Archives for November 2012

CamelCamelCamel & Tracktor: Amazon Price Tracking and Alerts aggressively varies their prices constantly based on a variety of factors, including matching lower prices from competitors. In addition, they often run limited-time deals like their current Lightning Deals page. But how special are those deals? For example, it may be advertised as “50% off list price”, but what if the regular price is 40% off list price?

Here’s a quick tip already known to many deal hunters – tracks the historical prices for nearly every product in the huge Amazon catalog. You can also get free price alerts when a product hits a target price. A similar and less-cluttered, but also less-accurate website is All you need to do is either copy and paste the entire URL, or scroll down to find the product’s ASIN (Amazon Standard Identification Number) under “Product Details”. Browser plugins/extensions are also available.

For example, I’ve been keeping an eye on the Canon PowerShot SX260 now at $199 which is a relatively small camera with a hefty 20X optical zoom and 1080p HD video. By going to CamelCamelCamel, I can see a history of the price drops on this rapidly-depreciating, memory-keeping gadget:

Here’s the same chart from Note that it doesn’t have the correct, current price of $199.

This camera only came out in February 2012, and is already down to $199 from $349. However, I can see the last price drop was relatively recent and perhaps not permanent. With this knowledge, it may be a good time to upgrade our last small camera which came out in January 2008 and only takes grainy video.

Paying Down a 30-Year Mortgage Faster vs. 15-Year Mortgage

What a difference a year makes. In August 2011, I did a mortgage comparison of a 15-year at 3.75% vs. 30-year at 4.75%. Now I’m redoing that same comparison at current market rates of 30 yr @ 3.25% vs. 15 yr @ 2.625%! To be fair, the numbers I used in 2011 were somewhat high.

In any case, the purpose of this comparison to compare the numbers if you wanted to pay down a 30-year mortgage in a 15-year accelerated timeframe, as opposed to just going with the lower interest rate and mandatory higher payment. I’ll be using the mortgage calculators at Dinkytown.

The 30-year at 3.25% would have a monthly payment of $1,305, while the 15-year would have a monthly payment of $2,018. Now, what would happen if we simply paid the $2,018 towards the 30-year mortgage? Using the calculator, we would enter an additional monthly payment of $713. That tells us the 30-year-plus-extra mortgage would be paid off in 15 years and 11 months, requiring 11 additional payments of roughly $2,000 and thus an extra $22,000 of interest in the end. However, the 30-year does allow me the flexibility to reduce my payment by about $700 a month if things get tight. Is the higher cost worth the extra flexibility?

I thought so when I got my first mortgage, but changed my mind once I figured that if I were to hit so hard that I couldn’t make the 15-year mortgage, I probably wouldn’t want to keep paying the 30-year either and would just sell the house and move somewhere cheaper and smaller. I viewed the potential payoff of going with the 15-year mortgage as being to retire one full year earlier.

Lots of people see the low interest rate for the 30-year mortgage and want to use that money to invest in the stock market. That may work out well if you actually invest your money as planned, I don’t know. I personally have enough invested in the stock market as it is, I don’t really want the extra leverage of essentially investing on margin with borrowed money. There is also a chance that the mortgage interest deduction may get capped or phased out over the next several years. That’s a lot of unknowns. I do know a top rate for a long-term certificate of deposit is the 10-year CD from Discover Bank with a yield of 1.90% APY. Meanwhile, the yield on a 30-year Treasury is 2.79%.

In the end, I don’t think there necessarily is a right or wrong answer. There are even more small nuances that went into my decision process, I’ll try and gather those thoughts for next week.

Mortgage Rates Still Dropping: Good Time To Switch From 30-Year to 15-Year?

In case you haven’t been paying attention, mortgage rates are still dropping to new lows. Here’s a chart of the historical mortgage rate averages since I bought my house in late 2007, courtesy of It includes the 30-year fixed, 15-year fixed, and the 5/1 30-year adjustable.

