Financial Awakenings

Past Performance is No Guarantee of Future - Even with Cruise Lines

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My family and I spent Christmas taking my daughter's "dream vacation," a Caribbean cruise. I'm not much of a sun, sand, and sea guy, so my enjoyment of cruising is based on relaxation and good food. I prefer to select a larger ship that has all the amenities and a well-rated specialty restaurant.

On this particular trip, however, I decided to make cost the priority. I selected the smallest ship in the Celebrity fleet, the Zenith, knowing it didn't have a specialty restaurant. Still, the price was attractive; almost too low, in fact. There had to be a catch.

I asked the reservation agent what the catch was. He said the ship was being sold in April 2007 to another company. Since this was an obvious red flag, I asked why the ship was being sold. I was told it was because it lacked Celebrity's trademark balconies, and it was being replaced with an even smaller ship that had balconies. I decided this wasn't a problem. Being the value-oriented shopper that I am, I don't purchase outside cabins, preferring the cheaper inside staterooms.

Still, I thought I should do a little more checking on the Zenith. I grabbed my trusty Berlitz Guide to Ocean Cruising and Cruise Ships and looked her up. They gave the ship four out of five stars and a pretty good review. I checked with www.cruisecritic.com, which gave her a favorable review and rated her equal to the Galaxy, a ship our family had previously enjoyed. Having done my due diligence, I booked the cruise.

Within two hours of boarding the Zenith, I knew I had made a big mistake. The ship was a broken down mess. There was peeling paint and rust everywhere. The decks were dirty, the furnishings were worn and tattered, and my toilet didn't work for two days. The computers didn't support the programs I use to access my office desktop. The gym didn't have complete sets of weights, yoga mats, or fully functioning treadmills. The kids' play area was so small and sparse that we had to beg our kids to go there—a first.

It was what you might expect of a ship being sold soon, where the owners were doing everything possible to minimize capital improvements and milk every last bit of use out of her.

Fortunately, not everything was a mess. The food was very good and the showers had plenty of hot water.

All in all, London's "dream vacation" wasn't what I had hoped for. Still, I can't look back and beat myself up too much about my selection process. I was reasonably thorough in my due diligence. There simply are limits to what one can research.

In part this is because the information available about a product, a cruise ship, or an investment is based on past performance rather than current or future conditions. Brokers who sell investments often rely on "past performance" as a selling point. What they tend not to mention is the fact that changing market conditions and many other factors can turn past performance statistics into a bunch of irrelevant numbers. In addition, there is always the occasional investment where everything appears to check out fine, but reasons no one could have anticipated make it turn sour.

Is it a mistake to trust a brand name or rely on past performance? Not necessarily. What is a mistake is to assume that those elements are a guarantee of satisfaction. Whether it's a cruise ship or an investment, it's important to do as much research as you can. It's just as important to accept the truth that sometimes the reality won't live up to your expectations.

The "Best" Gifts

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One of the concerns parents of young children have around Christmas is teaching the kids to value giving as well as receiving. Many of us have difficulty with our own contradictory impulses. We don't want to turn our kids into greedy little monsters, but at the same time we want to give them the best gifts and experiences we can.

This week I had a chance to think about this dilemma in a new way. I was talking with my daughter about our cancelled November family vacation. Due to last-minute chicken pox, we weren't able to go on our planned Athens/Istanbul/Egypt/Rome/Barcelona cruise. Instead, we're taking a shorter and, to me, less interesting cruise. As you read this, I may be on a beach somewhere in the Caribbean.

My daughter almost certainly will be on the beach. As we talked about the changed vacation plans, tears welled up in her eyes and she said, "Dad, the Caribbean cruise is my dream vacation."

"So you're really glad that Davin got the chicken pox and our European cruise was cancelled?" I asked.

"Yes. Dad, I've wanted to go to a beach for years now. I mean, you can only look at so many columns and crumbling rock."

Twenty years ago, I am positive my reaction would have been, "Oh, no! Am I raising a spoiled little brat?" At the ripe old age of ten, London has been to Europe at least four times. At that same age, I was pretty much resigned to the fact I would probably never have enough money to travel abroad.

Instead of responding in that manner, however, I was intrigued by her thoughts. Actually, quite pleased. While I do my best to find great values in cruises, it still costs about 50% more to take the kids to Europe than to the Caribbean. Before London had finished her sentence, I had calculated that Marcia and I could hire a babysitter for two weeks of "Parents Only Time," plus take the kids on a separate Caribbean cruise, for the same money it would cost to take them on the European cruise. It would be a win-win for all of us—a beach and kids club vacation for the kids, plus time for Marcia and me to pursue our passion of seeing the world.

