Everything they tell you about gas mileage is a lie.

January 4, 2013
It's a good idea to extinguish your cigarette before doing this

It’s a good idea to extinguish your cigarette before doing this

  • If your tires are underinflated, it can cost you 1 mile per gallon for every pound per square inch.
  • Slow down. Driving under the speed limit can save you 5 miles a gallon (and get you where you’re going later than you’d otherwise get there, but whatevs.)
  • An extra 100 pounds in your vehicle can reduce your miles per gallon by up to 2%.

And our favorite, from the taxpayer-funded functionaries at the Department of Transportation, presented here verbatim:

  • Aggressive driving (speeding, rapid acceleration and braking) wastes gas. It can lower your gas mileage by 33%

(The obvious solution? NEVER BRAKE.)

People love to repeat this nonsense as Holy Scripture, because it comes with the veneer of respectability. And why would the government lie to us? Governments always tell the truth, don’t they?

You don’t lose 60% of your body heat through your head, you don’t need to (and almost certainly shouldn’t) drink 8 glasses of water a day, you don’t need to chew each mouthful of food 100 times before swallowing, and being fanatical about gradual acceleration and gentle braking doesn’t make a difference to your gas mileage. (And the last one can kill you if you apply it uniformly without regard to the situation.)

There are hundreds of online threads in which drivers try to get to the bottom of this confounding problem, without ever reaching a conclusion. Instead, there’s a lot of talk about trivial variables and a stunning ignorance of how to gather data. To wit:

I usually hit 100-120 miles by the time it hits F (filling puts it past full)
250ish by the quarter mark
350ish by the half mark
475-500 on a tank.

those are summer numbers but you get the idea. we all deal with that.

…the last few days (minus monday) have been pretty warm so I have been seeing close to summertime numbers for fuel economy.

Hey genius: instead of looking at the analog marks on your gas gauge and estimating from there, how about keeping a log?

Not sure if you noticed this, but the pump measures fuel dispensed in thousandths of gallons. Your odometer measures tenths of miles. Divide the latter into the former, and you’ll have a reading accurate to one decimal place. Most of us, even the public school students, learn division by the 4th grade.

For the last month, your humble bloggers inadvertently conducted a fuel economy experiment. We drove the same vehicle, on essentially the same route, with the same cargo, and the same octane level of gasoline, through multiple fill-ups. We record our fuel economy on every tank as it is, and here are our miles per gallon readings in chronological order (taken to 2 decimal places, in our iconoclastic fashion):

29.87
21.42
20.55
25.02
22.34

You want to improve your fuel economy? Our experimentation indicates that there isn’t a thing you can do. (With one exception, which we’ll get to in a second.) We keep track of this stuff largely to look for any egregious movement: a 14 mpg tank would mean something is glaringly wrong. Smaller fluctuations don’t appear to be subject to any kind of improvement – again, with one exception.

It would appear that fueling up on a Tuesday can cost you 2.68 miles per gallon over doing so on a Wednesday, if you’re the kind of person who believes in fairies and tommyknockers.

Right now, some gullible and pedantic idiot is reading this and wondering, “Well, did they control for time of day? The tanks are full of condensation first thing in the morning, etc.” We didn’t control for the speed of the cars in front of us, either (which often dictates our own speed), nor did we control for battery cold-cranking amp capacity (which fluctuates). Sometimes we filled up with the car facing north, other times with it facing south, so yeah, that could change everything.

The only way to control for every single variable would be to take multiple models of the exact same vehicle, right off the assembly line, airlift them to the Bonneville Salt Flats, and drive one a day at the same time every morning until we had enough data points to plot.

Our conclusion: people love to mire themselves in easily understandable minutiae instead of looking at grand, tangible ways to improve their lot. There are several compelling reasons to keep your tires properly inflated anyway. Also, very few of us enjoy slamming on the brakes (and compromising the pads) for the sheer fun of it. The standard fuel-economy improvement advice is tired, ineffectual, pointless, and pays microscopic benefits if any. Aside from that, it’s very helpful.

Here’s what you can do, and it’s the only thing we’ve found that pays benefits of more than a few inches per gallon. You ready?

Don’t let the tank get too low. The numbers above positively correlate perfectly to the size of the fill-up. The 29.9-mpg fill-up was on around 3/8 of a tank, the 20.6-mpg fill-up when running on our last few molecules.

So why is this? Who cares? The most convincing argument we’ve heard so far is that the gas you fill up with displaces the vapor that fills the evaporation system. This goes into the intake. The more gas you have in the tank, the more powerfully the vapor is passed through the evaporation system, thus improving your gas mileage.

Some people argue that no, driving as long as possible on one tank is better because it means you’re spending more time driving a lighter car (i.e., one with less fuel in it.) These people can hypothesize all they want, but the data says they’re full of it.

Test your battery. Don’t strap pianos to your roof unless you’re delivering them somewhere. Stay out of 1st gear on level roads. But most importantly, fuel up as often as is conveniently possible.

