How To Earn $1 Million by not watching TV

By Jeffrey Strain
Special to TheStreet.com7/12/2007 12:42 PM EDT

A recent study found that it would take $1 million for someone to be willing to give up TV for the rest of their lives.

Guess what? If you decided to give up TV and invested the money you saved, you would get that $1 million -- and probably a lot more.
People rarely consider the cost of watching TV, and when they do, they usually focus on the cost of their monthly cable bill. The truth is that there are a wide variety of costs associated directly and indirectly with having a TV.

Here are some areas where your TV drains your finances: TV: The cost of your TV can range anywhere from a few hundred dollars to several thousand if you decide to go for the newer plasma flat screen TVs. Take this cost and multiply it by several times, since you will likely own far more than one TV during your lifetime.
Entertainment cabinet system: Most people don't consider this cost when purchasing a TV, but you need a stand or entertainment cabinet on which to display your TV and other components of your entertainment system. This will cost anywhere from a few hundred dollars on up, depending on how fancy you decide to go. You can also assume that you will replace this at least once during your lifetime.
Cable: Once they have a TV, most people aren't satisfied watching only the free basic channels. Most will subscribe to a cable or satellite package that will cost them anywhere from $20 a month for bare-bones cable channels to well over $100 a month.

Pay-per-view: There are an increasing number of special pay-per-view sporting and entertainment events now found on TV. You might spend nothing to over $100 a month on these, depending on your viewing habits.

Movies: In addition to cable, most people are going to want to watch movies. That means either purchasing the DVDs or renting them from a service such as NetFlix and paying a monthly fee.

DVD/DVR: In order to watch the movies that you rent, you are going to need a decent DVD player. This will cost at least a few hundred dollars. And again, you'll likely replace this a minimum of several times over your lifetime as technologies change and better quality devices are created. You also may buy recording devices or DVRs like Tivo and related accessories to catch all of your favorite shows.

Gaming system: If you are into video games, you will purchase a gaming system to use. These can cost anywhere from a couple hundred dollars on up. You will also likely buy a number of these over your lifetime as the systems improve.
Games: If you purchase a gaming system, you will also need to purchase or rent games to play on that system. This can get quite costly, as most people want a variety of different games to play. It can easily run more than $100 a month if you purchase multiple games.

Energy: You will need to pay for the electricity to run the TV and other related electronics. This will vary greatly, depending on the type of TV you have and how much energy costs where you live, but it will likely be a minimum of $10 a month and possibly much more.

Commercials: A huge hidden cost of TV that people never consider are all the commercials they watch. The commercials are there to get you to buy products -- and they are effective. Economist Juliet Schor estimated that for every hour of TV a person watches each week, he or she will increase his or her annual spending by about $200, according to a 1999 article in the Spokane, Wash., Spokesman-Review. In 2005, Nielsen Media Research reported that the average person watched approximately 4.5 hours of TV a day, or 31.5 hours a week. At $200 in extra spending for each hour watched, that means that the average person spends an extra $6,300 a year due to TV commercials that they wouldn't have spent if they didn't watch TV.

Opportunity costs: Another cost often overlooked when considering the price of watching TV is the opportunities forfeited when you choose viewing over something else. You could start a business, take on a part-time job or take care of your garden so you don't have to pay someone else to do it. Assuming that your time is worth at least the minimum wage of $5.85 per hour, your opportunity cost is $737 a month if you view the average amount of TV.

So what does this all add up to? Say you're 25 years old and you initially spend $2,000 for your TV, DVD player, entertainment cabinet and gaming system after getting your first job. Add in monthly costs of $100 for cable, $10 for electricity use, $20 for renting movies, $25 for buying games and $20 for an occasional pay-per-view event, and you're looking at $175 a month. Add in another $525 a month extra you spend due to the influence of commercials if you are the average person, and you are costing yourself $700 a month watching TV.

If you instead invested this money and received a return of 8% compounded annually over 45 years until you're 70 years old, you would have more than $3.7 million in your account.

That is actually a conservative number, as additional upgrades in equipment were not included. Not to mention potential repair costs. It's also more than likely that many of the services will rise in price over time and new TV-related services will be introduced. And the calculation does not even take into account the potential additional opportunity cost, which could be a significant amount of money.
Your actual lifetime TV costs will vary from the above assumptions depending on how you watch TV and what services you use. You can make an estimate of your total costs for watching TV by plugging the relevant numbers into a basic compounding calculator.

While it's probably unrealistic that you will give up your TV entirely, the above numbers should make you consider how much money your TV-watching habits are costing you. Even some small changes could have a huge benefit on your overall finances.

Fore! No, He's 5

By HILARY BENTMAN

phillyBurbs.com

From the Intelligencer

6/05/2007

Standing on the green at the 12th hole, Jeff Lograsso, 32, couldn't sink his putt.

Neither, for that matter, could Jim Church, a 74-year-old avid golfer.

Playing best ball at Indian Valley Country Club in Franconia, Montgomery County, the two men needed their third teammate, Kyle Lograsso, to help them out.

