000 would be a minor setback and nothing more. I save/invest more than that every single month.

But in my head, I’m on a treadmill 24/7/365. In front of me is the financial independence I want. Behind me is the scarcity of my childhood. In reality, it would take a serious sequence of mishaps for me to go off the back of the treadmill. It’s certainly not an impossibility but at this point, it’s unlikely at best. Claiming financial independence, on the other hand, will happen in the next three to five years, or ten at the absolute most, barring any catastrophic setbacks. And I’m much closer to thirty than to forty and only started making significant financial progress in my late twenties. So I should really just throw the treadmill in the garbage and focus on enjoying the moments of my life while making sure I stay on track with the big picture stuff behind the scenes.

For tonight, at least, the demon has been slain. I am calm and back to being thankful for how well my life is going. But even for someone as fortunate as I am, this can be very difficult. And it will undoubtedly be difficult again. However, it is important to look at this in a balanced way. There was a time when I could have gone into a tailspin of depression, anxiety, and anger over something like what happened today. But this time it only cost me an hour of misery. I will never fully escape my past or my tendency to occasionally let emotion cast a dark cloud over my actually sunny reality. But I can work at it and improve. In time, maybe I’ll get to the point of avoiding the negativity altogether.


How My Favorite Store Can Improve Your Bottom Line AND Your Life

Good riddance to the most crowded Costco I’ve ever lived near (I move next week and the one near my new place is MUCH better!)

I really don’t understand it but Costco seems to be one of those businesses that people either love or love to hate. I see hit pieces in the mainstream media all the time (oddly enough, the Reader’s Digest, in particular, seems to run one almost daily); although maybe they’re just trolling for clicks. But how could anyone hate a company that sells mostly high quality products for low to medium quality prices, puts service second to none, and treats its employees as well as any retailer on the planet in the process? I don’t see it. But today I’m going to tell you how this wonderful company has made my life better and saved me money at the same time to give you a better idea of whether it can help you too. And yes, I might be slightly biased, but no, I’m not selling anything or benefiting in any direct way from anyone deciding to shop at Costco.

Costco’s business model is pretty straightforward. Most of the profit margin comes from selling annual memberships and credit card sign ups. In other words, everything in the stores is sold at very close to cost. This results in some amazing deals. Of course, no store is perfect. There are items I don’t buy at Costco – mostly because as a one man household, I can’t consume them fast enough to buy them in bulk without wasting them. But there are still plenty of opportunities for the $60 annual membership to pay me back many times over.

I could write pages and pages about all the great deals. Clothes at Costco can be a steal and are usually high quality. For example, I’ve bought khaki pants for under $20 that are every bit as good as pairs I’ve paid triple for elsewhere. There are usually plenty of quality casual clothing options offered at very competitive prices. Decent quality athletic shoes are often $20-30, less than half of what you often pay at a shoe store. Athletic clothes are usually a comparative bargain as well. Two important tips are that Costco doesn’t have fitting rooms and inventory changes quickly. However, the antidote is the amazing return policy. If you see something you like, buy any sizes, colors, styles, etc, that you think might work for you. Try it all on in the comfort of your home and return what you don’t want. You want to buy anything that’s a possibility for you because it will probably be gone by the next time you visit. It’s not an ideal system but it works and it is worth dealing with for the awesome price/quality combination.

There is also a huge variety of other non-food bargains in the store. As a general rule, Costco won’t have everything but it will have a good option or two for a bigger variety of products than you might expect – kitchen stuff, tools/automotive/garage stuff, furniture, athletic equipment, Vitamix blenders (the best money can buy), paper products, prescriptions and other pharmacy related items, and the list goes on and on. You still have to use your head like with anything else but most of this stuff is going to be high quality and a lot of it at a better price than you can find almost anywhere else. Occasionally you will see some idiot write an article about how Costco is more expensive than Walmart. That’s like saying Cadillacs are more expensive than whatever automotive travesty Chevy replaces the Cruze with in its never ending quest to bore economy car buyers to death. In other words, these people are either trolls or they have the IQ of potatoes. Either way, their argument is way too stupid to be taken seriously.

