Sears Super Shopping: How I got 90% off at Sears

Super Shopping at Sears- Over 90% Off

They say you shouldn't go grocery shopping when you're hungry.  I guess you shouldn't go clothes shopping when you're cold...  This story has a happy ending- I got some great deals on winter clearance clothes at Sears.  

The following steps helped me save a ton on my unplanned shopping trip:

• Finding items on the clearance rack for $5- in my size and colors
• 5% discount using my Sears Gold Card
• Saving $10 more by applying for a Sears Blue card 

I was able to save over 90% off original price!

Super Shopping at Sears
Image Source: Dr. Penny Pincher

The Clearance Rack at Sears

I left my coat in the car and went walking around the outside of mall at lunch time.  It was sunny and looked pretty nice, but it was actually only about 20 degrees.  I decided to walk inside the mall to stay warm.  Still cold from outside, I entered Sears.  The clearance rack caught my eye.

I noticed Dockers Stain Defender long sleeve button-up shirts, regularly $50, were marked down to $5.  Sometimes I see clearance items with great prices like this, but the sizes are ridiculous like XXL-T and the colors are nearly unwearable.  Upon further investigation, I found that they had the full range of sizes and colors available for $5.  Awesome!  I picked 5 size Large with color schemes that push my style envelope a little bit, but not too much  I got some plaids and stripes, but work-wearable.  These are similar to shirts I have in my closet only much less worn out and higher quality.

Next I found a couple fleece pull-overs that were originally $50, marked down to $5.  I usually prefer the full-zip fleeces, but for $5 I can handle 1/4 zip.  I went with solid black and brown with some accent features.  There was an even more expensive brown fleece, regular price $60, marked down to $7.99 that made its way into my pile.

When Will Clothes Go on Clearance?

Updated March 10, 2013: The key to success was timing- I happened to come along at the right time.  Apparently the winter clothes were put on clearance that morning.  All sizes and styles were still available.  I stopped by again the next day, and almost all of the $5 shirts and fleeces were gone.  If you are a serious bargain hunter, it may be worthwhile to patrol your favorite store daily in early March so you can get the winter clothes on clearance.  Early March seems like the time that the stores want to put out shorts and summer clothes to sell for spring break.

Supersize Savings at the Checkout

My good fortune continued at the checkout.  The cashier asked if I had a Sears Gold Card.  I thought that I had one, so I answered "yes".  Good answer.  I saved an additional 5% by using my Sears Gold Card.  The cashier asked if I would like to save an additional $10 by applying for a Sears Blue Card.  "Yes," was the right answer to this question as well.

I purchased $410 of clothes for a total of $33.62.  I also got "Bonus Points" added to my Sears account for the purchase.  The Bonus Points can be used for future discounts.  

Percentage-wise, I saved over 90% off original price.  I realize that almost no one pays full price for these items, but this still seems like a great deal!  I also realize that I have about 2 weeks to wear the fleeces before it gets too warm, but these will be great in cold weather for years to come.  It was a worthwhile lunch break, overall.

Penny Pinching Tips

• Keep an eye out for clearance racks at end of season
• Pile on other discounts like coupons and credit offers
• Buy clothes out of season to save for future seasons
• Try to pick fairly tame style and colors so you will be more likely to wear them year after year

Recommended reading:

Kohl’s Credit Card: Get Kohl’s Cash and Kohl's Discounts

Death of Sears: The End of Brick and Mortar Stores and What will Replace Them

Penny Pincher Journal
Copyright © 2013 Dr. Penny Pincher.  All Rights Reserved.  Privacy Policy

How to Sell on Craigslist

How to Sell on Craigslist

Selling on craigslist is much like placing a classified ad in a newspaper.  You create an ad that describes your item for sale and how to contact you to view or purchase the item for sale.

Placing ads on craigslist is free.  All you need is an e-mail address.  If you don't have an e-mail address, you can get a gmail or outlook (formerly hotmail) e-mail address for free.  You can also include photos with your ad.  This will help your item sell.

Anyone with Internet access can look at ads on craigslist.  Some people check listings on craigslist every day (or even more often) looking for bargains.  For example, people interested in antiques may frequently check for new items for sale in the antiques category on craigslist.

I have used craigslist to sell items ranging from recreational vehicles to household items to collectibles and antiques.  Here is how to sell on craigslist:

How to Post an Ad to sell on craigslist

It only takes a few minutes to post an ad on craigslist.

1. Go to craigslist.org
2. Select the city nearest you.  One of the rules of craigslist is that you can only post your ad in one city at a time.
3. Navigate to the best category for your item.  Look under the "for sale" banner and select the best category from the list, for example "antiques"
4. Click "Post" to start the process of placing an ad on craigslist
5. When prompted, choose a category for your ad, for example "antiques- by owner".  You may also see categories for sales by dealer, etc.  Just pick the one that most closely matches your situation.
6. Fill out a description of your item for sale.  On this screen, you'll enter the Posting Title, Price, Specific Location, your e-mail address, and description of your item.  See below for tips to describe your item go get responses from buyers.

