No one can predict the future, but if I’ve learned one thing in my life, it’s that the future is rarely as ominous as people make it out to be. Here are 5 types of people that I’d really offer a free, hot cup of STFU to when it comes to listening to their views on what the economy is and isn’t.

1. People Who Freak Out Every Time The Stock Market Drops

If you’re a current retiree who has to sell shares from your retirement fund to make ends meet, you are allowed to freak out a little because the value of your retirement fund can have a direct effect on your lifestyle. Most people who I hear moaning and groaning the loudest about their funds dropping in value aren’t retirees, though. They’re generally people who are still buying into their retirement funds.

Why is it that people look at low prices as being a good thing everywhere that they shop except the stock market? How does that make sense? If you’re buying into your retirement fund, low prices are actually a good thing. Rule number one of how to make money in finance isn’t “buy high, sell higher”. It’s “buy low, sell high”. When stock prices are down, you should be giddily buying, not bitching that you can’t buy at a higher price. A low price means you can buy more shares and have a potentially higher profit margin when you sell those shares after you retire.

So, if you’re not currently retired, do us all a favor and stop sighing and complaining about how much you’ve “lost” in the stock market. The fact is, you haven’t lost anything until you sell at a lower price than you bought at. If you aren’t selling, then you aren’t losing. Got it? Now, get out there and start buying because there is a fire sale going on right now, and supplying a steady stream of coke and hookers to that retirement home in your golden years is not going to be cheap.

2. People Who Picket To Stop Foreclosures

I understand that things can go wrong in life, and if picketing is your way of using the media to refinance your mortgage, good for you for working the system. Between you and me though, let’s not pretend that it’s a mortgage company’s fault that you bit off more than you can chew. When you sign mortgage papers, they have a page that shows you your exact payment for the length of the loan. If that number is more than you can afford, or even close to what you can afford, you shouldn’t be buying the fucking house. Get something cheaper and fix it up, or wait until the market tanks and is full of dirt cheap properties.

The mortgage company didn’t trick you by pre-approving you for a bigger loan than you could afford. You’re not stupid. If a mortgage company told you that you could afford a $4.2 million dollar house, would you head over to Beverly Hills to start looking, or would you think they’re nuts and look for a house that fits into your budget? You look for one that fits in your budget. Trust me, I know what it’s like to go broke because of extenuating circumstances, but maintaining personal responsibility when the chips are down builds strength and character, which are getting harder and harder to find these days.

3. People Who Spread Fear

I’m not a Republican or a Democrat, and I see most of the antics of politicians as stupid theatrical tricks worthy of being ignored. When the President went on television and told the nation we were economically doomed, I got really irritated because there are a lot of smart people in the White House who know that the biggest thing an economy requires to move forward is consumer confidence. If you intentionally panic people (which is what I see as the intention of the message), then you undermine people’s confidence and drive the economy down.

If people are comfortable, they spend. If they are nervous, they spend less. If they are panicked, they spend nothing and start hoarding. That’s when you have bank runs that feed the panic and drive the economy under. For the President of the United States to act like there is a 700 billion dollar emergency ready take down the nation was a bad parlor trick whose only aim was to drive the economy into the ground. While there are a lot of motives for this, few are altruistic or in the interest of the common good.

4. People Who Want to Prop Up Failures

Purchasing a 700 billion dollar stake in companies that are failing was a ridiculous idea from the start and everyone knew it. Companies that make bad decisions should fail or be bought out by stronger companies. That’s how the free market economy works. If Congress comes to the rescue, then there is incentive for the companies to make the same mistake again because they will never pay the price for their mistakes.

But, without the bailout, loans will dry up! All the money in those Morgan Stanley funds will be gone I tell you! We’re doomed? AaAAaaAAaa! Ugh. Shut up and calm down. If you want to bet that the company that manages your retirement fund is going go out of business, then sell out, take the hit, and invest that money elsewhere. You’ll lose some of your money and retain your peace of mind. Then, a few years from now, you can look back and imagine all the money you would have made if you didn’t freak out and base a major financial decisions on raw fear. My feeling is that before a large company like Morgan Stanley starts to goes under, a larger company will step in and absorb them. All those accounts would move to the new company and everything will be business as usual under a new name.

