Archive for December, 2010
Sunday, December 26th, 2010
I’m still recovering from holidays, but I did see today that retirement specialist Jim Otar has made his book Unveiling The Retirement Myth available in PDF format for free until January 9, 2011. Here is the direct download link (expired).
I haven’t read it, but from I can gather it seems targeted at those DIY investors who are carefully planning the withdrawal phase of retirement, and not for beginners. For example, the summary teaser talks about “non-Gaussian optimum asset allocations”. 
Hey, sounds like great weekend reading to me. Learn more about the material at his site RetirementOptimizer.com. In any case, it’s free and the book retails for $50, so why not download it. I’m now wanting an iPad to read all these free eBooks out there…
Thanks to TheFinanceBuff for the tip.
Posted in Deals & Offers, Retirement | 7 Comments »
Sunday, December 26th, 2010
If you have an American Express card, here are a couple more quick promos that takes only a minute and can save you some bucks. The 5% back is on top of your regular card rewards.
Earn 5% back on every dollar you spend when you use your registered American Express Card to fill up at any Exxon or Mobil station between December 20, 2010 and January 20, 2011. You must register here first.
Earn 5% back on every dollar you spend when you use your registered American Express Card to fill up at any Phillips 66, Conoco, or 76 station until March 6, 2011. You must register here first.
Posted in Deals & Offers | 17 Comments »
Thursday, December 23rd, 2010
The Slate from Chase has improved from just being a credit card with a not-really-clever “vertical” design to one that is now offering a competitive 0% APR for both balance transfers and purchases for 15 months to those with good to excellent credit. No annual fee.
The fine print does show a balance transfer fee of 3% with a $5 minimum, which is I’m afraid the norm these days, but you should also consider one of the cards below first to see if they fit better.
If you have a smaller balance to transfer, check out the Chase Freedom Visa – $100 Bonus Cash Back that offers 0% APR on balance transfers for 12 months, on purchases for 6 months and a lower 3% balance transfer fee ($5 minimum). On top of that, you can offset the fee with the $100 cash back you get after make $500 in purchases within 3 months. There’s also the rotating 5% back rewards program. No annual fee.
Finally, the longest 0% balance transfer offer out there is the Citi Platinum Select MasterCard with 0% APR interest for 18 months on balance transfers. There is no annual fee and the balance transfer fee is 3% ($5 minimum). The card also includes 0% APR for 18 months on purchases.
Don’t use this as an excuse to fund any crazy holiday shopping sprees, but instead as an accelerant to pay down any balances or carefully-planned large purchases at a lower overall net interest rate. It’s really hard to find any offers with no transfer fees now, but a loan at 0% interest + a fixed fee spread out over 1.5-2 years can be much better than the current average credit card APR of 14.39%. Unfortunately, there are no longer any no fee 0% APR balance transfer offers to arbitrage easy money with.
Posted in Credit Cards, Deals & Offers | 5 Comments »
Thursday, December 23rd, 2010
Amazon.com is offering $2 in free MP3 downloads with the code GIVEMP3S. No purchase required. See details at this link. It should increase your gift card balance by $2 for music purchases only. You must redeem the code soon – by December 26, 2010 11:59 PM PST. Limit one Amazon MP3 promotional credit per customer.
It may ask you to install the AmazonMP3 Downloader software, but you should be able to skip it for individual songs. Entire album purchases may require installation. I gave in and just installed it, it seems to work fine with iTunes.
Update: Bing is offering up another $1.29 in MP3 credit. Just enter your e-mail and enter the code you get in the same place as above.
Posted in Deals & Offers | 2 Comments »
Thursday, December 23rd, 2010
I just received the following e-mail from Half.com, where I occasionally sell used books:
We’re writing to let you know that starting with transactions occurring on or after January 1, 2011, new Internal Revenue Service (IRS) regulations require Half.com (and other businesses that process payments) to file a Form 1099-K for all sellers with more than 200 transactions and $20,000 USD in sales per year.
