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My Experience Buying a Tesla

20160426_154635After making the decision to buy a Tesla, the analysis then shifted to how to get the best deal for my money.

Fortunately for me, what I wanted (a Model S 85) was only available used.  That ruled out new.  I looked at Telsa’s Certified Pre-Owned program but found I could find other deals online cheaper – usually by ~10k.  So that sent me focused outside of Tesla for used.

What I found was that since Tesla’s are a rather unique vehicle with a variety of configurations, used ask prices were all over the place.  Before I could get a “good” deal I had to manually figure out the “market” for used Teslas.

I built a spreadsheet that tracked the year, model, battery, and options for all Tesla’s for sale that matched what I wanted across the nation – and had my assistant keep continuously updating it.  We then tracked Actives (for sale), and solds/pendings.  The important information was really getting a solid feel for Solds so when an extra good deal came up, I felt confident so I could move quickly (and negotiate, as it turned out).

What we found were market inefficiencies and pricing all over the place.  The gap between ask and sale prices often exceeded 20k.  And even sold prices for very similar cars could vary substantially – understandably.  People were buying substantially blind.

In the end, I almost bought a car for 68k (plus 2k in shipping/fees = ~70k) that was almost exactly what I wanted.  It was a great deal and I pounced.  They were emailing me the paperwork.  Locally, I had found what I wanted – exactly what I wanted – but they were asking 85k, firm.  15k higher.  I wanted to try one more time to talk him down.

I ended up convincing the guy to meet with me, asap, and used my spreadsheet to my advantage.  He agreed he could ask anything he wanted, but what mattered is what he would sell for.  He had no idea what “reasonable” was.  I had the data.  Emotionally, he had just paid a fortune new and didn’t want to lose a fortune.  I showed him the data.  To have an equivalent car (to the 70k deal above) with this local car’s upgrades, a good deal would be to pay 72.5k-ish.  We settled on 73.5k.  It got me exactly what I wanted (Model S 85, tech, autopilot, 19’s, upgraded stereo and upgraded interior package) and I could see/touch it and know exactly the condition it was in.

Having the data helped me save $11.5k and gave me confidence it was a solid deal.

If interested is seeing the layout/data, I’ve put a link to the spreadsheet I built here.


My Tesla Analysis – A/B testing

My initial Tesla test drive experience was decidedly mixed.  I *loved* the autopilot but the ride was rough and loud.  It was enough to make me stop plans of buying the car. 

But the initial auto-pilot experience emotionally engaged me and made me want to learn more.

It made me curious to see what the quietest Model S I could find was like.  I did a lot of research and A/B tested different options:

  1. Motors:  Single vs Dual:  The single motor in the rear was noticeably quieter than having the second motor right by the driver.
  2. Tires:  19’s vs 21’s.  19″ tires really changed the ride quality and noise levels.
  3. Suspension:  The “upgrade smart suspension” vs the cheaper coiled suspension – the original coiled suspension was a much softer, more Lexus-like ride.
  4. Sunroof:  Unfortunately, I couldn’t test any Tesla’s to test drive that didn’t have sunroofs.  Research indicated no sunroof reduced wind noise a lot.

Overall, a single motor Model S with coiled suspension and 19’s was the quietest Tesla available – a pretty quiet, decent ride – vastly improved over the P85D with 21’s and smart suspension I originally test drove.

Was it tolerable enough when you add autopilot in to make it worth buying?  I couldn’t decide.

I did pro/cons on a variety of areas:

Sound deadening – just wait.  Eventually Tesla would get sound deadening figured out – people were already risking taking apart their Teslas and doing it themselves.  My best guess was a year, maybe year and a half.  At that stage owning a quiet, performance beast would be possible.  On the other, it would necessitate buying a brand new car to get this new sound deadening – which would be very expensive – and be a long time in the waiting.  The “quietest” version was already reasonably comfortable enough, much cheaper, and available now.

Other upcoming auto options.  Auto-makers from Toyota to GM to Mercedes to Audi to BMW are in a race to create self driving cars – maybe in a year or two or three something would come out that’s gas-powered – which avoided unknowns around owning an all-electric car.  But how good would they be?  I couldn’t shake the feeling that when it came to auto-driving technology, Tesla was a tech company first and foremost, who’d designed their cars to download improved operating system updates like a cell phone.  Other car makers just seemed so far behind the curve and even if they came out with something it felt like Tesla would keep updating, quickly, automatically, and for free, with something better.  For now, and for the foreseeable future, Tesla seemed like the clear auto-pilot leader.