Filed Under: Making Smart Choices, Travel Tagged With: , , , ,

The Control Your Cash 2012 Woman of the Year

January 2, 2013

 

(Not pictured: CYC Woman of the Year commemorative sash and scepter)

(Not pictured: CYC Woman of the Year commemorative sash and scepter)

 

Every year we honor someone who embodies the Control Your Cash spirit, and name that person our Man of the Year. To win, all you have to do is buy assets, sell liabilities; and most importantly, act as the primary determinant of where your money goes instead of complaining about how the world is stacked in somebody else’s favor. That describes fewer people than you’d think, despite our best efforts to change the world’s collective mindset. Previous Control Your Cash Men of the Year have included a presidential candidate, a guy whom we never met yet who managed to lead an interesting and productive life despite making little money, and a CYC acquaintance who refuses to spend money stupidly and take on unnecessary expenses.

With 2012 in the bag, we’re proud to announce that its honoree is our first Woman of the Year. And a personal finance blogger, although that’s just a coincidence.

It’s Paula Pant, who runs Afford Anything and whose attitude and acumen we’ve espoused multiple times on this site. More to the point, she’s a real estate investor whose cash is flowing at a large enough volume that a significant chunk of her income now derives from investments. Investments of her own creation, no less.

Standard, incorrect thinking maintains that anyone who succeeds in this rapacious capitalist society of ours either a) came from money or b) killed herself by working 17-hour days and never coming up for air. The first is at best a sufficient condition, not a necessary one. The second is a sucker’s game, which you instinctively know, whether you choose to acknowledge it or not.

Ms. Pant didn’t start off with gigantic privileges. She’s a 1st-generation American who grew up in a stable household of ordinary means, neither summering in the Hamptons nor panhandling for sustenance.

She didn’t even study corporate finance in college, nor neurosurgery, nor something else with a promise of immediate financial rewards upon graduation. Nor did she go to an Ivy League or other exclusive private college. She majored in sociology (of all things), at the University of Colorado. A school where most people major in weed, if you give credence to stereotypes.

We don’t know what kind of salary Paula draws, but she’s a freelance writer. Her direct income is probably closer to modest than it is to exorbitant. Yet she owns 3 rental properties, travels the world like she’s being chased by Interpol, and is still on the innocent side of 30. How is this possible, when the typical 20-something journalism graduate is

  • drowning in tens of thousands of dollars of student loans
  • often working retail, given the dubious long-term prospects for the business model of newspapers and magazines?

Short answer, Paula is a hopelessly original thinker. As proof of this, she wrote a post titled “If I Had $1 Million, I’d Go Into Debt” and wasn’t kidding. Most people are too dumb to draw a distinction between consumer debt (that monstrous VISA bill that you try to wish away the existence of) and smart leverage (borrowing money at x% so you can earn a return of x+y%, which is the only legitimate and lasting way for most of us to build wealth.) Paula is the exception.

She bought one of those houses at an 80% discount (not a typo). The house cost less than a new Ford F-150 without options, and while the house needed some cosmetic work, the effort she put into said work (her sweat, her contractor boyfriend’s sweat, the money she paid to some professionals) paid for itself several times over. And continues to, as her tenants are making her rich(er).

Last January, Ms. Pant announced that she was somewhat improbably going to invest every single penny she made in 2012. This wasn’t some character-building exercise, nor a New Year’s Resolution. It was a way to focus the “pain” of forgoing immediate luxuries in order to enjoy further and more pronounced pleasures. (Pleasures in the form of greater rental income, and ultimately greater self-determination. It also meant a year of deferring world travel, her passion.)

Wait, you mean you can invest your money obsessively and still enjoy life? Come on.

YES. What shameless self-promoter Tim Ferriss argues you can do in theory, Paula does in practice. And it doesn’t involve weighing your food to the nearest milligram, nor paying money up front to a fulfillment company and hoping for the best, nor hiring an Indian remote assistant to proofread your documents (which will invariably require another round of proofreading upon their return.)

Her priorities are specific, with flexible but detailed plans on how to get there. Contrast that with the directionlessness that most people exist under.

I hope I get a raise this quarter.
I really should ask for a raise.
Should I apply for another job? What if I don’t get it, then word gets around that I’m looking? Oh, I’ll be so screwed.
If I stay, they’ll match my 401(k). I couldn’t leave if I wanted to.
My landlady raised the rent again. So unfair. 

Look: most transactions in our society are mutually beneficial. Otherwise, they wouldn’t happen. For instance, no one likes paying rent, but it beats living under a bridge or with your parents. But fortunately (fortunately for the landed gentry, that is), there are plenty of people undisciplined enough that their very existence enriches the people who own things. And by “things”, we don’t necessarily mean high-rise apartment buildings or Class A shares of Berkshire Hathaway stock. A few single-detached rental properties in Atlanta will do.

Furthermore, it’s so easy to get to get to this position. All it takes is a tiny bit of motivation and again, discipline. Paula could have squandered paycheck after paycheck on unnecessarily expensive vacations and vehicles. Instead she travels largely on the cheap, sees no economic potential in $3000 leather car seats, and invests all the cash she has available. Not every investment turns to gold, of course, but it’s not that hard to minimize the potential risk. And as the saying goes, you miss 100% of the shots you don’t take.