Unaffected by the wet surface and a misty rain, Kyle lined up his putter, lowered his head, drew back his club and effortlessly tapped the white golf ball. It rolled straight into the hole, earning his team a birdie on the par 5 hole.

It was a masterful shot, delivered by a pint-sized putter. Kyle, just one week past his fifth birthday, is a pro — amazing family and friends, attracting media attention and causing fellow golfers to seek out his advice.

And if that's not enough, Kyle does it all with just one eye.

Watch the video

At age 2, Kyle was diagnosed with cancer in both eyes. Months of chemotherapy and the eventual removal of his left eye haven't stopped him from pursuing his passion. Today, he's cancer-free and three times a week he can be found playing the sport he learned simply by watching television.

To date, the preschooler has shot a 46 on nine holes and can drive the ball about 100 yards.

On Monday, Kyle teed off with players 60 and 70 years his senior at Grand View Hospital Auxiliary's 34th annual golf tournament, which hopes to raise about $30,000 for the West Rockhill medical center. His team included his dad, Jeff Lograsso, and Church, a radio sportscaster for WNPV in Lansdale.

Kyle and Church made an interesting duo as the youngest and oldest players out on the course. But that didn't bother Church. “It's a real thrill for me,” he said.

Sporting his white golf cleats, khaki pants and blue visor, Kyle is forever the competitor, even complaining when his dad sliced a ball toward some trees.

“There you go, ball into the woods,” Kyle said. Dad's reply: “The trees got in the way.”

Jeff Lograsso, a Marine staff sergeant stationed at the Willow Grove Naval Air Station Joint Reserve Base, calls himself Kyle's caddy. Although his game has improved since the pair started playing, they don't keep score. That's because Kyle keeps beating him.

Jeff and his wife, Regina, are former softball players. Both are at a loss to explain why Kyle became interested in golf.

“We knew nothing about golf,” said Regina, a native Virginian. “We kept taking the golf club out of his hand to give him a bat.”

But Kyle was hooked on golf.

His devotion to the game started when he was still in diapers. The military family was living in Japan and Korea and had access to the Golf Channel on TV. Kyle was mesmerized by what he saw and began imitating the players, taking a particular liking to superstar Tiger Woods and fellow leftie Phil Mickelson.

It was around this time that the Lograsso family got the news no one wants to hear. Kyle was diagnosed with bilateral retinoblastoma, a rare form of cancer in both eyes caused by a genetic mutation, said Regina.

The family, which also includes 13-year-old Kristen and 10-year-old Kaley, came back to the United States for Kyle's treatment, which included six months of chemotherapy and the removal of his left eye. Kyle was later fitted with a prosthetic eye.

During his recovery, Kyle's fervor for golf grew even stronger. “He got big into watching it. He was limited to what he could do as far as going out to play. It took off from there,” said Regina.

Kyle began swinging a set of plastic golf clubs around their Perkasie home and even took down a bookcase with his seven-iron. So Jeff decided it was time to get the toddler out on a real golf course. A novice himself, Jeff wanted to have a professional look at Kyle. “I didn't want to steer him in the wrong direction,” he said.

He made more than a dozen phone calls and got the same response: wait until Kyle is 5.

Then Jeff made one more call, to Lederach Golf Club in Lower Salford, where Bob Huber, director of instruction, agreed to look at Kyle. The youngster teed up a ball and “just smoked it, 30 yards right down the fairway. He teed up 35 balls and hit 30 straight,” said the proud dad.

Huber was impressed, not only by the youngster's skill, but his ability to overcome his handicap.

“You can't tell he doesn't have an eye. He has great hand-eye coordination, a great golf swing,” said Huber, who didn't start playing in tournaments himself until the ripe old age of 10.

Kyle joined the club's golf association and he and his dad are regulars on the Montgomery County course. Carts often slow down so other golfers can get a good look at the phenom.

Every once in a while, uninformed golfers don't want to team up with the Lograssos, thinking Kyle will slow them down. Inevitably, by the end of the round, they're asking him for advice on their swing.

Kyle's story has attracted attention from local and national media, including Golf Digest magazine and HBO'S “Real Sports with Bryant Gumbel.” Companies from around the country have made Kyle special personalized clubs, perfect for his short stature.

Regina said the attention is a “little overwhelming,” for the family, which recently moved to Telford. But Kyle takes it in stride.

“He's a ham,” she said. “You would think being as young as he is he would be shy, but he has a real confidence when he gets on the golf course,” his mother said.

Asked what he loves most about golf, Kyle simply answers “putting.” He also likes to hunt for stray golf balls and has about 150 in his collection.

Cancer-free for 21/2 years, Kyle gets checkups every six months because of the high reoccurrence of malignant tumors.

Last month, Kyle took part in “Take a Club to Cancer,” a golf tournament in Georgia benefiting the American Cancer Society. Later this month, he'll participate in a U.S. Kids Golf World Championship Qualifier at the Wyncote Golf Course in Oxford, Chester County.

