Unexpected and Wise Advice From Financial Advisor Ann Kaplan

I’d never heard of Circle Financial or Ann Kaplan before reading this Businessweek interview, but I found myself bookmarking it for later as she gives a lot of unexpected advice that you usually don’t hear from a financial advisor. For example, let’s take “What’s the biggest financial mistake people make?“. I would say that the majority of advisors would focus on some part of investing as that is how they justify their fees. Something like “they should manage risk better, like I do with my smart-alpha-low-beta asset allocation system”. Instead, Kaplan’s response focuses on spending and priorities (emphasis mine):

The biggest mistake isn’t bad investment choices, it’s overspending. Most people are very surprised when they analyze their spending to discover that a lot of it doesn’t reflect their priorities. Maybe they’re eating out a lot when their priority is travel. Most can cut one-third of their budget by eliminating things they don’t really need, whether that’s buying jewelry or theater tickets. The goal of thinking about this isn’t to encourage you to necessarily cut back but to understand that you can. That helps eliminate fear.

I agree wholeheartedly. From another 2009 Forbes article :

When we study what diminishes wealth, down markets and manager selection are not key figures,” says Kaplan. Instead, it is lack of diversification, overspending and borrowing too much. Build an effective checklist for your road to a healthy portfolio that includes planning, diversifying, monitoring investments, securing tax efficiencies and arranging for appropriate wealth transfer. “All these factors have one thing in common,” says Kaplan. “They are all things we can control.”

Even though she is a former Goldman Sachs partner (which at least to me suggests skill at ruthless profit-seeking), she focuses on the personal/social/behavioral aspect of financial advising and is known for exchanging advice in a group environment:

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Republic Wireless: Moto X Phone On Sale Now, New Plans $5-$40 a Month, Switch Between Plans For Free


Updated. Republic Wireless is a mobile phone service that uses WiFi internet to place calls and text whenever possible, saving both you and them money. When WiFi is unavailable, you fall back onto Sprint cell towers. No contracts, but you must buy a phone from them as you cannot bring your own. Some new updates:

  • Moto X. As of November 14th, you can buy the new Moto X smartphone for $299 (Engadget, Anandtech reviews). You can still buy the old Defy XT for $99 but it’s pretty old.
  • Switch between plans for free. You can switch between any of the new plan options, up to twice per month, with no penalty. This means you could upgrade to 4G for a week or a month if you need it, and even downgrade to the $5 or $10 plan if you are traveling or don’t plan to use any data that month. Nice flexibility
  • MMS now supported. MMS (multimedia/picture texting) is now officially working with all major carriers and most regional carriers.

Four New Plans

Here’s a new graphic that explains the plans pretty succinctly:

  • $5/month = WiFi only. No WiFi = Nothing works.
  • $10/month = WiFi + Talk + Text. Unlimited talk and text, no cellular data.
  • $25/month = WiFi + Talk + Text + 3G Data. Unlimited talk, text, 3G data.
  • $40/month = WiFi + Talk + Text + 4G Data. Unlimited talk, text, 3G/4G data.

Prices don’t included taxes and surcharges. Below is information quoted about their Acceptable Use Policy:
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SavedPlus Review: Automated Savings Linked to Spending


You’ve probably heard the adage “pay yourself first”. Well, now there is a website that will help you essentially tax yourself first. Recently mentioned in Businessweek magazine, SavedPlus.com tracks your spending and automatically transfers a set percentage of whatever you spend into your savings account.

Let’s say you choose a 10% preset savings and spend $75. SavedPlus will then transfer $7.50 from your checking account into your savings account. (In practice, the transfers are only done once a week.) This is an interesting way to force yourself to save, and perhaps knowing you’ll have to set aside extra will keep you from spending so much in the first place. You will have to provide your financial passwords for them to track everything. They claim the usual security precautions, using Yodlee for account aggregation. iOS and Android apps are also available.

After playing with it for a couple of days… so far I felt the interface to be a bit clunky and it took me a few tries to get my accounts linked up properly. It’s just not as polished as say Mint.com. A handy feature allows you to link credit card(s) to track spending; you don’t have to buy everything with your checking account debit card.

Expired $100 bonus offer. Their new Christmas promotion offers to match up to $100 your SavedPlus savings as of December 15th, 2013. You have to follow the directions carefully to set it up and it is limited to the first 100 new users, but otherwise it appears to be a pretty easy 100 bucks and they provide enrollment confirmation so you know you’re in. There is no need to change your spending habits at all. The promo worked, it got my attention!

Healthcare Flexible Spending Accounts $500 Carryover


The U.S. Treasury recently announced that participants in Healthcare Flexible Spending Accounts would now be able to carry over $500 of unused funds into the next year, but only if your employer chooses to allow it. Employers can allow either a 2.5 month grace period after the end of the year or the $500 rollover, but not both. Or they could be punks and offer neither. This could start as early as this year for 2013 funds. Various sources: CNN Money, Forbes, WSJ

I like the proposal that these “use-it-or-lose-it” FSAs be simply rolled into Health Savings Accounts which are currently only available to those with high-deductible health plans. The infrastructure and administrators (bank and brokerage holding accounts) already exist, and that way people can simply set aside some tax-protected money for health care for an indefinite period without worrying about losing it. Don’t make people predict their own medical expenses, that’s the main reason we need insurance.