Then you get into the food area. I’m a beer and wine guy myself and while the beer selection is middling at best, the wine selection is pretty extensive. As usual, the prices and quality in both categories are very competitive and I understand the liquor offerings are similar. I actually skip most of the produce (again, one man household) except for the organic spinach/kale/other substances that taste more or less like grass clippings, which I consume at a prodigious rate, after my blender has done its little trick of course. Some of my other favorite food items are: $5 rotisserie chickens, a variety of cheeses (shredded, block, and sliced), greek yogurt, eggs, a variety of good quality frozen items for when I’m in a hurry, tortillas, coffee, spices, and I could go on and on. The deli and bakery both offer great options if you’re looking for something to bring to some sort of group event and don’t want to be that person who brings yet another depressing casserole, only to bring most of it home and have to suffer through it anyway (those people have it coming by the way, trying to foist that crap on other people and then enjoy the good food someone else brought). And believe me, if I’m buying these items, you’re not likely to find a better deal elsewhere because I’ve looked. I could easily justify the membership buying just a few of them over the course of the year.

Costco tends to be about the cheapest around on gas and offers solid deals on tires. That said, due to their limited brand selection, I don’t buy them. I’m a Discount Tire man and if you’re anywhere where they have locations, you’d do well to give them a shot as well. Costco also sells cars although for someone like me who knows the ins and outs of the dealer game better than many of the car salesmen I enjoy playing it with, they are not a good deal. They also sell vacations, appliances, random stuff for houses, etc, none of which I’ve ever bought from them, and electronics, which I have. The electronics deals tend to be about as good as anything you will find but with the bonus of their additional warranty and amazing return policy. I don’t think they have Black Friday deals so much as just seasonal deals, but as a guy who bought a tv from them around that time, I can tell you mine was a phenomenal deal.

Nothing is perfect and Costco is no exception. But it offers products, service, and pricing that add up to an incredibly good overall value. It is definitely a cut above Sam’s Club in at least two of those three areas and light years ahead in my favorite area of all, which I’ve saved to highlight last. I think this is probably the most overlooked positive factor about Costco. At Costco, the average retail employee makes about $40k a year. Obviously no one is getting rich off of that but when compared to the $10 an hour or so that most retail employees make on a “work when it’s good for us” schedule (also relevant since Costco has reasonable hours of operation), that is amazing. You can see it on the employee’s faces. They are happy to be there because they are treated with at least a basic level of respect by their employer – something that is not nearly common enough. Their being happy makes me happy, and not just because it results in better service. I’m as big a capitalist as they come but I believe money can be made while also making the world a better place. I believe it is very important to support things I want to see more of by “voting with my dollar” and I am proud to do that with Costco. The fact that I get a great, consistent value and a great customer experience in the process is just icing on the cake.  

Car Maintenance Basics: Today’s $400 Investment and Why It Was a Great One

My current car having its oil changed in a freaking hanger by an absolutely fascinating man!

I don’t want anyone to get the wrong idea; I spend money, and plenty of it. But there are some key differences between how I spend that money and how most people do that allow me to live what I consider an upper middle class lifestyle for a lower middle class cost. One of these differences is that when I make a major purchase, I usually buy for the long term. I do a lot of research and I choose a high quality option I’m almost certain to love, both today and down the road. And then I take care of it so that I can keep it for a long time and it will stay in great condition. As a result, I’m able to own some very nice things while usually paying a lower overall cost than most people pay to own lower quality versions of them.