From looking up some quotes (see below), 30-year fixed rates are ~3.125% now (~3.5% with no closing costs), and 15-year fixed rates are ~2.5% (~2.875% with no closing costs). Can you honestly say that you would have expected this 10 years ago? Another example of the difficulty of predicting the future.

If you haven’t refinanced in a while, it is definitely worth a try to see how much you could save a month. But what are you going to do with that savings? Buy more stuff that you don’t need? Buy more house that you don’t need? Why not consider refinancing into a 15-year mortgage and have that house paid off much sooner? From this CNN Money article using recent average rates:

Homeowners current paying off 30-year loans with rates of 4% spend about $1,098 a month in mortgage payments on a $200,000 balance, paying a total interest cost of $143,739. Refinancing at 2.63% for 15 years would cost them about $250 a month more, but they would wind up paying just $42,250 in total interest and their payments would end years earlier. Refinancing into another 30-year loan at 3.31% would cost homeowners only $877 a month, saving $221 from the existing loan.

If were to give advice to my future kids, it would be to determine home affordability only using the 15-year mortgage. Just forget the 30-year exists. You’ll be forced to budget properly and if you buy a house at age 30 you’ll be mortgage-free by 45! I think they would thank me in the end. I can still tell them their old man paid his off at 35, of course. 😉

Compare with rate quotes from:

I hear that Costco provides a mortgage refinance referral service now as well – any real-world experience with them from readers?

Recent mortgage refinance articles:

What Is Your Holstee Manifesto?

Apparently I completely missed this when it first became popular, but the Holstee Manifesto is a set of ideals put forth by the founders of Holstee, a small apparel company which only sells environmentally-conscious and sustainably-sourced products. (Holstee = Holster + Tee, which I don’t think is even sold anymore.) I discovered it today only due to a LivingSocial deal selling a large poster print for $30, designed by Rachael Beresh.

My favorite line is actually “If you are looking for the love of your life, stop; they will be waiting for you when you start doing things you love.” (Although it didn’t happen to me… I was just working a part-time gig to help pay for college.)

What would my own manifesto include? Definitely something about freedom, but that could be taken as similar to doing what you love and following your passion. The difference is that I also appreciate being able to do required and difficult things, as long as I get to do it my way. I hope that made sense.

Instead, I suppose I’d add that if you want to “Keep up with the Joneses”, well, the truth is the Joneses are nearly broke, live paycheck-to-paycheck, and will work until they are quite old. Being different than the Joneses is the only way to go; there are many ways to do so but you have to pick one and be *proud* of it.

MyMoneyBlog Holiday Gift Buying Battle Plan

Holiday shopping season is upon us… According to a Black Friday survey, and the average shopper spent $423 this long weekend. Another National Retail Federation survey reported the average spending per person in 2011 was about $704. (They also spent $130 on themselves.)

Although I still avoid crowded malls like the plague, I’m not one of those Scrooges that say that you should say “sorry, I’ve gotten myself into some debt, so this year I won’t be giving any gifts”. There’s no need to spend lavishly, but even if things are tight, gift-giving should be something that you planned for ahead of time. Otherwise, unless you live like a miser, what you’re basically saying is “I prioritize giving stuff to myself higher than giving to others.”

In reality, my main problem with gift-giving is dealing with all the extra entropy generated. You get all this stuff, a certain percentage of which is useful and the rest that isn’t. Therefore, in addition to saving money, my “battle plan” includes trying to reduce the chaos and clutter inherent in the gift-giving process.

Use up all your gift cards. Every holiday season, we are lucky to receive a number of gift cards. A year later, a chunk of those gift cards still sit unused. Since I already had an entire year to use them on myself and didn’t, the new mission is to use up all those gift cards to buy other people gifts before the next wave comes in. If all else fails, I try to force myself to sell them for cash at a gift card vendor. Run your own gift card price comparison like I did, or use a site like

Get 5% back on all online purchases up to $1,500 from Discover. I do all my shopping online anyway. See here for details.

