Small Ball (Finance). . . Earning $160,000/yr. one minute at a time


In past posts, I’ve focused on concepts that will save you thousands of dollars per year.  Today, I’m going to talk about something that is decidedly “small ball”, but nevertheless will help you achieve our goal of “living beyond your means without debt”.

I recently bought a used car for my daughter (something I swore I would never do, but so much for youthful oaths!), which requires 91 octane premium gas.  Now, I hear you saying, “doesn’t that violate the idea of spending less and saving more?”.  Well, the idea is to live better, which isn’t the same as living as cheaply as possible.  So, yes, I bought her a premium car, because it was a much better value than a crappy econo-box that cost more money.

So, when my daughter expressed concern about the cost of gas, I started thinking about to lower that cost.  Of course, I told her about CostCo, where gas is typically 5¢-15¢ cheaper per gallon than neighboring stations.  I also told her about using a credit card that will save her 4% per gallon (CostCo American Express card).  So, right off the bat we are saving 20¢-35¢ per gallon or almost 10% per gallon.  Now, where we live in Florida, premium gas is 93 octane; the car only needs 91 octane.    Essentially, drivers like me are buying octane they don’t need.  The solution: combine 93 octane and 87 octane gas to get a 91 octane blend.  The blend is 2/3 93 octane and 1/3 97 octane (if you are interested, the math is: 93x + 87(1-x) = 91).  If your tank holds 20 gallons and your typical fill-up is 15 gallons, you simply put 10 gallons of 93 premium in your tank and then another 5 gallons of 87 regular and viola, you have made your own 91 octane blend.  Remember, I started talking about “small ball”.  Well, we substituted 5 gallons of 93 octane for 87 octane; in Florida, the average price differential is about 28¢.  I know that in many parts of the country, the difference is about 20¢, so I’ll use that.  Basically, we have saved about $1 . . . for less than one minute of work (I timed it!).  Again, remember “small ball” is today’s theme.  You may be saying, “$1, who cares”.  Well, think about this, $1 dollar a week is $50/year or a free $1,000 over twenty years.  More importantly, saving $1/minute = $60/hour (after-tax), which is the same as earning over $160,000 (pre-tax).  Now, I’ve earned more and I’ve earned less, but I don’t recall a time where I ever turned down an opportunity to earn incremental money at a rate of $160,000 per year.  So, there you have it, nothing dramatic, but an easy way to “make” money, $1 at a time (or, as I like to think about it, $160,000 at a time).