This is certainly my strategy with cars. It is not at all uncommon for people to buy a new one every three to five years. But that is an incredibly expensive form of vehicle ownership. For the last several years, used car pricing has been so stubbornly strong that one can make a pretty good case for buying new in many cases. I won’t argue with that and I’d be a hypocrite if I did since that is the conclusion I came to when I bought my current car – although even there I have some hacks – stay tuned. But regardless of whether you buy new or used, it is pretty indisputable that in general (there are certain exception situations), the longer you own your average car, the lower your annual cost is going to be. I owned my last truck for just over ten years and would probably still be driving it if I hadn’t failed to save it from a tragic end at the hands of black ice. Thankfully, it saved me in spite of this lack of consideration on my part. I walked away with barely a scratch from an accident that would have rendered most of today’s cars a pile of broken plastic, shattered glass, and twisted scrap metal. And in fact, the truck was still driveable. Built Ford tough indeed. Anyway, I’ve had my current car for almost five years now. However, and this is where it gets exciting, my vehicles are usually in as good of shape, both visually and mechanically, as just about anything else on the road and I almost never have any trouble with them.

How do I manage this when so many people start having problems before their loan is even paid off? Step one is to do the research and buy a quality product. For example, if you buy a Dodge, I can’t help you; you’re almost certainly going to pay a fortune to keep it on the road and the body is going to start coming apart and rusting before the new car smell is gone. I believe phrases like “you can’t polish a turd” or “trying to put lipstick on a pig” apply well here. This post I did about the best and worst brands is a good place to start and I will likely write plenty more about the ins and outs of car buying before long since it is a process I enjoy very much.

But once you own a vehicle, it is crucial that you maintain it properly. So today, at just over 60k miles, I spent a little over $400 on a handful of services: a brake fluid flush, a transmission fluid change (note the difference between the words “change” and “flush” here), new front brake pads, and the resurfacing of my front rotors to go with those pads. Before my minimalist, somewhat lazy new lifestyle, I would have done all of this myself and spent around a quarter of that much on parts and fluids only. And if you know how to work on cars or have an interest in learning, I highly recommend it as an extremely profitable hobby. But the important thing is that you get this stuff done, one way or another.

The day you buy your vehicle, I recommend you buy a repair manual for it as well. Haynes and Chilton are good options and shouldn’t cost more than $20-30, depending on the vehicle. If you spend even an hour or two reading that manual, it will more than pay for itself in the form of knowledge gained. And at a minimum, it will give you a comprehensive, realistic maintenance schedule. Don’t rely on the dealer or even your owner’s manual for this. The dealer will charge you substantially more than an independent shop for work that is no better than what a quality independent shop will do. Please note that I’m not talking about warranty/recall work here; that needs to go do a dealer. As for the owner’s manual that comes with your car, well, many of them now claim that transmission fluid is a “lifetime fluid.” Given that the transmissions in most modern cars are extremely complicated pieces of machinery that cost $5k or more to replace, I’m going to stick to changing the fluid at traditional intervals, thank you very much.

What is the payoff for the $400 and change I spent today? My brake system is now working as well as the day I bought the car – potentially a matter of life and death when you live in close proximity to as many attempted murderers horrible drivers as I do. My transmission will continue shifting smoothly for some time to come and is much less likely to develop any problems – any of which would cost easily several times what it costs to do the maintenance I did today. And I can continue to drive hundreds of miles from home without worrying about whether I might wind up stranded somewhere. Simply put, any money you spend on competently performed, fairly priced preventative maintenance is going to be a good investment.

What other maintenance do I do on my cars? Oil changes are a must. I am a big believer in Amsoil, ridiculously high price tag be damned. I have never had a problem of any sort while using it and I am confident that if I did, Amsoil is the kind of company that would stand behind its product. I only use K&N performance engine air filters and cabin filters. Instead of throwing them out, you clean/lube them and they will easily last the life of a car. So the $80-100 investment pays for itself in five cleanings (or roughly 100k miles) at most and provides slightly better performance every day the entire time you have the car. It is important to replace the coolant in your car at proper intervals as well to keep the engine running optimally. If you have a truck or an SUV, there is considerably more to be done – one of several reasons I don’t have a truck right now.

