The Two Sides of Stupidity
Posted on May 8, 2007 by Max
Filed Under Real Estate, Mortgages | Leave a Comment
Of course, everyone would rather be smart than stupid. But not everyone can be so fortunate.
Stupidity affects your income, for sure. Someone lacking in brain cells is more likely to be an average or poor performer at work, which ultimately means less money in the paycheck compared to his or her cerebrally gifted counterparts. This is compounded as years go by and the spread gets wider and wider.
But the financial damages do not stop there. Not only does stupidity hurt the revenue side of the equation, it also affects the expense side. Case in point – a friend of mine was purchasing a home and locked in his interest rate at 6.00%. By the time closing rolled around, interest rates dipped to 5.75%. His mortgage broker told him that if he wanted to get the lower market rate, he would have to pay some $400. My friend declined. Dumb.
The 5.75% interest rate made an approximately $50 per month difference in his 30 year fixed mortgage payment. He would have broke even on his $400 in eight months (excluding time value of money). His stupidity has been costing him $50 per month ever since that fateful day, when he failed to think through his actions. Five years later, he is in that same house, with the same mortgage, with the same 6.00% interest rate.
Another example is an ex-girlfriend, who would never be confused with a rocket scientist. She had amassed some $20K in debt for her matriculation. And never consolidated those loans! Now, for those who have never had the pleasure in borrowing money for school, student loans are awarded per semester, so by the time you graduate, you have multiple loans, each with a different interest rate depending on what the market rate was when you borrowed. The government allows you to consolidate your student loans once at ridiculously low statutory rates. For instance, my rate is 1.88%. But not everyone can be so fortunate.
Why are you ordering a Review Me review?
Posted on May 7, 2007 by Neo
Filed Under Internet Biz | Leave a Comment
I read many ReviewMe reviews on other sites that I visit and I often wonder if the website ordering the review is really just wasting money.
As with any business expense, you really need to decide on its purpose. Forking over $400 for a review from John Chow can be a huge waste of money if you don’t know why you are doing it.
Do you really want a review from the site? Or are you really paying $400 for the PR5 backlink and the traffic generated by the review? Will you take the reviewer’s suggestions to heart? What if you get a negative review?
Before you order a review, I suggest that you decide why you are doing it and formulate a game plan. Here are some suggestions:
You are ordering the review because you really want to know what the reviewer thinks about your website. Generated traffic from the review is a secondary benefit.
Read past reviews from the reviewer and determine if the reviewer produces a genuine thorough review. Does the reviewer make suggestions on how to improve your site? Is the reviewer qualified to make these suggestions? You don’t want someone telling you to change the colors on your website if their own site looks horrible.
Does the reviewer’s readers provide alot of comments to the review? Many times, the reviewer’s commentors provide great additional feedback giving you many additional mini reviews.
Does the reviewer make both positive and negative reviews? You don’t want to order from someone who is positive on everything. You probably won’t get the feedback that you’re really looking for.
You are ordering the review mainly to generate traffic and capture new readers. The content of the review is secondary.
You’d obviously still want to order a review from a high ranking high traffic site. You should still choose a high quality reviewer. However your reviewer’s audience type is much more important here.
You should determine if your reviewer’s audience would benefit from visiting your site. Remember, you may have only one chance to get their eyes onto your site. You have to plan for that.
For example, if your site is about fast food review and you order a review from ILoveHotdogsBlog.com, you should schedule a post about hotdogs on the same day that the review is posted on the reviewer’s site. Additionally, you should have some previous posts about hotdogs on your site for the reviewer to review. If your site does not have any hotdog posts before ordering the review, what is the reviewer going to be reviewing? You may have many posts about burgers and pizza, but your reviewer is probably an expert on hotdogs, not burgers.
What’s the reviewer’s blog traffic and how much do you expect to convert?
Let’s say you order a $400 review with the hopes of getting 1000 new visitors. If you know from your site statistics that you have approximately 40% return visitors daily then you can assume that you will get 400 new loyal readers from the review. Therefore, you are paying $1 per new reader. You should have some idea of this number before you go and blindly order reviews.
If your reviewer’s site has daily traffic of 2,000 visitors, it would be nice to know how many of its visitors will check out your site due to the review. I would suggest contacting the webmasters of the site’s past reviews to see if they are willing to share that information. After all, if only a quarter of its readers come to your site, your review probably will not reach your goals.