Buy discounted gift cards first. For large purchases, consider buying a discounted gift card to the store where you’re shopping (with a rewards credit card of course), and then use that gift card immediately to buy the final gift. You can even buy them while in the store from your smartphone. Don’t do this unless you are sure you’re going to shop at that store.

Redeem all those points you’ve been meaning to use. If you read this site, then it’s quite likely you have a stash of points somewhere. Earn ’em and burn ’em! Citi ThankYou points, Chase Ultimate Rewards points, American Express Membership Rewards points, Discover Cash Back or other balances that you need to request, and so on. The best redemption rates are usually for either a gift card or cash.

Sell your stuff. Really, actually sell it, not just think about selling it! Use your gift-giving urge as motivation to sell your old stuff. I know, it’s hard. Try selling electronics and popular items with an Amazon Seller account, you’ll get a better price than selling to a business, but it’s a little less crazy than eBay. Use the proceeds to pay for gifts or donate to charity. If you want zero hassle, run a sellback price comparison like I did for an old iPod Touch.

Cash Back portals. Cashback portals have become very popular, and most are having promotions right now which vary day-to-day. Sites that I have regularly use and cross-compare are eBates ($10 new user bonus after any purchase of $25+), Mr. Rebates ($5 new user bonus – minimum cash-out balance is $10), BigCrumbs (no bonus, but often offers the best payouts), FatCash, and Chase Ultimate Rewards mall (need appropriate Chase card). You can even earn cash back from Amazon and eBay now in certain categories. If you use these places, don’t forget to request a payment!

Credit card bonuses. Around the holidays, the banks usually have some new offers to grab us customers. Remember, use these loss leaders for your own benefit by never carrying a balance! I usually go through another wave of applications near the end of the year, all on the same day with different browser windows. Recently there are some new offers that I may jump on – 40,000 Thankyou points = $400 from Amazon from Citi, 50,000 American miles from Citi (100k if you do the business version too), $800 in Southwest Airlines airfare from Chase, and 50,000 points = $500 in gift cards from American Express.

All together, I’m sure I could scrounge up $704 with these tactics, counteracting both the cost and clutter of gift-giving. I’ll certainly be happy when I am done with shopping, though. Got some other ways that you help offset the hit from the holidays? Share in the comments below.

American Express Gift Card Fee Waiver Promo Code

american-express-gift-cardAmerican Express Gift Cards are a popular option for those last-minute or difficult holiday gifts. Here are the highlights:

  • Works wherever American Express is accepted.
  • No fees after purchase. Other cards may have inactivity fees or transaction fees.
  • Funds do not expire. If the date on the card expires, get a new card by calling Customer Service at 1-877-297-4438.
  • Replaceable if your card is stolen or lost.
  • Note: American Express does not ship Gift Cards to the states of HI and VT.

The standard drawback is that these cards usually have two separate fees: a $3.95 purchase fee and a $5.95 standard or $8.95 expedited shipping fee.

EXPIRED. Until 11:59 PM EST on Sunday 12/4/2016, you can get $0 purchase fee and free expedited shipping with promotion code CYBER16.

Some people also use these gift cards for meeting credit card spending hurdles as you can buy them with any major credit card (AmEx, Visa, Mastercard, or Discover card).

The Business Gold Rewards Card from American Express OPEN

The New Business Gold Rewards Card from American Express OPENThe Business Gold Rewards Card® from American Express OPEN is an upscale-oriented charge card for small businesses where you must pay off the balance each month, but you get the famous AMEX perks like purchase price protection, extended product return protection, and AMEX extended warranty. Here are the highlights:

  • The annual fee is $0 for the first year of card membership, and $175 thereafter. This way you can try out the card for a year for free. Get unlimited Additional Gold Cards for an additional annual fee of $50 but this fee is also waived for the first year.
  • Triple points on airfare. What makes this card different is that you can now earn triple points on airfare as well as double points on advertising, shipping, and gas purchases on the first $100,000 of eligible purchases in each category each calendar year. Everything else earns 1 point per dollar spent.
  • OPEN small business network gives you access to savings at partners like Fedex shipping and OfficeMax supplies.
  • Terms and restrictions apply

Welcome bonus offer not available to applicants who have had a Business Gold Rewards or any other Business Gold, Green or Platinum Card® account within the last 12 months.