Apple car.  Apple is clearly working on an anything-but-secret car named Project Titan, but all reports indicate it’s 4-ish years away from something a consumer can buy.  But worth knowing/analyzing and considering when making a big purchase.

Battery degradation.  Reports indicated that over 50,000 miles the car only depleted on average 6% of it’s capacity and the degradation slows down the more miles that are driven (see link)… that was a surprisingly good compared to my initial concerns.

Battery range: 85 vs 90D.  The P85D I test drove performed far below expected range.  User reviews of those who bought/tested a new car with dual motors compared to their old car with a single mtoor seemed suggest that somehow Tesla has figured out how the game the EPA ratings since the same battery with dual motors seemed to noticeably underperform a single motor when it came to range.  I believe a lower capacity 85 with a single motor would likely have a similar range to highest available 90 battery with dual motors (which is a require the dual motor option) and be much cheaper in real world performance (which is what I care about).

Autopilot 2.0:  This was probably my biggest variable (above battery degradation).  Tesla is working on an upgraded autopilot that will drive on city streets.  When released, this upgrade will be hardware related and require substantially more sensors around the car to facilitate the transition from a relatively simple highway autopilot to a much more complex, inner-city auto-pilot.  The hardware will not be retro-fitable.  If you’ve seen pictures of Google’s self-driving cars covered in sensors, that will give you an idea of the scope of difference.  Realizing this bought me an awareness: anything I bought would soon be outdated like an outdated early model iPhone cell phone.  To someone who is used to driving cars into the ground, buying a new Tesla and then a year or so later doing it again bothered me.  A lot.

3-Year Leasing:  Autopilot 2.0 analysis, combined with how many miles I drive (25-30k/year), basically killed any desire to do a 3 year, 12k miles/year lease.  3 years from now the technology will likely be much different – and I’ll want to upgrade before then.

Upgrading:  The more analysis / research I did, the more it felt like when the first few versions of the iPhone came out.  The hardware changes were so significant in the beginning that upgrading each cycle really did make a huge difference.  I knew I wouldn’t own the initial iPhone 1, or 2, or 3 or 3G for for 3+ years.  Even though all these iPhones did software upgrades (like the Tesla), the hardware improvements were enough to really make me want the newest version (I also have a passion for tech).

Model 3:  It’s supposed to ship at the end of 2017.  Tesla has never hit a deadline.  My best guess was 2 years from when they started taking pre-orders and even then, after doing detailed analysis on quality issues coming out of Telsa, I wouldn’t want a car in the first batch of 50,000.  Meh.

New perspective:  So it looked like my first Tesla wasn’t going to be my end-all car after all – which is initially what I thought when I started shopping for a Tesla – because of the ride/sound issues but really because of Auto-Pilot 2.0.  The self-driving technology is changing so rapidly I would probably own the car for 1-2 years and then flip it out when AP 2.0 came out.  Given that it would be an “in-between” car, the less money I wasted, the better.

Conclusion.  I decided that IF I were to get a Tesla, what made the most sense for me was a used Tesla Model S 85 with a single motor, 19″ tires, coiled suspension, no sunroof – and auto-pilot.  My ideal car at the moment was (fortunately) a used Tesla with very few upgrades!

* * *

I was still decidedly undecided, until recently, on another 4 hour drive over the pass, I hit an emotional wall.  I was done.  I wanted to buy my time back.  Autopilot could buy back 8 hours a week.  The thoughts then shifted from researching / analysis of the car, to researching how to buy it.  My next post is about the spreadsheet I built to determine the market value of the specific niche Tesla I wanted and then how to go about getting the best deal on it.

** UPDATE **  Elon Musk says AP 2.0 announcement coming at end of 2016.


My 500 mile Tesla test drive


I’ve wanted a Tesla for years.  I finally had the chance to test drive a P85D with all the upgrades and I drove it from Seattle to Tri-Cities and back, most of all to test the new autopilot feature.  This is my reaction to the $130,000 car.

Autopilot:  Can the car drive itself?  Yup!  And reliably.  If the car can see highway lines, it’s very good.  It’s a little less smooth, a little bit jerky – it reminded me of a responsible, attentive 1st year driver.  Overall, experiencing this level of automation exceeded even my high expectations.

