Friday, June 19, 2009

The MONEY Trap and the 1% Rule

The MONEY Trap - How making a lot of money can drive you bankrupt.

From a lot of people reading my blog, I get the usual reactions. "I make good money, so I don't have to worry about saving money," they say, "And $50 here, $100 there, it really isn't worth the hassle."

This blog is not directed at the dirt poor, but rather the impoverished middle class, who are often spending their way to the poorhouse. It is EXACTLY those sort of people who need to conserve their resources (as they are now belatedly finding out) and yes, $50 or $100 is "a lot of money".

Take for example, your typical young Washingtonian. They might have a job making $100,000 a year, which they consider to be a "lot" of money - the mythical "six figure income". When taken against that number, sums of $50 or $100 may seem insignificant - only a fraction of a percentage point.

However, when you consider how large such amounts are compared to disposable income, the picture becomes more focused.

For example, say our Washingtonian makes $100,000 per year. They live in an apartment or home and have a monthly rent or mortgage payment of $2000 per month. Right off the bat, $100,000 a year is reduced to $76,000 a year.

And of course, Federal and State income taxes (and social security, etc.) lop off another 35 percent easily. So now income is reduced to $41,000 per year.

Now, if our friend is playing his cards right, he should be contributing 15% of income to his 401(k) or equivalent program, which means that we now have a disposable income of $26,000 a year.

That works out to $500 a week in disposable cash. And that means $500 per week to buy groceries, make car payments, pay car insurance, pay the light bill, the cable bill, etc.

Suddenly, $100 is a lot of money, when you only have $500 a week to play with. Even $50 or $10 is not chump change anymore.

Of course, these days, making a hundred grand, particularly in Washington, is not hard to do. But even in upper income brackets, the same sort of rules apply. Most folks making more money tend to spend more - on bigger houses, fancier cars, you-name-it. As a result, the amount of income "left over" for daily living expenses can dwindle rapidly.

Cutting some of the big expenses is often a good idea. Owning an appropriately sized home instead of an expensive mini-mansion is one approach to saving money on mortgage payments as well as property taxes and utilitiy bills. But other "big ticket" items aren't so easily shaved off. You can't, for example, cut your tax bill very much. And cutting savings into your 401(k) so you can have Chinese take-out three nights a week is a foolish move.

I fell into this trap with a job I once took. At the the time, they offered me a "six figure" salary, and I thought I was going to be "rich". Of course, I had to drive 20 miles each way to the job, buy lunch at expensive restaurants, and buy new suits for the job. I came home every night, exhausted and unable to plan my finances or make dinner. Yes, we ate a lot of take-out and got fatter.

I realized that the "big paycheck" job was not really making me wealthier, as it also came with a big tax bill and big expenses. Just because I had a large income did not mean I could forego keeping track of spending. Rather, just the opposite was true.

One solution to this problem is to try to look at money in a different light. A person making $100,000 a year might say that $1,000 is not a lot of money, but in reality, it represents 1% of their income. 1% sounds like a small number, but it is not. You only get 100 of those 1%'s in your income. And as we have illustrated, most of those are already spoken for. You can't afford to squander even 1% of your income, because that is the most spendable part you have - the disposable part of your income.

And that 1% ($1000) itself is made up of ten $100 transactions. So "wasting" $100 on something is really a big deal, because you do that a few times, and bada-bing, you reach that 1% level.

I recently sold a bunch of junk on eBay and Craigslist (see my earlier blog entry) and made about $1700. Some folks might argue "well, that's not a lot of money, really". But when you think of it in terms of income, it is one of those one-percent deals, and a one-percent raise in your income is nothing to sneeze at, particularly in this day and age.

SO, get out of the mindset that "you can afford it" and stop squandering money on things like leased cars, cable television, subscription services, eating out five nights a week, and the like. Chances are, if you are a typical middle-class American, you CAN'T afford it, but rather you are mortgaging your future (sometimes literally, with a home equity loan) so you can have Kung Pao Chicken tonight.

Think about it...

Thursday, June 11, 2009

Hot Tubs on a budget

Our Hot Tub is now over a decade old and still going strong, for the time being.  It has given us many years of service at a fairly affordable price.

As we have seen in my blog, it is possible to overpay for goods or services dramatically. We are not talking merely 10%, or even 20% here, or even paying double for what something is worth, but in some examples (such as virtual fax services) paying thirteen times as much for the same goods or services.

Nowhere more is this true that with hot tubs. Many, if not most consumers spend two to four times more than they should, for these simple devices.

As I noted in the preface of my blog, the goal of this blog is not how to recycle pocket lint to save money, but how to live well for less money. A hot tub is, no doubt, a luxury item. And one way to save a lot of money on a hot tub is to not buy one in the first place. However, such an approach to savings takes no imagination and thus is not worthy of mention. Yes, one can live cheaply by living a monk-like existance. But that is hardly living.

A hot tub is a fun toy to have, as it can be relaxing and also help with sore muscles, back problems, neck problems, and the like. It reduces stress and can also be fun for socializing. Presuming you have really thought this out and want to own one, there are ways you can own a hot tub for far less than you think.

1. Don't Impulse Buy:

The first step is to really think this out. Buying a hot tub at a trade show, the State Fair, or a Hot Tub Store on impulse is often a very bad decision. Impulse buying in general is a bad idea, and impulse buying expensive items doubly so.

The Hot Tub rip-off artists, like the RV and Boat set, love to sell to people at trade shows and fairs, as the customer is often not sophisiticated, nor have they done any research. If you can convince a customer that something costs more than it is worth, and not let them do the background research, you can easily double or triple the price of an item without them knowing it.

2. Don't Finance a Hot Tub:

I have noted before in my Rips Offs article about Hot Tub and Pool Table stores. These stores thrive in suburban areas and offer these relatively inexpensive commodities at outrageous prices. People buy them at these prices because they offer financing.

Thus, for example, a consumer is conned into buying a $3,000 hot tub for nearly $10,000, on the premise that it is "Only $99 a month!". Never mind that the consumer financing note adds another $2000 to $5000 to the price. Suddently, a $3000 hot tub is now over $15,000.

Hot Tubs are fairly inexpensive to acquire, as we shall see. If your finances make it difficult to buy an item that is a few thousand dollars, then that is probably a good indication you should not be buying a hot tub in the first place, but rather get your financial house in order first. These are, after all, a luxury item. You can do without.

3. What is a Hot Tub?

Understanding how these things are made and built will better help you understand how much they are worth and what can go wrong with them.

As the name implies, a hot tub is little more than a container filled with hot water. The main part of the tub is the shell, usually molded fiberglass or plastic. This is set in a wood or wood product frame, and then filled with expanding foam. A cover keeps the heat in.

The mechanicals are not complicated. A pump circulates water through the tub, through a filter cartridge, and through a heating element. A simple timer and thermostat maintains temperature of the tub.

These basic components are common to all hot tubs, and when one of them breaks, it can be expensive if not impossible to repair. Leaks are the number 1 killer of hot tubs. Once the liner cracks, or a leak develops internally (in the plumbing, surrounded by all that foam) the tub is pretty much done for.

The pump and heater will wear out, eventually, and these can be expensive items to replace, particularly if you have to hire someone to do it.

4. What About Accessories?

Of course, many tubs have other features as well, and salesmen sell these as necessary and essential, and of course, they add to the price. A two speed pump can provide a high pressure massage through numerous jets. Many people, when shopping for hot tubs, look at pump horsepower and number of jets as one criterion of shopping.

While this is a good way of comparing apples to oranges, don't get too obsessed with pump power and jets. After owning a tub for 12 years, the primary feature we find we like is.... a container filled with hot water. The idea that you can get a "hydromassage" from numerous jets blasting your body is sort of overstated. Want a massage? Hire a massage therapist. A hot tub will help relax your muscles simply because it is hot, not because the water is "jetting" onto your body.