If you’re a high-volume seller who has met or is close to meeting the IRS thresholds, we may need to generate a Form 1099-K for you. If you have multiple accounts, we’ll take all of them into consideration when calculating your volume status. If you exceed the IRS thresholds, we’ll send your first Form 1099-K to you in early 2012. Your Form 1099-K will give you a consolidated report of all payments received through Half.com for 2011. This information will also be reported to the IRS.
Apparently, as part of new legislation designed to help track down (and tax) unreported income, starting in 2011 any credit or debit card payment processor with clients that have more than 200 transactions and $20,000 in sales per year must file a 1099-K with the IRS.
In addition to Half.com, this also includes individual sellers using services like PayPal and Amazon.com. Perhaps also sites like Etsy and Zazzle? This won’t affect me, but I think it’s a pretty good idea. I do feel that lots of eBay income goes unreported, and the limits are reasonable. If you’re clearing 200 transactions and $20k in payments, you should be tracking your income and expenses like a business. This 1099-K won’t really matter as it just reports gross amounts.
I’m more scared about the upcoming changes in 2012 that says that a business has to file a 1099-MISC for any person or business it pays more than $600 in a calendar year. Corporations are no longer exempt. That’s a ton of 1099 forms swirling around. I’m going to have to send W-9 forms to everyone from Staples to my web hosting company. I still hope they’ll change this rule before it goes into effect and swamps tons of small businesses.
More info: CNN Money, Journal of Accountancy, Stop1099.org
Posted in Self-Employment, Taxes | 9 Comments »
Wednesday, December 22nd, 2010
While procrastinating today, I of course ran across a couple of tips on productivity and success that both powerful and very different.
First is an essay called Good and Bad Procrastination by Paul Graham. It includes a lot of insights into procrastination, and my favorite was the idea that it was okay to put off less important, scheduled, to-do list-type things whenever you get a chance to focus and do some really great things:
The reason it pays to put off even those errands is that real work needs two things errands don’t: big chunks of time, and the right mood. If you get inspired by some project, it can be a net win to blow off everything you were supposed to do for the next few days to work on it. Yes, those errands may cost you more time when you finally get around to them. But if you get a lot done during those few days, you will be net more productive.
In fact, it may not be a difference in degree, but a difference in kind. There may be types of work that can only be done in long, uninterrupted stretches, when inspiration hits, rather than dutifully in scheduled little slices. Empirically it seems to be so. When I think of the people I know who’ve done great things, I don’t imagine them dutifully crossing items off to-do lists. I imagine them sneaking off to work on some new idea.
The second is the Jerry Seinfeld Productivity Secret by Brad Isaac:
He told me to get a big wall calendar that has a whole year on one page and hang it on a prominent wall. The next step was to get a big red magic marker.
He said for each day that I do my task of writing, I get to put a big red X over that day. “After a few days you’ll have a chain. Just keep at it and the chain will grow longer every day. You’ll like seeing that chain, especially when you get a few weeks under your belt. Your only job next is to not break the chain.”
“Don’t break the chain,” he said again for emphasis.
This idea of incremental change is not new – see this post on Kaizen for example.
Some things are best achieved when you attack it a little every day – things like debt reduction, learning a language, or weight loss. Other things you may have to wait for the inspiration, but when it comes, it pays to put it above all else. Perhaps a great business idea or investment opportunity.
Posted in Career, Entrepreneurial, Self-Employment, Time Management | 1 Comment »
Wednesday, December 22nd, 2010
First published in 2008, The 4-Hour Workweek by Tim Ferriss is a book about “lifestyle design” and included many uncommon ideas about working and retirement. He describes how you can build a business and delegate/outsource nearly everything about it. He’s ruthless (in a good way), from hiring virtual assistants from India to teaching you to avoid answering 99% of your incoming e-mails. Once you do that, then ideally you’ll find yourself working mere hours a week. Who doesn’t like the sound of that? 
Although not exactly a how-to manual if you’re currently in a 9-5 job, it was definitely one of those inspiring reads that made you think. That was based on my reading of the original, but the 2009 “expanded and updated” edition supposedly has over 100 pages of new content. Perhaps time for another go.
