T-Mobile vs. Verizon New Unlimited Data Plans Comparison (New 3 Lines for $100 Offer)

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Update: T-Mobile has thrown another punch in the price wars. They are now offering both new AND existing T-Mobile ONE, Simple Choice, or Simple Choice No Credit customers with two or more voice lines an extra line for free. Even if you don’t need another line, you could add your tablet or smartwatch. T-Mobile ONE customers don’t even have to pay additional taxes or fees. Limited-time offer.

This free line also stacks with their 2 Unlimited lines for $100 offer below, which makes it 3 Unlimited lines for $100 including taxes and fees. You can get either offers online at T-Mobile.com or by calling 1-855-407-3034.

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Competition is good. Without the popularity of the T-Mobile unlimited data plan, we wouldn’t have the reluctant, new Verizon Unlimited data plan. In turn, Verizon’s new plan features made T-Mobile improve their deal to include HD video streaming video and 10 GB of LTE tethered hotspot data. In addition, starting 2/17, T-Mobile is running a special promotion of 2 lines with Unlimited data for $100 with taxes and fees included. If you assume $5 on monthly taxes and fees, that works out to $45 + $5 taxes per line. This is nice if you’re a 2-line household like me and are unable to take advantage of the 4-line deals. T-Mobile is effectively $35 + $5 taxes per line if you have 4 lines. Until 2/22, you can also stack another $150 for each line ported to T-Mobile (bring your own phone).

Here is a comparison graphic of the T-Mobile and Verizon Unlimited plans as of 2/17/17. Although created by T-Mobile, I found it fair enough. Adding in an estimated $5 per line in taxes and fees is even low in some geographic areas.

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The final comparison point remains network quality (coverage, reliability, and speed). Although T-Mobile touts their network availability is within 2% of Verizon according to OpenSignal, this still remains a local issue. If T-Mobile doesn’t have coverage in your living room or in the middle if your commute, you don’t care about the rest of the network.

Premium features with a smaller price gap. Usually the “frugal” plans I talk about are MVNOs, but these plans have features that most MVNOs don’t have like:

  • Free voice roaming. For example, the unlimited T-Mobile plan will let you roam on AT&T GSM networks in rural areas where they don’t have voice coverage. Verizon also offers voice roaming onto other networks in areas where they don’t have coverage.
  • 4G LTE hotspot tethering. Most MVNOs either ban tethering or charge extra, including Cricket and Straight Talk.
  • Unlimited high-speed data without throttling. T-Mobile will “network de-prioritize” your data after you use 28 GB in a single cycle, while Verizon will do the same at 22 GB. Basically, if the network is really busy at a specific point in time and you have exceeded those limits, your data speeds may go down. This is different than the “throttling” that other MVNOs do, for example an always-on speed limit of 128 kbps.

For travelers, T-Mobile also includes unlimited international text and 2G data in over 140 countries. While some MVNOs have poor customer service and support via e-mail only (no phone number), the major 4 carriers will at least have humans via 1-800 number.

Bottom line. T-Mobile and Verizon have both improved their Unlimited plan features and lowered the prices recently. While they still cost more than MVNO alternatives, they also offer a few premium features like hotspot tethering that MVNOs usually don’t include. You’ll have to decide if the premium features are worth it at these new price points.

Schwab Matches Mutual Fund and ETF Expense Ratios, Now $4.95 Trades

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Update: Schwab has matched Fidelity’s price cut at $4.95 per trade + $0.65 per options contract, effective March 3, 2017. See press release for details. Everyone is battling for your assets and the ability to scale. (TD Ameritrade also announced a price cut to $6.95 per trade, down from $9.99.)

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Schwab announced some changes last week regarding their index mutual fund line-up and trade commissions. Here is the press release and a table of the updated mutual fund expenses [pdf]. Here are the highlights:

  • Stock trades now $6.95. Beginning February 3, 2017, the company will reduce its standard online equity and ETF trade commissions from $8.95 to $6.95.
  • Schwab Index mutual fund expense ratios now match their Index ETFs. Starting March 1, 2017, expenses for the Schwab market cap-weighted index mutual funds will be lowered to align with their Schwab ETFs™ equivalents.
  • Schwab Index mutual funds now have no investment minimum. You don’t have to worry about Admiral shares, Premium Class shares, etc.
  • New Satisfaction Guarantee. I’m not sure how this would work in practice, but it says “Simply, if a Schwab client is not satisfied for any reason, Schwab will refund any related commission, transaction fee or advisory program fee paid to the firm.”