These massage jet heads also tend to wear out over time, as the plastic becomes brittle due to exposure to chlorine and bromine. I have gone so far as to replace such jets, but the effort is largely futile and expensive.

Another feature common to most tubs is the blower. This is a feature commonly shown off at trade shows and hot tub showrooms, as it produces that dramatic bubbling effect that we think of when we think of "hot tubs". The blower simply blows air through a number of holes in the tub, causing the water to churn. What does this do for you? Largely nothing except look cool. It can be useful in causing impurities to foam up at the surface (where they can be easily removed) and it can be used to cool down an overheated tub. But as a feature you'd want to use while in the tub, it is far down the list. The bubbler tends to cause the chlorine or bromime in the water to mist, and make everyone sneeze or cough. After 12 years, we find the most enjoyable aspect of the tub is just the hot water - with all the pumps and machines OFF.

Ozone gnerators were a popular item, and our tub came with one. Supposedly they help treat the water and purify it. Ours died after several years and we never replaced it. And the water was just as clear as before. A deer whistle? Perhaps. But perhaps a dangerous one. Ozone is nothing to mess around with. Free radical oxygen is dangerous to humans. I am not sure generating it is even safe.

The latest gimmick is the chlorine generator, which is also pushed for pool use. The theory is simple, you take salt (NaCl) and take it apart electronically to generate chlorine. So you don't need to buy chlorine. But you do need to buy salt. Hot tubs use very little in the way of chemicals (or should, anyway) so I am not sure there is any savings to these.

Other items are just nonsense. Fiber optic lighting is cool, but not really necessary and not worth paying a lot for. Our hot tub came with a single 24 volt bulb, and a series of colored lenses you could put over it. The only good one was blue. Red made the hot tub look like a pool of boiling blood. Yellow, well, it looked like a urinal. Green made it appear that the tub had an algae problem. Blue was the only color that made the tub look cool and inviting.

The colored lenses eventually got old and cracked. One day the bulb burned out and I realized that it was the same bulb as in my lawn lights. You can buy these in colored versions for a couple of bucks at your local home improvement store. A lower wattage blue bulb provided a cool and subdued light than the higher wattage white bulb with a blue lens did not. So yes, fiber optic lighting is cool, but a colored bulb works well, too. And you'll often find you want the lights out, particularly at night, if you are in there naked.

Other accessories are a total waste. Built-in stereos and televisions are sort of silly, not to mention electrocution hazards. And I question how long a pop-up TeeVee will last in the chemical environment of a tub. If you want music, put boom box near the tub (but not so near it can fall in - usually at least 6-8 feet away is best). Get one with an IR remote, if you want to control the volume from in the tub.

5. Chemicals

Over-chemicaling a tub is a common occurrence. A hot tub is much smaller than a pool, and only minute amounts of chlorine and other chemicals are needed. I say chlorine, as I think bromine is a poor choice for hot tubs.

We were sold on bromine originally, as we were told that it would not cause ladies' hair to discolor. However, the same thing can happen in a pool, and we have few friends who have had discoloration problems due to pool use.

Bromine is more expensive than chlorine and harder to find. You usually have to buy it at a hot tub supply place, and it is priced accordingly. Chlorine, on the other hand, can be found at the pool section in WalMart or a wholesale club.

Some hot tub stores caution against using "pool chemicals" in a hot tub. However, the chemicals are the same, it is only the concentrations that must be monitored. It takes very little chemical to "balance" a hot tub, and usually less is more. If the pH or Chlorine levels are low, add a little and retest after a few hours, rather than dump in chemicals for a quick result. If you are not careful, you could turn your tub into a chemical bath.

Pool chlorine pucks (3" size) are generally too large for hot tub use.  But minute amounts of shock, ph Up and pool clarifier will work well in a hot tub.

In the last decade, we have seen the development of items that make maintaining your hot tub easier than ever. Test strips have replaced awkward chemical test kits, allowing you to monitor your hot tub without a lot of hassle and counting of drops. Just swirl the test strip in the water, shake it off and compare it to the chart.

Hot tub chemistry is not difficult. Chlorine (or bromine, which is just more expensive, not more effective) kills off bacteria and thus "sanitizes" the tub. The chlorine level should be kept in the "good" range specified by the test kit. Usually, a small, slow dissolving 1" puck in the intake basket will do this well. Occasionally, the water should be "shocked" with a large dose of fast dissolving chlorine, to prevent buildup of bacteria. And of course, you always have the option (unlike a pool) of occasionally draining and refilling the tub, although I find that enough splashes out over time and topping off insures that the tub water is cycled.

pH can be adjusted by using minute amounts of acid or alkaline. Again, only small amounts are necessary, and if you dump a lot of pH UP in the tub, then a dose of pH down, you are basically creating a chemical bath. Use small amounts and wait a few hours before testing.

Other levels, such as hardness, etc. can be important, if you have really bad source water. However, in most instances, such testing and obsession is not necessary. The point is to enjoy the tub, not obsess over it, and most new owners tend to over-chemical, with disastrous results.

I find that once the tub is balanced, it takes little effort.  I can feel when the water is starting to go south and add more chlorine.  I haven't tested mine for weeks at a time.  Once you become more relaxed with it, it is a lot less hassle and stress.

A little clarifier is useful on occasion, if the tub becomes cloudy. Clarifier (pool clarifier works well) attracts small dirt molecules to your filter, and thus makes the water crystal clear.

The filter on your tub is important. Most today are cartridge filters, which can last a long time. It is tempting to change these often, but for the most part, they can be removed and rinsed off, over and over again, with a new filter being installed only once a season, if that. Most filters cartridges are available online at low prices, too.

6. The Cover

I touched on the cover earlier and it deserves expanding on for several reasons. First, it is one item necessary to keeping the tub hot and clean and also keeping your energy bills low. Second, it is a wear item and will need replacement several times through the life of the tub.

For these reasons, it pays to buy a "standard sized" hot tub (a little smaller than 8 feet by 8 feet) as you can buy replacements cheaply online or at stores. Odd-sized or odd-shaped tubs are hard to find covers for, and as a result, replacement covers can be exorbitantly expensive. Even a "standard" hot tub cover is a few hundred dollars, delivered. So avoid the jumbo rectangular tub if you can. And the savings in going to a "small" odd-shaped tub are often lost in cover replacement.

Covers eventually get waterlogged and then collapse. To prevent this, keep them clean and apply some armor-all to the outside vinyl once a year. Buy a cover bracket (again, not paying hot tub store prices) to help you get it on and off. Covers can be awkward and heavy, and if you toss off the cover and let it fall on the ground, chances are, it will not last long. Our cover bracket is a simple affair that cost $200 and has a air strut like a hatchback. You fold the cover open, slide it onto the bracket, and then it hinges down out of the way.

But expect to buy a new cover every 3-5 years depending on use. Cheap covers, by the way, can wear out quickly. And thin covers provide little heat retention.

7. What about those tubs at the home improvement store?

Some of these are good deals, some not. Again, compare horsepower, heater size, number of jets, and overall size.

Some home improvement tubs have cheap covers and low power motors. This is not bad in and of itself, but it pays to compare feature for feature. On the other hand, don't let a hot tub salesman convince you that it is worth paying $6000 for basically the same tub that Home Depot wants $3000 for.

A good hot tub should run on 220V by the way, otherwise it will take forever to heat and may, ironically, use more energy. The only exception to this rule is the portable tub.

8. Installing a Hot Tub

One thing many folks don't take into account is that a hot tub needs to be installed. Years ago, the "built-in" hot tub was more common, and when installed, it meant that a shell would be built into a deck, with plumbing and wiring installed separately. Today, most tubs are the stand-alone kind, which require only placement and wiring.

Factor in the cost of installation when buying a hot tub.

To begin with, you need a place to put it. This sounds simple, but can be complicated. Most porches, decks, patios and the like are ill-suited for a hot tub. A hot tub needs to be on a flat level surface, and most concrete patios are designed to angle away from a house. A hot tub on such a surface may have an uneven water level.