When we talk about Paula’s modest background and stress that anyone with a brain can do what she’s done, we don’t mean to denigrate her nor her accomplishments. Far from it. Actually deciding to follow through on a plan, like Paula has done, is surprisingly difficult for many people to do. Most people, in fact. Better to lament one’s station in life than say, “I can do this, and will figure out how.” Paula Pant can, and did, and does. Leverage your assets into higher-valued ones, carry intelligent debt rather than stupid debt, and generate positive cash flow, and you could be a finalist for our 2013 Woman (or Man) of the Year.

Filed Under: Investments, Making Smart Choices, Man of the Year, Real Estate Tagged With: , ,

We’ll Give You $5 To Reject The First Offer

December 28, 2012

You’ve probably heard the expression, “You don’t get what you deserve. You get what you negotiate.” Okay, who coined it?

  1. Zig Ziglar
  2. Og Mandino
  3. Yag Oliveri
  4. Tom Peters
  5. Chester L. Karrass

1, 2 and 4 are/were self-help authors and motivational speakers. 3 is a name we made up.

5 is the right answer. You might remember him from such SkyMall ads as The Karrass Effective Negotiating Seminar. He’s this dour yet confident man:

C-dog

 

He might not even exist. Biographical information on Mr. Karrass is sketchy, but if he’s alive it seems he’s 89. That seems to be the most recent picture of him, and it looks to be at least 30 years old. Anyhow, Chet fancies himself as the authority on negotiating. Sit through one of his seminars and you’ll learn how not to leave money on the table, and how to make your adversary weep and gnash his teeth while you bleed him dry and leave a desiccated carcass where a would-be negotiator used to be.

The first rule of negotiation, as we all know? Get a number out of the other person first. Oh, you want my car? How badly? (Or conversely, You want to sell me your car? How badly?) It doesn’t matter how long the standoff (or standstill. Standoff? Standstill) lasts. Wait, wait, wait until the other party mentions a number, out of sheer boredom if nothing else. At that point, he’s already ceded tremendous ground.

What if you’ve both heard this rule and taken it to heart? Then stand there staring at each other until the 7th Seal is broken, whatever. This can’t happen in real life, only in theory, because at one point one party will say “This stalemate is eating up so much of my time that I need to be compensated for it. I quit. Either that or I’m internally recalibrating the scale and raising/lowering my price.”

Exchanging a car is the classic example, because it seems everyone does it sooner or later and the market itself is relatively unencumbered by regulation. And it usually involves head-to-head confrontation between the parties. But regardless of what good or service you’re exchanging, the rule applies. Get a number before you give one.

Here’s the funny part.

Q: How much does it cost to sit through a Karrass seminar?

 

Karrass

 

A: Exactly what they tell you it’s going to cost, Ace. Take it or leave it.

Now if you spend $1000 (excuse us, a much more reasonable $998) on a seminar, are you getting the best possible deal? Or are you on the receiving end of something one-sided?

You’re not negotiating, at any rate. Furthermore, the folks at Karrass seem to be violating the first rule of negotiating themselves. So what gives? Is everything we think we know a lie?

The Karrass people would argue that you have to be practical, it would grind their business to a halt if they had to haggle over every single transaction. The Control Your Cash people would argue that if you take the other party’s first offer, you’re paying too much.

You don’t need to drop a grand (or $900, if you can find 4 friends with too much money) to learn how to negotiate. You just need to develop a backbone. Learn to walk away. It’s this compulsion to make a deal, any deal, that leads to awful decisions. Even in the non-economic realm. Just ask the lonely guy who does everything but get down on his knees and beg a woman to go out with him because darn it, we were meant to be together. (Or less commonly, the girl who wants the abusive but occasionally charming guy to take her back.)

After you’ve bought several hundred copies of The Greatest Personal Finance Book Ever Written (complete with details on how to negotiate!) check out this 1997 release by sports agent Mark Shapiro, The Power of Nice. Don’t be fooled by the title, he’s still an attorney and thus probably an awful human being, but the book does contain one exercise that perfectly illustrates what we’re talking about.

Reciting the exercise from memory, you’re supposed to find a partner and each read one side of a page that describes financial details of a potential real estate deal, then negotiate said deal. One person, the seller, reads that he should sell the property in question for somewhere around $2 million, with a little wiggle room. Meanwhile, the buyer reads that he shouldn’t offer much more than $300,000 if he can help it.

The interesting thing is that the negotiated price is almost never around $1,150,000. Inevitably, it’s either close to $400,000, or close to $2,900,000. One party does almost all the conceding.

So don’t be that person. Easy, isn’t it? Lowball profusely if you’re the buyer, ask for something on the verge of absurdity if you’re the seller. Whether it’s a salary, a physical good, whatever. There’s an inherent reluctance to do this, for fear of insulting the other party or not having him take you seriously. Get over this. There are an infinite number of deals to be made, and only a small thinker thinks “I have to make this deal, no matter what.” Being dictated to is no way to build wealth.

Filed Under: Capitalism, Education, Making Smart Choices Tagged With: , ,
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