Big Savings with Airbnb! Top 5 Booking Tips

I recently finished a two week cross-country road trip starting from Vancouver and ending in Toronto. I decided to go through the US because I had not seen much of the interior US and I thought gas and accommodations would be cheaper (even with a weak Canadian dollar of about 70 cents to the US dollar).

Gas did end up being cheaper, even with the US exchange rate. One of the biggest savings came from staying at the many Airbnb’s available along my route. Since the US has more populated city centers than in Canada it wasn’t hard to find an affordable Airbnb at each destination. Also, with more Airbnbs to choose from at each destination, the competition usually kept the prices lower. It helps if you have a vehicle and are able to travel to the Airbnb since lower prices are usually available outside of the city centers. Airbnb’s website provides a price filter which helps you find the cheapest places to stay around your destination.

Another important note when using Airbnb is that you should book your stay a few days in advance, since your booking requires the host’s approval. It’s important to keep an up-to-date profile (on Facebook or Airbnb). There are however “instant books”, which do not require a host’s approval. With “instant books” you get the room booking as soon as you submit your payment information.

I always stayed in a place with a few reviews (the more the better), always with a score of at least 4 stars out of 5. This will also factor into the price, since places with great reviews may charge a slight premium over rooms with no review history.

The most expensive Airbnb I booked was just outside of Yellowstone National Park. This area had few Airbnbs to choose from and because of the park’s popularity the hosts were able to charge a premium. The cheapest Airbnb I booked on my trip was in Chicago. I booked a room just outside of the Chicago city center which saved tens of dollars a night. I was still able to access downtown via the subway.

To sum up my 5 Airbnb user tips:

1. Keep an up-to-date profile (either through Facebook or Airbnb). This will help your hosts get to know you and therefore accept your booking request. The more information you give them the better, so be sure to send them a friendly message about yourself and your trip. As you stay at more Airbnbs you will also be reviewed as a guest, good guest reviews will help your future booking requests.
2. Choose a high population destination. More people usually equates to more high quality Airbnbs and lower prices.
3. Have a car. If you can get to Airbnbs slightly outside of city centers you can usually save more.
4. Book in advance. Unless you’re booking with an “instant book”, you’ll have to book a day or two in advance to give your host a chance to review your profile and to accept your booking request.
5. Check the review. Be sure to book accommodations with a few reviews (the more the better), with a score of at least 4 out of 5 stars. If there are no reviews it may be cheaper, however you run the risk of having a creepy host or accommodations that do not match the description.

Here's a video with more Airbnb booking tips:

9 Most Affordable Places to Retire

I'm currently living in one of the most expensive cities in the world, Vancouver, British Columbia, Canada. This got me thinking that instead of trying to save and earn more so that I can one day retire, I could retire earlier and live a better lifestyle in a more affordable city.

The fast lane to your retirement may lie in finding a locale that is more affordable than the place you're currently living. Of course it also needs to be close to family and friends, and provide the lifestyle you currently enjoy. You may not need to live all year round in your retirement getaway, but perhaps a few months a year.

I found this article in US News that lists the 9 most affordable places to retire overseas:
9 Affordable Places to Retire Overseas

I've summarized the locations and sorted them by the average monthly budget:

Rank	City	Country	Montly Budget (US$)
1	Nha Trang	Vietnam	$650
2	Chiang Rai	Thailand	$750
3	Ipoh	Malaysia	$897
4	Dumaguete	Philipppines	$1,000
5	Cayo	Belize	$1,100
6	Loja	Ecuador	$1,100
7	Granada	Nicaragua	$1,300
8	Tralee	Ireland	$1,500
9	Carcassone	France	$1,750

See you in the south of France!

Here's a video which lists "25 Of The World's Cheapest Places To Live":

Blue Chips or Purple Chips?

In the world of investing blue-chip stocks are defined as a stock of a  large, well-established and financially sound company that has operated for many years. A blue-chip stock is generally the market leader and is often a household name. While dividend payments are not absolutely necessary for a stock to be considered a blue-chip, most blue-chips have a record of paying stable or rising dividends for years. The term is believed to have been derived from poker, where blue chips are the most expensive chips.

In John Schwinghamer's Purple Chips, he further refines his investment strategy to purple-chips, stocks that are of the highest quality blue-chips. What are the criteria for a blue-chip stock to pass as a purple-chip stock? Here are the three criteria listed in Purple Chips:

1. A minimum 7 years of positive earning per share (EPS) growth.
2. Smooth and predictable growth in EPS.
3. A minimum market capitalization of $1 billion.