As for keeping a car looking great year after year, my program is pretty simple. I pay $20 a month for unlimited car washes at Mister Car Wash, a high quality local option in Houston, and I run my car through about once a week. These plans seem to be gaining popularity nationwide and can make even more sense in a climate that attacks car finishes with a hellish cocktail of snow, slush, salt, and more. But rather than opting for the more expensive upgraded plan, which costs about double, I spend about a half hour around once a month applying spray wax (any decent brand will do and it costs no more than $5 for at least a few years’ worth) using basic microfiber cloths (these are great to keep at home for other purposes as well since they are reusable and do a better job than paper towels at all sorts of things). And finally, I use those same microfiber cloths to apply Nu Finish, an awesome polish product, once or twice a year. As a bonus, the waxing/polishing process is a great way to routinely inspect every inch of your car for any potential issues, which are almost always cheaper to address if they’re caught early. The result? People often ask if my cars are new, even when they’re several years old.

They certainly look and run as if they were. But instead of spending $5-10k a year on depreciation (yes, it is still an expense if it doesn’t affect short term cash flow), I usually spend $1-3k and sometimes even less. Over a lifetime, that will save me well over $100k compared to what the average person does. And again, I still drive relatively nice cars. Right now I have only one – a 2014 Hyundai Sonata 2.0T Limited, which offers 274 horsepower, a synthetic leather interior, a backup camera, blind spot monitoring, heated seats, 18 inch rims, and much more. And while it is still occasionally mistaken for being new, it is actually better than that since Hyundai took a tragic step backwards with the model in 2015 in both design and mechanical engineering (2 mpg city/0 highway gained in exchange for TWENTY NINE FUCKING HORSEPOWER lost to the tune of a 1.5 second difference in 0-60 time? If that didn’t get some people fired – or executed if it had been North Korea instead of South – it should have).

My next car is going to be a Lexus, more than likely a certain “radical” coupe that, with the aid of a few minor corrections modifications, puts out over 500 horsepower and sounds like an unstoppable monster from hell. I will probably buy one around five years old due to the way luxury cars depreciate but I will still probably keep it close to ten years and operate the same way I always have. With the combination of legendary Toyota reliability and proper maintenance working in my favor, I believe I will do just fine. If not, I will go back to buying premium versions of regular brands like I have in the past. Either way, I’m happily driving a good quality car with almost no problems and spending much less than average to do so. Everyone is obviously going to make different choices when it comes to cars. But if you take care of yours the way I take care of mine and keep it a while, you are going to get the same kind of results.

How I Occasionally Get Over Half the Cost of My Hotel Stays Back in Cash Equivalent Rewards and Why Choice Hotels is the Hotel Brand I Love to Hate (Hint: the two are related)

I try to see something interesting on every trip; in this case, Texan hero Sam Houston looks solemnly out over the highway.

Hotels offer a wonderful opportunity to make some extra money when traveling for work, and mind you none of the windfall is taxable. I personally use Marriott and Choice. My colleagues (yes, even the boss, who approves my expense reports and would seem to have reason to prefer smaller numbers) mock me mercilessly for “slumming” when it comes to my hotel preferences. But I come from a humble background and to me, it’s really not a huge sacrifice. Why those two chains? Marriott properties are where I most prefer to stay (not too fancy/expensive, but also not too “questionable,” as long as you avoid certain older properties) and the rewards program is decent. So if I’m going to pay for a hotel stay on vacation with points, Marriott is a good, solid option. Choice, on the other hand, has a rewards program that makes it number one for people who want to get PAID – during two parts of the year in particular. And if you travel to the same areas regularly, you figure out pretty quickly which of their properties are fine and which are better avoided, so that aspect of things becomes less of an issue.

The key with Choice is learning the ins and outs of the rewards program. It is clearly designed to offer a lot of potential value while quietly screwing as many people as possible out of much of it. But once you know what you’re doing, it’s pretty easy to deal with. First I’m going to show you just how valuable the program can be. Then I will discuss the pitfalls and how to avoid them. The two parts of the year when I “choose” Choice (sorry) are when two specific promotions are running. Otherwise, I’m at Marriott for the better overall hotel experience.