Place your ad to sell an item on craigslist
Source: Dr. Penny Pincher

7. Upload pictures.  This screen allows you to select image files on your computer to upload to your craigslist ad.  You'll need to take digital pictures of your item for sale.  Using a computer or smart phone, you can upload these to be included in your ad.  Pictures are not required, but are helpful to get buyers interested in your item.  

Upload images to your craigslist ad to sell your item
Source: Dr. Penny Pincher

8. Publish your ad.  You'll have a chance to preview your ad as it will appear on the internet and you can click a button to publish it.  If you spot any mistakes in your ad, you can go back and make changes before publishing it.

Preview your ad, click publish to place your ad on craigslist
Source: Dr. Penny Pincher

9.  You will see a message that you have been sent an e-mail that you will need to open and click a link to activate your craigslist ad.  This e-mail contains instructions on how to:

• PUBLISH YOUR AD
• EDIT (OR CONFIRM AN EDIT TO) YOUR AD
• VERIFY YOUR EMAIL ADDRESS
• DELETE YOUR AD

Save this e-mail for future reference so that you can edit your ad as needed and delete your ad after your item is sold.

Tips to describe your item to sell on craigslist

Your item will sell faster if you can provide a detailed description.  Include the make, model, age, and condition of your item.  There are lots of items for sale, so potential buyers will skip over your listing if they cannot easily understand what you are selling.

Clear pictures help.  Craigslist allows up to 8 pictures, so try to get photos from multiple angles.  The first picture you upload is the one that will be featured and shown first when someone opens your ad.

I like to include measurements in the description when selling items such as furniture- if you don't include measurements, you may get lots of questions asking for the measurements.  It's easier to provide this in the description.

It is helpful to provide a specific asking price as well.  Make sure the price you enter in the listing description matches any price you may mention in the item description.  If buyers see two prices, they will automatically go for the lowest one- or even worse see room to negotiate down from the lowest price.  So make sure you only have one price listed anywhere in your ad.  It is a good idea to specify "cash only- no checks" to avoid misunderstandings later.

Avoid scams on craigslist

Some of the biggest risks on craigslist are scams where people will try to get money from you for a product they don't actually have.  Car selling scams are an example of this.  Someone will try to get you to send them money for a product they will send you later- then they disappear with your money.  When buying, always see the item for sale in person.

When selling, always get cash from the buyer.  This avoids any problems with bad checks.  For larger purchases, a cashier's check from a local bank is much better than accepting a personal check.

e-mail Trolling on craigslist

When you have an item listed on craigslist, you may get inquiries about your item that simply ask, "Is your item still available?"  Generic inquiries like this are likely sent by robots trying to harvest your e-mail address so it can be sold to spam mailing lists.  I don't respond to inquiries unless they mention something about the item for sale, or the buyer's location relative to mine.  What I am looking for is evidence that the e-mail was sent by a human interested in my item rather than a robot trying to get my e-mail address.

I am happy to reply to messages asking a specific question about my item for sale, or how far it is from the buyer's location to mine, etc.  But consider it a red flag when you get inquires that are so generic they could be sent to anyone selling something on craigslist.  I ignore these.  If you are concerned about missing a sale from someone who may really not know if your item is still available, you can add text in your ad on Craigslist that states that the item is available as long as the ad is posted.  With craigslist, it is easy to take down your ad when your item sells, or add a note that says "sale pending" if you have accepted an offer but not yet received payment.

Here are some examples of actual e-mails I received responding to craigslist ads.  If I had replied to these, my e-mail address would have been captured and sold to spam e-mail lists:

• "Do you still have the item forsale?. Hit me back with an email if its available. My email is connected to my android phone and i can respond immediately. Thanks. Philip"
• "Still avaliable? Contract me at [address-deleted]@gmail.com"
• "Amount??? get back to me at  [address-deleted]@gmail.com"
• "Do you still have the items for sale, get back to me with your phone # and email to contact you with asap."

Notice how none of these messages refer to the specific item for sale.  These messages could apply to any item for sale on craigslist.  Also, notice the incorrect grammar and misspelled words.    My advice is to simply delete this type of generic inquiry to a craigslist ad to avoid providing your e-mail for spam mailing lists.

How much information to share on craigslist? 

When you create your ad on craigslist, you will need to provide some contact information so sellers can contact you to ask questions and arrange to purchase your item for sale.  Craigslist can turn your e-mail address into an anonymous e-mail, so your real e-mail address is not posted on craigslist.  This will reduce the amount of spam e-mail you receive.  You will need to decide how much additional information to reveal to strangers on the internet.  I keep it to a minimum.  Potential buyers contact me through e-mail.  I can then decide whether to respond or not.  Once you respond, your e-mail is no longer anonymous- the buyer gets your real e-mail address at that point.