This conversation reminded me that choosing "the best" for our kids doesn't necessarily mean getting the gift or experience that is the most expensive or that seems the most attractive to us as adults. A good example of this might be the traditional family dream vacation to Disney World. For toddlers, who need naptime and who are too little for most of the exhibits, a place like Disney World is too big and overwhelming. They'd be happier with a couple hours at a local attraction like Rapid City's Storybook Island.

So if you weren't able this Christmas to get your kids "the best" gifts, don't feel you've failed them. They may well be just as happy with something less lavish. Remember, too, that today's must-have toy often ends up as tomorrow's disregarded clutter.

A case in point. My son, with enough toys in his room to fill a flea market booth, has spent hours this week playing in the dirt of a planted pot. He assembled the volcanic rocks into a manger for the baby Jesus from our nativity set. Today the only other actors are a few sheep. Mary and Joseph were there yesterday, but I guess today they are out shopping. Maybe they are looking for the perfect gift for their special child.

Sometimes, The Best Laid Vacation Plans......

There isn't a  better family vacation than cruising. We typically book our cruises over Thanksgiving, when we can get some pretty awesome deals, unlike booking over Christmas vacation when prices are sky-high. Our annual family vacation this year was scheduled for tomorrow, November 19, on a cruise departing from Rome and visiting a number of ports, including Athens and Istanbul. I say it "was scheduled," until our son, Davin, came down with chicken pox.

Davin was diagnosed with chicken pox Saturday night, just ten hours before our early Sunday morning flight. And, yes, he was vaccinated as a toddler for the chicken pox, just as were six of his school mates who also have come down with the disease over the past two weeks.

Fortunately, I had trip insurance that hopefully will make us whole, financially.  Right now, the toughest pill to swallow is the loss of the time and effort put into planning and preparing for the trip and the expectation of making memories as a family. As I write this I am looking at five fully packed bags that were anticipating starting a long journey in just nine hours.

Many of you remembered all the drama from our cruise last year when Celebrity canceled a portion of our cruise and my daughter's cat had to be put to sleep while we were in the middle of the Atlantic. We all wished for a "drama-less" trip this year. I guess we got less drama, but in a more intense dose.

My daughter, London, cried her sweet heart out upon hearing the news. She concluded, with big tears rolling down her face, that Celebrity is "just a jinxed cruise line," and that canceling our vacation on her birthday was not exactly the present she had in mind. She was ten years old today.  I was reminded that last year the cat we gave her for her birthday died while we were on our cruise.  From her perspective, she may have a point.

So for the last hour we've been calling tour operators, Northwest Airlines, Celebrity, our house sitter, shuttle companies, and hotels canceling reservations that we've worked on for eight months.  Monday we file a claim with our trip insurer, Travelex, and begin collecting all our receipts, about $8,000 worth of non-refundable deposits, and cross our fingers that they will pay.

Certainly, we are sad and disappointed. As the doctor, who so generously opened his clinic at 8:00PM on this Saturday night, said, "I had to see this to believe it. Kids that get vaccinated aren't supposed to come down with this stuff. I mean, what's the point of spending the money on a vaccination if it doesn't work?"

I am sure that before too long, the planning will start all over again. And next time, we can be reasonably sure that chicken pox won't be on the list of culprits that could result in the best laid vacation plans (and vaccinations) going nowhere!

Rick Meets With BBC In London

Last week Ted Klontz and I had the privilge to meet with Michael Sutherland, Creative Director of Factual Entertainment for the BBC, and his associate Sarah McCarthy.  The purpose of the meeting was two-fold:  to further acquaint me with the program, "Millionaire's Challenge," of which I am a consulting producer, and to introduce the BBC to our work in integrated financial planning.  The meetings were productive and only time will tell if there is an angle that the BBC will find to present our work to TV audiences.

Ted Klontz was in London to give a preview of his upcoming London workshop at the "Be The Change" convention in May.  Ted and I joked that if he didn't show up, I could give his talk, since I have heard it more than a few times!

