Wall Street Journal, New York Times Becoming Totally Free?

You may have noticed that the Wall Street Journal website is free right now not free anymore. Rupert Murdoch wants to switch from a subscription-based site to an advertising-based model, and I am totally for it! It was always a pain to have articles publicly available for a limited only, or never at all. So visit WSJ.com today, drive up their visitor count during this little experiment, and help make it free forever

In related news, the New York Times is also going completely free, getting rid of the paid portion of its site called TimesSelect. You could still get it free with an .edu address so I was subscribed to it, but it’s nice that know that now I can still get it once my school e-mail dies off. In addition, the newspaper is also giving free access to all its old articles from 1987 to present. Nice!

Some people are skeptical that the shift away from paid content is a good idea, but I think it was inevitable due to competition. I mean, I wouldn’t have visited or linked to either the LA Times or Chicago Tribune just now if they weren’t free.

Posted in Frugal Living | 18 Comments »

Fed Rate Cut: Affect On Mortgages and Savings Accounts?

I’m sure you’ve heard by now, Bernanke and Friends cut the Fed Funds rate by 50 basis points to 4.75%. It was the first rate reduction in 4 years, which then spawned the biggest one-day gain in the Dow in about the same time. It seems like everyone has an opinion on the Fed rate cut. Some said it was needed to curb the hysteria and possible recession, while others thought it was just a bail-out for people who took unreasonable risks and now don’t have to pay the price. Personally, I think it’s just trying to delay the inevitable, but I’m no economist. I always try to keep a long-term view on the stock market, so I’m not that concerned there. So how else will this affect things?

Savings Account Rate Drops?
ING Direct has already dropped their savings rate from 4.50% to 4.30% APY as of today (plus their checking tiers as well), and I expect some other high-yield savings accounts to follow. I think one hope we have is that banks may want to stay at 5.0% for psychological reasons. If you want to lock in some 6-month or 1-year certificates of deposit, I wouldn’t wait too long to do so. Anybody notice any other drops?

Mortgage Rate Drops?
Personally, I’m hoping that this rate drop doesn’t work, and the the housing market continues to weaken. That way, I can still get a low mortgage rate with our excellent credit, and a house at more reasonable prices! But I wonder if significantly lower mortgage rates will actually occur…

Posted in Banking, Real Estate | 50 Comments »

Deals & Offers Updates: 25,000 Points From AmEx Gold, $25 From TextPayMe/OboPay, and $50 From TradeKing Received

Here are some updates on my list of Deals & Offers that I chose to participate in:

25,000 Points (25,000 Miles/Free Ticket or $250 Gift Cards) From AmEx
The American Express Gold Business card is offering 25,000 Membership Reward Points after sign-up and first purchase (update: now expired). Although there was the usual inconsistent information from some customer service reps, I was very happy to notice that my points have shown up in my account:

It took just under 9 weeks from my first purchase. I recommend messaging them via their online system if you haven’t seen yours yet.

$10 From OboPay and $5 From TextPayMe
The two start-ups in the pay-by-cellphone arena are still offering sign-up bonuses to try them out.

$10 Sign-up Bonus from OboPay as prepaid debit card (or cash). Originally $15, then $10, then $5, and now a commenter noticed that OboPay is now back at offering $10, while another one mentioned that you may be able to get another $5 from sending money to another user?

$5 Sign-up Bonus from TextPayMe. You must also send money to someone to get your $5. People with access to two phone numbers can get $15 total by referring each other ($5 signup +$5 signup +$5 referral)

For both of these sites, I have already withdrawn the free bonuses safely into my bank account with no problems besides the fact that the transfers were slow (5-7 days). I know some people were also concerned about spam, but I haven’t received any unsolicited text messages at all before or after signing up for both of these programs two months ago.

$50 Referral From TradeKing
TradeKing brokerage was offering $50 for both people if you were referred by a friend and completed one trade. Although this deal is now over, I wanted to update because I noticed that referrals were only starting to be processed in early September. I have gotten a few payouts, but many of the people who asked for a referral didn’t complete it according to TradeKing, and I just wanted to make sure that everyone who did satisfy all the requirements got their $50.

Posted in Deals & Offers | 27 Comments »

September 2007 Investment Portfolio Snapshot

Summary and Performance
This is my first update in almost 3 months (June update), as between the move and new jobs, there hasn’t been much activity to report. I finally managed to deposit some money and bought $10,000 more of a Total US Stock Market fund yesterday in a lump sum, despite some hesitation. It will be interesting to see what happens in the financial market today and the next few months.

