Wednesday, March 12, 2008

Are You Wealthy?

To answer the question of whether one is wealthy, I will take a quote from The Millionaire Next Door, by Thomas Stanley & William Danko, which I read several years ago. I consider this book to be a classic. Here, the authors discuss what one's expected net worth should be at any given point in life.

Multiply your age times your realized pretax annual household income from all sources except inheritances. Divide by ten. This, less any inherited wealth, is what your net worth should be.

To give an example, suppose one is 40 years old and makes $100,000 per year. Then, by the above formula, one's expected net worth is $400,000. The authors then go on to describe the wealthy (prodigious accumulators of wealth, PAWs) as those who have at least double this expected net worth based on age and income. Conversely, one who has accumulated less than half of their expected net worth is known as an under accumulator of wealth, or UAW.

In any case, the suggestion by the two authors is a broad rule of thumb. I would caution one against putting too much weight into the usefulness of a rule of thumb. Nevertheless, armed with this knowledge, you can at least have a rough idea of where you stand with regard to what your savings should be at any point in time.


Saturday, March 1, 2008

Update on Cruise Line Shareholder Benefits

Probably the single most popular post on PFStock is my article about Cruise Line Shareholder Benefits. Literally thousands of readers have seen this post. These readers were searching for information about how to get the Shareholder Benefit offered to stock holders of Carnival Corporation (NYSE: CCL), Carnival plc (NYSE: CUK), or Royal Caribbean (NYSE: RCL). With such an overwhelming response, I am surprised that I haven't been contacted by travel agents seeking to capture some of this attention.

In any case, there have been a few changes in the benefit programs, and I think that now is a good time to post an update. I mentioned that each cruise company offers a similar $100 onboard credit for shareholders that book a 7 day cruise and own a minimum of 100 shares. However, I didn't post all of the details at the time.

As a service to my blog readers, I am publishing the details of the Carnival and Royal Caribbean Cruise Lines (RCCL) shareholder benefit programs. If you are considering going on a cruise in the near future, both RCL and CCL require that shareholders own a minimum of 100 shares of their stock. The associated stock symbols are RCL, CCL, and CUK depending on which cruise you are going on.

For Carnival Corporation (including Carnival Cruise Lines, Princess Cruises, Holland America Line, Seabourn, and Cunard Line in North America) the following benefit is offered:

Onboard credit per stateroom on sailings of 14 days or longer: US $250
Onboard credit per stateroom on sailings of 7 to 13 days: US $100
Onboard credit per stateroom on sailings of 6 days or less: US $ 50

Outside of North America, Carnival Corporation also operates P&O Cruises, Ocean Village, Costa Cruises, Aida Cruises, and P&O Cruises Australia. Note that on these ships, the shareholder benefit will be offered in British pounds, Euros, or Australian dollars depending on the currency used onboard the particular cruise ship. The update here is that Carnival no longer operates Windstar, and Swan Hellenic. Cruisers on these cruise lines won't be able take advantage of the shareholder benefit.

Here is the direct link to the Carnival Corporation Shareholder Benefit. It gives the address and telephone numbers for each of the cruise lines that offer this benefit.

For Royal Caribbean (RCCL), Celebrity Cruises, and Azamara Cruises the following benefit is offered:

$250 Onboard Credit per Stateroom on Sailings of 14 or more nights.
$200 Onboard Credit per Stateroom on Sailings of 9 to 13 nights.
$100 Onboard Credit per Stateroom on Sailings of 6 to 8 nights.
$50 Onboard Credit per Stateroom on Sailings of 5 nights or less.

The Shareholder Benefit excludes sailings on Celebrity Xpeditions.

Here is the direct link to the RCCL Shareholder Benefit. This is an FAQ for their program. And this is a PDF file of the information for Royal Carribean International (RCI). Azamara Cruises is a new addition to the RCCL shareholder benefit plan.

In general, you will need to mail or fax either a shareholder proxy card or a copy or your brokerage statement to the company (either RCCL or CCL). This is to prove that you own at least 100 shares of stock.

Personally, I have taken advantage of the CCL shareholder benefit twice. However, I have not (yet) used the RCL benefit. One question that I have been asked is if cruiselines will offer two credits, if two separate shareholders book and share the same stateroom. Unfortunately, the terms of the shareholder benefit state that they allow only one shareholder credit per stateroom (not per passenger).

The other major player in the North American cruise market is Norwegian Cruise Lines (NCL). I previously mentioned that NCL and NCL America were owned by the Genting Group of Malaysia (which also owns the Asian cruise line Star Cruises). NCL is now jointed owned by Star Cruises (Genting) and Apollo Management which recently made a large investment in NCL. Investors cannot buy their stock directly in the United States. Unfortunately, a shareholder shipboard credit is not offered for NCL or NCL America cruises.

And, I wanted to share a picture from our most recent cruise. Here is a photo of the NCL America ship, Pride of Hawaii, docked in Maui.

NCL America had some substantial losses in the recent past caused by downward pricing pressure in the Hawaii market. Although these discounts are good for cruisers, they are bad for cruise lines. For this reason, NCL decided to move the Pride of Hawaii to Europe and rename it the Norwegian Jade.

If you have general questions about the shareholder benefit, or just want to talk about cruising, I invite you to send me an Email. (Note my Email address is listed in the right side column of my blog). Also, the above links may change or go out of date. If you find that the information or links are out of date, please Email me so that I will know to update it.

I have a one final thought. At one time, I did own shares in both CCL and RCL. However, I have since sold off my shares. If you don't already own Carnival or RCCL stock, they are both dividend paying stocks that might be an appropriate part of a diversified investment portfolio. However, I do not recommend buying the stock just to get the shareholder benefit. Make your investment decisions to buy CCL or RCL based on your investment needs, and not on your vacation needs.

A Note from the Author:
Thousands of people have read this post, but neither Carnival nor Royal Caribbean compensate me for directing readers to their websites. A few readers have sent me a message of thanks for pointing out a benefit that they didn't know about, but the vast majority of people pass through without saying a thing. If you have read my posts and have benefited from the information, I want to ask you to consider doing a couple of things to support PFStock.

First of all, please share this information. You can Email this post to friends, or spread the word by Twitter or Facebook. If you participate in a forum, such as those on Cruise Critic, please mention this post or link to the PFStock home page. If your are a blogger, please consider linking to PFStock.

Secondly, consider shopping or purchasing items from PFStock sponsors such as Amazon, or one of the other advertisers in the sidebar. If you are ready to book a cruise, please visit to shop for a deal on your next cruise.

Thank you for your support and happy travels.