Right now, Choice is running its “stay two times, get a free night” promotion. It’s not quite as great as it sounds, but it’s close. A typical one night stay (more on the significance of this wording later) will get you about 1000 points (roughly $100 x 10 points per dollar). But during this promotion, two of those 1000 point nights will get you a serious bonus. It gets a little strange here since supposedly you will get 8000 points total but in reality, you get a little more and there doesn’t seem to be any rhyme or reason as to exactly how many. But regardless, you get a minimum of 8000 points for two stays. Now to be fair, that will only get you a night at a select few Choice properties but that’s irrelevant to me because that isn’t how I use the points. I use them to buy Amazon gift cards, which are effectively cash equivalents. And the cost of a $50 Amazon gift card is 16,000 points. Are you one of the eight people who don’t use Amazon? No problem. There are tons of other gift card options as well and I believe they’re all priced the same.

The opposite promotion is twice as good. You still get 8000 points minimum for two one night stays but in addition, some of the gift cards, including Amazon, are discounted to half price – meaning you get a $50 gift card for every other night you stay. The catch here is that the discount only lasts while the promotion is running and if I remember correctly, there is a delay of 48 hours between gift card orders. So you have to stay on top of it or you will get screwed out of some of your bonus. But this can be an incredible moneymaker. Back when I was spending a few nights on the road in a typical week, I was making easily $500+ in Amazon gift cards during the approximately two months a year this promotion ran.

This pair of promotions represents the bulk of the opportunity, but I’m all about maximizing. You can make about an extra $2-10 per stay if you use ebates (www.ebates.com), depending on how much Choice is offering when you make your reservation. On my last stay, it was 10%! Usually it’s at least 2%. Another thing that is easy to overlook is the “Extras” portion. I use it to collect an additional $2.50 Amazon gift card for every stay. There are other “Extras” options but this one is the easiest for me to monetize. Finally, if you use a proper rewards credit card to pay for your stay, you will get even more cash back. I use the Wells Fargo Propel Amex to get 3%. All of these are small on their own but together, they add up to almost $10 per stay (or significantly more depending on the current ebates rate). And other than the $2.50 Amazon gift card, you can also use them at Marriott or most other major hotel chains.

What does this all look like in practice? This week I stayed a night under the “stay two times, get a free night” promotion. For the sake of simplicity, I will round the cost to $100, which is usually pretty close anyway. For my one night stay, I got: $12.50 in the form of enough points to buy a quarter of a $50 Amazon gift card, $10 through ebates, $3 through my Wells Fargo Propel credit card, and an additional $2.50 Amazon gift card through “Extras.” So in total, my $100 stay paid me back $28. If you factor in the vomit inducing amount of taxes I pay on every dollar of earned income, and will not have to pay on this since it falls under that magical “purchase rebate” category, that $28 becomes almost $40. And if this stay had instead been during the opposite promotion, I would have earned half an Amazon gift card instead of a quarter, bringing the total haul to nearly a whopping $60 with taxes factored in!   

How can you keep the clever bastards in Choice’s c-suite from conning you out of your rewards? First, you obviously have to register for a rewards account. But it’s not that simple. The two promotions above require a separate registration each time they run. So when I make any hotel reservation, I always start with the Choice site to make sure one of these promotions isn’t running. If it is, I immediately register and then use only Choice hotels for the duration. Another way they can get you is the difference between “night” and “stay.” The promotions are for “stays,” meaning that if you stay multiple consecutive nights, you have just made a terrible mistake because your multiple nights are only getting you credit for one half of the two “stays” required to earn the bonus (when multiple nights would already have earned you the bonus once and potentially more times, depending on how many there were). I believe the extras (the $2.50 Amazon gift card in my case) run the same way. So make sure you never stay two nights in a row in the same Choice hotel unless you’re ok with halving most of your payoff – and if you’re anything like me, the payoff is the only reason you’re there in the first place.