Business Credit Card Eligibility

Many people aren’t aware of the fact that they can apply for business credit cards, even if they are not a corporation or LLC. Why? Because any individual can be a small business as well. The business type is called a sole proprietorship. Perhaps you sell items on eBay, Craiglist, or Etsy. Maybe you do some freelancing and/or consulting. If you earned more than $600 from a single client, you probably got a 1099-MISC tax form and filled out a Schedule C. Boom! You have business income, you’re paying self-employment taxes (meaning you’re an employer), and you’re a sole proprietorship. This is the simplest business entity, but it is fully legit and recognized by the IRS. On a business credit card application, you should use your own legal name as the business name, and your Social Security Number as the Tax ID.

Specifically, this card will require you to personally guarantee that you’ll pay them back what you charge on the card, which means they’ll check your personal credit score like any other consumer card. However, the card itself is a business card so it won’t show up on your personal credit report, so it won’t change things like your credit limits, average account age, or credit utilization ratio.

Meeting Minimum Spend Requirements

I acknowledge that the spending requirement amounts to a little over $1.500 per month, which can be tough. Here are some tips readers have suggested. You can try to buy AMEX gift cards to help spread out the purchases over time, buy gas or grocery or Costco gift cards, prepay utility bills or insurance premiums, use the personal version of Amazon Webpay to pay others or send money to family/spouse/friends with no fee ($1,000 per month max), load money on American Express Serve with no fee ($25 bonus, $100 max load per day, $250/500 month max), and I’ve even bought some Forever postage stamps to put me over the top.

As usual, compare this card with other current $500+ credit card bonuses that you can also apply for.

  • Business Gold Rewards Card® from American Express OPEN application link

American Express Sync + Xbox Promotion

Here is another American Express Sync promotion if you sync your AmEx card with your Xbox LIVE Gamertag on Xbox 360. Visit to register. At the very minimum, you’ll get $10 for registering your card at, with more lucrative opportunities if you have Halo 4. As with other American Express promotions like Small Business Saturday, I assume you can get $10 for each card you own including authorized user cards, if you have multiple Gamertags. I don’t have an Xbox, but reader Nic helpfully sent me the e-mail text below.

American Express and Xbox are bringing you a new way to save. From now until December 31st, Cardmembers can sync an eligible American Express® Card with their Xbox LIVE Gamertag to unlock exclusive content, offers, and more.
• Spend $10 at AMC Theatres®, get $5 back
• Spend $50 at PacSun®, get $25 back
Get a $10 statement credit from American Express

Cardmembers who sync their Cards with Xbox LIVE and play the newly released “Halo 4” will also be able to unlock additional offers by reaching specified in-game achievements. These include:
• Spend $100 at Best Buy®, get $50 back
• Get a $25 statement credit from American Express

2013 401k, 403b, 457, TSP Contribution Limit Increases – Historical Chart

The IRS recently announced increased contribution limits for various qualified retirement plans for tax year 2013. The limitations are indexed to increases in cost-of-living (inflation) as per section 415 of the tax code. In particular, the elective deferral (contribution) limit for employees who participate in 401(k), 403(b), most 457 plans, and the federal government’s Thrift Savings Plan is increased from $17,000 to $17,500. However, the additional catch-up contribution allowed for those age 50 and higher remains $5,500.

The limits are the same for both Roth and “Traditional” pre-tax 401k plans, although the effective after-tax amounts can be quite different. Employer match contributions do not count towards the $17,000 elective deferral limit. (Although technically the total annual defined contribution limit is $51,000 for 2013… let me know if you have an employer that is so generous!) Curiously, some employer plans set their own limit on contributions. A former employer of mine had a 20% deferral limit, so if your income was $50,000 the most you could put away was $10,000 a year.