If Morgan Stanley and other big companies end up in that situation because of an over reliance on mortgage backed securities, that’s tough. If I go throwing my money away at the casino, Morgan Stanley isn’t going to drop by and hand me wads of cash to cover my debts, so I ask them for the same consideration. If a company screws the pooch with some bad financial decisions, they can’t knock on the taxpayer’s door for a handout. That’s not the taxpayer’s responsibility in a free market economy.

5. People Who Forget History

Let’s have a quick history lesson. In the 1980’s, there were specialized banks called Savings & Loans that used deposit accounts to fund mortgages. Thanks to deregulation in the quest for profit, the S&L’s played around heavily in real estate speculation. They wrote out high risk loans to capitalize on the double digit interest rates (despite some of them being completely insolvent), and for a long time, the government pretended not to notice. When the frenzy came to a halt, there was not only a glut of real estate on the market, but a lot of people were simply walking away from their mortgages because they were paying so much more than their houses were worth.

The S&L’s went into a tailspin and not only bankrupt the FSLIC (a S&L version of the FDIC), but required a $125 billion bailout from taxpayers. In the middle of all this (1987), the stock market crashed the hardest since the Great Depression. Most people had to kill and eat their neighbors to survive because society came to a grinding halt. I, myself, had to fight in Thunderdome to get some much needed gasoline for my all-terrain death buggy. Wait, scratch that last part. My memory is a little fuzzy, so that may have been from a movie I saw. Actually, despite the state of the economy, people went on as usual, and those who went against the dark financial forecasts and sunk their money into a house after everything crashed made their money back a number of times over when the market corrected itself.

Conclusion

Yes, real estate is typically the single largest asset people own, so it can seem like it would be a major effect of the economy as a whole. In reality, it’s not as big as you’d think. Real Estate makes up less than 5% of GDP, so the economy is not going to grind to a halt if the housing market bottoms out. The most important factor in keeping the economy strong is consumer confidence and that starts with all of us. I’m not saying to stick your head into the sand and pretend that economic downturns don’t happen, but they can be weathered and profited from with the right strategies. To profit in any financial climate, all you have to do is see opportunity where others see fear, do the opposite of what everyone else is doing, and of course, “buy low, sell high”.

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We do mostly city driving in my household, and I had heard that people who drive mostly stop and go city miles reap the most benefits from a hybrid. I headed over to Edmunds.com to investigate just how much green I’d be saving by going green. I was going to be like those people on TV who fill up so infrequently that they can’t remember where their gas tanks are. The oil companies were going to weep for me…

I dug into Edmunds looking for information on what hybrids were available, and I was pretty surprised to find that there were at least six four-door sedans on the market that have hybrid counterparts. When I saw the city mileage of the first couple of cars, I pictured myself talking to the neighbors saying things like “Yep, it gets 40MPG in the city. Can you believe that? Best car I ever bought that didn’t have a giant wing.” There was a lot of flexing and waving of complicated new power tools that were bought with the leftover gas money, but I won’t trouble you with the fine details of what goes on in my head.

When I started looking at the prices of the hybrids, I have to say that my excitement dwindled a little. If you’ve ever looked into any green products like wind power or solar, you know that they’re priced more for wealthy folks who want to feel good about saving the environment than for regular folks who want to save a couple of bucks. Hybrids seemed to be on a similar track, because similarly equipped gas-only models were thousands of dollars cheaper than their hybrid counterparts.

The Prices Of Hybrid Sedans And Their Gas-Only Counterparts:

Source: edmunds.com TMV pricing

While it’s great to do things that are good for the environment, when you don’t have a lot of money to throw around, you have to think economically about things. I wondered, “Was the hybrid just another fashionably expensive green technology, or could I recover the price difference in a reasonable amount of time through savings at the pump?” As a finance person by training and cheap bastard by lifestyle, I couldn’t help but make an attempt at calculating how long it would take to recover the hybrid price premium. I didn’t include interest rates, the inflation rate, financing costs, maintenance costs, or depreciation in my calculations, and I took a relatively simplistic view of increasing gas prices.