I did manage to calculate my portfolio’s personal rate of return, which were 3.2% year-to-date, and 4.5% annualized for 2007. Positive returns came from the Emerging Markets and International stocks, while my REITs and US Small-Cap Value funds haven’t been doing so hot.

Why do I continue to neglecting my asset allocation? The reasons remain the same. The first part is that many of my intended moves might be considered performance-chasing, such as a desire for a larger international allocation and slightly more bonds. Sometimes it’s hard to tell if the change is actually warranted or if you’ve just been listening to too much CNBC or mainstream personal finance media. The second part is that I don’t want to be one that changes asset allocations every other week, so if I do change things I want to it with lots of research and justifications… and I’ve been a bit disinterested in reading about asset allocation recently.

Posted in Investing, Retirement | 24 Comments »

Bank of America Money Market Savings, now 4.65-5.01% APY

Bank of America now has their own high-yield savings account, though with a minimum balance. You won’t find it advertised though, it’s tucked away in their new MyExpressions banking section. If you click around the various organizations, you’ll see a variety of checking/savings combos with different interest rates. The two highest I found were the Humane Society and the Defenders of Wildlife. Here are the current rates for those two groups as of 9/17 for Oregon:

You need $1,000 to open, and a minimum daily balance of $2,500 to avoid a $12 monthly maintenance fee. If you already bank with BofA and can always keep $2,500 in savings, this looks like a great way to boost your interest rate from the usual piddly 0.20%. Be sure to look at the ‘Money Market Savings’ account, not the ‘Regular Savings’ account. Can’t find it? It took me a while too, so I went ahead and made a video showing how to locate the account online.

If you are already have a BofA account you can login at the bottom and have the application pre-filled for you. New customers will experience a hard credit pull. Per a phone call, you don’t need to be a member of the actual association to apply for the account. I just hope these high rates don’t disappear once everyone finds out about them! (Though I’m not helping…) Thanks goes to Trice and BankDeals.

Update on 9/21: The rates have dropped to a range of 4.65% for $2,500+ to 5.01% APY for $50,000+.

Posted in Banking | 41 Comments »

The Widening Gap Between The Rich And… The Super-Rich

Forget the gap between the poor and the rich, what we really should be concerned with the growing gap between the rich and the super-rich. I mean, some people out there can only afford one yacht! The Onion explains:

“[When I grew up,] my pool didn’t even have a waterfall! I had to share tennis courts with other families.” - Author of Personal Jets on a Budget.

Posted in Funny | 8 Comments »

Hedging Against The Dollar: Opening A Foreign Currency Bank Account vs. Buying A Currency ETF

Lot’s of people have been asking me how to open up a bank account denominated in a foreign currency. The main reason appears to be a desire to hedge against future declines of the dollar. For example, right now the US dollar is trading at all-time lows versus the Euro, and at 30-year lows versus the Canadian dollar.

I must admit that I have no clue how to do this if one is not a citizen or permanent resident of another country. If you know how, please do enlighten us in the comments.

Now, I’m no currency expert, but doesn’t this sort of behavior seem like performance chasing? It’s the new “sure thing”. I figure if you own a good chunk of international stocks, you are already enjoying some foreign currency exposure. In addition, a weak dollar makes our exports cheaper across the border, which increases sales for domestic goods. As I expect to keep earning and spending US dollars for the foreseeable future, I don’t see any need for any additional hedging. If anything, I might hold more international stocks, but I’m still open to contrary opinions.

Let’s say you do have a desire or need for some currency hedging. Instead of opening up a bank account in Euros, here are two alternatives:

Foreign Currency CDs at EverBank
EverBanks offers what it calls WorldCurrency Certificates of Deposit, which invest in a variety of foreign currencies. For example, with the Euro CD your $10,000 will be converted to Euros, earn an interest rate between 2.50-3.0% APR depending on term length, and then be converted back to US dollars upon maturity. The British pound CD is currently earning between 4.25 and 4.50% APR. So you’ll have the chance to make (or lose) money from differences in exchange rates in addition to earning interest. Here are more pros and cons:

- Guaranteed interest rate
- $10,000 minimum purchase
- Available in 3, 6, 9, and 12-month terms. No account fees
- FDIC-Insured against bank failure, but not currency losses
- EverBank likely makes money off the yields in addition to the conversions: ?The currency conversion rate will be within 1% of the wholesale spot price EverBank pays for the currency.?