Decks and porches suffer from the same problem and in addition, usually cannot support the load involved. Most decks need to be reinforced with 6" x 6" support beams before they will hold up a hot tub.

One inexpensive alternative is to place four 4" x 6" beams (8 feet long) on the ground, making a square. Drill holes in the beams and drive three or  four foot sections of steel re-bar into the holes and into the ground to secure the beams. Use angle brackets in the corners to make a solid square of wood.

Then fill the space with 6" of gravel, packing it down firmly and leveling it off. Such a platform is not only inexpensive, it provides even support for the tub, and can be easily leveled. It is also easier to run wiring underneath the tub, where the flexconduit often enters.

We used such a system (recommended by our dealer) and placed the hot tub next to our deck, which allowed us to step into the tub from the deck at an almost level entry point. If you are accessing the tub from the ground level, build a set of steps next to the tub to make entry easier.

Wiring is another issue, and unless you are comfortable running 220V wires, you should hire an electrician. Hot tubs require heavy duty wiring, often 40 to 60 amps, which means big (and expensive) copper. The copper alone can cost a few hundred dollars. You will need a three wire copper lead, usually 4 gauge or bigger, with a ground wire in addition. Using three wires with no ground is a bad idea, as is going to cheaper aluminum wiring.

A service disconnect should be located near the tub so that a serviceman can disconnect the power. But it should not be so near as to allow someone in the tub or near the tub to touch it. Consult local codes as well.

The cost of copper wiring, a service disconnect, conduit, and a circuit breaker, can run $200 to $300 just in materials. This doesn't include the cost of an electrician, should you decide to hire one. So remember that cost when looking at a used hot tub. Even a "free" hot tub is going to cost you something, and many "free" tubs are free because the owner bought them used and never got around to doing the wiring part.

9. Moving a Hot Tub

If you buy a tub, how do you get it home and how do you get it to the location you want? Hot tubs are heavy and hard to move. But it can be done. I've even moved one single-handed, although I do not recommend it, as you could easily hurt yourself in the process.

A flatbed truck or U-haul box van is probably best. Moving a tub any distance on its side or at an angle in a pickup truck could crack the shell, particularly on an older tub. Our dealer delivered the tub on a flatbed truck. I later moved it in a U-Haul truck.

Although heavy, a hot tub is more bulky than anything else. It can be "rolled" into place by placing it on its side, wrapped in its original cardboard box, or by laying out cardboard or other padding in the path. Once on its side, you can then push the hot tub, end for end, to "roll" it into place, usually with two or three people on each end while "rolling" it. Pry bars and the like can be used to push the tub into position once it is close, being careful, of course, to use a board against the tub to prevent marring.

10. Where to buy new?

The key is to find a dealer who sells hot tubs at reasonable prices. Chances are, this is not the guy with the loud radio ads, who shows up at the trade shows or the State Fair. You have to look, but good deals are out there. We bought our tub from a dealer who operated out of several storage lockers. He father was a distributor, and she sold the tubs at reasonable prices. The big box stores may be another good place to look, as well as the Internet. The key, of course, is to do the research and compare features, rather than go to an aggressive dealer and be "sold" something "on time".

11. What About Used Hot Tubs?

These can be a good deal or a nightmare. Remember that with a used tub, you have to move it and install it yourself, and as a result, they are not worth much. However, since most folks overpaid for these things, they tend to think they are worth more than they are.

So, Joe Paycheck spends $10,000 on a hot tub worth maybe $3500, and, 10 years later, he thinks that $3500 is a "fair" price for a well-used tub. The problem is, he probably still owes that much on the loan, so you can never talk the likes of him into reality.

After several years, a hot tub starts to wear out. The cabinet may start to rot (lifetime warranties notwithstanding) and the pump or heater may wear out. The covers caves in and the plastic jets get brittle and jam and no longer "massage."  A tub with a number of issues like this is really worth nothing, as you could spend thousands of dollars moving it, installing it, and repairing it, and end up with a worn out tub that will probably crack in a year or two.

If you are handy and can install it yourself, a used hot tub could be a good deal if it was attractively priced. By attractively, I mean $1000 or LESS, in most cases, far less.  $500 or less is probably a fair price for a used hot tube in working condition, that you have to move.   If the operation cannot be demonstrated, assume it is broken.  If it has any broken components, probably it is worth little, and you are doing the owner a favor by hauling it away.

12. How Long Does a Hot Tub Last?

In theory, they could last forever. However in reality, the plastic parts react with the chlorine or bromine and become brittle after a few years. The pump and heater need to be replaced, and the covers need replacement regularly. Once the outer cabinet starts to rot, the end is not far behind. You can patch and paint and forestall the inevitable with some luck and handyman skills, but every manufactured product has an end game, it seems.

Leaks are the death-knell of a hot tub, and for this reason, I would not even consider a used tub that leaks. If the shell is cracked, forget it, it is not cost-effective to repair. If the internal plumbing (underneath all that insulation) starts to leak, it is a nightmare to repair. You'd have to turn the tub on its side, dig into the insulation, find the leak, repair it, and then re-foam the underside. Once one leak starts, no doubt other parts will leak shortly thereafter.

Most tubs are toast after a decade, some may last as long as 15 to 20 years with gentle care. But eventually, there comes a point where it is cheaper to just get a new one, particularly at an attractive price, than repair the old one. Keep that in mind when looking at used tubs (why is the owner selling it anyway?) and also when yours gets older.

13. What about Portable or Soft Tubs?

These can be an inexpensive alternative to a large tub. Most are plastic, either foam sided or inflatable, and can be filled with water. A small pump and heater, usually 110 volts, will circulate and filter the water and heat it. Usually there are few if any jets. But such tubs do provide the "hot" in hot tub and may be all you need. Most can be found inexpensively, particularly used. While these are a nice alternative, don't pay too much for them.

My neighbors have one of these and report they are very satisfied with it. After many years, the heater appears to have gone bad on theirs, but again, this is typical of hot tub maintenance (and why a hot tub that needs a heater, a pump, and a cover is not worth anything). As it is round, they can move it indoors when they are not using it. As it runs on 110V, it is easy to install.

I recently purchased one of these models (Softub) for a vacation home, used, for $300, which is about 1/10th the retail purchase price new. It was easy to move and easy to install. Set it up, add water and plug it in. At the price we paid for it, it was a good bargain and may give many years of service if treated properly. However, as it is made of vinyl (like a vinyl lined swimming pool) it does have to be treated carefully and once the cover, motor, and liner are nearly shot, it is not worth repairing.

It is not nearly as large as our standard fiberglass hot tub at our other home, but then again, we didn't pay as much for it, either.

An interesting feature of the "Soft Tub" is that it uses motor heat to heat the water.  It is slow to heat, initially, but once at temperature, it holds heat and is fairly efficient.  A clever design, and yes, I would buy another one, at the right price.

Inflatable tubs are really cheap, but a case of "you get what you pay for" as they don't last long.  Our Softub, bought used, is just starting to wear out after a decade of use.  Sadly, Softub no longer sells liners, but requires that you return the product to the factory for re-lining.

14. What about Whirlpool Bath Tubs (Spa Tubs?)

I have two of these (they came with my houses) and in my opinion, they are an utter waste. Again, the idea that a jet of water will "massage" you is somewhat overstated. Most do not have a heating element (often this is an extra-cost option, and most do not opt for it, as most are installed by contractors). As a result, when you get in, the water may be hot initially, but then quickly cools down to a "lukewarm tub". Since you have already drained your hot water heater, it is hard to re-heat these with more water. And since they are drained with each use, they result in staggering water bills or dried-out wells.

Most of these spa tubs are installed for the look and are rarely used. People expect to see them in modern bathrooms, but most folks end up using the stall shower instead, and the "spa tub" becomes a huge laundry hamper. I would save my money for a real hot tub - the spa bath tub is no realistic alternative.

