Archive for December, 2006
Monday, December 11th, 2006
Recently, I’ve gotten multiple e-mails from readers asking me if they should work for Primerica Financial Services, a subsidiary of Citigroup. I had no idea who they were. After some quick online searching, I quickly found this site and this site, both of which paint a very ugly picture of “the Amway of financial services.”
It seems like it is a multi-level marketing system, where just about anyone can join and sell financial products to their family and friends, and then recruit them as fellow associates. While they promise high salaries, it seems pretty much commission-based. On top of that, you must pay upfront fees prior to joining. This really concerns me, because the people who e-mailed me seemed very interested. Not surprisingly, the e-mails all started with “My friend does it and says I should join…”! This is not the same as selling Kitco knives or fancy vitamins, you are being a financial advisor!
In my post about what it takes to work for Ameriprise Financial, I’ve received a ton of interesting comments from current and former Ameriprise employees, interviewees, and clients. I’m not saying these two companies are the same, I just want to learn more. If anyone has any direct experience with them, please share in the comments. What is their “philosophy”? What’s the payout? How does your “downline” form? What kinds of products do they sell? What kind of training do they provide?
Posted in Investing, Retirement | 33 Comments »
Sunday, December 10th, 2006
Sharebuilder is Costco’s “Service of the Month” for December, and they are running a promotion offering $90 Costco Cash for Executive Members ($70 for Gold or Business Members). There’s no reason not to go for the $90, since you can’t lose with Executive membership - They’ll pay you back any of the $50 extra you don’t gain in purchases. You do need to open an account and make one stock purchase.
Don’t have Costco? You can find a bunch of regular $50 Sharebuilder promotional codes here. Now, unless you really want to use Sharebuilder as your broker, there are two options to get your bonus, as selling stock there costs $15.
- Instant Gratification: Open with $5. Buy $1 of stock and pay $4 for commission. Wait for your bonus. Let the $1 in stock just rot there.
- Delayed Gratification: Open with $50. Buy $46 of a quality stock like Berkshire Hathaway and pay $4 for commission. Get the $50 (or more), and treat it like you just got free stock. Just sit back for a decade or two while it grows and grows. Details on this method here.
If you choose the latter and are going to open with at least $20, you can try to combine this with the $20 back from eBates. You can only get one eBate rebate, but myself and others have successfully gotten multiple Sharebuilder bonuses by applying again after getting the first bonus. Others simply opened up multiple accounts for others in their household: spouse, kids, parents, and so on.
Posted in Deals & Offers | 29 Comments »
Sunday, December 10th, 2006
Okay, this isn’t financially related so feel free to tune out. I was tagged by Steve at AdventureMoney to reveal five things you might not know about me. In response, I submit to you these five tidbits:
Read the rest of this entry…
Posted in General | 7 Comments »
Saturday, December 9th, 2006
29 states and the District of Columbia offer a tax deduction or credit for residents who contribute to their state’s 529 plan. Here is a list of them all. If you’re working your way through school, you should definitely try to take advantage of these benefits for yourself.
How? It’s easy.
- Open a 529 and make yourself the beneficiary.
- Then, contribute to the plan and get the tax break, using the most conservative option (since you’ll be spending the money soon).
- Finally, take the money back out of the 529 plan to pay for your college expenses.
You must make sure that it’s okay for the contributor and beneficiary to be the same person. Also, you can’t pay for things with a 529 distribution that you want to use for the Lifetime Learning Credit. But this shouldn’t be a problem, as 529 plans are allowed to cover room and board, not just tuition. All you have to do is look up your school’s estimated tuition chart and see what their estimated room and board costs are.
For example, let’s take Oregon. You can deduct $2,000 a year in contributions. At Oregon’s 9% marginal rate, that’s $180 in savings each year. The estimated room and board for Oregon State University is $7,344, easily over $2,000.