Foreign Currency ETFs from Rydex
Rydex has a group of foreign currency ETFs that come close to pure plays on that currency. For example, Euro:USD exchange rate is approximately 1.39:1, so the share price of the CurrencyShares Euro ETF (FXE) is $139. If the exchange rate goes to 1.50:1, then the share price would be about $150. Along the same lines, the British Pound Sterling ETF (FXB) has a share price of $201.

In addition, the ETF do effectively earn interest like bank accounts, as they give off monthly dividends. The Euro ETF is currently yielding 3.39%, and the British pound ETF is yielding 5.46%. This seems pretty good, considering ING Direct UK is yielding 5.25%. More pros and cons:

- Can buy as little as one share, from existing broker
- You are subject to possible stock commissions, and bid/ask spread
- Possible premium/discount to NAV
- Expense ratio is about 0.40%
- Trade in and out at anytime during market hours

Comparing the EverBank CDs and the CurrencyShares ETFs, it would seem that the ETF would win out if you had a broker that offered free trades like Zecco or WellsTrade.

Finally, you may be able to purchase or exchange into foreign currencies directly via a FOREX-specific broker or a standard stock brokerage that offers such capabilities. I’m not sure how much interest these sites pay though - I wonder if it is is standardized or if it varies like money market fund rates here.

Posted in Investing | 52 Comments »

401k Lump Sum Contribution: Dollar Cost Averaging Looking Good Right Now

I’ve been really bad at regularly making contributions to my Self-Employed 401k from Fidelity. I had only planned to put $500 a month into it for the first part of the year, since I wanted to keep as much liquid cash as possible in case I bought a house. Now that it seems like (1) we’ll have enough money both buy a house and contribute to the 401k, (2) we’ve may not buy right away anyhow since we can’t agree on what we want, and (3) the year is quickly coming to an end, I went ahead and sent in a lump sum of $10,000 to catch up!

My problem: The money just showed up on my account today, so I will have to wait until Monday to trade. This is the same day Mr. Bernanke plans on making his Fed Funds rate announcement, which will either calm the market down (drop 0.25%), make it really unhappy (keep it the same), or make it really happy (drop 0.5%). Even with the subprime mess, I am definitely still going invest my money into the stock market… but should I do it all at once?

Usually, in the arena of dollar cost average vs. lump sum my position has been:

If you already have all the money available (not if you’re just taking a set amount out of each paycheck) and you are well away from retirement, you should just invest the lump sum all at once.

This is supported by several studies, including this FPA Journal article Lump Sum Beats Dollar-Cost Averaging, which concludes:

Given a lump sum, is it better to invest the entire amount immediately, or spread it out in equal installments? Based on historical evidence, the major conclusion of our study is that the odds strongly favor investing the lump sum immediately. This conclusion emerges after comparing annualized monthly returns for both DCA and LS strategies for all possible 12-month periods from 1926 to 1991. For the entire 65-year period, the LS strategy produced superior returns approximately two-thirds of the time, and the superior returns were statistically significant.

So it turns out 2/3rds of the time you win out, and 1/3rd of the time you lose. Not bad. The next argument that some people make is DCA is more of a risk-reduction method than anything else. Again, multiple academic articles suggest that DCA may not be a very efficient way to reduce risk, either! Bummer.

Still, given the Bernanke situation, I am considering dollar-cost-averaging $1000 a day over the next two weeks instead of $10,000 all at once on Monday. Prudent idea, or backtracking?

Posted in Investing, Retirement | 37 Comments »

401k to IRA Rollover Decision Process, Prosper Lending Review

I’m swamped today, so here are some posts from the past that fill requests from my suggestion box:

My 401k to IRA Rollover Decision Process
Part 1 - Stay put with old 401k?
Part 2 - Roll over into Fidelity?
Part 3 - What about Vanguard?
Part 4 - My Final Decision

Although this was done two years ago with my previous job, I think it still contains a lot of pertinent information. Note that Vanguard has since gotten rid of their low-balance fee if you accept electronic delivery of statements.

Also, since then there are now brokers that have free ETF trades, most prominently Zecco Trading (no minimum balance, $30 IRA annual fee) and WellsTrade ($25,000 minimum equity, no annual fee).

About Prosper.com - Person-to-Person Lending
Prosper Lending Review, Part 1: First Looks
Prosper Lending Review, Part 2: The Numbers
Prosper Revisited: Will Returns Drop As Defaults Increase Over Time?

I’m still not sold on Prosper’s risk/return characteristics to consider it a prudent part of my investment portfolio, but it can certainly be a fun diversion if you like that sort of thing.