Selling safely on craigslist

I will typically arrange to meet the potential buyer in a public place to look at the item for sale if it is transportable.  This may be a parking lot or coffee shop.  I will share my cell phone number with a potential buyer to make coordinating the meeting easier.  If the item is not transportable, you may decide to share your address with the potential buyer.  I would recommend talking to the buyer on the phone first to decide whether to share your address or not.  If you have any concern for your safety, simply say you have another call coming in and end the call without sharing your address.

Avoid sharing too much information in your ad since you have no idea who will end up with that information. Buyers on craigslist are fully capable of using craigslist anonymous e-mail to make initial contact if they are interested in your item- they don't need your phone number and address to do this.

Dealing with Buyers- Closing the Deal

Don't be surprised if you get an offer for less than asking price when you meet with the potential buyer.  Another situation that may occur is that the buyer offers you a personal check, even though you specified cash only.  If your item is in high demand, I would recommend holding out for your terms- full asking price and cash only.  However, if you think you might have trouble find another buyer you may decide to compromise a bit.  

I have had great success selling items on craigslist- the best part:  it's free and you can change your ad whenever you want!

Recommended reading:

How to Sell Used Items at a Consignment Shop and Get Cash

How to Ship Sold eBay Items

Amazon offer: The Garage Sale Millionaire: Make Money with Hidden Finds from Garage Sales to Storage Unit Auctions and Everything in Between

Penny Pincher Journal
Copyright © 2013 Dr. Penny Pincher.  All Rights Reserved.  Privacy Policy

Winter Driving Tips

Winter Driving Tips

How to Drive Safely in Winter Conditions

Winter Driving Conditions: City
Image Source: Dr. Penny Pincher

The 24 hour forecast:  9 inches of snow with gusting winds...
The drive to work tomorrow: not fun...

Here are some winter driving tips to stay safe and get where you are going:

Tip 1: Don't drive if conditions are too dangerous

It's your car and your neck that will be at risk if you drive.  If it seems too dangerous to drive, then consider waiting to drive until conditions improve.  If you can delay driving for a few hours, this will give snow plows a chance to clear the roads and spread salt and sand.  How would you rather spend a couple hours- watching TV and drinking coffee at home, or stuck along the road waiting for a tow truck?

Tip 2: Drive while it is light outside

If it is before sunrise, wait until the sun is up- this will improve your ability to stay on the road if visibility is limited.  If sunset is approaching, consider driving and getting to your destination before it gets dark.

Tip 3: Drive Slowly

Road conditions may be more slippery than you realize... until it's too late.

Winter Driving Conditions: Highway
Image Source: Dr. Penny Pincher

Tip 4: Easy on the brakes

Hitting the brakes suddenly can cause your vehicle to go out of control, even on a straight road.  Leave plenty of room between you and the car ahead so you can avoid sudden braking.

Tip 5: Forget full and complete stops

If you are driving on snow covered or really slippery roads, you may not want to stop completely at stop signs unless there is traffic.  You can reduce your chances of getting stuck if you slowly and carefully roll through stop signs.  Of course this is safe only if you can see that the intersection is clear of traffic.

Tip 6: Fill up before the storm hits

You are better off with a full tank of gas when driving in winter weather.  If you do get stuck, you can run your engine to stay warm until help arrives.  Also a full tank of gas will reduce the chances of fuel line freezing from condensation in the gas tank.

Tip 7: Put a coat and boots in the trunk

Prepare for the worst- let's say you slide into the ditch and need to walk a couple miles through a blizzard.  Having a coat and boots on board will make this situation a lot more manageable.

Tip 8: Clear your windshield, headlights, and brake lights before starting out

This will give you the best chance of arriving safely

Winter Driving Conditions: Interstate
Image Source: Dr. Penny Pincher

Tip 9: Even 4x4 vehicles are dangerous in slippery conditions

Vehicles like four wheel drive SUVs and pickup trucks have a high center of gravity and can roll over easily if they slide off the road.  Be especially careful in slippery conditions if you are driving such a vehicle.

Tip 10: Make sure you have your cell phone- and make sure it is charged up

If you do have an accident, having a cell phone available will help you deal with the situation

Recommended reading:

How to Get Better Gas Mileage Without Getting a New Car

How to Get the Best Deal on a New or Used Car

Penny Pincher Journal

Copyright © 2013 Dr. Penny Pincher.  All Rights Reserved.  Privacy Policy

ReadyBoost Windows 7 and Windows Vista

ReadyBoost Windows 7 and Windows Vista

Give your computer a performance boost with ReadyBoost.  ReadyBoost is a built-in feature of Windows 7 and Windows Vista that allows your computer to use a flash drive as a memory cash.  Flash drives have faster random access read and write times than a hard disk, so this can speed up your computer.  ReadyBoost also works with Windows 8.