Posted in Taxes | 16 Comments »
Saturday, December 9th, 2006
While digging through the garage to find our (three) Christmas decorations, boy did I find a lot of junk. I’m pretty sure that everyone reading this has a least one thing that they feel has some value and also don’t want. Old cell phones, DVDs, that-old-thing-you’ve-had-forever, whatever. Remember my 3 eBay selling tips:
1) Just list it. - The most common mistake I see people make is put off listing their items for sale, waiting for the perfect time or when they’re less busy. Unless you are listing antiques, your stuff is losing value by the second, especially electronics.
2) Take a picture. - Wouldn’t you rather see the actual thing you are buying? This is critical to getting the best price.
3. Make your description honest, clear, and concise. There is no need for fancy templates or a dissertation on your product. People just want to know what it is, and if there is anything wrong with it. I’ve seen so many auctions that have plain straightforward text with a good picture sell for much more than a gaudy listing that’s 3 screens long.
In other words, it really shouldn’t take more than 15 minutes to list your item. Just snap a picture, and write up a paragraph about it.
Posted in Frugal Living, eBay | 15 Comments »
Friday, December 8th, 2006
One of the things I don’t like about some charities is the lack of specific impact. Where is the money really going? Here are two charities that use the internet to add transparency and interaction to your charitable giving. In addition, they offer a way to leverage your donation to create even better change.
ModestNeeds.org is a non-profit 501(c) charity, operating predominantly online, with a goal of helping people who live paycheck to paycheck survive past life?s unexpected speed-bumps and perhaps save them from a slippery slope to financial ruin or even homelessness. Most of their ?grants? are less than $300 and go for things like unexpected medical bills. You can see all the money requests, and even vote on which requests to fund. The neat thing is that it started with just one teacher giving 10% of his salary every month.
Read the rest of this entry…
Posted in Giving Back | 15 Comments »
Thursday, December 7th, 2006
As promised, this is a quick update to the Citi Credit Protector $100 Gas Rebate offer. If you signed up, don’t forget to cancel your 30-day trial. The number again is 1-888-592-7344. If you haven’t, the offer is still available.
Here is a scan of my rebate form. It’s for the $100 all at once, and it says nothing about having to remain a member to redeem. I called to confirm and they said that receipts before your sign-up date are not valid (makes sense). I did a lot of driving over Thanksgiving and easily spent $100 in gas, so I’ll be sending in my rebate form in tomorrow. Hopefully this will be another easy hundred bucks to fund my gifts… uhh, Roth IRA! 
Posted in Deals & Offers | 19 Comments »
Thursday, December 7th, 2006
Google has extended their free credit card processing until December 31st, 2007. Not only is Google’s normal commission of 2.0% + $0.20 already better than PayPal’s base level of 2.9% + $0.30, but now you can get a whole year fee-free. If you accept any non-eBay payment via PayPal now, this is a great incentive to switch. I’ve already accepted a few payments through the service, and it has been very smooth. You simply send your clients an invoice, much like you would through PayPal, and they can pay with any major credit card. Most still pay me with checks, but now I don’t have to think twice about losing 3% to fees.
As you might expect, some people are trying to use this promotion to gain free frequent flier miles and whatnot, but I’m staying clear of that. My taxes are already messy enough, without thousands of dollars running around in circles. Still, now you can pay your friends back and also earn some credit card rewards at the same time.
Posted in Credit Cards, Entrepreneurial | 4 Comments »
Wednesday, December 6th, 2006
» E-Loan Savings lowered its rate from 5.50% APY to 5.38% APY. Commenters to my Eloan Savings review added that they had some transfer glitches as well.
» iGObanking is yet another online no-minimums savings account, offering 5.30% APY. I know little else.
» ING Direct recently raised its rate from 4.40% to 4.50% APY. $25 opening promotion.
See my online savings account comparison for a summary of the banking options out there.
Posted in Banking | 17 Comments »
Wednesday, December 6th, 2006
I was reading the Wikipedia entry for US Housing Bubble, and came across this troubling graph from the book Irrational Exuberance. I’m trying to find some rebuttal articles to this graph.