Posted in Investing, Retirement | 13 Comments »

Cash Back On All Purchases With Citibank CashReturns MasterCard

There is yet another rewards card variation out there - the Citibank CashReturns MasterCard.

What’s special about this card is the promotional offer. It offers 5% back on all purchases for 3 months. (Update: as of 4/20, it only offers a 20% bonus on the standard 1% back on everything), with no caps or limits. This would be ideal for those that either regularly charge high amounts on their cards, or have any large purchases coming up. Got a home improvement project approaching? Christmas gifts? Vacation plans? Reimbursed work expenses? I know we really racked up the charges when we moved.

Doing the math, this has the potential to be better than any of the other sign-up bonuses out there. If you get 5% back on $10,000 during the intro period, that’s $500 of tax-free cash in your pocket! (Why credit card rebates are believed to be non-taxable).

The standard benefits are pretty average, but do offer more towards simplicity:

» Earn 1% cash back on all purchases
» No limits or expirations on the amount of cash back earned
» Checks sent automatically upon earning $50
» No Annual Fee

Update: Yes, there is also 0% APR on balance transfers for up to 12 months with this card, but note that it comes with a transaction fee of 3.0% of the amount of each balance transfer ($5 minimum). If this is what interest you, see this list for alternative cards with no initial balance transfer fees.

Posted in Credit Cards, Deals & Offers | 61 Comments »

Make Money From Your Own Videos With Revver

You’ve heard of YouTube, but what about Revver? It’s a video-sharing site that also shares advertising revenue with either people who upload their own videos, or simply share existing ones. The creator gets 40%, Revver gets 40%, and the sharer gets 20%. I just read in USA Today that they have now paid out $1 million out to users. These guys have made over $50,000 alone for this Diet Coke/Mentos video:

I uploaded my super-amateur Roth vs. Traditional IRA video for kicks, but it hasn’t been approved yet. I’m sure making serious money this way would be very difficult, but if you had the creativity or happened to get lucky taping something unique, this might be both fun and profitable. There are a bunch of other sites like MetaCafe that also profit-share, but they seem to be much more selective.

In the creative department: I’ve been wasting time watching a lot of HappySlip videos, which are essentially a one-woman show - she is actor (with multiple roles), writer, producer, and director. Just her, a cam, and a Mac. Highly amusing!

In the lucky department: This blogger apparently got a 300-page iPhone bill, taped it, and has made $5,000 so far.

Posted in Entrepreneurial | 11 Comments »

Our Wedding: What We Spent, Who Paid For It, and How It Went

First, even though it could have been executed better, to the right are the results of my informal wedding cost survey. While there was a big spread, over 30% of people said they spent less than $5,000 on their weddings. Impressive! The median value was near $10,000.

Now, a few people asked me what we spent on our wedding. I’m sure more people were wondering, but weren’t so bold. I’ve actually avoided talking about this topic for a variety of reasons, the main one being that I don’t think I have anything especially helpful to offer on this front! However, I’m sharing all kinds of money stuff already, so why not throw it out there and see what happens…

Weddings Are Very Personal
Weddings are tricky. They involve the expectations, cultures, and traditions of two families, who might have completely different ideas of what a wedding “should” be. This is on top of what the media perpetuates as standard, in everything from wedding magazines to movies. As such, I try to refrain from forming opinions on what people should or should not do for their weddings. Everyone needs to find their own balance between wants and costs.

What We Spent
Read the rest of this entry…

Posted in Frugal Living | 27 Comments »

Free Nights of Theater In October and November

In an effort to attract new audiences, a large group of America’s not-for-profit theaters are organizing a Free Night of Theater clustered around October 18th, 2007 in various locations nationwide:

In 2007 the Free Night program will be presented in Atlanta, Austin, Boise, Cincinnati, Cleveland, the state of Connecticut, Indianapolis, Kansas City, Lexington, Los Angeles, the state of New Jersey, the state of North Carolina, Oregon (in Ashland and Eugene), Philadelphia, Sacramento, San Diego, San Francisco, Seattle/Greater Puget Sound, South Carolina, Charleston, several states represented by Southeastern Theatre Conference, Washington D.C. and the state of Wisconsin.

Despite the somewhat confusing wording, it’s not necessarily confined to 10/18, but depending on the area may include multiple plays from different groups. For example, last year in the San Francisco Bay Area over 8,300 tickets were given away to 151 performances from 110 local companies, including “many of the region?s leading theatre producers, such as American Conservatory Theater, Berkeley Repertory Theatre, San Jose Repertory Theatre, TheatreWorks, Magic Theatre and California Shakespeare Theater, along with a host of smaller companies.”