Comfort:  There were ridiculously high levels of wind noise, which I would rank as stupid high for a luxury car.  21″ tires were really rough on all but the smoothest roads.  On the rougher roads (like the pass), the interior rattled like my old 1988 Camry (I’m not kidding).  It was hard to hear my travel companion – things had to be repeated multiple times.

Battery Range:  We drove in winter time (30 degree temps), which I learned later significantly impacts range.  Because I can be nerdy, I tracked miles Tesla reported the battery would go vs miles actually driven.  For every mile we drove the car ate up 1.72 miles of estimated range, on average.  Said differently, the car overestimated how far it would go by 72%.  That was a massive difference.  You definitely can’t drive Seattle to Tri-Cities without stopping to charge and you can’t trust the “estimated range” in cold temperatures.

Supercharger:  We stopped at  the Ellensburg super charger.  I was impressed how the car charges from 0-50% in 20-30 minutes.  Very fast.  Charging slows down exponentially as the battery gets closer to 80%.

Large Screen:  Initially, the large screen touch screen is fun and kind of sexy.  However, at night, it’s like having a TV screen in your face.  I wished it would turn off.

Seats:  Comfortable.  Rear seats were definitely not comfortable.  Because the car seats are very low to the floor, it puts your knees high in the air.  My averaged height male friend complained of the low head clearance in the back.

Acceleration:  The P85D is wicked awesome.  It’s ridiculously fun taking off like a rollercoaster in Disney World whenever you slam the “gas” (electric?) pedal.  Electric motors give you instant torque and, wow, does it make you grin.

More on road noise:  there is a low, rumbling level that’s quite loud.  Hard to hear, found myself constantly looking at the person in an unconscious attempt to read their lips.  The Tesla salesperson said, “Turn up the radio.”  That’s a silly requirement on this expensive of a car.  That’s what I’d tell someone buying a $5,000 used car.

More on autopilot:  Would I want the car to drive in icy conditions over the pass by itself when the lines have been scraped off?  No.  Would I trust it on normal highway conditions?  Absolutely.  When it loses highway lines I was impressed how well it still “saw” the road and did exactly what a normal driver would do.  On the highway from Ellensburg to Kennewick, the Tesla drove itself the whole time – I didn’t steer at all.

Summary:  It is awesome to see the future of self driving cars in the here and now.  Not reading about it in a magazine where they plan to release it in “20xx.”  Right now.  I had high expectations and it exceeded even those expectations.  On the con side, I’m sensitive to road noise since I drive so much and the car was ridiculously loud, rattling and shaking like a much less expensive car.  While I love the acceleration, the reality is, 99% of the time I want a smooth, quiet peaceful ride.  The gap in estimated battery range VS reality was also kind of mind blowing.  If we hadn’t way over charged the battery, we wouldn’t have made it.

Final feel:  It’s a car I want to love.  The autopilot and acceleration really are amazing, but the ride is horribly rough and can’t-hear-others-talk road noise and interior rattling kill the buzz, and quickly.  The best description I heard of Tesla is, an amazing software company that is still learning how to make quality cars.  That’s exactly how it feels – like being in a 40-60k car with amazing software.

Update:  My experience apparently matches the Consumer Reports article on other user complaints.  Here’s more detailed breakdown of reliability data, which ranks Tesla in the worst category for reliability but high for customer satisfaction.

Why I hate most mutual fund investing



“I have bad news and good news.  The bad news is we lost a ton of money.  The good news is that none of it was ours.” – Investment banker addressing colleagues after collapse in mortgage-back bond market

I’ll start with the basics of why I hate the financial / mutual fund industry so the next time you’re meeting with your “financial adviser” or 401k “adviser” you’ll be aware of some things they may not be sharing with you:

The industry is incentivized all wrong
Managers – particularly hedge managers – are paid to take huge risks.  If they take huge gambles and it pays off, they get a huge bonus.  But if they don’t pay off, they don’t eat the losses.  Sure, the investors may lose some or even all their money, but it isn’t the manager’s money.  All upside, no downside.

Example:  Year one, a manager places a crazy bet and wins, he gets paid a huge bonus.  Next year he does it again, and wins, again, another huge bonus.  And the next year, his luck runs out and the fund runs massive losses for investors.  But the manager gets to keep his past bonuses.  It made sense from his perspective to do exactly what he did (not from the view of the investor).

I have a retired 32-year old friend who used to manage a hedge fund and he talked about this phenomenon.  I asked what he does when the gambles blow up and they lose all the investor’s money:  “Go get other investors.”

Understand this and you’ll understand most of what drives the behavior of the financial fund managers.

With all that speculation, 95% of mutual funds eventually under perform or blow up
Most people think mutual funds are around for 20-30 years.  Over a 10 year period over HALF of the funds will disappear.  They do so poorly that the fund companies just get rid of them.  Of the remaining funds that survive, 95% of them will underperform the market average over 20 years.  

People have been suckered into thinking mutual funds can beat the market when 95% will underperform.

In fact, funds are often such bad investments that between half and eighty percent of funds managers own no shares (zip, zero, zilch)  in the funds they manage.

How does the public have any chance when half the funds can’t even make it 7-10 years and half the “professional” fund managers don’t invest their own money in the funds they manage?

Mutual fund real returns are much lower than they report themselves
I don’t know how this is legal.

Mutual funds report their returns based on what they call “time weighted” instead of dollar-weighted returns.  What’s the difference?

Imagine a fund goes down -50% and then up +50%, a fund then reports “it has an average return of 0%.”  But what actually happens to the money of their investors – which by the way is the ONLY thing that counts?

$1,000 went down -50% to $500 and then back up +50% to $750.  $750 still has to go up another +33% to reach $1000 or the 0% that the mutual funds report.  That’s a long ways from what they report they earned.

Studies show most funds reporting 10.0% rates of average return actually are earning investors less than 7.5%.

For example, over a 25 year period ending 2005, the S&P500 index returned 12.3%.  Funds reported they earned 10% – keep in mind those are the funds still around.  On a dollar-weighted average, investors actually earned 7.3%.

Not only do mutual funds under-perform what they report, they underperform the market to the tune of nearly 5% per year.

How much of a difference does 5% make?
Nearly 4x.  Over that 25 year period, mutual fund investors on average experienced a 482% increase in their capital.  Yet those who just bought and held the market through a basic S&P index fund earned 1718% – nearly 4x as large!!  That’s $250,000 vs $1,000,000.  A life changing difference.

Guess where that $750,000 of investor money goes?
Fund manager’s bonuses.  Lawyers.  Advising fees. Fund expenses.  Trading costs.  Lots of advertising to attract more money.  And just under-performance from bad bets and bad management.  All of that loss is like compounded interest – but against you.

What about all these funds I read about that out-perform the market?
Mutual fund companies are smart.  They start multiple funds at one time.  Some funds under-perform or blow up.  The fund companies get rid of them.  The funds that survived/”succeed”?  They showcase them in brochures.

Who do you think funds are targeting with glossy brochures and pictures of beaches and smiley couples?  The rich who are already retired?  They’re targeting the naive, return-chasing middle class.  

The cruel reality is, those funds who gambled and now have higher returns for a short term (3-5 years) will subsequently have their long-term average (10+ years) returns revert to the mean (10%).  In order for that average to drop, the following years’ performances will be much, much worse.  Ironically right as the middle class is jumping in.

So the investor gets hammered.  But for a while, the manager has more money to work with and subtract fees from (before you hop your money into another hot fund they have).

Screwing summary:
Managers are incentivized to gamble money for huge returns because they have huge upside if they win and almost no downside if they lose.  Most fund managers don’t invest in their own funds.  Over half of funds can’t survive 7-10 years.  The returns funds report are on average 2.7% lower than the returns you’ll earn.  Those that happen to perform well likely subsequently perform horribly.  On average, over a 25 year period, mutual funds reduce 75% of stock market growth.

If I’m going to invest in the stock market, where should I invest without getting screwed?
A well constructed study showed over a 20 year period a Vanguard S&P 500 index fund would help you beat 95% of everyone who is getting suckered by mutual funds.

The math is so compelling that Warren Buffet made a famous million dollar bet with any fund manager that Buffet could put his money in a Vanguard S&P 500 index fund and do nothing but hold it and he would out-perform any fund “professionals” willing to take the bet over a 10 year period.

Protege Partners took him up on it.  Eight years later, Protege’s picks are up 22% and Buffet is up 66%.

When Buffet dies, his will directs that the majority of the money his wife will inherit is to be invested in a Vanguard S&P 500 index fund.

Pause.  Really think about that.  The richest person on the planet gives the person he cares for most the following financial advice:  Vanguard S&P 500.