I will note that as a guy who has been to the top tier of Choice’s rewards level and well beyond, there is very little benefit to doing so. You get some bonus points on top of your regular 1000 but nothing else of value. And for me, that isn’t enough to get my business over a superior Marriott option, which is typically priced only a little bit higher. The money is made with the two major bonus promotions. There are a couple of other promotions throughout the year (for example, one doubles the points you earn from a stay) but there again, they aren’t enough to move the needle for me.

There you have it. You now have the tools to make some serious money off of your hotel stays, especially at Choice properties. Stay tuned because I’m going to post about other ways to put your travel job to work making extra money for you – and no, it’s not anything illegal or underhanded. Happy system gaming and have a great afternoon!

Stop Ignoring the Opportunities in Your Life!

Frequent flooding doesn’t stop some of the brave souls in Houston!

I’d like to start today’s post with an old joke to illustrate a simple, but incredibly important concept.

A man is trapped in his house during a hurricane so he prays to God for help. God answers and promises to spare his life. Not long after, a man drifts by in a boat and offers to rescue him. “No thanks,” he replies, “God is going to take care of me.” So the boat leaves. The water gets higher and the man is forced up to the second floor of his house. Another boat comes by with another offer of help but the man turns it down as well. Finally, the water level gets high enough that the man has no choice but to climb onto his roof. A helicopter hovers over and a voice calls down, once again offering help. But once again, the man turns it down. Soon after, he drowns. Later that day in heaven, the man asks God why he hadn’t come through on his promise to help him. God sighs with frustration and says, “I sent you two boats and a helicopter.”

I was reminded of this joke after dealing with a particularly difficult customer whose business probably won’t survive the year. I’ve seen plenty of other customers go through situations like his and come out better and stronger for the experience. But unless he changes his attitude, he won’t. Where the customers who ultimately succeed see opportunities, even as they struggle through setbacks, he only sees the odds stacked against him. Where members of the first group take responsibility for their situations, learn their lessons, and improve their tactics, he blames anyone except himself for everything that happens. I’ve tried to bring this to his attention in the most delicate manner possible, but I bet you can guess what the response has been.

Admittedly I’m not great at softening my tough love, but in his situation, I’m one of the men in the boats or in the helicopter in the joke. I’m offering him help but it isn’t the help he wants and he assumes other, more preferable help is going to come. Of course, it won’t, and even if it does, it probably won’t be quite the help he wants either. People like this very rarely succeed in the long run. And I’ve learned that once the initial offer of help has been offered and turned down, it isn’t worth losing any sleep over the situation. You can’t help someone who refuses to help himself and you can’t force someone to see an opportunity. If you could, far more people would be successful.

What I’m trying to say is that opportunity doesn’t usually visit us when we prefer, nor does it usually appear in the form we want or expect. But that doesn’t mean it isn’t there. Opportunities are all around us. One of the major differences between those who succeed and those who fail is that some of us see opportunities, grab them, and make the most of them, while others simply complain that they don’t have any opportunities. Obviously most people want to be successful. I would have thought it was everyone at one time in my life but I’ve seen plenty of evidence to the contrary.

So my goal isn’t to help the people with zero ambition or zero personal responsibility. Unless they find at least some of both, I can’t do a thing for them. Instead, I want to help the people who want to be more than they are but simply haven’t figured out how yet. I also want to help people like me who are already successful but want to keep that going and/or increase it. Today, I’m trying to do that by reminding everyone not to be like the man in the joke. If you think you don’t have any options, you’re wrong. Understand that there are people who find options in absolutely any situation and with that in mind, look again. And don’t just look. Opportunities aren’t for ogling. They need to be taken and combined with effort. Only then will they turn into successful results. If you can change the way you think, you will eventually change the results you are getting out of life. I encourage you to be on the lookout for opportunities because they definitely will cross your path whether you spot them or not. It all comes down to who you want to be and only you can answer that.