It sounds like quite an event, and a good opportunity to get out and see something new. Check out the website for additional information and how to book tickets, as it is first-come, first-serve. Via Punny Money.

Posted in Frugal Living | 3 Comments »

Interest Rate Chaser Discussion: Where To Go After FNBO Direct’s 6% APY Promotional Period?

Many people who are with FNBO Direct right now earning 6.0% APY are asking - What is FNBO Direct’s rate going to be after September 28th? After a few phone calls, the official answer is apparently “We’re not going to tell you until we have to… on 9/28.”

This is actually pretty smart on their part. If they announced that the rate is going to drop now, then people may already start moving their money out. It’s better to keep us in suspense, playing off our hope that it will somehow stay high. I personally feel like it’s going to go back to 5.25% at the highest, otherwise they would have told us to kept us from preemptively moving. But that’s just my guess.

If this turns out to be the case, then the rates for no-minimum balance, no-monthly fee, liquid savings accounts will be again clustered closely around (a respectable) 5% APY. For those that want to keep chasing, I also tried to find the best combination of highest rate, FDIC-insured, lower minimums, and high liquidity:

6.01% APY for up to 6 months from EverBank, $1,500 minimum
Although this is technically a promotional rate for their FreeNet Checking Account, since it’s guaranteed you could simply treat it like a 3-month, 100% liquid CD paying 6.01% APY. Here are the details:

• 6.01% APY guarantee for first 3 months, after it goes to 3.35-4.89% APY based on balance.
• $1,500 minimum to open, no monthly minimum or fees, no direct deposit requirement
• Online Billpay costs $4.95/month if you have less than $1,500 in there, $25 fee if closed within 30 days of opening
• Free ACH in/out funds transfer system
• Checkwriting (1st 50 free), ATM rebates (up to $6/month), Postage-paid deposit envelopes
• FDIC-insured (certificate #34775), 3 star “Performing” Safe & Sound rating

After the first 3 months (assuming it’s still available), you can then open a Yield Pledge Money Market that also has 6.01% APY for 3 months. Also $1,500 minimum to open. It has more restrictions since it’s a savings account as well as a monthly minimum balance, so go with the Checking first. In total, this offers up to 6 months more of 6% goodness.

5.70-5.75% APY from IndyMac Bank
Indymac Bank has seen some troubles from the subprime loan mess, even though it specialized more in “Alt-A” loans, which are between prime and sub-prime in quality. However, it does offer some of the current top FDIC-insured rates. Here are two options:

$5,000 Mininum - Internet CD

• 5.70% APY for 5-month or 6-month Certificate of Deposit.
• Minimum to open is $5,000.
• It’s important to note that these are certificates of deposit, and so you can’t transfer money in and out as with checking/savings accounts. In addition, there is a early withdrawal penalty of 1 month of interest.

$25,000 Mininum - Internet First Rate Money Market

• 5.75% APY for balances above $25,000. No guaranteed term for this rate.
• Minimum to open is $1,000. Monthly fee of $7 if your balance falls below $1,000.
• Limited checkwriting is available.

Indymac’s FDIC certificate number is 29730, and it has a 2 star “Below peer group” Safe & Sound rating. Worried about their financial health? Check out my post exploring What happens if my bank goes bankrupt or fails? There may be ways to expand your $100,000 FDIC coverage.

Posted in Banking | 38 Comments »

This Is Why I Hate Rebates…

Wonder why you haven’t received your rebate? It might be because they just threw it away. Above are 1,300 unopened rebate forms that were dug out of a dumpster by a San Jose Mercury reporter (need a login?). Here is an excerpt:

I know that Shu Wong of San Jose hasn’t received the $3.50 mail-in rebate for a Vastech computer networking USB hub purchased at a Fry’s Electronics in May. Richard Louie of Austin, Olivia Sattaypiwat of Saratoga and Buu Duong of San Jose haven’t received their rebates, either.

I know this because they told me so, and because I am staring at more than 1,300 rebate requests sent to Vastech on Bonaventura Drive in San Jose. The envelopes were tossed - unopened - into a garbage dumpster near Vastech. I have two boxes of envelopes that were thrown out without being processed. In all of my years of reporting, I have never encountered such outrageous behavior against consumers.

Grrr. Did you know that rebate processing companies compete with each other based on their rebate rejection percentages? It’s part of their marketing materials… essentially “We reject more than the other guys, so go with us!” Makes you feel warm and fuzzy, no? Via the Consumerist.

Posted in Frugal Living | 30 Comments »