* * *

By doing your research and taking the initiative, you can have nice things in your life and not spend a fortune doing it. Often the difference between "wealth" and "poverty" has less to do with how much you MAKE than with how you SPEND it. I've seen folks who make more money that I do have far, far less, because they squander most of their income through bad deals. Spending $10,000 on a hot tub when you can get one for a couple of grand (or less) is a case in point.

Wednesday, June 10, 2009

Take It Back!

Unused merchandise can be returned for a full refund.  Yet many people throw away, give away, or sell at a garage sale, items which can be redeemed for full price!

I was at a friend's garage sale the other day, and saw that they were selling a set of curtain rods.

I looked at them closely. They were still in the original packaging, boxed up, wrapped in shrink wrap, with the store price tag on them.

"You like those?" my friend said, "We bought them, but found out they didn't fit, so we are selling them in the garage sale".

"Why don't you take them back and get a refund?" I said. My friend looked flabbergasted.

Getting in the habit of taking things back can save you a considerable amount of money. I did not fully grasp the concept myself until I recently moved.

Most modern "big box" stores have generous return policies, although in recent years, they have been tightened somewhat to prevent fraud and abuse.

However, in order to encourage you to buy items for sale, they offer these return policies as an incentive. If you buy something and later don't need it, or it doesn't fit, you can always take it back.

Even without a receipt, most stores will give a store credit for a returned item. So my friend's curtain rod would have yielded $15 in store credit, as opposed to $1 at a garage sale.

Don't get me wrong, garage sales are a fine and wonderful thing, and a great way to get rid of items that are cluttering up your home - and convert them to cash. But if you can get full price for an item by taking it back, then do so.

Home improvement items are a big area where the "take it back" concept can work. When moving recently, I realized I had a lot of PVC plumbing parts that I had bought for various plumbing projects over the years. When you install a sink or whatever, often you end up buying more parts than necessary, as "going back to the store" for one 59-cent elbow is a frustrating experience.

The temptation is to "keep" the extra parts for the "next project" as they are somewhat inexpensive. However, a 59-cent elbow, times 10, is over $5 of stuff cluttering up your workbench.

We put a large cardboard box in the garage labeled the "Take Back Box" and then when we found something we had bought, in the original packaging (or as the case with plumbing parts, with the original bar code on it) we put it in the box. When going to the home improvement store to shop, our first step was to go to the return desk to get a store credit for the take-back items.

In some instances, we didn't remember which store we bought things from. In those cases, I would simply take it to the return desk at one store. If it scanned, great. If not, I would simply take it to the other store.

Surprisingly, we ended up with hundreds of dollars in store credits at various stores this way. We had bought a lot of items for projects and either the project didn't materialize, or the parts were "left over".

I recently bought some lower unit oil for my boat at Wal-Mart. When I got to the boat, I realized that I had already bought the oil last year. Some might say "well, now I have extra", but at nearly $10 a quart, it is a lot of expensive oil to have hanging around, particularly since I was planning on selling the boat. I took it back and got a $42 store credit.

Get in the habit of taking things back and your garage will be a lot less cluttered and you'll have more money in your pocket. Even after a year or more, most stores will take back products, provided they are in the original packaging, in good shape, and the product is still sold at that store.

As I have noted in my other entries, the big-box stores do encourage a very destructive form of shopping - the "unfinished project" shopping. And I know a number of people who go to such stores, buy lots of expensive items with grandiose plans for backyard or home improvement projects, and by the time they get them home, are too tired to even start the project.

This sort of thing can happen to anyone, but some folks are more addicted than others. These types of stores are designed to distract you, and when you go to buy a light bulb, it is temping, walking through the aisles, to say "Gee, maybe we should put in a fancy new sink" or something. Before you know it, your car or truck is full of lumber and cement and parts, and your credit card is sagging hundreds of dollars lower. You get it all home, and it languishes in the garage.

Plan projects you need to do, and do them first. Finish one project before starting another. Resist the temptation to start a spontaneous project based on the merchandising at a big-box store. And if you buy something for a project that is leftover or you never finish the project, TAKE IT BACK!

As I wandered around my friend's garage sale, I noticed a number of other items like the curtain rods - products that were still had the original packaging and could have been taken back for a refund (with receipt) or a store credit (without). Unfortunately, many of the items had been improperly stored (left outside), or broken out of their packaging, and thus could no longer be returned for a refund. Much of these items were sold for pennies on the dollar, which is a sad waste of hard-earned money.

Money takes labor to earn, and unless you want to end up like Sisuphus, perpetually working to no end or purpose. Wasting money is wasting your labor, so it only makes sense to spend wisely.

And if you buy something you don't need.....


Wednesday, June 3, 2009

Sell it on eBay! (Or CraigsList)...or maybe buy it.

eBay can be a great way to unclutter your home and raise a little extra money. Many folks think about doing it, but are scared away by the horror stories out there. Others consider it a waste of time. Yet others think that it is not a "good deal" because of the fees charged. While these are all valid concerns, eBay can be a good outlet for unloading stuff that you no longer need. It is better to sell something on eBay and get some money for it than to drown in a sea of junk or end up throwing it away.

CraigsList is another good place to sell, particularly for local items that cannot be easily shipped. One bonus of Craigslist is that it is FREE, so you do not incur listing charges like on eBay. I have tried to sell some items on both Craigslist and eBay at the same time, but it probably is a better idea to pick one of the two instead of both. eBay frowns on selling items "off eBay" and sometimes, you end up with two people "buying" the same item at the same time. Better to pick one and let it go at that.

Update: After a week of selling on eBay and Craigslist, I have unloaded over $1000 worth of "stuff" that I had no use for or had not used in years. It feels liberating!

Update: After a week and a half, the total is up to over $1400 and climbing! Of course, eventually you run out of things to sell, but that is the point - to clean out clutter in your life and liquidate.

Here are some tips I have for selling things on eBay & CraigsList:

1. Good Candidates for Sale on eBay:

Some things are not good candidates for selling on eBay, while others are ideal. You can sell a car on eBay, it is true. And if you want an old car to "go away" in 10 days or less, an eBay auction can be a good place for it. But my experience has been that items over $15,000 or so are not good candidates for sale on eBay. That is a large amount of money and most folks don't have it lying around. So selling a motorhome, for example, might not be a good idea, unless it is really clapped out.

Collectables and special interest items are prefect for eBay. Unlike the local classifieds, you obtain a national audience for your item, and thus can find the right person who wants it, out of 330 million people, as opposed to the few thousand that might see your ad in the local Craigslist. These are also items that are easy to ship.

Parts are also good candidates for sale on eBay. Car parts, computer parts, whatever - if they are still good or useful, eBay is a good way to find a buyer. When I need a part for something, be it a photocopier, a computer, or a car, I can type in the part number, and 9 times out of 10, the part pops up on eBay. I needed a new carburator for an industrial leaf blower. I typed in the part number and voila - it was for sale on eBay for cheap.

2. Good Candiates for Sale on CraigsList:

Anything to heavy or bulky to ship is probably better sold on Craigslist. Craigslist is local, of course, but the search engine on the site picks up hits from neighboring cities and areas, so you need not list multiple times. There are also nationwide craigslist search engines that search all the craigslists out there, so you potentially have a national audience.

Cars, boats, RVs, furniture, yard sales, etc. are good candidates for Craigslist. Autotrader, RVtrader and Boattrader should also be cross-listed for those items as well.

3. Price it right:

Asking unrealistic prices just wastes your time and everyone else's. The idea is to get SOMETHING for the item, as opposed to the NOTHING you have for it right now. This means you do take a risk that something might sell for a pittance, but that's sort of the fun of it. Buyers like to think they are looking for a bargain.

If you list your price too high, no one will bid, and you've paid 75 cents to list it on eBay to no avail. You'll end up re-listing the item (or throwing it away) once it doesn't sell.