In addition to these three criteria John lists three Financial Health Ratios that helps separate the purple-chips from the blue-chips:

1. 5-year return on equity is greater than 10%.
2. 5-year return on assets is greater than 10%.
3. 5-year net profit margin (average) is greater than the industry average.

Here's a short video introduction to the book:

Are You Ready for the Fastlane?

The Millionaire Fastlane by MJ DeMarco is unlike most personal finance books. DeMarco explains that the road to significant wealth isn't through saving and scrounging, or trying to deprive ourselves of lattes, but it is through entrepreneurship that great wealth is made. He mentions that most personal finance gurus are quite wealthy, however they didn't attain their wealth from the same advice they peddle, such as "pay yourself first" and "save 10% of your income" (most attain their wealth through writing books). Although this is still good advice, it's not how the affluent gained their wealth.

So the "fastlane" to wealth is entrepreneurship. One of DeMarco's quotes that stuck with me is that "to make millions, you have to affect millions." I think this quote sums up entrepreneurial success, successful businesses help solve problems for a lot of people. They provide a service or product that's in demand.

Building a successful business is incredibly difficult and may not be for everyone. It's important to get into business for the right reasons, which DeMarco says is to help people solve their problems. Going into business just for the money will inevitably lead to failure.

The premise of what DeMarco is saying is true, vast wealth is held by a select few who have risked their livelihood on an idea that their service or product was something the world needed. The reality is that the majority of the population is risk adverse and would never want to attempt to start their own business. There's nothing wrong with that, however it's important to note that you won't be travelling down what DeMarco calls the "fastlane" to financial freedom, but the "slowlane."

Here's a video book review:

Common Stocks and Uncommon Profits

In our quest for investment knowledge it is best to learn from the best.  Renowned investor, Warren Buffett, has said that his investment style is 85% Benjamin Graham and 15% Philip Fisher. This naturally leads us to wonder, what is Philip Fisher's investment style? In Philip Fisher's 1958 publication Common Stocks and Uncommon Profits, he distills his wisdom from a career as a securities analyst.

First of all Fisher sees stocks as part ownership in companies and thus they should be analyzed as such. One key lesson Fisher shares is the way he gains knowledge about companies he's considering investing in. He calls his method the "scuttlebutt" method. The scuttlebutt method is a way of learning about a company through the business grapevine. After thoroughly researching the fundamentals of a company, Fisher would start asking questions to people with knowledge about the dealings of the company such as competitors, customers, former employees, suppliers, etc.. This is a way of gathering information that may not be accessible by reading annual reports and helps paint a picture of the company's economic future. The scuttlebutt method seeks a deeper understanding to what makes the company a success, or uncovers any alarm bells signaling upcoming dangers.

Also, within Common Stocks and Uncommon Profits is Fisher's 15 key questions which he asks about the prospective investment:

1.  Does the company have products or services with sufficient market potential to make possible a sizable increase in sales for at least several years?
2. Does the management have a determination to continue to develop products or processes that will still further increase total sales potentials when the growth potentials of currently attractive product lines have largely been exploited?
3. How effective are the company's research and development efforts in relation to its size?
4. Does the company have an above average sales organization?
5. Does the company have a worthwhile profit margin?
6. What is the company doing to maintain or improve profit margins?
7. Does the company have outstanding labour and personnel relations?
8. Does the company have outstanding executive relations?
9. Does the company have depth to its management?
10.  How good are the company's cost analysis and accounting controls?
11. Are there other aspects of the business, somewhat peculiar to the industry involved, which will give the investor important clues as to how outstanding the company may be in relation to its competitors?
12. Does the company have a short-range or long-range outlook in regards to profit?
13. In the foreseeable future will the growth of the company require sufficient equity financing so that the large number of shares then outstanding will largely cancel the existing shareholders' benefit from this anticipated growth?
14. Does the management talk freely to investors about its affairs when things are going well but "clam up" when troubles and disappointments occur?
15. Does the company have a management of unquestionable integrity?

Fisher elaborates on each question, explaining the importance of the question and the answer he is looking for. If the answer to a majority of these questions are favourable than it is likely that the investment has great long-term growth potential.

Today Philip Fisher would be labelled as a "growth" investor since he seeks capital appreciation in companies with long-term growth potential. In some cases he may even prefer a company that doesn't pay a dividend so that profits can be re-investing into the company financing its growth. In this case the belief is that the company has the capability to grow faster than the gains the investor could obtain investing elsewhere.

Common Stocks and Uncommon Profits is a classic investment guide and should be on the book shelf of any do-it-yourself investor: