Archives for June 2006

Retire to Mexico?

mexflag.jpgI found out that a friend of mine’s parents have been retired in Mexico for years now as US expats. Supposedly the housing and living expenses are affordable, taxes are low, and the healthcare is reasonably good. I have no idea if any of these things are true, and obviously this is not for everyone, but according to him they are very happy there. Good weather, nice people, and so on.

I wonder, where are other popular international places to retire? Asia? Africa? Western Europe sounds more expensive. I doubt that I would really want to retire away from family, but the idea has a certain charm.

Possibly My Next Car: 2007 Honda Fit

honda_fit2.jpgWhile our current cars are running fine (even though one is 11 years old), I find myself very intrigued by the new 2007 Honda Fit. One of many perky new compact cares, many people may assume that it’s just a response to recent gas prices, but the Fit has been sold in Japan and around the world as the Jazz since 2001.

I like it because it just seems simple and useful. It’s got decent seating room due to it’s shape. Check out the different seating configurations, or ‘modes’, that it has. The rear seats actually fold flat like in an SUV, giving you lots of storage space. And it’ll be easy to park.
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One Guy’s Thoughts on Housing Prices

house picI realized just now that there is only about one year left in my wife’s training program, after which she will be geographically mobile again and we plan on moving back close to family. This also means that we have only one year left before we plan on buying a house. Scary! I haven’t been keeping a particularly close eye on the real estate market, just kind of reading the newspaper and talking with friends.

What will housing prices be like in a year? Who knows for sure, but here are my thoughts on housing prices, from a late-20s guy who’s never owned a house. I think that housing prices are set by supply and demand like everything else, and people buy what they can afford. I think that four major things have made the prices rise to fast in recent memory: low interest rates, dual-income families, relaxed mortgage lending policies, and parental support.
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June 2006 Retirement Portfolio / Cash Snapshot

In addition to my monthly net worth updates, I’ve decided to also take snapshot of my investing portfolio and my overall asset allocation. I want to also track any fund or ETF purchases so that I can better calculate my actual returns over time.

I haven’t decided whether to do it monthly or quarterly, but here’s my retirement portfolio as of today:

Retirement Portfolio
Fund $ %
IVV – iShares S&P 500 Index ETF $9,500 15%
VIVAX – V [Large-Cap] Value Index $11,700 19%
VISVX – V. Small-Cap Value Index $12,000 19%
VGSIX – V. REIT Index $7,100 12%
VTRIX – V. International Value $6,500 11%
VEIEX – V. Emerging Markets Stock Index $5,900 10%
VFICX – V. Int-Term Investment-Grade Bond $7,100 12%
BRSIX – Bridgeway Ultra-Small Market $1,900 3%
Total $59,800
June Fund Transactions

I also decided, after meaning to do it for a long time, to track my “what I could come up with in 24 hours” cash balance as well as my current metric of “non-retirement” funds for my Mid-Term goal. This Liquid Available Cash is a better measurement of how much money I could put towards a house down payment as it removes things like my 0% balance transfer money, and my car equity. My small individual stock portfolio is included because I would just sell them as needed.

Right now, I’m just putting down my best estimate.

Liquid Available Cash $25,000 (est.)


The stock market overall ain’t doing so hot. I wish I had more money to dollar-cost average, but I think I have already put too much money into retirement and have neglected my cash needs. I am going to keep most of the money I make this summer in cash accounts and hopefully pump up that $25,000 number a bit.

I am also considering moving my IVV S&P 500 ETF holdings, which are currently in a taxable account at Scottrade, to a Self-Employed 401k (administrator unknown). Since they are currently at a loss, I won’t have any capital gains tax to pay if I sell and I’ll just need to find an appropriate ETF to avoid wash-sale rules. I’ll also be able to harvest some tax losses.

Behavioral Finance – I’m Irrational. Are You?

The efficient market hypothesis contends that it is not possible to consistent beat the market on a risk-adjusted basis, as overall people are rational and all of the information available is already priced in the investment values.

On the flip side, the field of behavioral finance contends that humans are inherently irrational, and we, well, do stupid things. Here’s a list of such stupid things. I don’t know about you, but I think some of them definitely apply to me.
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My Money Blog is excited be included in a few carnivals this week:

Carnival of Personal Finance #54 at Mighty Bargain Hunter.
Carnival of Investing #28 at My Personal Finance Blog.
Carnival of the Capitalists at Financial Methods

The next Carnival of Investing is also going to be held at Mighty Bargain Hunter. What a sucker for punishment 😉

Citibank E-Savings Up To 5.0% APY, Feature Review

Citibank’s e-Savings Account just bumped up to a nice, round 5.00% APY.

This needs to be used alongside a Citibank Checking account. To avoid monthly fees, you need to one of the following:

  • Direct Deposit,
  • Make two monthly bill payments, or
  • Maintain a $1,500 combined average balance.

If you don’t have the minimum balance, I would just set up an $1 monthly auto-pay for your electricity and phone bills or any other two recurring bills you have and you’ll be all set, with nothing extra to remember each month. If you overpay it just carries over to the next month anyways.

Sounds like a great deal if you use Citibank already for your other banking.

With all these recent rate bumps, should you move your money? Perhaps my Rate Chaser Calculator can help.

Why College Is CHEAP!

Ok, I fully realize that everyone complains, and it is just how most people deal with stress. Nothing wrong with that. But I’m sick and tired of the media frenzy about college costs like it’s worse than HIV or something. Books, magazine articles, newspaper headlines. I’m here to say: College Is Cheap. And here’s why:

Tuition. I don’t know of any public university that charges more than $5,000 $10,000 a year for in-state tuition. I also don’t know of any state that doesn’t at least have one decent college. On top of that, in most states you can do your first 2 years at community college, and then transfer for your final 2 years and still get the exact same Bachelor’s degree.
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More Consumer Outrage via Jiffy Lube

Q: When is an oil/filter change not an oil/filter change?

A: When you go to the Jiffy Lube featured in this video. They leave the original filter in the car! (They mark the old filter with a smiley face.)
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And You Thought You Had A Hard Time Cancelling!

If you’ve already hard about the guy who had the worst time ever cancelling his AOL account… and recorded the entire conversation, then skip the rest of this post. Otherwise, turn down the volume in your office cubicle and watch this:
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Rates Keep Rising…

Trying to keep up with all these online banks and their rate activity could be a full-time job! So here are just a few more snippets. Emigrant Direct is now at 4.80% APY. [$10-$20 Bonus]

BankUnited offers a savings account paying 5.25% APY with $5,000 to open and $300 minimum to avoid fees.

Most of my own cash is still being held in 28-Day and 182-Day Treasury Bills, as they continue to offer the best equivalent taxable yield for me since I have to deal with state income taxes.

Be Careful of 0% Financing At Retail Stores Like Lowes

Most homeowners may already know this, but since I’ve never had to purchase a bunch of large appliances, I only noticed this recently while fawning over fancy appliances (Man, I’m getting old). When stores like Home Depot, Lowes, or Best Buy offer “No payments and no interest for 12 months”, it’s true, but with an interesting catch. If you don’t pay in full before that 12 months ends, they will charge you back interest for the full price of the purchase from the date of purchase, often at about 20% APR! It doesn’t just start accruing from when the promo period ends.

Here’s an example. You buy a nice stainless steel fridge and oven range for $1,500. You’re happy, paying nothing for 364 days. If you pay it off early, you pay $1,500. If you figure, well, I’ll wait after the whole 12 months is up and then start paying it off, you get to pay $1,800 ($300 more!)
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