4. Use Priority Mail:

USPS Priority mail is a great way to ship things on eBay. The rates are often flat, so you can calculate the cost of shipping into your minimim sale price and offer "FREE SHIPPING!". USPS provides free boxes and you can track the items online with a tracking number, so the buyer can't claim they never received it.

Priority Mail is also about 1/2 to 1/3 the cost of UPS or FedEx.

5. Don't Let People Waste Your Time:

Some lonely people are on eBay and Cragislist and they like to spend a lot of their time (and yours) with endless questions and games, sending you numerous e-mails about an item, or asking you to end the auction early or whatever. Do yourself a favor and keep your responses simple and to the point. Sorry, no exceptions to the Rules.

The end-the-auction-early folks are hoping you'll sell them the item for cheap, because you don't realize what it is worth. The "will you hold this while I am on vacation" types are another. They want you to hold the item for weeks and weeks until the time period for negative feedback has elapsed. Then they say "Well, I think you charged me too much, but I'll take the item at a lower price, of course...." Just say NO to these scams.

Many people don't sell things on eBay or Craiglist simply because of time-wasters. If you are making $50 a hour at your job, it seems like a waste of time to spend an hour of your time selling a $25 item. So be sure to monitor your time consumption and not spend more than it is worth.

6. Avoid the Obvious Scams, of Course

The horror stories you hear about eBay are from people who were stupid or greedy or both. There are two major scams - the eBay seller scam and the eBay buyer scam. From my SCAMS AND HOW TO IDENTIFY THEM page:

eBay can be a place to find a good bargain, althogh increasingly it is becoming just a place to find stuff at OK prices. It can be a good place for you to unload your own stuff, too. but beware, there are scammers out there. One scam is the phoney auction. The scammer advertises a desireable consumer item worth maybe $10,000 to $30,000 for less than half the price. Kubota tractors, Honde CBR 500 motorcycles, BMW 3-series cars, Harley Davidson Motorcycles, etc. are typical of the genre.

The auction might ask you to contact them directly (their eBay e-mail is "broken") and mysteriously, the auction has only a few hours or a day left on it. You e-mail them, and they ask you to wire $5000 to the UK or Canada or somewhere overseas. They may tell you to send it with a "security password" so the money cannot be released until you receive the car, which they claim they will ship to you by 'air freight". Often there is a convoluted story about how the car belonged to a deceased brother or something. Usually there are glaring descrepencies between the picture of the car and the description as well.

Yes, these are stupidly obvious rip-offs. Yes, hundreds, if not thousands of people fall for these every month. eBay tries to police them, but cannot be everywhere at once. The scammers are moving to Autotrader and other vehicle selling sites as a result of increased policing on eBay. If it sounds too convoluted and too good to be true, walk away. NEVER buy a car without seeing it in person first!

The eBay buyer scams works in a slightly different way. You decide to sell your car or boat on eBay and you get an e-mail. The buyer will pay your asking price, no questions asked, but wants the car shipped overseas. They will send you a money order or cashier's check for the full amont, plus $3000 in shipping. They ask you to wire the money to a 3rd party (usually in Canada or Africa) to pay the shipping.

Two weeks later, you find out the cashier's check was a bad forgery and you are out the $3000 you wired overseas. And no, they are not interested in stealing your car, just your $3000, thank you. Again, if it sounds too good to be true (someone willing to buy your car at asking price, sight unseen, and willing to send you more than the asking price) then it probably IS too good to be true! Walk away.

7. Use the Money to Buy Something You Want:

After you've sold a number of items on eBay, you may find yourself with several hundred dollars in you PayPal account. You can take that money out, of course, but I find it fun to use that money to purchase something I actually need on eBay. In this way, I am taking things I own, but don't need, and exchanging them for things I need, but don't have.

The key, of course, is to actually spend the money on something of value, and not just "shop" for more junk to clutter up your house. Selling off junk to buy more junk is not really solving anything, just wasting time and money.

8. Be Brutal In Finding Things To Sell:

Owning a lot of junk is not "wealth". When looking around your house for things to unload on eBay or Craigslist, don't limit yourself to what is in the attic. A lot of things hanging around your house are simply clutter. One attitude that derails the entire process is the "well, let's not sell that, it's worth something!" comment.

Here's a clue: the only things worth selling are the ones that ARE worth something. Again, hanging onto something because you perceive OTHERS to value it is merely hoarding for the sake of hoarding. If it has no value to you, then it is better off converted into cash. Keeping an ugly vase around because "people collect these" is a nonsensical idea. Unless you find it attractive and useful, it is merely accumulated trash.

Note that "collectables", be they cars, antiques, coins, or whatever, are horrible investments. They usually appreciate in value at a rate less than most savings accounts. The stories you hear about such-and-such a chotchke being worth millions are just that - stories. Oftentimes auction houses and dealers shill up bids on things like that in an attempt to drive up prices. Ask the fellow who bid on a "vintage" Ferrari in the 1990's whether it was such a swell investment. Most lost half their value after the dot-com bubble burst, and have yet to recover to those levels.

So toss the idea that mother's ugly old vase is "money in the bank". Money in the bank is money in the bank. The value of "collectables" varies widely, and if you can get good money for something you aren't using, then it may not be a bad idea.

9. Don't Sell Trash:

Oftentimes in the country, you see garage sales every weekend where people are literally selling their garbage. A broken teacup is not worth anything to anybody, nor is a bent spoon. But people try to sell things like this.

If something is broken or needs repairs that exceed its value, chances are, no one will want it. Don't waste your time and others' by trying to sell outright trash on eBay or Craigslist.

Oftentimes, I hear from people who try to take my eBay advice. They go through their house and find something of "no value" and then try to sell it on eBay with no photos or good description. When it doesn't sell (but they are charged a listing fee) they become disappointed and say my idea is not sound.

The idea of selling things on eBay and Craigslist is not to unload your GARBAGE, but to sell things of VALUE that you are NOT USING and HAVE NO BONA FIDE INTENT TO USE. Garbage should go in the trash, period. You can't sell your garbage.

People thwart the idea of eBay and Craigslist when it comes to selling things as they go through their house and say "Well, we can't sell that, it's WORTH SOMETHING". Well, Duh, if it is WORTH SOMETHING, someone might BUY IT. Trying to sell worthless items is fruitless and stupid.

Hanging onto things on the premise that they are WORTH SOMETHING but not WORTH ANYTHING TO YOU is idiotic. Again, unless you are a collector of those items, it is not worthwhile trying to collect things you think have intrinsic value. In most cases, you are better off putting that money in the bank and earning interest.

I ran into this with my spouse, initially. "Don't sell that ugly clock, IT MIGHT BE WORTH SOMETHING!" Again, "Duh!" with a capitol "D"! An ugly clock dry-rotting in the attic will soon be worth nothing to anybody. If you don't use it yourself, and find it doesn't match your decor, hanging onto it on the premise that it has intrinsic value alone is foolish. Sell it to someone who will cherish it and invest the proceeds in something that YOU like and will use.

Sell the GOOD STUFF you don't need, throw the garbage in the trash.

10. Buying on eBay or Craigslist:

There are bargains to be had on eBay and Craigslist, to be sure. But there are also a number of pitfalls, mostly of your own chosing.

To begin with, as I have noted before, "shopping" is one of the most destructive finaincial behaviors for middle-class Americans. Buying things you do not want or need, merely to experience the thrill of buying is very self-desctructive.

And on eBay, it can be all too easy to "shop" for things and end up buying stuff you really don't want or need. Resist the urge to buy something unless you are in need of it, not merely skim by it and say "that's interesting".

Also, it pays to check prices before buying. With the Internet, it is often an easy task to check online for competing prices for any item. So there is no reason to bid too much on eBay for something, when you can buy it locally or from another online source.