You'll need a USB flash drive, also known as a flash memory stick to take advantage of ReadyBoost.  The San Disk Cruzer Fit worked well in this upgrade of a Windows 7 laptop for $12.99.  The flash memory must be fast enough or else ReadyBoost will not be enabled using that device.  Unfortunately there is no easy way to determine in advance if a flash memory will be fast enough or not.  The good news is that most newer devices seem to work, and the prices have come down to the point where it is not a big risk to try one and see if it works.

How to Start ReadyBoost: Windows 7 / Windows Vista

Simply insert a flash drive into a USB port on your Windows 7 or Windows Vista computer.  Navigate to the drive using Windows Explorer and right-click on the flash drive letter, then select properties.  On the properties window for the flash drive, click on the ReadyBoost tab.  Select 'Use this device' and click OK.

Drive Properties Window allows you to Enable ReadyBoost
Image Source: Dr. Penny Pincher

Now your computer is running faster by using ReadyBoost.  There is nothing else you need to do.  ReadyBoost for Windows 7 and Windows Vista automatically checks the flash drive speed to ensure that your computer will run faster before it will use ReadyBoost.  So if you were able to enable ReadyBoost, your computer is running faster.

Troubleshooting ReadyBoost

There are 2 issues that can go wrong with starting ReadyBoost:

1. ReadyBoost will not use your flash device because it is too slow or too small
2. There is no tab for ReadyBoost on your drive properties window

ReadyBoost will not use your flash device

If you insert your flash drive, click on the ReadyBoost tab, and get a message that your flash device is not compatible with ReadyBoost, the most likely cause is that it failed the memory access speed test.  Sometimes a device will be right on the line between passing and failing due to it's speed and will sometimes be used for ReadyBoost and other times not used.  The easiest way to solve this issue is to try a different (and hopefully faster) flash device.

You can check the access time of a flash device that fails the ReadyBoost speed test using the Windows Event Viewer.  In the Start Menu, search for Event Viewer (or eventvwr.msc ).  Launch this program and navigate to: 

Applications and Services Logs

Microsoft

Windows

ReadyBoost

ReadyBoost Log in Windows Event Viewer
Image Source: Dr. Penny Pincher

You will find event logs for the ReadyBoost flash drive speed tests.  In order to be used for ReadyBoost, the drive must have access time of 1 ms or less and sustain 2.5 MB/s read speeds and 1.75 MB/s write speeds.

If you are having problems getting ReadyBoost to work, make sure your flash memory is big enough, you'll need at least 256MB.

There is no tab for ReadyBoost on your drive properties window

I encountered this situation on my older Windows Vista laptop.  I inserted flash drives that I was confident would meet the access time requirements, but I did not get a ReadyBoost tab on my drive properties.  I checked the ReadyBoost Log in the Windows Event Viewer- and noticed that the last speed test was performed about 4 years ago!  This was a big clue to solve the problem...

I probably tried to optimize Windows Vista performance by removing unneeded Windows Services.  Since I wasn't using ReadyBoost at the time, ReadyBoost was an unneeded service.  If the ReadyBoost tab is missing, make sure the ReadyBoost service is enabled on your computer.

At the Start Menu, search for services.  The name of the application to launch is services.msc, or it may be called services with an icon that looks like a gear.  Launch this application and scroll down to find ReadyBoost and click once on it to select it.  If it is not running click start.  You can also right-click and set it to start automatically.

Start the Windows ReadyBoost Service if it is not running
Image Source: Dr. Penny Pincher

After starting the Windows ReadyBoost service, now try to insert your flash drive again- you should see a ReadyBoost tab.

How Much Boost will you get from ReadyBoost?

How much ReadyBoost will speed up your computer depends largely on how much memory your computer has and how fast the hard drive runs.  If you have a laptop that does not have a lot of memory and has a slower hard drive, you could see it run much faster with ReadyBoost enabled.  On a desktop with lots of memory and a fast hard drive, you will likely see little benefit from ReadyBoost.  If your PC has a solid state drive, you will get no performance benefit from ReadyBoost and in fact ReadyBoost will not enable on that computer.

Can you use a SD card for ReadyBoost?

SanDisk Extreme III SD Card for ReadyBoost ($8 on eBay)
Image Source: Dr. Penny Pincher

I decided to use a SD card for ReadyBoost on my old Windows Vista laptop.  I wanted to keep the USB ports free and the SD reader on my laptop is never used.  Since my SD card reader is about 5 years old, it is not compatible with the newer SDHC or SDXC cards.  I had to find an old SD card.  The speed class of the SD card reflects its access time.  I chose a speed class 6 SD card with 6 MB/s read-write performance. I found a used 2GB SD card for sale on eBay for $10 or best offer with free shipping.  I offered $6.50.  Counter offer: $8.  The card seems to work well for ReadyBoost.  Speeding up my old laptop is certainly worth $8.

