EmigrantDirect Lowers Rates!
I just went to EmigrantDirect's website to check on my account and I noticed that they lowered the rate to 5.05% from 5.15%. We'll have to wait and see if/when they fall farther.
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September 30, 2006
September 29, 2006
How does that Make Sense?
Someone ran into my car recently. The damage wasn’t horrible but the car is so new I wanted to get it fixed.
I got an estimate for about $700 to replace the bumper cover from a reliable repair shop. This would have taken a day. The insurance adjuster for the guy that ran into me insisted that it could be reconditioned.
The shop said they have to start with what the adjuster said, but that they knew this couldn’t be reconditioned.
Now the insurance company is paying roughly $28 a day to put me in a rental car for seven days because of the time for them to come out and look at my car for a second time and the delay associated with ordering the part. Instead of saving themselves money they cost themselves and extra $196.
It is easy to forget your ultimate goal. Here the adjuster was trying to save money for the company but the short sighted decision just ended up costing them in the not so long run.
September 28, 2006
Starting with Prosper.com - Risks
I signed up with Prosper.com recently. Prosper is a social lending network. The idea is that people with money to lend can get in touch with people that need to borrow. Prosper handles the legalities and administrative aspects.
This disintermediation (fancy word for cutting out the middle man) should result in better rates for both borrower and lenders.
There are some significant risks that make Prosper speculative at the moment. The two key items that cause me the most concern are the lack of history and the limited supply of borrowers.
Prosper has been operating for less than a year which means that there is little information to correlate credit scores to actual default rates. This I important because proper is not a car loan or a credit card. It will take a few years to build sufficient data to make reliable judgments.
There were over 500 loans originated last month and it looks like they’ll top 700 this month. This might seem like a lot, unfortunately it is not enough for diversification purposes. To limit risk I want to split my investment among many (over 100) loans with the same set of characteristics. There is no way I can do this.
Prosper is clearly in the speculative category for now. I am very interested in the value services like this can provide. I’m happy to earn a better interest rate than I can get at EmigrantDirect while helping someone else get a better rate than they can get with Visa. For now I will only be putting a small slice of my money to work here.
I’ll keep you up to date on what I learn and how well things work.
September 27, 2006
Carnival Thanks
Thanks to Crossroads Dispatches for hosting this weeks Carnival of the Capitalists. It wouldn't hurt to read my article about being glad I haven’t lost five billion dollars (in a week anyway).
Thanks to My Money Forest for hosting the Festival of Frugality (is a festival a really week carnival or a rocking carnival?) Please take the time to check out my piece on saving money by buying the same thing for less.
More on CVS (Re-edited to better conform with the English language)
I’ve received a series of ads from CVS with $3 off a of purchase $15 or more. These are not as good as their $5 off $10 or more coupons, but money is money.
But all the coupons had "valid in Indiana and Illinois only" in the fine print. I finally was curious enough to send them and email. It took them a few days to get back to me but I got an email from them today apologizing for the mistake. They said they have instructed their California stores to accept the coupons.
It is definitely a plus for me when an organization addresses issues as opposed to ignoring them.
September 26, 2006
Carnival of Investing is Up
The Carinval of Investing is up at Free Money Finance.
You can read my contribution on a 5 billion dollar loss, a bad week.
I found this article on the impact of residential leanding criteria on the kind of home we live in very interesting.
Enjoy!
September 25, 2006
Biggest Loser Deal
24 Hour Fitness is running a deal that is short lived giving 6 personal training sessions for $49. The deal expires this Thursday so if you want it hurry.
Please be careful. My girlfriend signed us up (Thank you) and they tried a hard sell to get her to upgrade the 25 minute sessions to hour long sessions for only $250. They told her the regular price is $350.
Unfortunately for the poor soul trying to up sell her she had previously checked into this and found out they would go much lower than $200.
She balked, but apparently two other folks there at the same time upgraded for the “super discounted” $250.
Good luck on your physical goals and your fiscal goals!
September 24, 2006
Condo Conversion Catastrophe?
I personally am not sure what amount of price declines we are going to see in the real estate market. Long term rates are still in the low 6% rate which keeps things relatively affordable. One area I have not understood for a long time, from a buyers perspective, is condo conversions. They generally are not nearly as nice as regular condos and don’t afford a significant discount to regular condos.