Here are the three mutual funds that I would care most about:

  • Schwab Total Stock Market Index Fund mutual fund expense ratio used to be 0.09% while the ETF version cost 0.03%.
  • Schwab International Stock Index Fund mutual fund expense ratio used to be 0.19% while the ETF version was 0.07%.
  • Schwab TIPS Index Fund mutual fund version used to cost 0.19% while the ETF version was 0.05%.

These were pretty big differences, which was why I felt it was rather obvious that Schwab was making their ETFs a loss-leader in order to be slightly cheaper than Vanguard and/or iShares. I’m guessing they are still selling these index products at a loss to gain market share, but it’s nice to see that they have now simplified their expense ratios across the board. The self-directed brokerage option of my 401(k) plan is through Schwab and only allows mutual funds, so this is a positive change for me.

I have been impressed by the committed strategy Schwab has undertaken towards low-cost, index investing. Schwab has an existing profit machine from its traditional services, but hasn’t been afraid to disrupt and even cannibalize itself. The key is that people seem to like Schwab customer service, whereas I would rate Vanguard as “satisfactory”. If Schwab can have top-quality index products and maintain a reputation for better customer service, that would be a great long-term position.

As an aside, you can’t buy shares of Vanguard but you can buy an ownership stake in Schwab. I don’t own any individual shares of Schwab (SCHW) stock as of this writing, but I would not be surprised if it made a good long-term holding. Once interest rates rise, Schwab will start making a lot more money on its customers’ cash balances (which it forces you to hold it their Intelligent Portfolios robo-advisor instead of charges upfront fees). It will be interesting to see how it plays out. I’m just putting this down in writing so I can check back on my prediction later in 2022 and 2027.

How to Minimize Investment Returns – By Warren Buffett

At the bottom of the Berkshire Hathaway 2016 Annual Report, you may not have noticed that Warren Buffett republished a previous article from the 2005 annual report titled "How to Minimize Investment Returns". A version become the first chapter … [Read the rest]

Fidelity Investments Stock and ETF Trades now $4.95

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Fidelity Investments has announced their online stock and ETF trades will now cost $4.95, down from $7.95 previously. The press release also points out that they also do not accept payment for order flow (unlike TD Ameritrade, Schwab, and E-Trade), … [Read the rest]

Berkshire Hathaway 2016 Annual Letter by Warren Buffett

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Berkshire Hathaway (BRK) released its 2016 Letter to Shareholders [pdf] over the weekend. Although the financial media will create some catchy headlines, I recommend reading it for yourself. It is only roughly 30 pages long and is always written in … [Read the rest]

Food Rankings: Most Protein Per Dollar, Caffeine Per Dollar

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A while back I did a post on What Does 200 Calories Cost? The Economics of Obesity, where I found that you can find the cheapest calories in things like flour, pasta, oil, bread, and doughnuts. Meanwhile, the most expensive calories included all … [Read the rest]

Infographic: It’s Never Too Late To Start

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There's a new movie out about Ray Kroc and McDonald's called The Founder. Did you know that Kroc was selling milkshake machines into his 50s until he stumbled on a pair of brothers buying a ton of milkshake machines for their new hamburger … [Read the rest]

Amazon Promo: $8.62 off $50+ Order (2/22 Only)

In case you don't visit every day (which is probably a good thing), Amazon.com is giving $8.62 off $50+ orders with promo code BIGTHANKS. Valid until 11:59pm Pacific 2/22 only. Must be shipped and sold by Amazon. If you need filler ideas, you … [Read the rest]

Municipal Bonds vs. US Treasury Bond Yield Comparison

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As a follow-up to my post on the risks of investing in bonds, I should share that a slight majority of my personal bond holdings are in short-term and intermediate-term municipal bonds. Why? Well, here are some considerations if you are choosing … [Read the rest]

Shelter Institute: Learn How to Build Your Own House in 2 Weeks

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While listening to a Tim Ferriss podcast with guest Mr. Money Mustache, I came across this quote from John Taylor Gatto in the comments. Apparently Gatto was not a fan of compulsory schooling and offered this instead: I want to give you a … [Read the rest]

Citi® Hilton HHonors™ Visa Signature® Card 75,000 Point Offer Review

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Limited-time offer. The Citi® Hilton HHonors™ Visa Signature® Card, from our partner Citi, is offering a limited-time bonus increase. Here are the highlights: Earn 75,000 Hilton Honors Bonus Points after making $2,000 in purchases within the … [Read the rest]

Understanding the Risks and Downsides of Bonds

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To get the full return of any asset class, you'll have to own it through the good times and the bad times. The good times are easy, but getting through the bad times requires deeper understanding and faith. You'll usually hear this about holding … [Read the rest]