Unused SD Card slot on laptop- ideal for ReadyBoost
Image Source: Dr. Penny Pincher

Penny Pinching Tips:

• ReadyBoost is worth a try if your computer is running slowly
• Try USB flash drives/memory sticks that your already have around- these may work
• Expect the biggest speed-up from ReadyBoost Windows 7 / Windows Vista on computers with little RAM or slow hard drives

Recommended reading:

Use a Cheap USB Flash Memory Stick to Speed up Windows 7

How to Speed up Windows 7

Penny Pincher Journal
Copyright © 2013 Dr. Penny Pincher.  All Rights Reserved.  Privacy Policy

How to Get Rich

There are 3 primary ways to get rich:  inheritance, high salary, and investment.  We'll focus mainly on how to get rich through investment since this is the only way to get rich that is available to most people.

Pile of hundred dollar bills
Image courtesy of David Castillo Dominici via FreeDigitalPhotos.net

Inheritance

Inheriting money is probably the easiest way to get rich.  However, if your relatives are not rich, you will not get rich through an inheritance.

High Salary

Some people, such as actors and sports stars, get rich from making a very high salary for their labor.  This usually requires a great deal of talent, skill, and good fortune and can be achieved by only a few people under special circumstances.

Investment

Most people who get rich do so by owning something that increases in value.  The fundamental strategy to get rich is to make investments that grow in value over time.  The amount you can invest and the rate of return on the investment will determine how long it takes for you to get rich.
    

Risk and Reward

There is a relationship between risk and potential reward.  For example, you could start a small business or invest in a start-up company and end up with a very high rate of return.  However, there is a significant chance that you could lose money as well.   At the other end of the risk spectrum, you could put your money in a savings account.  There is essentially no risk of losing your money in this investment, but your rate of return would be very low, currently less than 1% per year.

Most types of investments have a risk level and rate of return between the high risk/high return of a start-up business venture and the low risk/low return of a FDIC insured savings account.  Stock market investments are popular.  Historical long-term return of stock market investments is about 8.8% including price appreciation and dividends.


Real estate is another popular investment vehicle.  Real estate property values depend on both local and national/global factors.  The local economy influences real estate prices.  If a community is popular and people are moving in, then the real estate market will be strong for residential and business property.  Factors such as interest rates and tax policy also impact the market price for real estate.  Since real estate prices can be volatile and depend on local economics, a real estate investment may be higher risk than a stock market investment.

How long does it take to get rich?

How long it takes to get rich through investment will depend on how much you can invest and the rate of return on your investment.  Let’s consider some investment scenarios that require various levels of skill and active management of the investments on the part of the investor.

Stock Market:
Let’s assume you get the historical average return of 8.8%.  A stock market investment does not require much skill or work on the part of the investor.  You could invest in an index funds or mutual funds and allow your investment to grow without daily intervention.

Real Estate:
Let’s assume you have some skill in real estate investment and can follow the hot markets.  This would take significant skill and a fairly high level of attention to your investments.  For example, you might invest money to buy a home in an up-and-coming neighborhood, fix it up and sell it.  You may gradually purchase some homes, rent them out, and sell them as they appreciate in value.  Let’s assume you can sustain a 15% average return on investment over time in real estate investments.  This will not only require cash but hands-on work as well.

Start-up Business Ventures: 
This scenario involves either starting small businesses or investing in small businesses- a risky proposition.  Let’s assume you keep your businesses growing and continue to start new ones to get a 30% return over time.  This would be a very impressive rate of return and would take dedication, hard work, and good fortune to achieve.  The business could be anything that could achieve a 30% rate of return, for example investing in and running a growing franchise fast food or service business.  It will require both cash and active participation of the investor to achieve a high rate of return.

Years to Reach 1 Million Dollars through investment
Source: Dr. Penny Pincher

The table above shows the number of years that it would take to acquire 1 million dollars through investment with the average rate of return indicated.  You can see that even with a small monthly investment of $50, you could become a millionaire in 24 years- if you can sustain a very high rate of return.  Unless you have good investment skills and are willing to be an active investor, the 8.8% annual rate of return is a more reasonable expectation.  At this rate of return with an investment of $1000 per month, you would reach 1 million dollars in 25 years.

Effects of Inflation

Years to Reach 1 Million Dollars through investment, adjusted for 3% inflation
Source: Dr. Penny Pincher

Considering that prices tend to rise over time, you will need more than $1 million in the future to buy the amount of goods and services that would cost $1 million today.  If we factor inflation at 3% (the long term average), we can see how this impacts how long it takes to get rich.  With our stock market investment of $1000 per month, it will take 32 years rather than 25 years to reach $1 million of purchasing power.

How do you get money to invest?

It takes money to make money through investment.  The easiest way to get money is to simply not spend the income you have coming in.  Through frugal living and careful budget planning, you may be able to use more of your income for investments rather than spending it on expenses.  Penny Pincher Journal has some great ideas to help you save money.  Another possibility is to get a second job to earn additional money to invest.