One ReviewMe for $400 or Two $200 reviews or four $100 reviews?
Is it better to order one review from a big site or multiple reviews from smaller sites? This really depends on your site’s niche. If you decide to order reviews from multiple site you would need to determine if these sites have a different set of readers.
In going back to the example about a fast food review, it would make sense to order multiple reviews from a hotdog site, a pizza site and a burger site. You wouldn’t want to order two reviews from competing hotdog sites because there’s a good chance that they have many readers in common.
How to you increase traffic to your blog
Posted on May 5, 2007 by Neo
Filed Under Internet Biz | 1 Comment
There are so many how-to increase traffic posts online, so why would we make another? Well, it’s because there are so many ways to do it. I am a concept guy, I like to drill down to the basics and then expand upon them.
There are basically three ways for people to find your site:
- They type it into their browser or have it in their favorites
- They click on a link to it from another webpage
- They find it through search engines
It’s so simple but many people don’t grasp its simplicity.
People using method #1 already know and like your site, you only have to work on keeping them. This should be easy if your maintain your content quality.
To get people to your site using method #2 is simple also. The goal is to get links to your site out there. In the blogging world it is so easy to market your site by creating links. Here are a two simple examples:
- Comment on blogs with high quality comment features
- Sign up for Mybloglog and visit as many sites as possible that show the Mybloglog profile images
Method #3, getting people to your site through search engines is a little more indirect. I have found that producing quality content that ranks high on long tail searches gives you very good search engine search results.
Since most of the time you don’t really know what people are searching for on long tails, just having alot of content will increase your chances of getting a hit. Look for a future posts on getting maximizing long tail search results.
Why you should not buy a house in a flat or declining market
Posted on May 3, 2007 by Neo
Filed Under Real Estate | Leave a Comment
It’s the ago old question, should I buy or rent? Most financial advisors and planners will always tell you to buy your own home as soon as possible. You’ll start building up equity and have the pride of ownership.
But that is not always case. Mathematics will tell you differently.
In a today’s market, where homes in some areas are declining in value or at best remaining the same, renting may be a better option than buying. If you are planning to purchase a home in an area where renting is cheaper than owning, you should perform these calculations first.
Let’s say that an average home is $250,000 and that it rents for $1200/mo. It’s taxes are $3,600/yr and there are no HOA fees. You have $50,000 downpayment for this home. The properties in this area are not appreciating in 2007.
Should you buy this home? Let’s do the math.
If you decide to buy: $200,000 mortgage at 7% the payments are $1,630/mo ($1330 + $300 taxes)
If you decide to rent: $1,200/mo
Renting saves $430/mo.
But that’s not all. You had to put a downpayment of $50,000. You have lost opportunity costs of this $50,000. If you decide to rent, you can safely put your $50,000 into an ING Direct account at 5% interest. This would generate $208/mo.
Renting now saves you $638/mo.
One big factor the financial advisors don’t account for is maintenance. If you are renting and the AC unit breaks, guess who has to pay for it! The owner! Not you. If the roof leaks, the dishwasher goes bad, the fence falls… the landlord pays. These are unknown potential savings but they are there.
However there are bigger savings that may come down the road.
If you decide to purchase a house down the road the price of the home may have dropped, it may be only $240,000. Even if it’s still $250,000, you have still saved over $7,656 during the course of the year.
If you decide to purchase the house that you are currently renting, you may be able to negotiate a better price from the owner. This is because the owner will not have to pay the customary 6% realtor fees to sell the house. On a $250,000 house, the owner will save $15,000 in realtor fees. You may be able to buy the house for $235,000!
If you do decide to rent because of the reasons above, you should be aware and follow market conditions. When you see the market begin to turn around and homes begin to appreciate that’s when you should BUY.
Note: There are tax savings when you buy real estate. In the example above, a person in the 28% tax bracket would save approximately $400/mo on their PITI payments when it comes tax time.
Welcome to our site!
Posted on May 1, 2007 by Neo
Filed Under General | Leave a Comment
Welcome to 2 Bros Blogging. This is the first post on the site marking the day that this blog came into this world.
What is 2 Bros Blogging?
My brother and I decided to start this site to share our financial knowledge. We have very different educational backgrounds and different investing styles. We felt that we have certain insights in many financial fields that may be of value to others.
This site is about making money, saving money and investing money. From basic personal finance skills to real estate investing, stock and option investing to building business and making money online.
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