Today the local paper reports on a major slow down of condo conversion sales in San Diego. How this relates to single family homes and more conventional condos only time will tell. Those of us with money tied up in San Diego real estate will have to wait to see the full impact.
Stuff Happens
You know it does. It is so easy to ruin the best thought out plans. Your transmission breaks down $2,400. Water heater busts $400. You just closed on a new house and lose your job.
While each of these events is unexpected the fact that these things happen is not. So how do you deal with planning your financial future when fate is hanging around waiting to yank the rug out from under you?
Have a fund for the unexpected. What kind of things can disrupt your financial plan? Figure out what kind of money you need to deal with the occurrence. I try to have six months of expenses set aside. I used to think three months was okay until I had a time where I couldn’t find a good job for four months. Open an account with easy access and a high interest rate and starting saving. If you don’t have a fund set up for these unexpected events you will find yourself pulled under by high interest credit cards.
A Simple Way to Save on Taxes
- Get a file folder.
- Write Taxes and the year on it.
- Keep the folder where you read your mail and pay your bills.
- Every time you get a piece of paper that could be conceivably tax related stuff it in the folder.
Why is this so important?
We Forget
The donation we gave to the Boys and Girls club. The car tax we had to pay. The medical bill that insurance didn’t cover. There is no guarantee that everything you put in the folder will help you on your taxes, but if you don’t remember you will not get the deduction.
Finding Documentation Takes Time
One of the most grueling tasks associated with doing taxes is gathering the documentation to put your taxes together. This is true whether you do your taxes or hand them off to someone else. Your time is valuable, and simply stuffing your documentation for taxes in one place drastically reduces the tax time paper hunt.
Some of you are very organized. You have a sophisticated filing system and you instantly know exactly where everything is. Obviously this entry doesn’t apply to those of you so lucky and disciplined. Everyone else should go get that folder now!
How does this save me anything?
It saves money by making sure that you take advantage of all the deductions you are entitled to. It saves time by eliminating the paper hunt.
Go get that folder and save some time and money for your next go around with the tax man.
September 22, 2006
Taxes for Our Military
Don't Mess with Taxes has a great article on new tax benefits for our service people.
If you know someone serving in our military send it along to them.
The Fed Decoded
The Federal Reserve met this week and held the fed funds rate steady. You can read their statement yourself here or you can read the layman’s translation at bankrate.
The biggest impact I see is that if you have an adjustable or negative amortization loan that is about to swamp you, you still have a chance to refinance to a fixed rate since they are not all that high.
0% Pleasant Surprise
Today I receive the Citibank card for the zero percent offer. I activated the card and called them up to request checks so that I could get the money over to my money market account. The operator started the process and then remembered that, as of yesterday, they will not send blank checks any more.
I was a bit disappointed so I thought I’d call Novus(the Discover card people) to see what they would do with an overpayment figuring they might send me a check that would let me get the money to Emigrant Direct. While I was thinking about this I was registering for the Citibank card site. I clicked on the balance transfer button and they will let you send yourself a check!
Bingo! That is exactly what I wanted.
We’ll see how long it takes to get the check here. The site said about two weeks.
September 21, 2006
WSJ Free
Consumerism Commentary might be able to help you read more about the $5 billion loss with a free offer.
Your Week Was Not as Bad As…
Brian Hunter’s.
I have had a few weeks in my life in which I lost a lot of money in the stock market. I have grudgingly accepted these occurrences as just part of the world of investing. For the first year or so that I was in the stock market every time I made an investment the stock fell precipitously the next day. It made my stomach twist. But one of those stocks was Amazon and it has played a role in my financial progress. Over the years I’ve learned to be light hearted on these days (mostly).
You can read this article to find out about a very bad week. Last week a trader, Brian Hunter, from Amaranth lost $5 billion. Yes, I wrote billion not million.
I’m not an expert on commodities (the loss was in natural gas) but it seems to me that there was likely a good deal of speculation involved. It would be interesting to know what percentage of the assets controlled were in natural gas.
In reading the Wall Street Journal article (subscription required) it appears that he may have been very leveraged, but the description is not yet detailed enough to tell.
