Archive for October, 2005
One perk of U.S. Savings Bonds (USSB) and Treasury Bills is that they are exempt from state and local income taxes. For comparison, what would be useful is a quick way of comparing those tax-advantaged rates with the regular interest rates from a bank savings account or CD. So let’s do that. To start, we agree that we want find the equivalent bank rate that gives us the same after-tax return.
AfterTaxReturnBank = AfterTaxReturnUSSB
RateBank * (1 - Fed Tax Rate - State/Local Tax Rate) =
RateUSSB * (1 - Fed Tax Rate)
This gives us:
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Posted in Savings Bonds, Treasury Bills and Bonds | 26 Comments »
I was snooping around the U.S. Treasury website looking up stuff on potentially laddering I-Bonds, when I came across Treasury Bills again. Treasury Bills are short-term investments (from 4-26 weeks usually) that common folk like us can also buy at TreasuryDirect.gov. The minimum investment is $1,000, and you buy them at a discount to their face value. In their example, you might pay $970 for a $1,000 T-Bill. I’ve never really bothered to learn much about them though, since their yields recently have beem much lower than online savings accounts like EmigrantDirect. For example, a recent rate for a 29-day T-Bill is 3.696%.
But, one key thing is that interest earned from T-Bills are exempt from state and local income tax. For example, if you were in the 28% federal tax bracket, and in a 10% marginal state income tax bracket, that’s 3.696% turns into 4.29%!!
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Posted in Treasury Bills and Bonds | 7 Comments »
I have most of my cash in a high-yield savings account making 4.12% APY. However, in previous days when the yield curve wasn’t so flat, a technique called laddering along with certificates of deposit (CDs) was pretty popular.
For example, let’s say you had an emergency fund of $5,000. You want to keep that pretty liquid and safe, but you also don’t want it sitting there getting eaten up by inflation. So, you put $1,000 in a savings account, $1000 in a 1-Yr CD, $1000 in a 2-Yr CD, $1,000 in a 3-yr CD, and $1,000 in a 4-Yr CD. You would end up with better overall interest rate, and take an interest hit if you needed to take out more than $1,000 in a year by breaking the older CDs. Now, when the 1-Yr CD matures, you go out and buy another 4-Yr CD, keeping the ‘ladder’ intact (The old 4-Yr CD now has 3 years to go, etc). For a while, the increase in interest by doing this was not worth the loss in liquidity. Let’s check again:
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Posted in Banking | 8 Comments »
I’m still a bit in shock over getting kicked out, with countless thoughts zipping around in my head. Here’s my attempt to put them on virtual paper.
Buying. Just not going to work. With 20/20 hindsight, yes, we should have bought a place when we moved here initially a bit over a year ago. House values have have increased 30-50% and we wouldn’t be faced with being kicked out. But now, we have less than 2 years left in this city, not enough time to even make the 2 years needed to make any capital gains tax-free. Also, with only one income now getting a loan would be very difficult. I’d probably have to go back to work again, at least long enough to get the loan.
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Posted in Real Estate | 8 Comments »
So I get a call from my landlord saying she just put up a bid for some beachfront property and may have to sell the house I’m renting to pay for it. Another “heads up” that we may have to move again in less than 9 months. I’m getting really. tired. of this crap. I almost want to buy a house just to not have to worry about it. Back to Craigslist I go, there are a lot of comparable houses that rent in the same price range. Maybe we can even save some money…
Posted in Real Estate | 10 Comments »
I guess the word has spread about the great I-Bonds rates, as is shown by this recent USA Today article. Unfortunately, this article does not help me at all, since the key to buying now or later is the upcoming fixed rate, and these two so-called experts can’t even agree on it. One says it may go down to 0.5%, the other one says 1.3-1.5%. Gee, thanks guys.
Posted in Banking | 8 Comments »
Next up in the Bored Money arena is e-Rewards. It’s similar to MyPoints in that the make you fill out a big long profile and then pay you to receive e-mails, sign-up for offers, and fill out online surveys. They differ in that instead of Points and gift cards, e-Rewards uses e-Rewards dollars (not actual cash) and gives out some pretty random stuff. It’s pretty easy to earn money though, sometimes I get $5-$10 in one day.
For $25 in e-Rewards dollars, examples of what you can get include: 500 American or Northwest Airline Miles, $25 off any purchase at FTD.com, or 1,000 Hilton Honors points. However, my favorite reward is $25 for 6 free Blockbuster rentals - you get one movie free each month for six consecutive months. Here’s how I use it instead of NetFlix:
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Posted in Bored Money | 10 Comments »
My $5,000 I-Bond online purchase looks like it went off today without a hitch at Treasury Direct. Well, almost. I didn’t pay attention to my BillPay along with my checking account balance and I ended up going below the $1,000 minimum on my Presidential checking account. Doh! At least it’s only a $5 low-balance fee and not a bounced check.