One way to accumulate ownership in an investment without cash is to use “sweat equity”.  Sweat equity is contributing labor rather than cash investment to gain equity in a business.  For example, an angel investor may invest $100,000 cash in a start-up to gain 50% equity, and the entrepreneur who runs the business day-to-day would put in $20,000 cash and full time labor for one year to gain 50% equity.

How to Get Rich

Like many things, getting rich sounds simple but is hard to achieve.  If you had $100,000 right now, would you invest it, or would you spend it?  Most people would be tempted to buy a new car or bigger house.  People on the way to becoming rich would likely invest the money and grow it into a larger asset.

Really, there are only 2 steps to  how to get rich:

1. Establish a budget so that you have money to invest every month.  You may need to reduce your expenses or obtain additional income.
2. Make regular investments over time that maintain a good rate of return.  This may require active investing to make adjustments to your portfolio.

How long it takes to get rich will then depend only on the rate of return and the amount you invest each month.

Recommended reading:

How to Make One Million Dollars by Driving a Used Car and Investing the Car Payments

How to Win the Lottery 

Penny Pincher Journal
Copyright © 2013 Dr. Penny Pincher.  All Rights Reserved.  Privacy Policy

How to Win the Lottery

How to Win the Lottery

Your best chance to win: Powerball or Mega Millions?
Image source: Dr. Penny Pincher

The only way to improve your odds of winning the lottery is to buy more tickets.  For both Powerball and Mega Millions, the odds of winning the jackpot is about 1 in 175,711,536 per ticket that you play.  That’s one chance in 175 million.  Pretty long odds.

The good news is that there are two aspects of playing the lottery that you have control over that can help you without buying more tickets:

1. Which lottery drawing you play 
2. Which numbers you pick.

Choosing the Best Lottery Drawing to Play

Lottery Ticket Scanner
Image Source: Dr. Penny Pincher

Each lottery drawing has its own set of tickets for a chance to win the jackpot.  The jackpot amount varies depending on number of tickets sold and whether or not anyone has won recently.  The jackpot continues to accumulate until there is a winner.  The size of the jackpot affects the number of tickets sold.  When the jackpot grows enormous, the lottery becomes front page news and many tickets are sold.

The Value of a Lottery Ticket

One way to decide the best time to buy a lottery ticket is by trying to estimate the “value” of a lottery ticket.  For example, if the jackpot is $175 million, and your odds of winning are 1 in 175 million, then the value of a ticket is $1.  This does not take taxes or inflation into account.  Federal and State taxes will reduce the lottery jackpot payout that you keep by about 40%.  If you prefer immediate payout rather than payout over a 30 year payout, this will reduce the jackpot amount by about 30%.  Keep these reductions in mind when you see the "value" of a lottery ticket.

Now let’s look at some real data.  This is data I requested and obtained from the lottery office for the national Powerball and Mega Millions lottery drawings over a 2 year period.  The graphs below shows the calculated “value” of a lottery ticket based on the jackpot amount divided by the odds of winning.

Mega Millions Ticket Value vs Jackpot
Source: Dr. Penny Pincher

Powerball Ticket Value vs Jackpot
Source: Dr. Penny Pincher

The Risk of Sharing the Jackpot

Based on this data, the best time to buy a lottery ticket is when the jackpot is largest.  The big Mega Millions drawing for $640 million and the Powerball drawing for $587 million look like the best ticket buys, with a value of over $3 for a ticket that costs $1.  One ticket buys a 1 in 175 million chance of winning the jackpot, no matter how big it gets.  However, a big jackpot leads to more tickets sold.  Why does this matter?  The number of tickets sold does not affect your chance of winning the jackpot, but it greatly effects the chances of sharing the jackpot.

The plots below show the number of tickets sold vs the size of the jackpot.

Mega Millions Tickets Sold vs Jackpot Value

Powerball Tickets Sold vs Jackpot Value
Source: Dr. Penny Pincher

We can calculate the odds of more than one winner based on the number of tickets sold and the odds of winning.  The plots below show the odds of only one winner vs the number of tickets sold. You can see that when the number of tickets sold grows to more than 100 million or so, the odds that you will have to share the prize is about 50%.  This significantly impacts the “value” of a lottery ticket.

Mega Millions Odds of 1 Winner vs Number of Tickets Sold
Source: Dr. Penny Pincher

Powerball Odds of 1 Winner vs Number of Tickets Sold
Source: Dr. Penny Pincher

How to Win the Lottery

The best drawings to play have a good “value” for the lottery ticket based on the jackpot size and odds of winning while also having a high probability of only one winner.  Looking at lottery tickets from the perspective of return on investment, this is the best time to play.  Unfortunately, the number of tickets sold does not seem to be published before the drawing, so the best you can do is look at historical relationship between jackpot size and ticket sales to estimate the number of tickets sold for the current drawing.