One thing I’m sure of is when I come home to see all my stocks down badly for the day I’m glad I don’t have to face angry calls from investors and ominous calls to preserve my records and meet with regulators!
September 20, 2006
Save Money, Buy the Same Product Cheaper
Seems absurdly simple, but do we do it?
I often will not buy generic or store brand products like toilet paper where the generic doesn't do the job.
But for other items where the generic is, by my estimation, the same quality I pounce.
This is mostly true for me with store brand medications. How do I know? The active ingredients and amounts are printed on the back of brand name and generic medications. Ibuprofen is ibuprofen wheter or not it has Advil stamped on it. Antacids are antacids, except for the new smooth ones that I've only seen under the Tums brand. I usually save 30-50% buy doing this, and medications are some of the most expensive items in my cart.
* A note here, I'm not a doctor. This is not medical advice. List to what your doctor tells you.
Carnival of the Capitalists – Uncensored is Up
This weeks Carnival of the Capitalist was somewhat abbreviated. A big thank you to Michael Wade at Execupundit for writing “Carnival of the Capitalists –Uncensored” in four parts.
You can check out my entry on buying real estate with fake money.
It does take a lot of work to put these carnivals together.
Part One
Part Two
Part Three
Part Four
Once again, thank you Michael.
You can check the regular schedule for the carnival here.
Gas Prices Down Again
Another refill, another 13 cents cheaper. I refilled today at $2.58 a gallon compared with $2.71 a week ago. Four dollars a month will not make me rich but saving that money is better than spending it.
September 19, 2006
I will not...
cut my own hair. Sorry, I like saving money but I also like my ears. This weeks Festival of Frugality is up.
Check out lots of great saving ideas and my contribution on the movies.
It’s okay with me if you want to cut your own hair!
Tips on Canceling
It is clear that companies are making it very hard to cancel. From AOL to cell phones, gym memberships to online subscriptions many companies have made canceling subscription excessively difficult.
MSN Money has an article giving some tips on canceling service you o longer want or need.
The tips range from waiting patiently on hold to dieing. Yes, they said dieing and yes I it seemed a bit excessive to me too.
One tip that they didn’t mention is to use your credit card as leverage. On some occasions where I encountered unhelpful customer service I politely let them no that they are no longer authorized to charge my account. I let them know I’ll be following up with a letter and that if they charge the card again I’ll report it to the credit card’s security department. I’ve never had to pursue the issue any further once I expressed this.
I don’t know how the credit card company would actually react. I do know that on a few occasions when I’ve seen charges that I didn’t remember making the credit card companies have been very concerned with the charges being legitimate.
Companies should realize that this may give them some small, short lived benefit but in the long run making cancellations excessively difficult alienates customers and drives away business.
September 18, 2006
CVS Switch is Short Term Benefit but Long Term Loss?
As with many of you my local Sav-On store recently switched to become a CVS. I was pleasantly surprised the first time I walked in as the place was better staffed, cleaner and faster.
In addition to that I’ve been taking advantage of a series of three “$5 off purchases $10 or more” coupons that they were handing out. Unfortunately I have to report that CVS prices are quite a bit higher than the prices of nearby stores. It seems that they are about 10-50% higher depending on the item. While I think I will likely go back on occasion as they are the closest drugstore, I’m a bit disappointed at the increased prices. The level of service also seems to have declined in the weeks following the switch.
With the use of the dollar off coupons I saved $15 which translates to about $10-$12 dollars on the market rate for these items. That is a pretty good deal for now, but the coupons are all gone!
The service and prices may or may not be long term trends. Only time will tell.
This Weeks Carnival of Personal Finance
This weeks Carnival of Personal Finance is up. Thanks to Free Money Finance for putting the Carnival together this week.
You can see my contribution on The New Monopoly.
September 16, 2006
Movie Theater Escapades
Nickel at Five Cent Nickel writes about sneaking candy into the theater to save money. This is a great tactic with sodas, candy and popcorn going for 3-5 bucks each. I can attest that very few ticket takers even care. A bottle of soda in one pocket and a bag of candy in the other is not going to cause a confrontation. I’ve even munched on M&M’s while handing in my ticket.