There was also a good question about partial redemptions of Savings Bonds - If you withdraw any of it early (less than 5 years), will you be paying a penalty on all future withdrawals, even if you wait more than 5 years? I e-mailed them (they don’t seem to have a phone number?), and the answer I got was no. Here’s my e-mail and their response:
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Posted in Savings Bonds | 3 Comments »
Pinecone Research is a consumer opinion research group that polls people via online surveys and occasionally by actually sending you out product samples to review. In exchange for your feedback, they mail you a $5 check for each online survey you complete for them. Each survey takes about 15 minutes. It has a homegrown-feel to it, so I try to answer all the questions honestly (although I still don’t give out my home phone number).
The catch is that they are usually closed to new members, so it is really hard to join their panel. But this week happens to be Open Recruitment Week, so sign up right now if you’re interested! I’ve probably gotten around $100 from them, the $5 checks seem like nothing but you get one about every two weeks and it adds up! I’ve also received a bunch of free food items to review.
Posted in Bored Money | 14 Comments »
I’ve decided to add a new category called Bored Money. Be forewarned that these are not an efficient use of most people’s time. But if you have a desk job or any job with some downtime and internet access (or are just bored), why not eek out a little money?
The first one I’ll talk about is MyPoints, since it has been around for a while and has always delivered the promised goods. First, you sign up and give up all your personal information. Well, that’s the idea. I actually have an entire separate alias for all these Bored Money sites. The only thing you have to get correct is your name and address (use a fake phone number, they never check). I also use a free Yahoo e-mail.
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Posted in Bored Money | 16 Comments »
Every since I quit my job in July, I have had no dental insurance. I just had x-rays and a cleaning in June, so I figured I was good at least until the end of the year. As Open Enrollment is here, I have decided not to be added onto my wife’s dental plan again for 2006. Here are my reasons why:
» It costs an additional $45 a month (pre-tax). So that would be about $540 pre-tax or $390 a year post-tax.
» I have never had a cavity (knock on virtual wood) or any other tooth issue, floss and brush, and I get regular cleanings.
» I am still going to get the semi-annual cleanings and maintenance stuff. If I pay cash, my dentist (who I like and want to stay with) says it will cost about $200 a year. Not a bad annual savings.
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Posted in Insurance | 17 Comments »
I finally got around to applying to an HSA-eligible high-deductible health insurance plan today on eHealthInsurance
. (Please see my previous posts on getting quotes and HSA pros and cons). I kind of dropped the ball, as Open Enrollment for my current insurance ends on 10/31, and I may not get my decision until after that. I was trying to get a State Farm-brokered plan from Assurant (only $65/month), but they don’t take applications that far ahead of time (I need to start 1/1/06). I don’t have any medical problems except for elevated cholesterol, but that might have raised my rate significantly, and I didn’t want to take that chance. At least it is a no-committment application.
Posted in Insurance | 3 Comments »
I haven’t been as active in the 0% APR balance transfers game recently (still have $20k in borrowed money), but sometimes the trickiest part after finding the best 0% offer is to figure out how to get your cash.
It seems like some issuers are not playing well with others recently. Flexo at Consumerism Commentary reports having his credit balance request sent from Discover denied by MBNA. I’ve heard similar problems with American Express, although I have gotten checks from them before. The good news is that if you transfer to Citibank, they now let you request a check for any credit balance online. So for sure they let you do it, and on top of that there’s no human to question your motives (not that you’re doing anything wrong). Definitely the best choice, if you have to go that route.
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Posted in Credit Cards | 17 Comments »
Our house is old, and many of our windows are single pane and very drafty. In the wintertime, this equates to a 100-300% increase in our electric bill. On a recommendation by a neighbor, we decided to install some plastic shrinkwrap insulation (also mentioned by Dawn in her recent Carnival post). Although we bought it at Home Depot for ~$14, I couldn’t find it on their site, but here is the exact product.
Basically you tack up some double-sided tape on your window borders inside, put on this saran-wrap type of plastic, and then use a hair dryer to “shrink” the plastic and remove all the wrinkles. The results: you can still see out your windows, but it reduces drafts and you have an insulative air pocket. Here are some pics of my handiwork:
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Posted in Frugal Living | 7 Comments »
A relatively unpublicized new feature of buying your Savings Bonds online is the ability to cash out only part of your bonds, mentioned briefly here. I just noticed this recently, and explored it further in my account with my paper bonds that were recently converted to electronic format. Now that they are electronic - I can partially cash out those too! Apparently the only two restrictions are:
1) The minimum amount you can redeem is $25
2) The remaining value of the bond cannot be less than $25
Here is a screen shot of me trying to partially redeem my bonds:
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Posted in Savings Bonds | 10 Comments »