And yes, people routinely overprice items on eBay or Craigslist. Generally speaking, you should not pay more than 50% of retail price for a used item, unless it is nearly brand new. A set of patio furnitue may sell for $400 new, but used, may be worth only $100 or so.

The other thing, is that often stuff sold on Craigslist, in particular, is broken or otherwise damaged. Items that are missing pieces or are otherwise broken are of no value at all. As I noted in my "Tragedy of Hoarding Disorder", hoarders often lose pieces of items (intentionally it seems, it is a control thing) and thus, that weight set that is missing the locking pins is really unusable. Make sure all the parts are theree and the item is in working order. Buying someone else's broken trash is no bargain.

11. Freecycle and other Free Things:

As I noted in my Hoarding Disorder article, it is tempting to get something for free. And once in a while, yes, you do get something for free that is a good deal. But a lot of times, free things are worth what you pay for them. Freecycle in particular, can be a real time-waster, even if you are just giving away things. People call or e-mail saying they want something and will come by, and they never show. Or you drive 10 miles out of your way to pick up an item, only to find out it is broken or just trash.

The temptaiton to get something-for-nothing is great. But your time is valuable, too. After a brief experiement with free-cycle, I swore off the page. It is a boon for hoarders, but little else.

* * * *

Monday, June 1, 2009

The Tragedy of Hoarding Disorder

The incidence of hoarding disorder appears to be increasing in this country.  Or is it just more noticeable these days?

I have touched on this subject in the past, but it bears addressing again, as hoarding disorder can be devastating to one's finances.

It is unclear to me whether hoarding disorder is on the rise, or merely more apparent than before. What is clear is that people with hoarding disorder are more visible today than in the past. There could be a number of reasons for this:
1. We are a wealthier country than in the past, so it is easier to accumulate junk than before, as people are throwing things away more.

2. There is some chemical in the environment that is triggering this disorder.

3. There is some sort of societal stress that is inducing the disorder in more and more people.

4. The disorder is harder to keep hidden as our society becomes more and more crowded.
Perhaps it is a combination of these factors that is causing the apparent rise in hoarding disorder. As noted in "Do We Control Our Own Destiny?" we are finding out that a combination of brain chemicals can alter behavior. A drug given for Parkinson's disease, for example, causes people to gamble uncontrollably.

Obviously, the causes of hoarding disorder are the subject for scientific study.  However, I believe they are related to our current obesity epidemic (over-consumption food being an aspect of hoarding disorder, in my opinion).  And hoarding disorder takes on a number of other forms as well – such as the desire to hoard animals, for example, which I touched upon in "The Pet Trap".

Mental illnesses and disorders are subject of some controversy and social stigma. The medical profession tells us these are illnesses, and should be treated as such.  Society, on the other hand, ostracizes the mentally ill and those with behavioral disorders as being responsible for their own plight.

Where does the truth lie?  Well, I think somewhere in the middle. Yes, our behaviors are largely dictated by our brain chemistry.  But, to adopt an entire brain chemistry model is to negate the entire concept of self-awareness, freedom of action, and choice.  While we can acknowledge that we have predispositions to certain behaviors, we can also acknowledge that we can counteract, to some extent our predispositions.   In other words, we can take responsibility for our actions, at least to a certain extent.

Hoarding disorder, I think, is one of those behavioral predispositions that is present in every human being. The desire to keep and hang onto things is, no doubt, a survival skill bred from our ancestors. That sharp rock may look like junk, but it may come in useful to scrape a hide or attack an enemy. The urge to keep things, in other words, is a survival skill encoded in our DNA.

But, somewhere along the way, this urge to keep things gets out of hand and becomes a major problem. How can we distinguish the difference between the ordinary need to keep things of value and the harmful behavior of hoarding disorder?

After meeting and dealing with many people with this problem, I think there are a number of indicia that characterize hoarding disorder from ordinary collecting.  And I think it is possible to take steps to prevent yourself from sliding down this slippery slope from collector to crazy.  If you see yourself starting to do any of these things, stop now and take corrective action.  Perhaps you have no choice in the matter, but its worth a try, anyway.

You may have hoarding disorder, if.... The following are indicia I have noted of this disorder:

1. The Hoarder Collects Disparate Objects

The first hoarder I met was at an apartment building I lived in when I first moved to Alexandria.  He was a nice enough fellow, but the fact that he drove a Chevrolet Step Van (large square commerical cargo van) as his choice of personal transportation should have been a tip-off.  The van was full of stuff – old broken lawnmowers (a favorite of male hoarders) and other junk.

He invited me to his apartment one day to give me some car magazines, and I was shocked to see that it was literally two to three feet deep in stuff. When I say "Stuff" I mean everything from magazines, to books, to car parts, to furniture, to broken lamps, to cookware. You name it. There was no rhyme or reason to his collection. He was not a car enthusiast, but yet had a collection of car magazines. He knew nothing about small engine repair, yet his van was filled with broken lawnmowers.

If you collect stamps, you are a stamp collector.  But if you find an old stamp collection and then throw it onto your pile of "junk" then you are merely a hoarder. What distinguishes the hoarder from the aficionado is discrimination. The hoarder will take anything that appears to be "of value" even if it is not, on the premise that "people collect these things."  A collector will discriminately select only certain items for his collection, and then limit himself to certain areas of collection, which he researches avidly.  The hoarder collects all sorts of stuff, without much discrimination between what is good and bad, only that he has more.

A variation of this effect is the car hoarder.  I know one fellow who had a collection of BMWs. Collection is a subjective word here, as his neighbors (and the County zoning board) call it an unlicensed junk yard. He had over 50 cars, many of which he claims are "significant" but none of which are in running condition or indeed even very good condition for restoration.   He has no money to repair or restore any of them, and realistically, no intention of doing so.  He merely hangs onto them because he perceives them to be of value to someone, and enjoys, in his mind, the "status" of being a car collector, even if he arrives at every BMW car meet in an old Subaru.

If you find yourself taking something for free (or at a low price) on the premise that it is valuable to someone else (but of little or no value to you) then you are merely hoarding, not collecting or acquiring useful things.  If you collect disparate objects with no connection to one another, you are merely hoarding, not collecting.  If you collect things of one type, but do no discriminate between good and bad things, you are merely hoarding.

2. The Hoarder Does Not Take Care of the Objects

As my apartment neighbor example illustrates, the hoarder generally does not take care of the objects they hoard.  On the contrary, once they obtain the objects, they often allow them to go to utter waste.

Thus, for example, the old man who collects broken lawnmowers does not carefully repair them and place them in his garage, but rather lets them sit out in his yard in a pile to rust and degrade. My apartment neighbor piled his prized possessions in a mat two feet thick, which he walked upon, until most of the things he "salvaged" from the trash were broken or useless (or more useless than they were before).

If something hoarded has multiple parts, the hoarder typically tends to scatter them among his possessions (or ironically, throw them away), usually losing critical parts in the process, rendering the rest of the item useless.  (Note that methamphetamine addicts do this, and they even have a name for it - "tweeking" - taking apart the stereo, for example, and then scatting the parts to the four winds.  Perhaps chemical imbalance is to blame for hoarding).

Thus, for example, a hoarder may "collect" an interesting old lamp from the trash, but then put the shade in one place, the base in another, and the unique bracket that mounts the shade to the lamp somewhere else (or throw it away). Eventually, the shade gets stepped on, the lamp is knocked over, and it is all utterly worthless (if it was worth anything to begin with). What might have been a "funky collectable" is utterly destroyed.

The hoarder does not carefully organize or pack things away, but rather puts things in piles, often with the most delicate breakable items on the bottom. Hoarders often tend to put things that should not get wet (furniture, appliances) outdoors, and then wonder why they end up destroyed.

To the hoarder, the acquisition is the thing, not the owning. This is why they hoard so much. They have a need to GET things, and thus continually obtain more and more junk, while neglecting, if not actively destroying what they already have.