If he has access to nearly unlimited funds and the best money managers in the world, why would he recommend this unless mathematically it was the best play.

Why are Vanguard Index funds so much better?
Not all index funds are created equally.  Vanguard funds have 83% lower expenses than similar funds.  Who gets that savings?  Investors.  They don’t gamble to beat the market, they just match it.  They’re structured as a non-profit – so extra savings is returned to investors.

Do your own research.  Google it.  Depending on the time frames used, quality of the research, and other factors, the numbers can be a bit higher or lower.  I’ve endeavoured to use averages reflecting somewhere nearer the middle.

The most important thing is you do your own research.  It’s your retirement that you’ll work 30+ years to build.  The advantage of being an informed investor:  A retirement 4x as large.  $750,000 more is a life-changing difference.

Update 5/3/16:  Warren Buffet goes on rant against Wall Street, hedge funds, and investment consultants.


2016 Primary Predictions: Democrats

720x405-demsI like to bet money on elections.  So I can’t afford to be emotional about who I want to win – I only care about who will win.  

Despite only being ahead of Sanders by only 5% in the national polling, Clinton has the Democratic nomination locked.

Ignore the national polls.  They are fun for the national media to create suspense and sell ads. The reality of the system is, nominations are decided by delegates.

Democrats have a surprisingly undemocratic process for choosing their nominee by using a huge number of “super delegates.”  These are party power players who can vote for whomever they choose – regardless of how their states’ vote.

This is a big deal.  Clinton has managed to secure 96% of these declared super delegates, 435 to 20! To put this in perspective, for the hoopla surrounding the 3 states that have voted so far, Clinton has only won a total of 52 delegates. But she already has an extra 435 super delegates in her pocket.

How high is this super delegate hurdle?  Sanders has to win at least 58% of the vote in ALL of the remaining the states  — or it’s over.  Currently polling shows this has no chance of happening.

A sample of the states voting over the next 8 days:

  • Alabama 59% Clinton to 31% Sanders
  • Arkansas 57% Clinton to 29% Sanders
  • Georgia 63% Clinton to 26% Sanders
  • South Carolina 58% Clinton to 31% Sanders
  • Massachusetts 46% Clinton  to 46% Sanders (Even if Sander’s “wins,” maybe he will net 1 extra delegate tops over Clinton – meaningless against 435)
  • Michigan  56% Clinton to 37% Sanders
  • Tennessee 53% Clinton to 30% Sanders
  • Texas 60% Clinton to 34% Sanders
  • Louisiana 60% Clinton to 29% Sanders
  • Vermont 75% Sanders to 25% Clinton (Vermont is Sander’s home state)
  • Virginia 55% Clinton to 35% Sanders
  • Mississippi 60% Clinton to 26% Sanders
  • … and older polling in Colorado, Minnesota, Kansas shows Clinton far ahead.

It’s easy to look at the polls and see Clinton is about to knock it out of the park.

I’ve also looked over at the financial betting markets.  Numerous markets are putting Clinton at 90+% chance of winning the nomination.

The media can make a lot of noise about a “close” the race between Clinton and Sanders.  If one focuses on the super delegates and upcoming calendar of states that Clinton has locked up, it’s easy to see, Clinton has the D nomination.

Side note:  I felt this primary was decided back in 2013 when many viable alternatives to Clinton publicly implied they would sit if she declared.  3 years ago, I wrote an article that predicted that, if she ran, she would win the nomination and later, the presidency.

How Clinton could lose:  Clinton has a <9% chance of losing but but not by a Sanders’ rally, but by an indictment by the FBI and DOJ regarding her email server.  This is a very real issue D’s are ignoring.  There is strong evidence and on-going FBI investigations.  I’ve won $100 betting Clinton wouldn’t be indicted quickly but I won’t bet further.  Not until the FBI and DOJ decide what they’re going to do.  Too much risk.

Best Cash Back Credit Cards (2016 Update)

Best Cash Back Credit Cards for 2011

If you have good credit, the opportunities this year are as good as they’re going to get for the foreseeable future!  Here are the two best cash back credit cards I’ve seen, ever.


