Free Return Shipping When Paying with PayPal (Activation Required)

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If shop online at websites like eBay, Walmart, and Home Depot where PayPal is an option for payment, consider that PayPal will reimburse your shipping costs if you buy using PayPal and end up having to make a return.

You must first activate this service, and then after that PayPal will cover up to $30 of return shipping costs for up to 12 eligible PayPal purchases worldwide per calendar year (January 1st to December 31st). You must submit a refund request within 30 calendar days of mailing back the returned item. Found via SD.

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When shipping back the item, remember that you’ll need to provide the following proof:

A return shipping cost receipt that also shows the seller’s address. (If your receipt doesn’t show the seller’s address, also send a photo of your return package that does.)

Real-World Example of Why High-Cost Index Funds Are The Worst

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Here’s another reminder that in the world of investing, having low costs is more important than owning “passive” index funds. Why? The simplest argument is that index funds can have high expense ratios.

Anyone can open an account at Vanguard, Schwab, Fidelity, or TD Ameritrade and purchase an S&P 500 index fund with expenses of about 0.05% a year. That works out to $50 a year on a $100,000 balance.

Meanwhile, the following companies have the most expensive S&P 500 index funds on the market. These happily charge you $1,000 to $2,300 a year on a $100,000 balance while investing in the same companies in the same amounts. Credit to Meb Faber for compiling this list.

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These could be considered the worst mutual funds out there. Why? If you buy an actively-managed stock-picker fund, at least you have the possibility of outperformance (for a little while at least). You bet on red in roulette even though there is zero and double-zero. With an expensive index fund, you have zero upside. You can’t win. You didn’t even bet on double-zero. Instead, you essentially lit 1% of your money on fire.

Let’s look at the real-world performance of Rydex S&P 500 Fund (RYSYX) and the Vanguard 500 Index Fund (VFINX). Here’s a Morningstar chart showing the relative performance of the Rydex S&P 500 Fund (RYSYX) and the Vanguard 500 Index Fund (VFINX) from the inception of the Rydex fund in mid-2006. This is a “Growth of $10,000” chart, and you can see how the gap just keeps widening over time.

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Here’s a quick takeaway from this chart:

  • Someone who invested $100,000 in the Rydex S&P 500 Fund (RYSYX) from 5/31/06 to 5/21/17 (~11 years ago) would now have $185,183.
  • Someone who invested $100,000 in the Vanguard 500 Index Fund (VFINX) from 5/31/06 to 5/21/17 (~11 years ago) would now have $235,948.
  • That is a difference of over $50,000 with no luck involved as both are passive funds that that legally promise in their prospectus to track the S&P 500 index.
  • Let me repeat: That’s a difference of $50,000 on a $100,000 starting balance over only 11 years! That is real money; actual dollars that someone will not have to spend in retirement. Imagine what that number could grow into over 30 years of saving.

Isn’t that horrible? Now, consider that the reason why someone would buy these funds in the first place was probably due to a human advisor putting their client in such a fund. Therefore, there is the possibility of another layer of advisor fees on top of the fund expense ratios. (Or they could be options in a bad 401(k) plan. It would be really scary if these were the best options on a plan menu.)

I can’t understand how these companies can get away with charging so much for doing so little. According to Morningstar, the State Farm S&P Index fund (SNPBX) currently has $1.4 billion in assets and the Invesco S&P 500 Index fund (SPICX) has $1 billion in assets. Billions of dollars? Why are so many people buying this stuff?!

Real-World Example of Sequence of Returns Risk

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The standard investment advice is the older you get, the more bonds you should hold in your portfolio. There are various rules of thumb like "Age in Bonds" or "Age minus 20 in Bonds", and so on. On the other hand, stocks have higher historical … [Read the rest]

Shoe Dog by Nike Founder Phil Knight: A Great Audiobook

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As a kid in the late 1980s, I admit that I yearned for a pair of Nike Air shoes. I'd doodle shoes with that AIR logo and visible air pocket. I still remember the day I finally got a pair. They were an ugly blue-suede color from the bottom of … [Read the rest]

Frugal Entrepreneur Earns $5,600 a Month Farming Other People’s Yards

https://www.youtube.com/watch?v=53ARF_Ku3GU Here's a cool story at the intersection of entrepreneurship, frugal living, and sustainable farming. Jim Kovaleski is a one-man farm, growing produce and selling it at local farmers markets, earning … [Read the rest]

Coffin Homes: Living in Tiny Spaces As a Last Resort

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The Atlantic has a photojournalism article The 'Coffin Homes' of Hong Kong which startled me and challenged my idea of a "tiny" living spaces. The size reminded me of capsule hotels in Japan, except these are in much worse condition and are … [Read the rest]

Costco Membership Discount: $10/$20 Coupon Code

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As of June 1, 2017, Costco will be increasing its Gold/Business annual membership fees to $60 (formerly $55) and Executive annual membership to $120 (formerly $110). Executive membership comes with a 2% cash rebate on purchases (now up to $1,000) … [Read the rest]

OhmConnect: Get Paid For Saving Energy One Hour Per Week

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OhmConnect is a start-up that works with consumers and their local utilities to lower energy costs and save money together. Before reading any further, it appears that cash payments currently only work with customers of PG&E, SDG&E or Southern … [Read the rest]

Ally Bank vs. Goldman Sachs Bank CD Interest Rate Comparison

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After last week's WSJ article about interest rates, I noticed that both Goldman Sachs Bank USA (GS Bank) and Ally Bank have both been hiking rates on their CDs. Competition is good and I like that they both still show the desire to stay at the top as … [Read the rest]

How Much Do Other Parents Help Pay For College Tuition?

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As the school year ends, I am reminded that my children are another year closer to college. I still remember paying off my own $30,000 in student loan debt, and now I am worried about saving up for their tuition. While I still maintain that … [Read the rest]

Best Interest Rates on Cash Savings – May 2017

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The WSJ article Bank of America Pays Peanuts for Deposits, but the Money Keeps Flowing In (paywall) outlines how BofA gets away with paying less interest on its deposits than nearly any other US bank (not that the other mega-banks are that much … [Read the rest]

Best Places to Find a Decent Used Car For Under $1,000

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I suppose my pre-Uber generation might be the last one to equate having your own car with fun and freedom. In high school, I would comb through the "Under $2,000" section of the newspaper classified ads every day. How it looked didn't matter as … [Read the rest]