When he's not on the course, Kyle can be found doing typical 5-year-old things, like bothering his older sisters and playing video games. Of course, it's usually a Tiger Woods' game loaded in the console.

Kyle dreams of following in his idol's footsteps as a professional golfer. His parents recognize his talent and encourage his desire but also want him to enjoy just being a kid.

“We just want [golf] to be fun for him. He does have a gift from God,” Jeff said, “but he's still 5.”

Hilary Bentman can be reached at 215-538-6380 or hbentman@phillyBurbs.com.

June 5, 2007 4:08 AM

Curing the Credit Epidemic by Suze Orman

It's nice to see that a recent bit of congressional jawboning scared a few major credit card issuers into rescinding some of their most egregious practices.


Just before being hauled into a Senate subcommittee hearing, Citigroup, the nation's largest card issuer, announced that it will no longer impose "universal default" on its cardholders. This clause in Citi's credit card agreements allowed the company to boost the interest rate on a cardholder's account at the first whiff of a late payment on any other accounts the person held.


At the same time, Citi also said it would stop its "anytime, any reason" right to boost interest rates whenever it felt like it. Chase also got in on the consumer-friendly act by announcing that it will no longer use the "two-cycle billing method," a system for calculating interest payments that was a huge cost to cardholders who infrequently failed to pay off their balance in full each month.


Don't Let Them Off the Hook

I'm obviously pleased that the credit card industry took these steps voluntarily, but I hope Congress doesn't think its work is done. Without legislation forbidding these practices, the card issuers are free to change their policies at anytime -- when Congress stops paying attention, for instance -- and reinstitute predatory behavior.


There's plenty more that the credit card industry can be taken to task for. A recent study by the General Accounting Office documented that late fees charged by credit card issuers have risen from an average of about $13 in 1995 to $34 as of 2005. If the penalty had merely tracked with the rate of inflation, the late-fee charge would be about $17.25 today, yet the card issuers have managed to eke out more revenue by doubling that.


This wouldn't be such a big deal if everyone managed to pay their bills on time. But the GAO also reports that about 35 percent of cardholders made at least one late payment in 2005.


A Matter of Magnitude

There was a supposedly silver lining to the GAO study: Compared to the pre-1990s industry practice of charging a fixed interest rate of about 20 percent, the move to variable rates has led to lower rates for some cardholders. Among accounts at the six largest credit card issuers studied by the GAO, about 40 percent of cardholders are currently levied at a rate under 15 percent.


Fine, but that still means that 60 percent of cardholders pay more than 15 percent. In fact, it can be 30 percent or higher in the most extreme cases. With the prime rate at 8.25 percent, that means credit card issuers have quite a "safety cushion" in terms of what they charge to offset their oft-stated risk of cardholders not paying up.


I'm in no way suggesting that credit card companies should operate as nonprofits, but there's something off-putting about the magnitude of profit issuers generate in the fees and interest rates they charge consumers. That's what needs to be addressed.


Highest First

It also needs to be easier for consumers to tackle their most costly debt. It's ridiculous that credit card issuers are the ones who decide which balances a card holder must pay off first.

For example, if you have a balance transfer at a low rate, a balance for new charges that's levied at a higher rate, and a cash advance at an even higher rate, most credit card companies are going to take your monthly payment and apply it to the balance with the lowest interest rate.


It's widely accepted that the best way for consumers to tackle their debt is to make getting rid of their highest-rate debt a priority. Clearly, credit card companies often make that difficult.


A Lack of Clarity

It would also be helpful if the credit card companies were required to clearly explain all their fees and interest rates. I was pleased to see that Sen. Carl Levin (D.-Mich.) recently stated that he found the fine print language of credit card agreements unwieldy -- and he's a graduate of Harvard Law School. There's no reason that all the pertinent credit card charges and policies can't be laid out in a clear, one-page chart.


And when is someone going to force credit card issuers to clearly spell out the net effective rate of the interest charged? Right now, the percentage you see on your statement is the annual percentage rate (APR), and it doesn't take into account the compounding of that rate over the course of a year.


That figure is known as the APY, and it's always going to be slightly higher than the APR. Current law allows credit card companies to emphasize the APR and underplay the APY.

Lapsed Education

The issue of clear disclosure in truly consumer-friendly language is especially important for credit cards issued to college students. A recent survey by Sallie Mae found that more than half of students accumulate over $5,000 in credit card debt, and a third of survey respondents reported they left school with $10,000 in credit card debt.


A lot of young adults now dealing with their costly card debt feel that they were duped by the issuers. We require high school students to take driver's education and pass a written and driving exam before we allow them to operate a car. But we do absolutely nothing to educate them on how debt works, and instead allow credit card companies to set up booths at freshman orientation and sign kids up to cards with sky-high credit limits. Ideally, every college-bound student needs a quick course on the true cost of debt.


In the meantime, clearer disclosure in credit card agreements as well as the monthly statement would go a long way toward getting the facts in front of new cardholders. That way, they could (hopefully) make more informed choices about how they use their card. That's basic credit education all consumers are due.