Posted in Real Estate | 35 Comments »
Tuesday, December 5th, 2006
Being a real estate newbie, I’ve been reading a lot of housing market articles lately. It seems like everyone has an opinion. Buy now. Buy next year. Sell now. It’s a bubble. It’s not a bubble. You know what it reminds me of? The stock market.
And therefore, just like the stock market, perhaps it is simply best to buy for the long-term and ride everything out. The median home price in June 1976 was $46,100. The median home price in June 2006 was $243,300. Did really matter if a person bought it for $42,000 (10% less) or $50,000 (10% more) back then? Not in my opinion, especially considering I see no proof that anyone can predict housing prices. At the very least, I’m certain that I can’t predict housing prices, and that’s what really matters. Just like the (good) investing books say, it’s time in the market, not timing the market that counts.
Even if I decide to move, I expect my new house’s price to move up or down with the value of my current house. On top of that, I’ll probably try to rent my first house out if at all possible. Finally, if the market does tank, perhaps that will provide a buying opportunity for an investment property.
So here’s my game plan: 1. Get 20% down, or at least 10% and no PMI. 2. Decide on an affordable mortgage amount. 3. Find a good house, regardless of future price predictions. So far I’m still working hard on #1…
Or am I all wrong?
Posted in Real Estate | 61 Comments »
Monday, December 4th, 2006
(image fixed, it was wrong initially)
About My Credit Card Debt
Newer readers may be alarmed by my high levels of credit card debt. In short, I’m borrowing money for free and keeping it in safe investments while earning me interest. Along with other things, this helps me earn extra side income of thousands of dollars a year. Recently I put up a detailed series of posts on this 0% game. Please check it out first if you have any questions, it should contain answers to most of them.
More Thoughts Read the rest of this entry…
Posted in Goals | 23 Comments »
Monday, December 4th, 2006
It’s time again for the lazy people like me to count up their receipts and make sure we’ve spent all our FSA money. Actually, I’m 99% sure that this year we went well over, both due to bad estimates and the unforeseeable.
If you’re looking for a very, very detailed list of what’s eligible for reimbursement and what’s not, check out this big list by a an actual FSA administrator. From a quick review, here’s some unexpected items that count and more:
Unexpected Eligible Items
Acne treatments
Batteries for durable medical equipment
- (must note usage of batteries on receipt)
Lactaid
Lodging of a companion
- (If accompanying a patient for medical treatment)
Sales tax on qualified medical expenses
Read the rest of this entry…
Posted in Frugal Living | 11 Comments »
Monday, December 4th, 2006
Target-dated retirement mutual funds are getting more and more popular, offering instant diversification into stocks and bonds, as well as automatically shift to a more conservative blend as you near your target retirement date. An all in one fund! Whenever you see a finance article talk about the “best” of these mutual funds, invariably Vanguard and T. Rowe Price top the list. Recently, Kiplinger’s Personal Finance magazine named T. Rowe Price “the best Target fund available”. I’ve been meaning to do my own personal (and imperfect) comparison for a while now.
What makes a fund good?
First, why am I picking these two to compare? If you’ve read the books on my reading list, you’ll know that history and research has shown that the two most important factors that predict long-term performance are:
- Asset class - What is the fund invested in? Large-cap domestic stocks? Short-term bonds?
- Expense ratio - How much is the mutual fund company charging for its services?
Vanguard founder John Bogle sums it up well:
Read the rest of this entry…
Posted in Investing, Retirement | 63 Comments »
Sunday, December 3rd, 2006
While there is a ton of great financial information on the internet, I still think the best way for a beginner to learn how to invest is to read a book. It’s by far the most efficient way to understand all the history and research behind why people like me promote low-cost index fund investing. The more you know, the less you’ll be tempted to pay high fees or chase hot stocks.
By my count, I have read and reviewed 24 financial books so far. Here are my picks. They would make a great gift or simply provide some useful reading during holiday downtime. I own all of these books, and they were some of the best money I’ve ever spent.
Best Beginner Personal Finance Book
Best Starter Investing Book
Read the rest of this entry…
Posted in Book Reviews, Investing | 15 Comments »