This is also a reminder that there are less than two months left in 2013, so here’s a link to my post on ideas for using up your FSA funds.

Google Hangouts iPhone App: Free Voice Calls and Google Voice Compatibility


Google announced a few days ago that third-party apps will no longer work with Google Voice as of May 15, 2014. I already updated my Obihai post, but this will also affect those people who make voice calls over data with GrooveIP or similar smartphone apps.

The good news is that Google has stated that it wants to fully integrate Google Voice into their own mobile apps so that you can make free voice calls and SMS over data. (Well, I’m not sure about the free part. Given how late it is in the year, I think it will stay free for another year at least.)

The Google Hangouts app for iPhone/iOS has been updated to add free voice calls over WiFi and cellular data (anywhere in the US and Canada) and Google Voice integration. I downloaded it and it worked well. Incoming calls to my Google Voice number rang directly to my phone screen. I can make outgoing calls from inside the Google Hangouts app, and the person I call sees my Google Voice number on their Caller ID. Voice quality was good, although I was on WiFi at the time. So far, SMS/MMS/voicemail are unavailable.

This makes Google Hangouts a good alternative for iPhone owners on the T-Mobile $30 a month Unlimited Data Plan or for those on minimalist pay-as-you-go plans as you can make free voice calls over WiFi. Works on iPod Touch too.

Similar functionality is supposedly coming to Android phones “early next year”. I would hope this means before May 15th.

Obihai + Google Voice = Free Home Phone Service Until End of 2013

(Update November 2013: Google announced a few days ago that third-party apps like Obihai and GrooveIP will no longer work with Google Voice as of May 15, 2014. Obihai confirmed this on their official blog, while stating that your box will still be compatible with many other low-cost VoIP providers. It looks like Google wants people to do the free calling via their own apps…)

Original post December 2012:

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Lessons from a Man Living on $5,000 a Year


Can a person live in the US on only $5,000 a year? According to this NBC News article and this Youtube video, Dan Price has been doing it for 20 years. I enjoy these kinds of interviews as they reinforce the fact that we all make choices every day, it’s just that most of them are the “default” choice. I like being presented with people who make different “opt-out” decisions, even if they are extreme. The article uses terms like “intentional poor” and “voluntary poverty”. Why not just “conscious simplicity”? I enjoyed this quote:

I don’t believe in houses or mortgages. Who in their right mind would spend their lifetime paying for a building they never get to spend time in because they are always working?

Lessons and takeaways from Dan Price’s $5,000 a year lifestyle:

  • Lifestyle-based income. His rare lifestyle partially funds itself as the “wilderness zine” described in the article is simply a print journal of his own thoughts and activities (remember those things before blogs?). Sponsors also provide things like tents and clothing in exchange for mentions in his journal. A brief search locates his website: Moonlight Chronicles. (It annoys me when articles don’t just tell you these things.)
  • Rent. He managed to find a place that only costs him $100 for entire year. I gather that in exchange he also serves as a caretaker for the 2-acre undeveloped plot of rural land in Northeast Oregon. Deals like this are never advertised; nobody lived there and he asked the owners directly. He rebuilt all the fences and helps maintain the property.

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Amazon Free Super Saver Shipping: Higher $35 Minimum, Officially Slower

Amazon.com recently announced changes to their Free Super Saver Shipping program. First, the minimum order size for “free shipping” has increased to $35 from $25. Second, it is officially getting slower:

With free shipping, your order will be delivered 5-8 business days after all of your items are available to ship, including pre-order items.

So not only will it take up to 2 weeks to get your stuff, that is only after every single thing is ready to ship. I’ve already noticed their “Free Super Saver Shipping” getting slower and slower. “ParcelPool” seems to be code for “let it sit around until you absolutely have nothing else to do.” Personally, I’m okay with a $35 minimum. But the slower shipping is why I don’t shop at Amazon as much anymore.

Various media outlets have their theories on why this happened – higher shipping costs? Amazon about to record huge losses? Shareholder revolt? My interpretation: The loss-leader party is starting to wind down.

Up until now, Amazon has taken a “loss leader” approach to building up their business. Their margins are razor-thin… In 2012, they sold over $60 billion dollars of stuff yet still lost money. Why?

  1. To crush the competition. Is there any direct competitor to Amazon? Buy.com? Ha. There are some tech places like Monoprice and Newegg that have a loyal following. eBay is cheap but inconsistent. So we’re left with the brick and mortars – Walmart, Target, and Costco.
  2. To change your shopping habits. They also need to promote a huge behavioral change where when you need something you don’t think Walmart or Costco, you think let’s go on Amazon and just click and buy. It takes lots of repetition to gain that kind of trust and habit formation. Low prices and fast, free shipping will do that.

During this time, consumers like myself have been happily buying things cheaper from Amazon than anywhere else, from laundry detergent to diapers to hard drives. Why waste the time and gas going anywhere else? I’m afraid they are almost done giving out the free drugs. Are we addicted enough to finally allow them to make big profits?

It seems like they are switching to the Costco model. They want your $79 Prime membership fee, and then they hope to break even on everything else by giving you a nice solid low price along with free 2-day shipping. (Free 3-month trial with Amazon Mom, Free 6-month trial with Amazon Student)

Uncrustables and the Many Degrees of Frugality


At the recommendation of reader from one of my Cost of Convenience posts, I have been reading the book Make the Bread, Buy the Butter by Jennifer Reese. In it, Reese does many similar cooking experiments where she decides whether it is better to make it yourself or buy it. I was surprised that she put a “make it” recommendation on things like hot dog buns (while hot dogs themselves are “buy it”), lard, and goat cheese. I’d never even considered making any of those things myself.

Was I wrong? Is there right or wrong? Take the example of Smucker’s Uncrustables, which is a factory-made peanut butter and jelly sandwich with the crusts removed (and extra oil, sugar, and preservatives added). There are many articles out there ranting about how this invention must be a sign of the apocalypse. How hard can it be to make a peanut butter and jelly sandwich? Can’t we do anything for ourselves now? I find myself nodding in agreement.

But wait.

A generation or two ago, someone “making” a peanut butter and jelly sandwich actually baked the bread from flour, shelled, roasted, ground up raw peanuts, and preserved excess fresh fruits via canning. Doing all of these things is actually not that hard. Okay, so maybe you bake your own bread, but do you grow the wheat? In the 1930s, 25% of Americans lived on a farm before widespread monoculture, and thus probably grew the flour, peanuts, and fruits on their own land.

So my takeaway was really that we should be open to the possibilities, consider the options carefully, and then each draw our own lines between D-I-Y and B-U-Y. There will always be someone more or less DIY/frugal/green than you. We all have to balance our own time, energy, and beliefs. This book has inspired me to at least try making a few things once. I wonder how my Eggs Benedict with homemade English muffins and hollandaise sauce with turn out.

Ooma Telo Phone Service Discounts + Long Term Review


Updated, now only $99 with free shipping via referral below. The Ooma Telo is a VoIP system that creates a home phone service through your broadband internet. Just plug in your regular landline phones and go. Features include unlimited domestic long distance, 911 service, caller ID, voicemail, and call waiting. In addition to the one-time purchase price, new customers must pay a share of government taxes and regulatory fees that works out to around $5 a month. Consumer Reports rated it their #1 home phone service in their June 2012 issue. Here is the Consumer Reports “Claim Check” video:

My Long-Term Review

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Straight Talk SIM Card + Any iPhone 4 or 5 = $45 Unlimited Prepaid Plan


October 2013 Update: “Unlimited” has been clarified to mean 3G/4G data speeds for 2.5 GB per month, throttled to 2G data speed after that. Both AT&T and T-Mobile SIM cards are now available, with the newer ones allowing 4G / LTE speeds if you bring your own 4G HSPA+ / LTE-compatible phone. Price dropped to $6.99 with free shipping. See screenshot below.

You can also now buy the iPhone 4 ($200 refurb) and iPhone 5 ($400 refurb) directly from StraightTalk now at reasonable prices. iPhones sold by Straight Talk are CDMA and work on Verizon networks and their wider coverage. Note that the CDMA iPhone 5 comes factory GSM unlocked as well, so you can even switch to AT&T with the SIM cards above. Remember these come with no contract and also go with the $45 unlimited plan. Details below.

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FreedomPop FREE Cell Phone Plan Review


Cell phone service seems to get cheaper each year. I still remember when a great deal was $40 a month for 1,000 minutes with no text and no data. So what about FREE cellular service? Well, it’s here, but with a few important catches…

FreedomPop just rolled out a new cell phone service on a freemium model. That means they have a free option, in the hopes that enough people will pay up for various upgrades to make a profit. You may know the name from their 4G data hotspots that offered 500mb a month of data for free. I bought one, but ended up returning it as it didn’t fit my needs (and like other folks was charged about $15 in unexplained fees). Here are the details of this new venture:

  • Phone. The only phone currently available is an HTC EVO Design 4G for $99. Pretty basic Android phone. Older model, came out in late 2011/early 2012. Online reviews state that it’s pretty thick in size, 4″ screen is pretty good, battery life is below average.
  • Service. Everything works using cellular data only using VoIP software. Primary is Sprint/Clearwire WiMax 4G data coverage, backup is Sprint 3G data coverage. Your coverage may be very limited. See coverage maps here and here. Voice quality over 3G may be spotty.
  • Free Plan Details. For $0 a month, you’ll get 200 minutes, 500 texts, and 500 mb of 3G/4G data. Additional use past that is charged as data, at 2.5 cents per MB ($25 per GB). Voicemail is $2.50 per month extra.
  • “Unlimited Plan” Details. For $10.99 a month, you’ll get unlimited voice minutes, unlimited texts, and 500 mb of 3G/4G data. Additional data costs 2.5 cents per MB ($25 per GB). Voicemail is $2.50 per month extra.

(click to enlarge)

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