Here’s a historical chart and table of recent contribution limit increases:

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2013 IRA Contribution Limit Increases – Historical Chart

The IRS recently announced the Traditional and Roth IRA contribution limits for tax year 2013. The limitations are indexed to inflation, but only in $500 increments (as of 2010) which are triggered when the cost-of-living calculation reaches a certain threshold. The threshold was finally met, so the limit on annual contributions to an Individual Retirement Arrangement (IRA) increases to $5,500, up from $5,000. However, the additional catch-up contribution allowed for those age 50 and higher remains $1,000.

The limits are the same for both Roth and Traditional IRAs, but each one has their own unique set of eligibility requirements. IRAs are “individual” accounts by definition, so the limits are per person. The deadline for 2012 tax year contributions is the same as the 2012 tax return filing deadline: Monday, April 15, 2013. Tax return extensions won’t apply to this cutoff.

Since I like visual aides, here’s a historical chart and table of recent contribution limits. I’m proud to say that we’ve both done the max since 2004. Have you been taking advantage of your potential IRA tax break?

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ING Direct’s New Name: Capital One 360

ING Direct announced to customers last week that they would soon change their name to Capital One 360, effective February 2013. Goodbye big orange ball, you were the first no-frills savings account that paid high interest by piggybacking on regular checking accounts (no branches, no ATM access, no checks) and it worked brilliantly, creating an entire new banking niche. But the financial crisis happened, ING Group got a big Euro-bailout, and as part of the restructuring terms they agreed to sell their ING Direct unit for $9 billion dollars.

It was a fun ride, ING Direct. For a while, you paid me nearly 5% APY interest as I borrowed money for free using 0% APR balance transfers. Your website was unapologetically simple, but everything worked as promised. You created handy sub-accounts for savers to stash their money for specific needs. Good times. Of course, I can’t forget that you also had a nervous brainfart and bullied my webhosting company into shutting down my entire website without any warning. In the end, your interest rates also started to fade a little from the top while staying somewhat competitive, and being a rate-chaser I moved my money elsewhere. No hard feelings?

As is always the case, the new company promises to keep everything you loved about the old company, while also making additional improvements. I still keep about $100 with ING Direct to keep them from closing my account, mostly out of nostalgia I suppose. I’ll continue to wait and see how they integrate the site with the other recently-improved Capital One products like their 1.5% cash back personal cards and 2% cash back business cards. CapOne wants to join the big boys Chase/Citi/AmEx as a broad financial services company.

What are you planning to do with your ING Direct account?

Beating the Market: Investment Skill, or Luck?

One of the eternal questions in investing is whether performance results are due to skill or luck. We’ll probably never get a universally-accepted answer, but Michael Mauboussin (chief investment strategist at Legg Mason Capital Management) explores the subject in his new book The Success Equation: Untangling Skill and Luck in Business, Sports, and Investing.

I haven’t read the book, but in a WSJ interview the author shares a graphic illustrating where he views investing on the skill-to-luck continuum. At the extremes are the pure luck of roulette and the overwhelming dominance of skill in chess.

Mauboussin is quick to explain that the luck factor comes into play because making money is a hugely powerful motivator and thus draws in the smartest people in the world. This leads to competition at such a high level that differences in results are mostly luck, especially in the short-term.

This reminds me of another famous skill vs. luck argument by Warren Buffett called The Superinvestors of Graham-and-Doddsville (Wikipedia). You can feel his annoyance at the academics suggesting that his mentors were simply statistical anomalies.

For the record, I don’t believe in the academic definition of the efficient market hypothesis either. But as the graphic above suggests, market efficiency is not a yes/no situation but a matter of degree. Even Buffett has repeatedly stated that most investors would be better off in low cost index funds, and even wagered $1 million that the Vanguard S&P 500 index fund would outperform a basket of hedge funds over a decade. The bet started in 2008, and as of March 2012 the index fund is ahead. Of course, no matter who wins, was it skill… or luck?