If this interests you, you can currently download a digital PDF version for free. Supposedly to promote his new book The 4-Hour-Body (of which I know nothing about), he’s now offering free digital versions of The 4-Hour Workweek and The Slow-Carb Cookbook, a companion book to the 4-Hour Body. I’m still not sure if this is fully intentional, but Ferriss is both tech-savvy and a crafty marketer so I can only assume it is. Instructions via SD:
Click here: http://short.e-junkie.com/4hourworkweek
Hit the ‘Checkout’ button.
Fill out the form with your name and email address, then hit the ‘Complete Free Checkout’ button.
On the final page, you’ll have access to The 4HWW and Slow-Carb Cookbook.
Expires December 26, 2010. The e-mail doesn’t to have to be “real”, as the download links appear immediately on the next page. However, I did enter mine and received an alternative download link.
Posted in Deals & Offers | 10 Comments »
Tuesday, December 21st, 2010
Recent articles in the New York Times and BusinessWeek magazine talked about the growing emergence of websites where individuals can rent out their belonging to other strangers, coining the new term “collaborative consumption”. I like the idea. Not only can you make some extra money renting out your stuff when you aren’t using it, but as a borrower that means you need to buy less stuff as well. In addition, people can use it as a “test-drive” to try out things like a certain model car or an iPad. Here’s a list of websites in this area, please let me know any that I’ve missed.
RelayRides
Peer-to-peer car rentals! Rent your car to strangers by the hour. Started in Boston and now available in San Francisco Bay Area as well. Free to join, and renters start with $25 free driving credit. Prices are cheaper than competitors like ZipCar, which owns their own private fleet. Claims that owners can make $250 a month on average renting out their vehicles. Rates include gas and insurance.
Similar: Spride Share (currently in SF Bay Area), WhipCar (UK),
Airbnb
Rent out extra rooms in your house (or the entire house, a castle, or private island…). Free to sign up. Set your own prices and availability. Airbnb facilitates all bookings and financial transactions. They already have over 50,000 properties in 10,000 cities.
Similar: ParkatmyHouse (rent out driveway or garage space in crowded areas)
Zilok
Technically you can rent out anything on this site, but it has specific categories for cars, vacation sites, power tools, and event rentals. You can rent from businesses or individuals. Looks like a PS3 is going for $20-$25 a day.
Similar: SnapGoods (newer, but more polished website), Rentalic
Share Some Sugar
Can I borrow a cup of sugar? You can also rent out anything on this site, but SSS seems to promote borrowing between people in the same neighborhood for free (with a refundable security deposit). After browsing a bit, I realize that I could use a lawn aerator, if only there was someone nearby with one available.
Similar: ShareZen (more for collaborative ownership of a plane, home, or boat), Skyara (a marketplace for “experiences”)
I suppose the main concern would be either theft or breakage of your property. Most sites have a user rating and feedback system similar to that of eBay, as well as security deposits. The car rental agencies do provide insurance, but I don’t believe the other sites do. In many cases, you can restrict your lending to members of your social network of friends via sites like Facebook.
Of course, the hardest thing about these sites is often getting the critical mass of adequate inventory to rent out to interested customers. Let’s hope one of these gains some traction. The one I want to use right now would be ParkatmyHouse. Combine their inventory with a real-time iPhone/Android app, and you could search for cheap parking almost anywhere. If you live where parking is scarce, you could profit from what is usually just a headache.
Posted in Frugal Living, Simple Living | 10 Comments »
Monday, December 20th, 2010
Our tax rates for the next two years have been decided, a two whole weeks before January 1st! Just in time for their winter break, what a coincidence. The “Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010″ was signed into law last Friday. There’s a lot of stuff in it, as with any tax-related it seems, but here are the two big highlights for individuals:
Payroll Tax Cut
The employee portion of the Social Security tax is reduced to 4.2% in 2011, down from 6.2%. This lasts only for one year. The employer portion remains unchanged at 6.2%. The limits on wages subject to Social Security tax remains at at $106,800 for 2011. Medicare taxes remain unchanged at 1.45% each for employers and employees.
