Wednesday, July 18, 2007

Law of 72

The Law of 72 says that if you divide 72 by the percent return on investment you expect, then the result is the number of years it will take for your initial amount to double.
For example:
Law 72
If assume 10% rate of return then it will take 7.2 years to double.
So, if you have $1000 today, in 7.2 years invested at 10% you will have $2000 ignoring taxes, cost of investment, etc.
Some other examples:


72/10% = 7.2 years to double


72/7.5% = 9.6 years
72/5% = 14.4 years to double


72/2.5% = 28.8 years


72/1.25% = 57.6 years

Wednesday, July 04, 2007

Best rate on a hotel

Some hotels in the California area appear to be a little to significantly more expensive during the week when you buy them on portal sites such as nexttag.com, orbitz.com, priceline.com, hotelsale.com, cheaptickets.com, etc. OK, this isn't always true by any means, but it is sometimes. The point is that you really need to shop around. A variety of factors affect the hotel price. Don't assume that weekends are more expensive than weekdays. It really depends on the class of the hotel, the company, events in the area, business travel bookings, etc. Do a little home work and you can learn and save a lot. Sites that I mentioned above generally seem to be the same as what you can get if you book on the portal site or the website of the hotel itself.

Another strange thing I noticed is that hotels on these sites are a little to significantly cheaper if you wait until the last minute (same day even) versus doing it a couple weeks in advance. I think the hotels or resellers get desperate when they have a bunch of rooms still available and want to fill the room so they don't lose the income. Again, this is probably not the norm, but don't assume you have to pay a high price for booking at the last minute.

The more economy style hotels like Best Western, Good Nite Inn, etc tend to keep their prices the same regardless. The Radisson, Holiday Inn, Hilton, etc tend to vary the most depending on when you book. According to the Radisson Hotel, rates are based on demand. The essentially means how many rooms are available. In general it is better to book a head of time to get the best rate. This is not always the case when there may be a special event in the area that is booking many of the rooms. So, it makes sense if you have the flexibility, to check days and weeks around the time you want to go to get the best rates. According to Best Western the rates are the same for the weekend and weekday. Internet rates are discounted versus walking up and asking for a hotel.

For higher end hotels like Radisson, the rates seem to consistently be consistently higher on the weekdays versus the weekends. For example, when booking over a month in the future the rates during the weekday was $135 a night versus $90 a night for the weekend. If you walk in, it is $165. Amazing differences to me. So, shop around.

If you can help it, never just show up at the hotel. Rates are the most expensive that way. Even if you book just before you get there online you will generally get a much better rate.

Unfortunately, I haven't found a sure fire way to get the best price. There are just too many factors to come up with one rule. Here is the best have come up with.

1. If you are flexible with your dates, then try different days around the day you want to be there.
2. If you are not flexible with your dates, then try different hotels in the area. In particular, you may be able to stay in a nice hotel instead of an economy style hotel if you get lucky.
3. Book well in advance like over a month in the future and you are likely to see what the best deals are. Though, you may be able to get a deal last minute as well.
3. Consider different area if all else fails.