Gas is at about $3.50 now, and gas prices have been rising in the U.S. at an average of $0.30 per year over the last 5 years (approximated from midgrade gas prices from 4/2003 to 4/2008 from U.S. Energy Information Administration data). I chose $4 as a reasonable guess at the price per gallon about two years from now. If we assume that everything stays constant, that would also be the average price of gas over the next four years.

The guessing continued as I tried to figure out how many city and highway miles that we drive each year. I think we do an average amount of driving, a majority of which is through city and back roads, so I estimated that we drive about 15,000 miles a year, with 11,500 of that (76%) being city driving. It’s only a guess, but it seemed like a reasonable one.

Once I had my constants, I headed back to Edmunds to gather MPG ratings, so that I could calculate what each of the cars would cost me for fuel each year. The formula for annual fuel cost (if you ever need it) is simply:

((city miles/city MPG)+(highway miles/highway MPG)) * gas price per gallon

Annual Fuel Cost Of Hybrid Sedans And Their Gas-Only Counterparts:

source: edmunds.com TMV pricing

I was pretty surprised that only one of the hybrids on the list had what I considered to be an acceptably high city gas mileage (the Honda Civic), and three of them, namely the Chevy Malibu Hybrid, The Lexus GS450h, and the Saturn Aura Hybrid were absolute jokes. I have a car that burns fuel like a furnace as its turbo whistles it up to 60 in under 5 seconds, and it gets better gas mileage than these hybrids. They each get no more than 24 MPG, which is so ridiculously low for a hybrid that it suggests that neither Saturn, Chevy, nor Lexus put a lot of effort into their hybrids beyond simply getting them to market to capitalize on the green trend.

Once I had what each of the cars would cost me in gas for the year, I could find out how much a hybrid would save me at the pump by subtracting the hybrid annual fuel cost from the gas-only counterpart’s fuel cost. Then to find out how long it will take to recoup the difference in price with the money you save on gas, you take the premium that you paid and divide it by the fuel savings per year:

(hybrid price – non-hybrid price) / (non-hybrid fuel cost – hybrid fuel cost)

Breakeven Points of Hybrid Sedans And Their Gas-Only Counterparts:

I had to check these numbers a couple of times with different gas prices, because I was pretty shocked by the results. Don’t be fooled by the Lexus being at the top of this list. The Lexus might have the lowest breakeven point, but it’s a $50,000 car that gets a mere 22 MPG in the city. The only reason it is in the top spot is that the non-hybrid Lexus gets the worst gas mileage on the list at 17 MPG. Even though the Chevy and Saturn grace the bottom of the list, they get similarly terrible gas mileage for hybrids, and would take between 14 to 17 years to recover the premium. It really should be noted that the non-hybrid Civic gets better gas mileage than the Lexus, Chevy and Saturn hybrids.

The gas mileage differences between hybrids and normal gas cars are greater for city driving, so someone like me who does 75% of their driving in the city should be a prime candidate for a hybrid. Unfortunately, the fastest that I could recover the cost premium for a hybrid is 5 years. People who do more highway miles will see less savings and longer payoff times, and people who don’t keep their cars for 5 years or more may never recover the hybrid premium at all.

Will you save money by buying a hybrid? You’d have to do your own calculations based on how much you drive and what you think the future holds for gas prices, but in most cases, it doesn’t seem likely. Hybrids may be a way of showing your neighbors that you care about the environment, but you will certainly pay for the privilege to do so.

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Before 2005, I would drive to the local Blockbuster or Hollywood Video and wander the isles looking for something to rent. I’d then pay the clerk the $5 a pop for something I was only partially interested in, only to end up running back to the video store at some odd hour because my five day rental turned out to be only a two day rental. All told, I spent more time getting the movies than watching them, and sometimes I’d pay more money than if I actually bought them outright.

Making Life Easier

In 2005, I signed up for Netflix’s $17.99 plan (In July of 2007, this price was reduced to the current price of $16.99), which allowed me to have three movies at home at a time . When I was done with each movie, I would pop them into a postage paid envelope, drop them in the mailbox, and another movie would be mailed out to me. In a short time, Netflix changed the way I watched movies the same way that the digital video recorder changed the way I watched TV.