While I’ve never snuck in popcorn (my favorite movie treat) I did once sneak in food that did ruffle some feathers. Once I was going to the movies next to a great deli. I decided that I had to have one of their amazing hot pastrami sandwiches. It ended up taking a while to get through the line and for them to make the sandwich.
It was too late to eat outside without missing the start of the movie. I ended up sneaking this wonderful smelling hot pastrami sandwich into the theater by orbiting the white styrofoam box around my body. I’m sure the ticket taker knew I had something but he really didn’t care.
The wonderful smells spilling off the sandwich earned me more than one dirty look from my fellow movie viewers. Oh well, it was worth it.
The lesson is you aren’t likely to get stopped from bringing food into the theater unless you have a very ambitious ticket taker or are very blatant about it.
September 15, 2006
More Bold Lies
NECESSARY MORTGAGE DATA
That is the title across the “offer” I got in the mail today.
They are trying to sell mortgage insurance. Technically I guess the data is necessary for them to sell me mortgage insurance that I don’t need.
I ask again “Why would I want to do business with a company that is clearly trying to deceive me?”
September 14, 2006
Gas Prices Down
Gas prices are starting to fall in a serious way around here. Today I filled up for $2.71. This is a big drop for San Diego where prices not too long ago where consistently in the $3.30 - $3.40 range. I did get gas at Costco so the typical prices are a bit higher. On the way home I saw $2.85 - $2.90.
This amounts to a savings of about $30 a month for me.
Buy Real Estate with Fake Money…
Of course the real estate is also fake. I have to say that this is far better than buying fake real estate with real money. I’m talking about the new version of Monopoly called Monopoly Here and Now. Hasbro updated the game to include new properties and new prices. Buying properties for less than a few hundred dollars and developing them for a few thousand dollars at the most is a thing of the past even in this fantasy world.
The new tokens include a plane, a Starbucks cup and an order of McDonald's Fries. I’m not sure I like buying a board game with product placements, but I’ll probably agree to trade in the thimble for a box of fries.
Of course my first question was what replaces Boardwalk? Times Square.
Why bring this up on a finance blog? Its fun. I also venture that most people my age spent more time playing Monopoly than taking any kind of class on finances.
Through Monopoly we learned that:
- Governments can be arbitrary and capricious
- People that charge rents win, people that pay rents loose (mostly true)
- You can’t charge rent when your property is mortgaged (where did this come from?)
What have you learned from Monopoly?
September 12, 2006
Carnival of the Capitalists is Up
Thanks to Jason for hosting the Carnival of the Capitalists this week. These Carnivals are a great way to find new blogs. I found this article on finacial freedom great.
0% Cash Back Plan
I recently started fishing for a 0% offer. I intend to move the money over to my EmigrantDirect account for the length of the 0% offer and then pay it off.
I had been waiting till after my loan funded.
So I did some research and finally decided on the Citi Platinum Select Card. I saw several other cards that had rebates but I wanted to keep it simple and this card has 0% on transfers and purchases.
This requires careful work to avoid wiping out any gains:
1) Make sure the way you move the money does not incur fees and/or rates. If you get dinged for a cash advance fee you’ll wipe out a lot of gain.
2) Don’t do this for spending. The money should be set aside in a high rate savings account.
3) Make sure you pay of the card by the end of the 0% offer or you’ll be slammed with a huge interest rate. I’m going to probably pay it off one month early (two if I’m doing with another card.).
I’ve only carried a credit card balance once before but 5.15%-0% is cold hard cash. I’ll let you know how it goes.
September 11, 2006
Bad Debt and the Carnival of Debt Reduction
Thanks to Pragmatic Finance for hosting the Carnival of Debt Reduction this week.
My contribution was on bad debt. Free Money Finance has a post debating the existence of good debt.
I strongly believe there is good debt and bad debt. If I can use debt to help me achieve my financial goals without undue risk then I will use it. Obviously if you don’t feel safe holding debt or don’t have the desire to manage the process by all means don’t do it.
Never use this as an excuse. I believe debt is far too often used without a thought and that can’t be good.
September 09, 2006
Bad Debt
It is easy to find people talking about getting out of debt. Searching for the phrase on Google gives you about 90 million results. But should we always be trying to get out of debt?