The evening of his talk, I arrived about four minutes early.  The organizer of the evening met me at the door and said, "Rick, Ted is hopelessly tied up in traffic and won't be here for at least an hour.  Can you give a talk?"  So, with four minutes to go, I called Ted on his cell phone and got the "Cliff Notes" of his speech.  I spoke for an hour, and when Ted arrived he slipped in and continued.  Afterwards, participants said the presentation flowed so well, that had they not known better, they would have assumed the presentation was carefully scripted to have happened exactly as it did!

The Value of a Great Cup of Coffee

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If you were at a Safeway store in Rapid City sometime in the past couple of weeks, you may have seen me skulking toward the checkout line, hunched over suspiciously, with something hidden under my coat. No, I wasn’t shoplifting. I was just buying cheap coffee.

Most of you know that I enjoy really good food. That also extends to what I drink, including coffee. Only recently I discovered a new “Money Script” that I had about coffee. I guess you could call it a “Coffee Script.” It had two parts: "You've got to pay a lot of money to get good coffee," and, "You can't buy good coffee at Safeway."

I recently discovered irrefutable evidence that those two scripts are dead wrong. Even though it has been painful, I have accepted the truth and begun to change.

The bursting of my coffee money scripts came at the hands of Consumer Reports magazine and a website called rateitall.com. Consumer Reports tested 42 varieties of various brands of coffee. Their choices for the three best coffees were: First, Caribou, an expensive brand from a chain coffee shop; second, plain old inexpensive Eight O’Clock coffee that is available in grocery stores, and third, the coffee served at Dunkin’ Donuts.

As I processed this information in light of my “coffee scripts,” the pain got worse. The coffee ranking dead last in the survey was the prestigious Starbucks. Just above it were the Millstone and Seattle’s Best brands.

Once I had worked through the difficult emotions associated with uncovering and revising my coffee money scripts, though, I began to appreciate the good news. Not only does Eight O'Clock taste good, it's one of the cheapest coffees available, selling for half to a third the price of the premium brands. On my next visit to the grocery store, then, I overcame my previous beliefs and reached for the Eight O’Clock coffee. We now proudly feature it here at KFG’s dining room.

However, while I was persuaded that 8 O'Clock was the best grocery store coffee, I was not convinced it was better than fresh roasted coffee from a local company like Dunn's or Black Hills Coffee. Neither was Michele Powers, my financial planning assistant, who is a coffee aficionado.

We tested 8 O'Clock against Dunn's fresh roasted Columbian. Michele’s verdict was that Dunn's won hands down and she wouldn't hesitate to pay three times as much for it. As for me, I noticed a difference, but not one worth three times the price.

What makes a good cup of coffee, of course, is bound to be subjective. True coffee connoisseurs could debate endlessly over the finer points of dark or medium roast, robusta or arabica beans, and whole bean vs. ground.

The point is that it makes sense, whether buying coffee or anything else, to pay attention to what works best for you instead of assuming that if you spend more you will automatically get something better. It’s a matter of value.

There are times when a higher price does mean a better value. Sometimes, though, the only thing you get for a higher price is a higher price. The important thing is to keep an open mind and decide whether something is a good value to you. Your assessment of value may be completely different from someone else’s.

When you do find a great value, go ahead and enjoy it. Let it warm your heart—or as the case may be, your stomach—like a great cup of coffee at a bargain price.

How Not To Gain Weight On A Cruise

I've told this story to several people and the response was the same: "You need to put that on your blog!"  So, here goes.

Gaining weight on a cruise is as ubiquitous as breathing, or so I thought.  Indeed, on my first cruise I gained three or four pounds, and I've done the same on every cruise until my last two.  I haven't gained a pound on either of them, and my secret isn't that they were only two day cruises!  One was six days and the last one was 12.

No, the secret isn't that I didn't eat! I figure I ate about twice what I normally eat.  In addition to my morning bowl of gourmet oatmeal (chock full of nuts, berries, and dried fruit), I had a croissant or two, sometimes a grilled kipper, and yogurt.  For lunch I had a personal size pizza on most days.  And for dinner, I certainly ate more courses than normal, which included foie gras every other night, and a daily dessert (which I never eat at home).  I also did a few high teas and consumed more coffee and chocolate than I usually have in a year.

So, here are my secrets of not gaining weight. 

First, this isn't your mother's house.  You don't need to eat everything on your plate.  If you are full, you can push the plate away without guilt.  If not eating everything on your plate when you go to a restaurant causes you financial pain, the good news is that your cruise cost won't go down or up because of the amount of food you eat or don't eat. 