I no longer had to wander around the store looking for something I hadn’t seen, and #1GF! no longer had to waste her time waiting around for me to pick something. Because I was making my choices from my PC, I had access to reviews and movie information to help me make better and faster choices than I ever could standing in front of a wire rack full of obscure “staff recommendations” (#1GF! might argue whether or not I actually made better choices, but we both know that potential is important.).

It was all so easy, that I have remained a Netflix customer for over three years. In that time, I’ve rented 415 movies from them and watched around 30 more through their on-demand service. While I have probably been guilty of visiting a Blockbuster store a couple of times, I can’t say that the experience gave me any incentive to give up my Netflix account.

Has Netflix Been Cheaper Than The Video Store?

There’s no question that Netflix has made renting easier, but while going through my bills this week, I wondered if it had been any cheaper. I went through my rental and payment histories and discovered that over the last three years (from 1/3/05 to 1/3/08 to be exact), I paid Netflix a whopping $673.74 to rent 415 DVDs. That seemed like a lot of money until I broke it down into the cost per movie.

To be fair, I decided not to include the 30 free on-demand offerings in the calculation to offset the possibility that I might’ve gotten free Blockbuster rental coupons in the mail during the past three years. Because an in-store rental at Blockbuster costs a hefty $4.82 per movie, eliminating those 30 movies didn’t help to tip the scales in Blockbuster’s favor. Those 415 movies cost me $1,326.56 less by renting them through Netflix! Yes, you’re reading that right. That’s over thirteen hundred bucks over three years, which means

Is this typical, though? Would I have rented two to three movies per week over the last three years if I had to go to the store, or does the constant flow of movies from Netflix knock down the cost per unit by increasing the number of movies I watch? While I think that Netflix does provide me with more movies to watch, it’s not just the cost per movie that makes Netflix cheaper. The overall cost is cheaper, too.

Let’s say that I never signed up for Netflix, and the aggravation of the stores caused me to cut my rental habit down to only two movies every other week. I think that’s a pretty large exaggeration, but let’s go with it anyway. Those 156 movies would’ve cost me $751.92 from a Blockbuster store over the last three years. Even at a rental rate of one movie per week, the Netflix 3 movies out at a time plan still would’ve been cheaper by $78.18 ($26.06 per year), and would’ve provided me with two to three times as many movies. If I dropped to the 1 movie out at a time plan (which would make sense if I was only renting 1 movie a week) the savings jump back up to $412.10 ($136.70 per year)

Verdict: Netflix Saves Money

Cost Per Movie:
Blockbuster (in store): $4.82
Netflix: $1.62
Difference: Netflix costs $3.20 less.

Total Cost For 415 Movies:
Blockbuster (in store): $2,000.30
Netflix (3 out plan): $673.74
Difference: Netflix costs $1,326.56 less.

Total Cost For 1 Movie Per Week for 3 Years:
Blockbuster (in store): $751.92
Netflix (1 out plan): $339.82
Difference: Netflix costs $412.10 less.

See what I’m getting at? Whether you like to watch a movie every now and then, or you’re a real movie buff, you’re not saving money by going to the video store. Whether you sign up using the link below or sign up on your own, I’m telling you that Netflix will not only change the way you rent movies, but it will save you money.

Are you still renting from the video stores or did you make the switch to Netflix? Do you prefer one way or the other?

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These days, the largest package isn’t always the best deal, and doing math problems over pennies is a waste of your time. There is a much faster and easier way to figure out the best deal with no math required, and it’s right under your nose.

Say you go to the grocery store and are faced with the following packages of q-tips:

• 300 for
  
• 500 for
  
• 625 for
  

Can you tell which is the best deal in under five seconds? You can if you know where to look.

In the tags above, you’ll notice a number in orange to the left of the price. That’s the unit price, which is the retail price on the tag divided by the number of units in the box. In this example, the 625 pack is the best deal at a little over 60 cents per hundred q-tips, while those same hundred q-tips are going to cost you 25% more in the 300 pack.

Unit prices are available on almost all grocery items, so the next time you go shopping, you can make smarter shopping decisions in less than five seconds with no guesswork and no math.

Thanks, unit price!