(Drum roll) The best cash back credit cards for 2016


CitiBank DoubleCash Master Card:  Earn 1% immediately and 1% when you pay off your card (2% total).  Since Mastercard/Visa are accepted in many more locations than AmEx, this is my go-to card, except for purchases where I need the warranty or other benefits that an AmEx card provides.  App

American Express Fidelity Rewards: Earn 2% cash on everything.  Requires opening a Fidelity account online here (<3 minutes, no deposit required). Cash back rewards are transferred to the Fidelity account (can be transferred to your checking or automatically invested in an IRA or college savings account).  You can setup the cards to auto-sweep to your account monthly assuming you have at least $50 (instead of yearly like Costco or until you have some minimum number of points).  App.

These two cards represent where 95% of my charges go.

Before continuing to other cards, I want to briefly discuss American Express benefits:

  • American Express Additional Benefits:
    Extended Warranty: Extends the term of the original manufacturer’s warranty up to one additional year.  This actually can save a lot of money (TVs, phones, stereos, etc)
    Damage/Theft Protection: Protects purchases against accidental damage and theft for up to 90 days from purchase.
    Other Benefits here half way at bottom.

American Express is the best card to use for all high value new purchases, particularly flat screen TV/computer/smartphone/tech purchases, because it extends the warranty for free for a year, which has a lot of value.  For example, extending the iPhone warranty 1 year costs an additional $70; an extended warranty on a new TV or other high end purchase is worth even more money.  A friend recently had the water pump on his hot tub go out;  it was outside the manufacturer’s warranty by 1 month.  But it was covered by American Express, who cut him a check for $700.

On mileage cards:

Q: “Do any of the air mile cards make sense to keep long term and pay the fee vs the 2% cash back? I’ve always had trouble with paying a credit card a yearly fee so I haven’t paid attention to it. But I do travel a lot. ”

The only way a $95/annual fee makes sense in my opinion is if you travel a lot and get free baggage with it.  That can save $35-50 each direction.  Do a couple trips a year and that adds up.  Otherwise, $95 chews up $9500 ($95/.01) worth of expenses you charged that would have earned you $190 ($9500*.02) on a 2% card.

High reward / High annual fee cards:

American Express Platinum:  I just got it this year and will review it after I’ve had it a year.  This card has a very hefty annual fee ($450) but comes with a lot of perks.

Chase Saphire Reserve:  Also with a $450 fee, depending on how you travel this could be a better card than the AmEx Platinum.  It’s under consideration for next year.  App.

High sign-up bonuses:

Is it worth it?  Absolutely.  Some cards will pay $400-600, even $1,000 for signing up for their card.  Some will waive the annual fee the first year.  Just make sure you cash the bonus out and cancel it in time.  I often make an extra $500-600 a year just signing up for an extra credit card.  I consider it the perk of good credit.

Continuing onto other top cards:

VISA Capital One Rewards:  Earn 1.5% cash back on everything.  This is better than the Fidelity VISA card in two important ways:  it doesn’t require a Fidelity account and instead of sweeping the money into an account, you can set it to auto credit against your future bill so you get immediate benefit instead of the bank holding your money. App.

VISA Fidelity Cash Rewards: Earn 1.5% cash on everything.  Requires first opening a Fidelity Cash & Brokerage account online here (<3 minutes, no deposit required)). Cash back rewards are transferred to the Fidelity account which can be transferred to your checking or automatically invested in an IRA or college savings account.  Be sure to give Fidelity account # to representative if applying by phone.  App.

Amex SimplyCash Business: Earn 5% cash back on wireless service and office supplies , 3% on gasoline up $12,000 per year, and 1% on every other purchase.  $100 annual fee (which eliminates a lot of its value for me).  Plus, it is automatically credited to your statement each month. App.

VISA Bank of America Rewards: 3% gas, 2% restaurants, 1% everything else plus $50 cash bonus.  App.

Summary:  The difference between 1% and 1.5%-2% is  is 50%-100% more cash back.  It’s the difference between a $500 (at 1%) and a $750 (at 1.5%) or $1,000 (at 2%) for simply using a better card.

Avoid.  Credit cards with “up to” language or that have rotating categories or other strings attached generally are games that lower total cash back at the end of a year.

Debit Cards.

While I strongly dislike debit cards because they are more difficult to deal with in terms of fraud protection and offer less fringe benefits, below is the best cash back debit card available:

Mastercard PerkStreet Debit Card:  2% cash back on everything provided you maintain a $5,000+ balance. Less than $5,000, the reward drops to 1%.  Why you would have this card is beyond me… but it’s a top debit card. App.