At one meal, I happily watched Davin eat the blueberries off of 8 tarts, pushing the crust and filling aside and going on to the next tart.  There is no way that would have happened if I had directly been paying $2.50 for each tart!  However, in this case, not only was he choosing to eat healthily, I had already paid for the tarts, whether he ate one or 20. Also, if ever you don't like what was brought to you, the waiter will gladly take it away and bring you something else. 

Second, I do high intensity yoga three to six times a week.  On my cruise, I got in just two really good yoga sessions, which should have been a good reason to gain weight, since I was working out less.  What I did do, however, was walk 30 minutes a day on a treadmill at the fastest pace I could maintain.  For me, that was about a 13-minute mile.

That was it:  sample everything, don't clean your plate, and exercise vigorously every day for 30 minutes.

I hope this can work for you.  Happy cruising!

“Your Wine Tab, Sir.”

While on Celebrity’s Millennium, I came as close as I will probably ever get to an outrageously expensive bottle of wine, a 1949 bottle of Petrus. Had you, or your parents, bought a magnum (equivalent of two regular bottles of wine) or two of this wine in 1949 and stuck it away in a cool, dark place for 56 years, you would be a very happy wine investor today. Each bottle would be worth a cool $12,000!

For that $12,000, charged to my shipboard account, the bottle could have been mine. The fact that my new American Express Blue card only has a $1,000 limit was only one reason why buying the Petrus wasn’t an option.

My tour of the ship’s wine cellar was graciously given to me by the cellar master, who also pulled out a 1907 bottle of Champagne which was the same make and vintage of that served aboard the Titanic. The particular bottle he showed me spent several decades on the bottom of the Baltic Sea as a result of a cargo ship that sank. For $7,000, that Champagne could have graced my dinner table that night.

The wine cellar was as extravagant as the bottles of wine that it held. The paneling came from the original MS Olympic, as did the light fixture and the gold-plated sink. In the middle of the cellar was a table, where just three weeks prior to my visit, a patron had consumed a $5,600 bottle of Chateau Cheval Blanc.

While I easily resisted the urge to spend $19,000 on the wine for my evening meal, I enjoyed my visit to the wine cellar. It was well worth the price of admission, which was free.

Travel Insurance - Necessity or Rip Off?

There was a time I rarely, if ever, purchased travel insurance.  Recently, however, I've been buying it more often.  I especially find travel insurance more of a necessity when traveling outside of the US.  My biggest concerns are coverage for medical services, trip delays, and in the event I am taking a cruise, reimbursement if a covered event causes me to cancel my trip.

When it comes to medical coverage, I am also finding it is not just the life-threatening events that would cancel your vacation for which you may wish you had coverage.  For example, on my family's latest cruise, our daughter, London, came down with a UTI.  Certainly not a life-threatening event, it still needed attention.  A quick check with the ship's infirmary found the cost of diagnosis and antibiotics in the ship's infirmary was $200, plus an additional $50 for an appointment during the middle of the afternoon when the infirmary was closed.  I also was certain that Dakota Care would not cover this expense.

The solution?  Quick consumption of copious amounts of cranberry juice relived her symptoms long enough for us to go ashore at the next port of call in Spain and purchase the needed antibiotics.  My wife had spent a reasonable amount of time in Europe and knew that antibiotics were available at pharmacies without a prescription. With a minimal amount of pantomime, pointing, and poor Spanish, we were able to secure the needed antibiotics for $3.  We also made a quick visit to an Internet cafe where I Googled the medication to be sure we received the right drug and correctly understood the dosage.  That research proved that everything was fine.  London recovered completely and quickly.

A fellow passenger didn't fare as inexpensively.  She got food poisoning on the ship and spent a day in the infirmary.  The cost was $800.  She was annoyed that the medical treatment wasn't complimentary, since it was the ship's food that caused the need for medical attention in the first place.  The only reason she wasn't completely out of sorts about the charges is that she always purchases travel insurance and knew she had coverage.

These experiences have given me a reason to find out more about what my medical insurance does and doesn't cover when traveling, especially on a ship, since I cruise a fair amount.  I'll be checking into and reporting on that at a later date. 

Another coverage that travel insurance affords is for expenses for delayed baggage.  We lost our baggage for three days on our departure flight and for one day on our return flight.  We had $400 of delayed baggage coverage and used every bit of it and more buying basic clothing items in Spain.  I'll let you know how that claim settles, too, and I'll have further recommendations on coverage and companions to use in a future article.

