Archives for January 2010

Support Haiti Recovery Effort Through Microlending

Posted on January 15, 2010 // 7 Comments

I received this e-mail today from Microplace, which provides loans to low-income entrepreneurs around the world. I think it’s a great idea, although of course you should remember that you are lending money and it may or may not be repaid. You may consider augmenting your charitable contributions with this type of investment.

Haiti earthquake increases need for microfinance to support rebuilding

Dear Jonathan,

A massive earthquake with a magnitude of 7.0 hit Haiti on Tuesday near the capital, Port-au-Prince, and is feared to have killed thousands. This disaster requires both immediate emergency relief and longer term rebuilding efforts. Microfinance will support the financing needs that inevitably arise from this type of catastrophe as Haitians look to rebuild their country.

You can help today by investing on MicroPlace in Fonkoze, the largest microfinance institution in Haiti.

Even better, I see that Microplace is still running their Buy-1-Get-1-Free promotion, where if you buy a $20 gift certificate towards any fund, you get another one for free. That’s $40 of microlending funds for only $20. To find the Fonkoze Haiti fund, click on Find a Gift Now, and use the Geographic filter > Latin America > Haiti.

Filed Under: Giving Back //

Free Basic SnowBomb.com Tahoe Card – Discounted Lift Tickets

Posted on January 14, 2010 // 10 Comments

Here’s one for the skiers and snowboarders out there. Until 1/15, grab a free 2009/10 Basic Tahoe Card from Snowbomb.com, which offers free discount lift tickets (electronic only). You can also get a free subscription to Snowboard or FreeSkier magazine. Usually costs $25.

Simply create a new account at SnowBomb.com with the promo bode snow1970. You should receive immediate confirmation, with the magazine sub option on the bottom of the page. Credit to FW user FatMattE.

Account Activated
You have completed the activation process. You now have access to the cheapest prices in the SnowBomb online store for the 2009/10 season.

The discounts aren’t awesome, but sometimes it can be the best deal available. For more ski deals, check out SlidingOnTheCheap.

Filed Under: Deals & Offers //

15-Minute Resolution #5: Check the Asset Allocation of your Investment Portfolio

Posted on January 12, 2010 // 14 Comments

Here’s the next installment of my series on New Year’s Resolutions that can be done today, and not put off for “some day” in the future. We all know how that usually turns out…

Last year was definitely a roller coaster year when it came to the stock market, and you may have taken the “just don’t open the scary statements” solution. Well, it’s time to take a peek and see where you stand. I won’t pretend that recent performance has been great, but if you made regular contributions throughout, you may be surprised to see your portfolio balance higher than it was in 2007. (Maybe.)

Asset allocation is how your investments are split between different asset classes. The most generic examples are stocks and bonds, but you can also divide them further into categories like large companies vs. small companies, international vs. domestic stocks, or different safety grades of bonds. Other asset classes include real estate, commodities, or precious metals. Your mix of assets has a great impact on the volatility and expected future return of your portfolio.

The easiest way is gather all your most recent financial statements and plug your holdings into the Morningstar Instant X-Ray tool.

(If you want it to remember your portfolio, you must sign up for a free site membership.) The site will then “x-ray” your holdings and break it down by asset class:

How do I know if my asset allocation is correct?

Well, ideally you would already have set your target asset allocation, and all you would need to do is to rebalance your assets to that target. Rebalancing is a way to maintain the risk/reward balance that you have chosen for your investments, and also forces you to buy temporarily under-performing assets and sell over-performing assets (buy low, sell high). How often one should re-balance their portfolio depends on a few factors. See this post on How often should I rebalance my portfolio?

Otherwise, setting an asset allocation can be a very complex topic. I recently pondered a very general rule-of-thumb where you set your stock percentage to double your tolerable loss in one year. So if you could only stomach a 30% stock, you should only invest a maximum of 60% of your portfolio in stocks.

Here’s a big collection of my posts that I did when deciding on my own target asset allocation:

Simplified Theoretical Stuff

  1. Disclaimer and General Philosophy
  2. Consider Simply Buying The Entire Market
  3. Efficient Frontier and Modern Portfolio Theory

Choosing An Asset Allocation

  1. Deciding On The Stocks/Bonds Ratio
  2. Deciding On The Domestic/International Ratio
  3. Considering The Diversification Benefits Of Small and Value Stocks
  4. Equity Asset Allocation: Comparison of 8 Model Portfolios
  5. Investing In Real Estate Through REITs?
  6. Interim Target Asset Allocation: Looking Back & Some Decisions

…See the rest of my 2010 Instant New Year’s Resolutions here!