These are the best deals I believe are available.  If you’re aware of something better, please let me know.

Life Hacks for 2015

bruce leeSometimes it’s the little things in life.  Like taking away the things that bug the hell out of you.  Here are the top things I’ve found in the last year or so:

Sleep:  If you naturally go to sleep easily, screw you.  For those of us who struggle to sleep, I got an adjustable bedframe that puts the body into a zero-gravity position.  Now I fall asleep without meds and the real difference is now I can sleep on my back, and what I found by transitioning from side/stomach sleeping to back was a massive difference in quality of sleep.  This might be the single quality of life difference I’ve discovered in 2015.  I would have paid a small fortune to have learned this a few years ago.  This might not work for everyone – I recommend Sleep Country:100% cash back (not store credit) for 90-days – so you have zero risk- and they price match.

MightyText:  When I walk into the office, my Android phone jumps on the WiFi and instantly I get my texts on my computer.  I literally developed neck/muscle issues from holding my phone so damn much and texting.  This app alone was a compelling reason for me to switch from an iPhone.  If you use Chrome, try the plug-in.  Using the web version, try the “Power View.” (Credit: Craig)

Spare cell battery: Amazing how $40 can solve a reoccurring stress so easily. I recommend this phone case for heavy iPhone users and buying a spare battery/charger for android users.

TypeMail:  This app is literally everything I wanted an e-mail app to be.  Customizable shortcuts, ability to archive and put in folders easily, laid out intelligently — everything the stock email app wasn’t and should have been.

TripAdvisor:  This was my best travel discovery.  I love to travel but want the planning phase of it to be over as quickly as possible (while optimizing for cost/experience awesomeness).  When planning my trip to Argentina, someone recommended I 86 the stack of long-ass-overwhelming-to-read-already-dated-guide books and use TripAdvisor/user reviews.  Pure gold.  So fast, so easy, so painless, and accurate.  Plus, when I was traveling, found the smartphone app super useful for finding the best restaurant, coffee shop, dance club, etc like an experienced local.

DoctorOnDemand:  Holy crap if this wasn’t one of my favorite discoveries from CES 2015.  Want to see a doctor for $40 instead of $125, in minutes instead of an hour or two?  Give this a try.  Game changer for basic doctor visits, simple prescription needs.  They often have coupon codes for free first visits.  Use my code 339elx9q to get your first Video Visit FREE! If you sign up, I get credit too. Download the app or register here:

External monitor/keyboard:  I was spending hundreds of dollars a month combating headaches caused in part from being hunched over my notebook computer.  Spent $200 on an external monitor (and stacked boxes redneck-like until it was head-height) and $80 on a great keyboard – problem solved.  Best money I spent all year and good investment in keeping me from being a hunchback.

Smart watch:  If you are constantly checking/using your phone for business, try a smart watch.  I’ll bet $50 you don’t return it.  Also does step tracking and often for sale used on Craigslist or eBay (where I just bought mine for over half off barely used).  This awesome, free service allows you to see all the email lists you’re subscribed to and have them put into an email each day so you’re getting 1 email instead of 10 each day, and makes it easy to unsubscribe to pesky ones you no longer want.

Facebook Purity (  *Highly recommend*  Allows you to make facebook what you want it to be:  remove keywords (ie, Jenner, politics, jesus, whatever) and disable notifcations, remove ads, and more.  Works for the web (not mobile).

Health Insurance:  Can’t believe I didn’t know this existed years ago.  I went from 5k deductible at $275/month to a $500 deductible at $150/month by switching to Christian Healthcare Ministries.  Unsure about what happens when you actually have to use it?  I can speak from experience, since I had to file a claim recently.  To add to the awesomeness, any discounts you negotiate with the doctor count against the deductible.  Example:  my $2,700 hospital bill was discounted $650, which CHM applied against my $500 deductible.  Total deductible:  $0.  For families, $450 covers everyone, regardless of number of kids.  Do your own math and analysis.  Premium savings alone cover my whole deductible 3 times a year. If you sign up, please reference member #189034, since it’ll save me a month’s worth of insurance.  (Credit: Dustin)

Favorite small bluetooth speaker:  Large sound for size, crazy battery life.  Great for packing with luggage, hot tubbing, etc.

Favorite deodorant:  Much better than the deodorant stick I’ve been using for 8 years.

Favorite Omega-3 oil:  This is the best rated oil for the money and one of the few supplements that I can feel.