For example, someone earning $50,000 will pay 2% less towards Social Security, for a tax savings of $1,000 spread out over a year of paychecks. The maximum savings per person is then $2,136. Your future Social Security benefit is not directly affected by this change.
However, what has been expired is the “Making Work Pay Tax Credit” of 2009 and 2010, which was a refundable tax credit 6.2 percent of earned income, up to $400 (single) or $800 (married filing jointly). This meant that if you were single with earned income of at least $6,452 in 2010, you got a $400 tax credit. Married couples filing joint returns earning over $12,903 got $800. Note that this tax credit was phased out for taxpayers with modified adjusted gross income in excess of $75,000 (single) or $150,000 (married couples filing jointly).
Net Benefit
Here’s a chart from the Tax Policy Center showing the net difference in tax savings from two as a function of earnings.
As you can see, our example of a single person earning $50,000 would be paying approximately $600 less in taxes in 2011. (Gain of $1,000 payroll tax cut, loss of $400 MWP tax credit.)
Current Individual Income Tax Rates Extended
The current income tax rates, sometimes referred to as the “Bush Tax Cuts”, are extended for everyone for two years. Although the exact income ranges are not set, here are projections from the tax software provider CCH Group. They are slightly higher than the 2010 Federal tax brackets, due to inflation.
For the curious, it is estimated that an individual earning $50,000 in 2011 will paying $890 less in federal income taxes as compared to what would happen if no action was taken (even though that was highly unlikely).
Also…
- The top rate of 15% for qualified capital gains and dividends is extended for another two years, along with the 0% rate for taxpayers in the 10 and 15 percent income tax brackets.
- Another last-minute patch was made for those subject to the Alternative Minimum Tax because the brackets were not mandated to be adjusted with inflation. The 2010 exemption amount will be $47,450 (single) and $72,450 (married filing jointly).
- Extended unemployment benefits are to be continued at their current level for 13 months.
Since we know that the income and capital gains tax rates will stay the same for the next two years, the standard end-of-year tax actions should apply. The general idea being to take any deductions you can right now, and defer as much income as possible until next year.
Posted in Taxes | 18 Comments »
Friday, December 17th, 2010
It’s that time of year again, to frantically use up any remaining balances in our Flexible Spending Accounts (FSA). This year, it may be good to stock up on over-the-counter (OTC) medications that you use regularly. (Watch out for expiration dates, but read this Harvard Medical School article first before throwing anything out.)
Effective January 1, 2011, the cost of OTC medications will no longer be payable through a FSA, unless the medication was prescribed by a doctor. If your FSA administrator allows you a certain grace period in 2011 to use leftover funds from the 2010 calendar year, the your actual purchase date must still be before 12/31 to remain eligible. The change does not affect insulin, even if purchased without a prescription, or other health care expenses such as medical devices, eye glasses, contact lenses, co-pays and deductibles. [IRS FAQ]
If you still need certain OTC drugs in 2011, you can always ask your primary doctor to write a prescription for them during your annual checkup. In addition, Target and Walmart offer 30-day supplies for $4 and 90-day supplies for $10 on many generic drugs.
Quick Ideas For Last-Minute FSA Spending
- Advanced refill of prescriptions
- Eye exams
- Contact lenses and lens solution
- Pain killers
- Cold and flu medicines
- First aid supplies for emergency kits
- Condoms and other birth control items
- Ear plugs
- Acne medication
If you’re looking for detailed guidance on what is eligible or not, check out these handy guides from health insurer Aetna and from administrator Conexis.
Honestly, I wonder when this whole guess-how-sick-you’ll-be-this-year madness will finally end. If this is our money, why shouldn’t it just roll over every year until we use it for a valid medical expense? Health Savings Accounts have already been around for years now, we can use the existing infrastructure.