A Cruise Critic’s Report on the Celebrity Millennium

Most of you know I am a great fan of cruise-ship vacationing, especially for families. With a cruise, everyone in the family wins.

The kids have 18 hours a day of tailor-made activities available, even when the ship is in port. The “Kids Club,” as we call it, allows parents plenty of time to tour various ports of call unencumbered by whining, cranky kids. The kids get to leave the boring itineraries of parents to the parents and get on with doing what kids do best, playing.

If you shop the lines, I find you can get some incredible bargains cruising. It does take a little legwork. One of the best places to shop and compare cruise deals is Cruise.com. However, when Celebrity canceled the first two days of our current cruise, Cruise.com proved to be ineffective in helping me resolve hotel accommodations or rebooking flights. I was left pretty much on my own.

I’ve been told that a local travel agent can match the deals found on Cruise.com. If that proves to be true, in the future I’ll shop the deals online with sites like Cruise.com, Cruisecritic.com, etc., but place the order with my local travel agent.

Currently, we are sailing on the Celebrity Millennium, a relatively new ship put into service in 2000. This is my 11th cruise. Marcia and I have sailed on a variety of cruise lines: Carnival, Royal Caribbean, NCL, Holland America, Cunard, and more recently Celebrity.

It will come as no surprise to clients and longtime readers of my columns that one of the main features I look for in a ship is good food—really good food. I consider the food on Carnival and Royal Caribbean equivalent to the Golden Corral, food for the masses. A step up is the food on Holland America and Cunard’s main dining rooms. But so far, the food on Celebrity has them all beat, especially on the Millennium. The food in the main dining room on the Millennium is superior to that I had in the main dining room on the much ballyhooed Queen Mary II. Surprising, but true.

I stress the “main dining room,” because some ships now offer alternative dining rooms, where for an additional $25 or $30 per person, you can dine in true gourmet fashion. I’ve eaten in the alternative dining room aboard three ships: the Amsterdam, the Queen Mary II, and now the Millennium. Two of these alternative restaurants are outstanding: Queen Mary II’s “Todd English” and the Millennium’s “The Olympic.”

I would rather stay in the least expensive stateroom, typically an inside cabin, and spend my money dining in the alternative restaurant every night. For example, our current 14-day cruise cost $900 per person for our inside cabin, which is unarguably the worst cabin on the ship. I got a great rate by booking the cruise 10 months in advance, as those booking the same cabin three months prior to sailing paid $2,500 per person.

To upgrade to an outside cabin would have cost an additional $300 per person. So I had to weigh looking out of a window in a cabin I would rarely be in, at a seascape that pretty much looks the same from day to day, against dining every night like a king in The Olympic dining room. For me, that was a no-brainer.

For the most part, the Millennium is a great ship. It has plenty of common areas, cafés, indoor and outdoor pools, hot tubs, saunas, and all the common trappings of a newer ship. We’re all enjoying our trip across the Atlantic.

Port Excursions--What Cruise Lines Don't Tell You

While it’s possible to find great bargains on cruises, your savings can quickly disappear when you start to add on shore excursions. In fact, it is pretty easy to spend as much on shore excursions as the cost of the cruise. This is where the cruise lines often offer the least value for the money, and the Millennium is no exception.

Since the cruise lines make so much money on their shore excursions, they are not especially forthcoming with helpful information on finding your way around various ports of call. For example, at our stop in Santa Cruz, Tenerife, in the Canary Islands, there was literally no information available on the port. No port talk, no maps of the island or the port, nothing on transportation, sights to see, or shopping. That’s pretty good motivation for the beginning cruiser to throw in the towel and sign up for the one of the ship’s shore excursions.

Seasoned cruisers, though, know better. They have learned to do some research ahead of time. The best preparation is to research each port of call before you even leave on your trip. Look online or at the library, or buy a guidebook. Find out what you want to see, where you want to eat, and what transportation is available. If you copy the information on the ports you’ll visit, you won’t have to drag a heavy guidebook with you.

At every port there is typically a shuttle that will deliver you from the ship to town, or at least to an area where transportation is available. From there, you may be on your own, but since you will be in a tourist area, you can almost always find people willing to help you find your way around.

Visiting ports of call on your own is generally not difficult. As well as saving money, this can allow you to spend your time ashore doing what you really want to do rather than what the cruise ship’s tour planner thinks you ought to do.