Best time to play to maximize ticket "value" based on jackpot size and odds of winning AND have low chance of sharing the jackpot:

Megamillions: Jackpot between $200-300 million

Powerball: Jackpot between $200-250 million

You want the lottery jackpot to be big, but not so big that the number of tickets sold make it likely to have more than one winner.  For example, the big Mega Millions jackpot of $640 million on March 30, 2012 was split 3 ways.  Not surprising since 531,721,271 tickets were sold.  This very high number of tickets sold made the most likely number of winners 3, effectively reducing the "value" of a lottery ticket for this drawing by a factor of 3.  The Powerball drawing on November 28, 2012 for $587 million had 2 winners- again, not a surprise since 563,131,974 tickets were sold.  The most likely number of jackpot winners for this number of tickets sold is 3.

Keep in mind that we did not include taxes or the cost of receiving an instant payout vs a 30 year payout when calculating the "value" of a lottery ticket in the graphs above.  When these factors are included, along with the risk of sharing the jackpot as more tickets are sold, the value of a lottery ticket is less than $1.  However, choosing which drawing to play can increase the value of a lottery ticket by 2x if you choose wisely.  It's worth thinking about.  If you're going to play, you might as well maximize the value of the lottery ticket you buy.

Which Lottery Numbers to Pick?

Play Powerball!
Image source: Dr. Penny Pincher

The other aspect of playing the lottery that you can control is the numbers you pick.  Most people play “lucky” numbers like birthdays, anniversaries, etc.  These numbers range from 1 to 31.  The Mega Millions and Powerball numbers on the lottery balls range from 1 to 56.  If you pick numbers in the range of 32 to 56, you are just as likely to win and are less likely to have to share the prize if you win since fewer people play these numbers.  However, many people use computer picks which choose from the full range of numbers.  So you will also want to use the strategy above to choose drawings that have a high jackpot, but not so high that the number of tickets sold makes multiple winners likely.

How to win the lottery without buying lots of tickets, or at least improve the value of your ticket:

• Choose the best drawings to play in order to maximize the value of a lottery ticket
• Choose the best lottery numbers to reduce the chances of sharing the jackpot

Recommended reading:

How to Make One Million Dollars by Driving a Used Car and Investing the Car Payments

How to Get Rich

Penny Pincher Journal
Copyright © 2013 Dr. Penny Pincher.  All Rights Reserved.  Privacy Policy

Selling a car: What to do?

Selling a car: What to Do?

What to do to sell a car? There are free resources available on-line to help you sell your car quickly.  You will need to prepare the car to sell, set the right price for the car, advertise the car for sale, respond to questions from potential buyers, and close the deal.  You will need to accept payment from the buyer, sign the title of the vehicle over to the buyer, and write up a bill of sale.   These steps explain what to do when selling a car.

What to do to sell your car
Image source: Dr. Penny Pincher

Step 1.  Prepare the Car to Sell

You will get the best price for your car and sell it more quickly if you prepare the vehicle before trying to sell it.  Simply washing the car and vacuuming and wiping down the interior will make your car more attractive to buyers.  Use Armor All or other conditioner on the dashboard to make it look new again.  Use glass cleaner to wash the inside of the windows and polish the instrument panel.

Buyers may be scared away if they think that your car has mechanical problems or has not been properly maintained.  Get an oil change and make sure the service sticker is applied so that buyers can see that has up-to-date maintenance.  If your car has scratches or chips in the paint, get matching touch-up paint at an auto parts store.  You can get a small bottle of car paint that includes a brush built-in to the cap for under $10.

Perform any minor repairs such as replacing burned out light bulbs or headlights.  You may not have been bothered by this sort of minor issue, but buyers will see this a sign that the car has not been maintained and may have bigger problems.  Also make sure the check engine light is not on.  Sometimes a minor issue, such as a low fluid level or broken or missing gas cap can cause this light to come on.  If the car does need expensive repairs that you are not planning to have done- get an estimate for the repair.  You can use this in negotiation with a potential buyer.

• Wash exterior 
• Vacuum carpets
• Wipe down dash board with Armor All
• Wash inside of windows with glass cleaner
• Polish instrument panel with glass cleaner
• Get an oil change with service sticker
• Touch-up paint on any scratches or exposed metal
• Minor repairs such as replacing burned out light bulbs
• Get service done so check engine light is not on (if possible)

Step 2. Set the Price for your Car

If you set your asking price too high, it will take a very long time to sell your car.  If buyers think your price is too high, they will often not even look at your vehicle.  How do you find out the right price for your used car?  You will need to look at book value prices.  Kelly Blue Book (KBB) and NADA book value are two of the most widely used sources of used car pricing information.  You can also check to see what prices are like for similar vehicles on sites like craigslist and autotrader.

You will need to enter the year, make, and model of your car.  The make is the vehicle manufacturer such as "Ford" or "Toyota".  The model is the model name of your car such as "Fusion" or "Tundra".  You may also be asked for the vehicle style such as coupe (two door car), sedan (four door vehicle), hatchback (four doors, plus rear hatch), etc.  Another question will be the "trim level".  This is often described using letters that follow the model name such as "EX" or "XLT".  These letters may indicate which options package was installed when the vehicle was purchased as a new vehicle.

