Steven at Even Steven Money wrote a great article entitled DIY – Toilet Repair An Early Retirement Extreme Like Analysis. He does a cost benefit analysis of fixing a broken toilet at a rental property himself vs. hiring the job out. The two major factors that come into play other than the cost of materials and cost for the plumber are the value of your time and your desire to learn. There are many jobs I have ran into both as a homeowner and as a landlord that once the value of my time is factored in I effectively lost money by not hiring it out. Doing this is worth it to me because throughout the process I learn a new repair skill and ways to do it better and cheaper in the future. If the first time I fix a toilet it takes me 2 hours, by the 2nd or third time I do the same job it may only take 15 minutes.
Ed Butowsky at Fox Business wrote an interesting article entitled If You Have A Company Pension, Consider Retiring Today. The thesis of the argument he gives is based around how lump sum pension payouts are calculated. Many employers will offer a lump sum cash value to employees in order to forgo paying them a monthly check for the rest of their lives. The reason it makes sense in Ed’s eyes to retire now and take the lump sum is due to the extremely low interest rate environment we are in. The lump sum that the company will pay will be derived from current interest rates. Since interest rates are very low, the lump sum amount has to be relatively high in order to cover the promised monthly payouts. If interest rates rise the lump sum value will drop. This was a very interesting article to me and I think this can help a lot of people who may be on the fence about retiring to take the leap.
I love experimental finance, so naturally I was drawn the The 2nd Annual Goodwill Smackdown Challenge by Aaron at Three Thrifty Guys. The challenge is to buy something at the thrift shop and sell it on ebay for a profit. The person with the highest profit margin wins. While buying stuff at thrift stores/garage sales/flea markets and selling on ebay may not work for everyone it’s a fun and challenging experiment to see how much you can make.
What awesome articles have you come across this month?