Favorite computer glasses:  Discovered at CES, these just make my eyes relax when I’m on my computer.

Favorite white noise maker:  I’ve been using this for 10+ years.  I take it everywhere I travel.

Favorite protein bars:  And best price on the internet.

Favorite Blogs:  Financial and Life.

Get 13.3% cash back on large purchases

I had to drop about $3,000 for business on an annual charge.  I found out instead of paying with a check, I could use credit card.  So I found a credit card with a $400 sign-up bonus.  To save you the work, here’s a link to the best resource I found to save having to repeat the research energy:

My goal is to cancel the card after I get my cash back and then repeat the process with each major purchase with other rewards programs.  I love free money.

Note:  You have to plan 7-10 days ahead because that’s how long it takes for the card to show up.

Movement to end the Electorate College: The data

With the US Presidential Election decided by essentially 7-10 swing states, a movement has started to do away with the all-or-nothing Electorate College.  Instead, a growing group of states has signed a pact to distribute their Electorate College votes proportionally based on the popular vote of each state.


This map shows where each state is at in the process.  11 states have already signed the legislation into law, including California and Washington.  Colorado looks like the next on deck.  Then there are 10 more that have gotten the legislation through one state house.  The magic number is to get 270 Electorate Votes to support it.  This change would fundamentally shift the American Presidential election process.  The question is, how close are we?  We’re already at 165 already (passed) and if you add in the states that are at stage 4 & 5 of the process in the map above, that number jumps to 250!

But the initial analysis masks an important trend.  Note ALL of the states that had passed it are D leaning states.  Not only that, they were some of the most liberal states in the union.  Conversely, the states that have advanced this process the least and are at Stage 1 or 2 on the map above (Bills introduced only & Hearings held) are almost all R-leaning or swing states (who love the hundreds of millions elections pour into their state).  If you love to see the data yourself, I created a table which shows how polarizing the issue is.  It can be viewed here.  Note the heavy biases by political leaning.

Apparently, the move towards a “popular vote” system is one that D’s feel will help them win and R’s feel will be detrimental, and swing states regardless of leaning don’t support.  To tighten the original estimation, I reexamined the states in that 250 number and looked for D leaning states that had would pass the law into action but would be blocked by a Republican governor.  Also, I subtracted the states that were at Stage 4 of the process, but lean R.

The final analysis at the bottom of the table shows:


In summary, it appears that while it has garnered significant and growing support, that support has been highly partisan and this legislation is unlikely to garner the widespread bi-partisan support needed to pass it in the near future.  Even looking at an upper bounds if everything were perfect, at 222 it still falls substantially short.

Great continued reading on which states get screwed by the Electorate College.  Hint Wyoming residents are counted 3:1 over the most screwed state.


Bitcoins: The IRS ruling shifts the game

bitcoin precious image

The IRS recently issued a ruling  that imposes severe taxes on Bitcoins that significantly change the ROI/breakeven analysis for anyone involved in Bitcoins.

The IRS essentially decided to charge taxes on 100% of the value of each bitcoin when it is made.  Before, most Bitcoin miners assumed that taxes would only occur when Bitcoins were converted from Bitcoins to US currency.  Now you instantly have a “loss of value” of 28% – 43% of your investment as soon as it comes into existence.  But it’s a little different.  It looks like a $100 investment taxed at 28% must go up 28% to cover the 28% in taxes.  Harsh.  But that’s not fully accurate, because the IRS taxes the 28% increase as well.  So assuming it’s sold within a year (short-term capital gains), at a 28% bracket, it must appreciate 39% for a Bitcoin to be break even.  Best case scenario, at 15% long-term capital gains it must go up 33%.  At $600 a bitcoin would have to rise to $798 (long term) to $834 (short term) just to be break even.
Essentially the IRS ruling is reasonably destructive to the currency.  It’s also a double edged sword.  My father (a tax attorney) thinks that the ruling will be challenged and overturned.  So, do you pay taxes and avoid penalties (which by any metric are severe and would make these number even worse) or do you wait, and see if the ruling is overturned and hope they redefine Bitcoin as currency?
And all of this presumes stability of the Bitcoin “property” / “currency”.  This is a great graph of bitcoin’s changing value  (Change the time measurement to 1D).  In the last few months it has fallen from 1163 to 450.  This changing stability of course could make the percentages above even different.