To normal people, the behavior of the hoarder is particularly galling in this regard. The hoarder is often poor or pleading poverty, and yet allows thousands of dollars of possessions to go to waste, for no reason at all. Even items of value, that the hoarder has paid for, are usualy sqandered by the hoarder.

My friend with the "collection" of "rare" junked BMWs is the same way. They sit out in the yard, rusting (again, the hoarder does not take care of his hoard) and he refuses to sell any of them. I told him to sell most of them and use the money to restore one or two - at least that way, he would have a nice ride, and the other cars could be salvaged. His widow will sell the rusty cars, years from now, probably as scap metal. Mutiply this story times a million and you can see the extent of the junked car problem in America.

3. The Hoarder Does Not Want to Part With the Objects

This part is almost humorous, if it were not so tragic. Watching a hoarder try to have a garage sale is a joke, because they cannot part with anything. They may put things out for sale, but put outrageous prices on things, or, after someone expresses an interest in an item, decide, "that's not for sale."

My apartment neighbor was a case in point. I was working on my car one day and he came out to chat. He said "your hands will get dirty working on the car, and I found a box of rubber gloves the other day, do you want them?" Initially, I said "no thanks" but he persisted. He came back from his apartment with a box of surgical gloves. The rest was comical.

"Here, you can have this," he said, handing me the box. "Uh, gee, thanks," I said, not really wanting them. "On second thought," he replied, "maybe I will need some of these down the road, so why don't you just take two for now and I can give you more later?"

"Well, OK" I replied, not even wanting the gloves in the first place. He peeled off two gloves from the box and held them out, then hesitated, drawing his hand back. It was killing him to give these away, even though the whole idea was his. To him, these gloves had value to someone. But he did not want to part with them. He finally relinquished the gloves, which I had not asked for in the first place.

He clearly was a lonely man. As I worked on the car, he kept asking me questions and talking to me. "I have a lot of old hot rod magazines in my apartment, do you want them?" Old car magazines are a lot of fun to read, so I said "Yes". He invited me to his apartment, where I saw the staggering mess he had. He dug through the mounds on the floor and came up with a stack of mid-1960's copies of "Hot Rod" magazine. Again, the tug of war ensued. As I reached out to take them, he pulled back, having second thoughts. "Well, maybe you can BORROW them," he said, reconsidering the offer. Even that seemed too much. "Perhaps you can borrow a FEW for now, and come back for the others later."

Eventually, I left with one magazine, which he nagged me to return later that day. Of course, since it had been piled in his apartment, it was wrinkled and stepped on. A collection of old Playboy magazines, carefully cataloged, or old National Geographics, can be a joy to read. But a pile of old magazines that are tossed in a corner is not a collection.

I have seen this behavior with other hoarders as well. They seem to enjoy the idea that people think they have something of value, and then play a game of not wanting to part with it. For example, another neighbor had an old Mercedes parked in his driveway. Like any typical hoarder, he was allowing it to waste, by leaving the windows down in the rain – for 10 years. It was worth $25,000 if restored, but as a "parts car" might be worth only a thousand or two.

Neighbors asked him if he was selling the car, and he mistook their horror at his front lawn junkyard as an expression of interest. "Everyone keeps asking me if I'll sell that car" he said, "But I'm keeping it! It's my retirement! That car is worth $300,000!" Unfortunately, he was confusing his junker with a more expensive and collectible model Mercedes, which, if restored, might fetch that price. The reality is, his widow would end up selling the car for its real value, as he had no intention of ever parting with it. To the hoarder, part of the appeal is the perception that they have something of value – something that people want.

Keeping things thus is the name of the game.

4. The Hoarder Cannot See They Have a Problem

Things tend to accumulate in any household, and after a while, one does not "see" junk in the house. This is, to some extent, normal. But with the hoarder, it becomes a major problem.

Has it ever happened to you that you come into the house and set down a box or something and say "I'll put that away later". Weeks go by and you suddenly realize, to your horror, that you've had a cardboard box in your hallway for nearly a month?

Oftentimes, when we go away on vacation and come back, we "see" things like that for the first time. Or, as an outsider in someone else's apartment or home, you see this sort of junk that the resident has become so used to that they no longer can perceive it.

The hoarder is this way as well, but on steroids. One classic symptom of the hoarder is the use of aisles or pathways to get around the house. A hard-core hoarder will occupy every surface and space in the house with "stuff" until there is only a small pathway through the house from Point A to Point B.

A friend of mine had parents this way, and she was horrified to discover that they had made "paths" throughout the house, and in some instances, entire rooms were inaccessible or full of "things". Not only was this unattractive, but it was also a fire hazard.

Similarly, the lawn full of junk is invisible to the hoarder, who sees nothing different in his piles of crap as opposed to your neat and tidy life. In fact, hoarders often will say that a neat home looks "too sterile" and express the opinion that piles of junk make a home look "lived in".

The hoarder makes junk invisible by mentally processing how things should be as opposed to how they are. So the broken lamp, will be "fixed some day" and the piled up furniture is, mentally, arranged tastefully in their mind. But of course, it never ends up that way.

Again, the junk car collector works the same way. They cannot "see" the junked cars under tarps on their lawn (although the neighbors certainly can) and they cannot understand why they are being "hassled" by the zoning authorites for their junked car collection. My friend with the yard load of old BMWs was mystified why his "asshole" neighbors complained to the authorities about his cars - cars which he had moved from his previous home to his new neighborhood.

Living next door to a hoarder can be mildly annoying at best. At worst, it can be unhealthy and/or dangerous. Unfortunately, many hoarders develop anti-social behaviors as well, probably as a result of the disorder, or perhaps as one of the causes of it.

5. The Hoarder has a Car Full of Crap, Too.

It is not hard to spot a hoarder's car, as the springs are usually sagging in the back. In one tragic case, a neighbor of mine had a son with hoarding disorder. Only 18 years old, he started collecting junk in his Volkswagen Jetta, until it was filled to the windows. Only a small space was available in the cockpit for him to drive, with all other seats and the trunk being full - of junk. What were the precious collectables he had to keep in his car? Old magazines, food wrappers, laundry, books, CDs, odd items pulled from the trash - you name it. He had that car chinked full of crap. I have even seen people add cargo carriers to the roof of their cars and load those as well.

Another example is my neighbor with the step van, who took hoarding-while-you-drive to new heights. Hoarders tend to cruise neighborhoods on the night before trash day, to scout for new finds (broken lawnmowers, old lamps, furniture). So it is not atypical that they have a car load of junk. They rarely unload their cars, however, or leave their "finds" in the car for weeks or months, unloading them only so they can acquire more.

6. The Hoarder has Other Mental Illnesses

My apartment neighbor turned out to be an outpatient of a local mental hospital. He was functional, somewhat, despite his disorder. Hard core hoarders usually have other mental illnesses as well, which is tragic. Hoarding may be related to these illnesses, chemical imbalances or the like. Or perhaps it causes it. I am no expert. I do know, however, that people with mental illnesses can be dangerous to be around, and also drag you down emotionally (See, "Emotional Vampires"). Being friends with a hoarder is never fun. Being neighbros with one can be downright dangerous.

A neighbor of one of my tenants was a full-blown hoarder. His apartment was also knee-deep in trash, and he had a stack of four door mats in front of his apartment door. He had a crazed look and always tried to start fights with the other neighbors (but always backed down, as he was an utter coward at heart). He decided to take over the parking spot for my rental condo, going so far as to paint his apartment number on the space. His urge to hoard had spread to parking spaces. My tenant was understandable upset, and this sort of passive-aggressive type action is typical of the hoarder (Passive aggressives are an annoying pain in the ass, period).

I confronted him on the issue, and he got all blustery and shouted at me, but he backed down eventually. He tried to argue that he was entitled to two parking spaces, but I pointed out to him that everyone else in the development had only one, and the development map clearly showed where my tenant's space was supposed to be.