The Real Reason the Media is Flipping Out About Tax Refunds This Year

You’ve probably seen some of the articles talking about people screaming and stomping their feet because their tax refunds are smaller this year. There have been plenty of them. Unfortunately, a lot of people simply don’t understand how the federal tax system works and the mainstream media, which makes its money by fanning up any potential controversy into a firestorm, is all too happy to spread the ignorance around as usual rather than doing the responsible thing and explaining the reality of the situation. So I guess it falls on my shoulders to put out their fire by spraying it with facts. This is not a political post. My goal is not to change anyone’s opinion about the tax reform package that took effect in 2018. I just want to do my part to combat the apparently widespread ignorance.

Let’s say you go to the store and buy a candy bar for $.75. You pay with a $1 bill and the cashier hands you a quarter. Did you just gain 25 cents? No, you simply overpaid and got the change you had coming to you. That is exactly what happens when you file your tax return. In the case of most people, your employer has been withholding a portion of your pay all year. The tax return is a reconciliation. It determines how much you were legally obligated to pay, compares that to the amount you actually did pay, and either gives you your “change” in the form of a refund if you paid too much, or demands that you pay more if you paid too little. You are not gaining or losing anything except cash flow. And if you’re getting a refund, it’s technically bad news since it means you gave the government an interest free loan for an entire year. If you don’t know why that is a bad thing, google “time value of money” and get ready for the most important lesson you’ve learned in a while. Simply put, it’s how people like me use our money to create more money. It is also how people who don’t understand the principle fall further and further behind. Ignorance does not exempt anyone.

In 2018, most people actually paid less in taxes than in previous years, assuming important factors like income, dependents, etc didn’t change. The main category of people who paid more are people who itemized previously. Roughly 30% did so for the 2017 tax year and that number is expected to drop by about half for 2018. This is because the standard deduction, the alternative mechanism to itemizing, was increased at the same time as certain deductions were limited. But the important point here is that most people paid less.

However, most payroll software (and most employers use the same handful of payroll vendors) updated to account for the changes in 2018. Almost everyone who was getting a tax cut got it spread out over every paycheck – just as they would have if they had gotten a pay raise. It wasn’t a lot; for most people, it was $500 or less over the course of the year. If you’re high income, then it was probably more but also a proportionally small amount. A lot of people probably didn’t even notice their paychecks were $10 or $20 higher. Unfortunately, some of the payroll software was a little more optimistic than it had been in previous years and as a result, many people’s 2018 refunds got smaller. However, this simply means that instead of getting their interest free loans back a few months into the following year, they simply never made them in the first place or made smaller ones. In actual financial terms, that’s a gain.

So why all the howling if the majority of people are paying less in taxes? First off, as I already mentioned, there are a lot of people who don’t understand the situation. And it doesn’t help when the media has no interest in doing anything but amplifying that effect. But aside from ignorance, most people are negligent with their finances. They save little or nothing throughout the year and as a result, their tax refunds are found money in their eyes – and usually found money they’re mentally counting on. This is why car dealerships, furniture stores, and tons of other businesses tend to have tax refund themed sales around this time of year; it is the only time a lot of people will have any money in hand. If you’re in this group, it’s time for some tough love. You’re put yourself in a difficult position and I encourage you to take a good, honest look at what you’re doing with your money. If you don’t know how to do that, ask a wealthy person you know to do it for you and give you some tips. Or email me at admin@healthwealthpower.com. Everyone has to start somewhere and I will be happy to help anyone who is serious about improving.

There are people who legitimately paid higher taxes in 2018 but a lot of the people who are complaining about their refunds are not in this camp. For anyone a tax refund is a big deal to, I encourage you to use this as a wake up call. Keep reading this blog and others like it. Evaluate the way you handle your money and make changes. Even little ones will make a big difference if you’re in rough shape, just like how people who don’t exercise regularly will typically get huge results from just getting started in the gym. Turn a negative into a positive. I’m here willing to help and there are a lot of others like me. But at the end of the day, all the information and advice in the world won’t do an ounce of good if you aren’t honest with yourself and/or don’t make the necessary changes. But regardless of what you do, please stop complaining, particularly when the thing you’re complaining about actually benefited you. It’s not a good look.