The answer depends on the kind of debt. Any debt that is not contributing to you’re financial progress is bad debt.
If debt is being used to buy things that you couldn’t otherwise afford and don’t need it is probably bad debt.
This bad debt can come in many forms. It could be using credit cards to buy expensive meals, the latest clothes or whatever your particular vice is. It could be buying a new car every two years. It could be taking out a home equity line of credit to rollover your credit cards so that you can spend more.
Use debt wisely. Look for good rates and put the money to use for things that help you achieve your financial goals. Take out a loan for an investment property. Buy the furniture that you need and can afford with cash today on the zero percentage rate card you have and put your money away in a high rate money market (be sure to pay it off before the zero percent expires).
Before you use debt ask yourself these two questions:
Will this debt be used for something I need?
Is this debt contributing to my financial progress?
If you can’t answer yes to at least one of these questions don’t do it.
September 08, 2006
Dine at Happy Hour
I’ve been noticing recently great happy hour deals at local restaurants.
A really good sushi place near me has great happy hour deals. Several rolls, including most of the ones I like, are half price on weeknights. There are many appetizers that are dirt cheap.
I just found out the Chili’s near me has some really good deals as well. The selection is not great and you have to sit in the bar and lounge. I would have saved $7 on a $24 tab using those prices. Unfortunately I ordered takeout. I discovered the deal on an enclosed flyer.
Tip #1 Look for happy hour deals.
Tip #2 Always ask what specials and discounts are available.
September 07, 2006
In Honor of Steven Goldstein, 9-11 Victim
As we approach five years since September 11th, 2001 it is time to remind ourselves of our promises. That day evoked so many emotions and so many of us promised to never forget. We promised to never forget because it was the right thing to do.
Honor the memory of the victims by honoring your promise. Honor those that woke up that day to do their job and were struck down. Honor those that stood up and fought. Honor those that risked and lost their lives to save others.
The 2996 project is an effort to remember the individuals that died that day.
I honor the memory of Steven Goldstein. I didn’t know Steven, nor did I know anyone who died that day. Nevertheless I’m doing what I can to learn more about him. I know he was 35 and that he worked for Cantor Fitzgerald. I know he touched the lives of many people judging by the comments I saw on the links below. I know he has a brave wife Jill that wrote an article about her experiences. I know he has a loving family.
Please remember your promises. Please remember that day. Please put Steven and his family in your thoughts and prayers. I will.
Links
Steven Goldstein at Legacy
Steven Goldstein at September 11 Victims
List of all the victims
If you know how I can get a hold of the article Steven’s wife wrote please let me know (email is on the right)
If you find any more information or happen to have known Steven personally please post a comment or email me.
Update
More on Steven, including his picture:
Steven Goldstein
Pictures of the victims:
Carnival of Personal Finance
The Carnival of Personal Finance is up at Aridni. The Carnival is a collection of top articles of personal finance and is well worth reading.
Where Have Housing Prices Gone?
Almost a year ago I asked "where will housing prices go?"
I recently had an opportunity to look into this in depth given my refinance. The best I can tell prices in my area of San Diego have gone up 5-10%. My house for example went up 5%.
I also have friends and relatives looking into housing and I'll say that the range in Southern California seems to be +/- 20% from where it was a year ago.
Now, as with a year ago it looks like the next six moths will be very interesting.
September 06, 2006
Refinancing Sparks Misleading Offers
My recent refinancing experience has provoked a slew of misleading offers. I was expecting some offers based on previous re-financings. But this has been crazy. I had not been keeping count of all offers but yesterday was so absurd I counted them up. Seven offers in one day mentioning my refinance.
These aren’t the first offers. I know for example that the loan company itself has offered me mortgage life insurance three times since the loan funded. The volume of offers is just amazing.
These offers are almost all highly misleading. They start with big, bold text Important Notice and Complete and Return. The list the lender, property information and loan amount. It seems they are trying to create the impression that these are forms from my lender that I must fill out and return. They do disclaim any associate with my lender in a small footnote, but that is not what is at the top of the offer and it is not what is on the outside of the envelope. Assuming I wanted mortgage life insurance I wouldn’t deal with a company whose opening tactic is to mislead.
Always be suspicious of your mail!