Again, he turned out to be an outpatient of a mental facility, which I discovered after he was found dead in his apartment. The rise of outpatient treatment for mental illness may be another factor in the rise of hoarding disorder - or the rise in the apparentness of it.

Hoarders can often be unstable and thus dangerous. Some may be hoarding weapons. Approach with caution. As a landlord, the hoarder can be a nightmare tenant. Some live in their own filth to the point where the smell drives out other neighbors. Some collect garbage in their yard, which attracts rats and other pests. Pet hoarders can cause health problems for neighbors, as their neglected animals become sick and die (and the smells from the large amount of pet excrement become staggering).

Hoarding disorder isn't funny, really, even if the behavior of the hoarder sometimes seems amusing. The victim of the disorder certainly isn't happy, and their actions can make others unhappy as well.

So What Can You Do?

While full-blown hoarding disorder is clearly a mental illness that requires treatment, I think that creeping hoarding disorder can occur to any person over time, and it is necessary to be vigilant to prevent yourself from sliding down that slippery slope of mental health. There are steps you can take to help prevent yourself from slipping into hoarding habits.

1. Stop Acquiring Junk:

It is tempting to stop at the curb and pick through someone's trash, particularly when they are throwing away "good stuff". Salvaging a lamp or a table or some other valuable item is fun, and you feel you are getting something for "free" which is always the best deal in the world.

But unless you have a specific need for the item RIGHT NOW, just walk away. If you see a perfectly good chair being thrown out, and you think, "You know, that will fill that empty spot in my living room" then it may be a good deal. On the other hand, if you are merely collecting the chair because it is "good" and "worth something to somebody" but have no place to put it, then you are merely hoarding.

Note also that broken things can backfire in a big way. Acquiring something that "just needs a little work" is a bad idea, if the amount of work (and parts) needed exceeds the value of the item. So a broken desk needing a new leg is no deal, if a new leg costs $100 and ht edesk is worth maybe fifty bucks.

Also, broken things are no bargain if you have no abilities, inclination, talent, time, or tools to fix them. Broken lawnmower collectors often have dozens in their yards, basements, and garages, but lack the time, tools, skills, parts, or know-how to repair them. And often, there is a very sound reason people throw such things away - they are utterly shot, ruined, or worn out, and the cost of repairing them exceeds the cost of a new one. With more and more things made inexpensively overseas, it just isn't worth repairing many consumer items anymore (this goes for computers, televisions, radios, or any electronics, small engines, and even cars, after a certain age).

2. Pick One Thing:

If you collect old coins, that's great. But collecting hundreds of different things, merely because they are free (or nearly free) is not being a "collector," merely a junk collector. If you find you have an eclectic mixture of stuff that you got merely because it seemed valuable to someone else, rethink your collection.

I found some items in my basement that I had collected, not because I was a collector, but because they seemed cool and valuable, and relatively inexpensive. Old phones, radios and the like ARE collectables. But I am not a phone or radio collector. So I sold them on eBay to someone who was.

3. Take Care of Things:

If you acquire something, but then leave it out in the rain or pile it somewhere where it will fall over and break, then something isn't right. A real collector will clean, maintain, and organize things, rather than let them sit around in a pile. If the stuff you are collecting is going to waste, then you have a problem. If you have something that is lying around and getting knocked over, kicked, or otherwise slowly destroyed, but you don't want to part with it because "it is valuable" then maybe it is time to part with it!

4. Get A Fresh View:

Go through your house and try to look at it through a stranger's eyes. Look for boxes, magazines, bags, and other things that are out of place. Is there too much furniture in your rooms? Is it hard to navigate through your house because of stuff? Do you bump into things or have to do a two-step to get around something?

It takes some time, but it is worthwhile to do this now and again, to help you "see" things that the mind tends to blank out. For example, I had a cabinet in my office that was sitting on the floor. The movers had broken the legs on it, and I intended to fix it. It sat there, on the floor, at an odd angle....for three years.

One day, after coming home from a hoarder friends house of horrors, I started looking around, and I could "see" for the first time a number of potential hoarding horrors starting to fester in my own home. Vigilance is necessary to prevent such things from accumulating in your own life.


It is temping to "keep things" that might be worth something to you down the road. But, as I noted in another blog entry, if you can't find something you want, it is like not owning it at all. Keeping things organized is the key to keeping things at all.

I tend to keep old car parts, as they are useful in repairing cars. However, broken parts are of no use to anyone, and should be thrown away. And if you keep a part, and don't know where it is when you need it, then it is like not having the part at all. I bought several totes for tractor, boat, and car parts, and then carefully went through my collection and tossed those things that were broken or unsalvageable and put the rest in the totes, which I have stored on shelves in my shop. Not only is this visually more appealing, it makes it easy to find the parts when I need them.


It is unfashionable to throw things away these days, and this unfortunately tends to reinforce hoarding behavior. Hoarders can now claim to be "Green" and "recycling" instead of just running an unlicensed junk yard.

However difficult or politically incorrect it may be, it pays to toss things away sometimes. If clutter prevents you from finding the things you DO need, then clutter is, in effect, costing you money. Things of little or no intrinsic value should not be saved, period.

One friend had a mother who saved the plastic trays that meat comes packaged in. It is tempting to save containers these days, as packaging has become so complex that it seems a shame to throw away such well-engineered containerage. A simple plastic water bottle is a miracle of engineering. Throwing it away seems so – well, wasteful! But it has no intrinsic value. The best you can do is to recycle it.


Scrap values have risen in recent years, and selling junk, even for scrap value, is always a good idea. As I noted in "Money, the Greatest Invention", you can liquidate almost anything you own, and then later on, if you decide you want it back, buy nearly the same thing for about the same price (factoring in inflation and storage fees). Money is nice and liquid and doesn't clutter up your life.

For example, during a recent move, we sold off a set of wicker furniture. It was a shame to sell it, but we did get $150 for it and didn't have to move it (which costs money) or store it (which costs money). Meanwhile, that $150 was freed up to pay other expenses or be invested (and earn money).

Years later, we decided we wanted that wicker furniture back. We found almost the exact same set at a yard sale for $200. Not having to move and store that furniture for five years was well worth $50, believe me. It is far easier to liquidate and re-acquire than to hold onto things. And that original set? Well, it would be five years older by now, and probably damaged to boot.

Today, we have eBay, Craig's List, local shopper's magazines, and of course, the trusty garage (tag) sale, all of which are excellent outlets for unloading things that you no longer need. With eBay and Craig's List, you can reach a large audience for little or no money and liquidate things you don't need and use the money to buy other things you might need instead. It is a game, and it can be a fun game to play, if played correctly.


Hoarding is a habit, and countering this habit requires developing other habits. When you come home every night, take EVERYTHING out of your car and PUT IT AWAY. Get in the HABIT of putting things away or throwing them away if they have no use.

Hoarding does not "just happen" but like other disorders, grows over time. It starts with a book left on the floor and then morphs into dirty dishes in the sink, then laundry left on the sofa. Before you know it, the whole house is full of junk.

Countering hoarding disorder, I believe, requires constant mental discipline. Like the alcoholic, you cannot afford to "fall off the wagon" and take "one little drink". Once collecting junk starts, it goes downhill quickly.

A visit to a hoarder's home can be a frightening thing - but educational as well. After one such recent visit, I came home and "saw" my home in a new light. Suddenly, small things that were hardly "clutter" jumped out at me. I did not want to end up like my hoarder friend. In that regard, while knowing a hoarder can be a nightmare, it can also be instructive, or as Kurt Vonnegaut called it, "dancing lessons from God". You cannot change the hoarder, of course, but you can learn a lesson from them.

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Hoarding Disorder is a tragic thing, as it can destroy the lives of the people involved, both financially and emotionally. Unfortunately, so many factors in our society seem to feed this disorder – the materialistic need to acquire things, the availability of so many inexpensive consumer goods, and the large amount of stuff discarded every year. I believe you can fight this disorder, but it takes conscious effort on your part.