The value of your vehicle depends a lot on the mileage and on its condition.  You can match descriptions of vehicle condition to the actual condition of your vehicle.  Many people overestimate the condition of their vehicle and set the price too high.  Another mistake that sellers make is to assume that a buyer will really like their car and be willing to pay a little more.  The fact is that there are lots of cars for sale, and that serious buyers know how to check the book value of vehicles.  You could get lucky and find a buyer that will pay more than book price, but the most likely outcome is that it will take a long time to sell you car if your price is too high.

However, it is usually not a good idea set the price at the lowest amount that you would accept.  A good starting price is a little bit higher than the minimum price that your would accept.  This leaves you some room for negotiating with the seller.  Most sellers will not offer your asking price.  Sellers will expect you to come down in price a bit during negotiation.  They may point out minor issues and then reduce the price accordingly.  If you build a little margin into your asking price, you will be in a position to negotiate and close the deal.

Step 3. Advertise Your Car to Buyers

Now you have your car polished up and looking good.  You have picked out a fair price that leaves you a little room to negotiate to close the deal.  Now it's time to find a buyer.

There are several on-line sites where you can list a vehicle for sale.  You will want to post pictures, a description, and your asking price.  Include the year, make, model, mileage, and asking price.  Include your contact information for both day and evening hours.  Take the pictures of your car in good daytime lighting including interior and exterior.  Here are some options for listing your car for sale:

• Craigslist is a great place to list a car for sale.  It's free and simple to do yourself.  
• Autotrader costs $25 for a 3 week listing
• Newspaper classified ads cost varies with the size of the newspaper and includes print and on-line advertisement
• eBay motors is another possibility, but this may not be the best way to reach local buyers.

Your car can also be used as an advertisement.  Place a "For Sale" sign with your phone number in the car.  If possible, park it in a busy parking lot where lots of people will see it.  You can get a windshield marker to write on the windshield as well.

This car is a moving advertisement
Image source: Dr. Penny Pincher

Step 4. Field Inquiries from Buyers

Buyers will ask questions to get a sense of both the car and of you, the seller.  Some common questions include:

How often did you change the oil?

Buyers ask this to size up how will you took car of the car and how likely it is that there is something wrong with it.

Is there anything wrong with the car?

Buyers are rightly concerned that a used car may have hidden issues that will be expensive to repair.

Why are you selling the car?  

Buyers ask this to try to find out if there is something wrong with the car, for example you just found out that the transmission is bad so you're selling it rather than repairing it...

Is the price negotiable?

I think that saying the price is firm tends to turn buyers off.  If the buyer thinks that there is at least a chance of getting a bargain, they are much more likely to look at the vehicle.  If they look at it, they might buy it.  A good way to answer this question is that you set the price below book value but you would be willing to consider a reasonable offer.

When can I see the car?  Can I take the car for a test drive?

Now you're getting somewhere!  Make it as convenient as possible for the buyer to see your car.  It is a good idea to ask to see a drivers license before you let someone drive your car.  You'll have to decide if you want to ride with strangers on a test drive or not.

Step 5.  Sell the Car

The moment of truth has arrived.  A buyer makes an offer to buy your car.  The offer is little lower than you had hoped for, but it is exciting to get an offer.  You make a counter offer that is a couple hundred dollars higher.  The buyer accepts.  What to do now?

Accept Payment for the Car

In order to complete the deal, you will need to accept payment for the vehicle.  The best form of payment is a cashier's check from a local bank.  The buyer can obtain one at his/her bank.  This is a bit of a hassle for the buyer, but do you want to risk taking a personal check?  If you sign the vehicle title over to the buyer and the check doesn't go through... what a mess.  A local cashier's check will ensure that there will be no problem with the payment.  Cash also works well.

Write a Bill of Sale

You can hand write a bill of sale, or type one up.  This is simply a statement that the buyer is purchasing your car (include year, make, and model of vehicle with the number of miles on the odometer) for the purchase price.  Make a copy for you and one for the buyer.  Both the buyer and seller sign both copies.  This will eliminate any potential misunderstandings later.

Sign the Title of the Vehicle over to the Seller

The back of the title to the car has instructions for transfer of ownership.  Read carefully and make sure you are comfortable that you have received payment before signing over the title.

Remove the License Plates

The buyer will need to register the vehicle and get license plates.  You can turn in the old plates and get a refund for any vehicle registration fee that has been paid.  If the buyer is stopped and asked about the missing license plates, the bill of sale will provide an explanation.  Also remember to call your auto insurance company and terminate your coverage on the vehicle you sold.

Recommended reading:

How to Buy a Used Pickup Truck

How to Get the Best Deal on a New or Used Car

Penny Pincher Journal

Copyright © 2013 Dr. Penny Pincher.  All Rights Reserved.  Privacy Policy