Posted in Frugal Living, Taxes | 10 Comments »
Thursday, December 16th, 2010
A lot of people are worrying about inflation or deflation in the future. The most widely used definition of inflation is the Consumer Price Index, which is published monthly by the Bureau of Labor Statistics and is based on a basket of consumer goods using price surveys from cities around the country. This takes a while, so the CPI for December would be published in mid-January.
Professors Roberto Rigobon and Alberto Cavallo at the MIT Sloan School of Management started the Billion Prices Project which, directly pulls data from online retailers from around the world. In the US, the software is tracking 550,000 items from 53 retailers. The best part – since it’s all automated, the numbers are updated daily! The goal is to predict the CPI before they even announce it. You can see from the charts below that the two track reasonably well together.
Daily BPP Index vs. CPI
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Annual Inflation (over last 365 days)
If they start to vary widely, which one should be considered inaccurate? Via the NY Times.
Posted in Investing, Tools & Calculators | 11 Comments »
Wednesday, December 15th, 2010
Citi has two new credit cards in their rewards line-up, the Citi ThankYou Preferred Card and Citi ThankYou Premier Card. Instead of straight cash back, they pay you in ThankYou points. Here’s a look at how they stack up.
How much is a ThankYou point worth?
Since this is the currency we’re dealing with, let’s see what we can get for it. Although they run promotions from time to time, in general it takes 6,000 points to redeem for a $50 gift to retailers like Gap, Banana Republic, Bed Bath & Beyond, CVS Pharmacy, Land’s End. At 10,000 points, you can get a $100 gift card. This gives a value of 0.83 to 1 cent per point in gift cards.
Want something closer to cash? For a check mailed to you, it costs 8,000 points for $50. For a statement credit, it’s 7,500 points for $50. For a prepaid Visa card, it’s also 7,500 points for $50. For a check mailed towards your mortgage payment or student loan (made out to your lender), is costs 6,400 points for $50. This works out to between 0.63 to 0.78 cents per point.
Citi ThankYou Preferred
- You’ll get 6,000 bonus ThankYou points after $300 in purchases within 3 months of account opening. As noted above, 6,000 ThankYou points can redeemed for a $50 gift card at various retailers.
- 0% Intro APR for 15 months on both purchases and balance transfers.
- The standard rewards system is 1 point per dollar spent. However, you’ll receive 5 points per dollar during the first 12 months.
- Other smaller perks, like 100 bonus points for signing up for online account access, 100 points for paperless statements, and a 1-3% bonus on your existing point balance on your annual card anniversary.
- No annual fee.
The sign-up bonus and 15-month 0% intro offer with no annual fee is good for those can use it , and combined with the 5x points make this card somewhat attractive in the first year. But as an ongoing rewards card, this card lags behind many others since earning 1 point per dollar is even less than “plain vanilla” 1% straight cash back.
Citi ThankYou Premier
- You’ll get 30,000 bonus ThankYou points after $1,500 in purchases within 3 months of account opening. 30,000 ThankYou points can redeemed for a $300 gift card at various retailers.
- The standard rewards system is 1 point per dollar spent. However, you’ll receive 1.2 points per dollar spent at gas stations, supermarkets and drugstores. They promote this as 20% extra, but I still remember the days when we could get 500% (!) extra – same a 5% back – for gas purchases…
- When you purchase airline tickets using this card, you’ll also earn an additional point per mile flown on that ticket.
- Other smaller perks, like 200 bonus points for signing up for online account access, 200 points for paperless statements, and a 1-5% bonus on your existing point balance on your annual card anniversary.
- Annual complimentary domestic companion ticket. (Fees and taxes not included. Full details not available on application.)
- No foreign transaction fee on purchases.
- $125 annual fee (waived for the first 12 months).
If you want to try a card out for a while, this is the one to get. You can basically get $200 upfront in gift cards with no annual fee during the first year. But as an ongoing rewards card, the 1.2 points per dollar from this card is essentially less than even 1% cash back even on gas and groceries. And they want a $125 annual fee for that? Not very competitive when compared with other cards.
Posted in Credit Cards, Deals & Offers | 10 Comments »