Do you pay attention to the unit price?

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If Dad’s a gamer, swing down and grab him Battlefield 2142 for $20 at Circuit City. He never has to know it was $20. Then, grab yourself a copy, get online and pwn his elderly ass. If Dad doesn’t know what pwn even means, you should probably skip this idea and move to the next one.

If Dad has a Sony phone or camera that takes a pro duo memory card, the Sandisk 4Gb pro duo memory card is on sale for $50 at Circuit City. I picked one up for my phone, and you won’t find a better deal in a brick and mortar right now. Then, Dad will be able to show people what you look like without having to direct them to those awesomely horrific pictures on your MySpace page.

You’re dad is a big, fat nerd? Hey, that’s ok. Without nerds, we wouldn’t have rockets or rocket scientists. Just print off this Borders 20% off coupon and grab him a big fat nerd book. You can get better deals on Amazon, but if you’re reading this, you’re not really a planner and you don’t have time to wait for shipping. Keep this link handy, because the site seems to regenerate a new coupon every time the current one expires.

Speaking of coupons, if Dad’s a BestBuy type of guy, print off these BestBuy 10% coupons. The selection on what you can buy is limited, but there’s definitely a music coupon in there for your long-haired hippy dad, or your long-haired metal dad.

If Dad’s a geek or geek-in-training, why not load up a flash drive with a bunch of applications, pictures, and games for him? A 2 Gb can be had for about $20 (4Gb for $40) at Bestbuy or Circuit City. Then you just need to load it up. You can throw on the Portable apps Suite, or you can browse Wikipedia’s massive list of portable apps and their equally massive list of portable games. Just getting him a flash drive is not going to be impressive. Giving him the drive with some tools he can use just might be.

While I’m not a fan of giving gifts that later require an ongoing payment, I got my parents a Netflix Gift Subscription one year and it was a huge hit. Netflix changes the way you rent movies. Is it too complicated for Dad? Absolutely not. Will he be able to blame Netflix for replacing all your mother’s romantic comedy rentals with action movies? Oh, yes he will. Will he thank you for this? Oh, you bet. A three month gift subscription will run you a little over $50.

In the same vein, what about getting him a Comcast DVR? I built my own DVR years before the Comcast DVR was available, and I can tell you that people who have DVRs watch TV differently than those who don’t. I gave this to my parents one year and it completely changed the way they watch TV. It’s a tricky gift because the local Comcast office won’t give you a box on someone else’s account. If Dad has a cable box now, you can give him multiples of $14 to cover the cost of upgrading to a dual tuner, High Def/DVR box for a specified period. Figure six months will run you about $85.

And if all else fails, I don’t think there’s a Dad out there who can’t use the ol’ Home Depot Gift Card. At least he’ll be able to buy new locks so your key won’t work when you show up to drag him off to the nursing home. It might not stop you, but he will certainly be smiling when it slows you down a little. And what is your dad’s happiness worth?

Any other ideas? Share the wealth in the comments.

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There are also many places to look for good prices on things. salescircular.com has all of the weekly newspaper circulars jammed into one website, allowing you to easily compare prices without even cracking the paper. Pricegrabber.com will get you the best prices on tons of items, and can calculate in the shipping costs to show you you the true best deal. Froogle was recently introduced by Google labs, and seems to work ok, too. And don’t forget that most retailers (walmart, kmart, bestbuy, staples, etc.) have online stores that allow you to check their inventory. Don’t fight those low tech weiners. Arm yourself with technology, make your list, and either have it shipped, or go get it for pickup. I didn’t include all the good geeky places to shop, because most geeks know where they are already, and non-geeks don’t care. Just in case I am wrong, you could look at thinkgeek.com to get you started…

If anyone out there is thinking of getting me something, I would rather that you donate the money to either the National Kidney Foundation or to the ACLU. I would appreciate it much more than any pornos, as when my kideneys fail, I don’t want the Nazi StormTroopers hassling me while I wait for them to grow a new one. Seriously. Life, and Liberty: now that’s a cool gift.

Then, if anyone wants to send me to the AVN awards for that whole pusuit of happiness thing …

Elimminate the stress. Gifts on the doorstep, Click click click.

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