Filed Under: Goals, Investing, Retirement //

American Express Premier Rewards Gold Card: 25,000 Points Sign-Up Bonus + Double Points on Gas & Groceries

Posted on January 8, 2010 // 28 Comments

American Express is promoting a new charge card called the Premier Rewards Gold Card from American Express®, which is different from their other Gold/Gold Rewards/Platinum/Precious Metal cards.

Since this is the new card being pushed, it has the best sign-up incentives for new cardholders:

  • Earn 25,000 Membership Rewards bonus points when you spend $2,000 in your first 3 months of Card membership. MR points are very versatile, and can be converted to 25,000 frequent flier miles in a number of programs (or 10 Southwest credits), or you can simply get $250 in gift cards at several stores like Home Depot, Crate & Barrel, or Macy’s. I think you can also get cash equivalents at a reduced ratio.
  • Offers 3X points on airfare, 2X points on gasoline at U.S. stand-alone gas stations and at U.S. stand-alone supermarkets, and 1X points on other purchases. The traditional versions only offer 1 point per $ spent, so the double points on gas and groceries are an extra perk, although the annual fee is much higher at $175.
  • No annual fee for your first year. Another important feature, you can get the sign-up bonus and also try out this card for free for a year.
  • Earn 15,000 Membership Rewards bonus points when you spend $30,000 within one calendar year. This means that if you spend $30,000 in a year ($2,500 per month) that you’ll get at least 15,000 for sign-up + 30,000 on spending + 25,000 bonus = 70,000 points total, plus any extra for gas/groceries/airfare. That’s enough for 60,000 frequent flier miles or 2.5 free flights on Southwest (40 credits). Terms and Restrictions Apply.
Filed Under: Credit Cards, Deals & Offers //

PineCone Research Application Link (Paid Online Surveys)

Posted on January 8, 2010 // 10 Comments

Here is an updated application link at Pinecone Research, which is again accepting new members. (May expire at any time, so apply now if you’re interested!) Looks open to all, but only one person per household can sign up. Thanks to reader Chris for the link.

PineCone Research remains one of the better paying and reliable survey companies, with a payout of $3 (check or PayPal) for each 15-minute online survey. The hardest part is getting accepted, as they only take applications intermittently. Some users have reported an increase in unpaid “weed-out” surveys, while others seem to remain happy. I got kicked out a while ago for missing some surveys when I moved, so I’m afraid I can’t comment. It was great for me while it lasted!

The four survey sites that I have been most active with nowadays are NFO MySurvey, Opinion Outpost, BzzAgent, and SurveySavvy. I like it them because they consistently offer me paid survey opportunities, they pay out reliably (important!), and they don’t mind if I don’t do every single survey offered (unlike Pinecone which does).

I shared my thoughts on Pinecone and paid surveys in general here. I call them Bored Money – not terribly efficient but you can do it at your leisure and occasionally get to try some neat things like shampoo, dog food, new soda flavors, and once even got a new $100 Sonicare toothbrush to keep.

Filed Under: Bored Money //

15-Minute Resolution #4: Automate Your Emergency Fund

Posted on January 8, 2010 // 17 Comments

It’s Friday, so here’s an easy slam dunk resolution involving emergency funds. If you’ve done any sort of financial reading lately, you know that many folks recommend having at least 3-6 months of living expenses put aside. Given the current high unemployment rates, I personally wasn’t comfortable until I had 12 months of expenses. Not only could you lose your job, but there could be unexpected health expenses, car repairs, or whatever. But that’s not the main point here.

The easiest way to build your emergency fund is to put it on auto-pilot. Your task for today is to schedule an automatic, repeating monthly transfer of $100 into a savings account.

Just about every savings account available allows you to set up an automatic monthly transfer from your checking account. Here is how to do it with Capital One 360’s Automatic Savings Plan. I just chose $100 as a round number, but change it as you like.

(Perhaps you’ve already got a healthy emergency fund. If so, then you can apply this resolution to another specific savings goal, like a new car fund or in our case a pet healthcare fund to replace costly pet insurance.)

Instead of telling you more reasons to do it, I’m going to try to counter any reasons NOT to do it.

  • Don’t wait until tomorrow. It won’t get any easier later on, only harder.
  • Don’t open up a new account, if you already have one available. If you don’t, one of the fastest applications I’ve seen online is at Capital One Consumer Bank. Takes less than five minutes.
  • Don’t worry about interest rates. It doesn’t matter if your savings account doesn’t earn as much interest as some of the top accounts. This can all be changed later.
  • Don’t worry about not being able to keep it up. Start with as much or as little as you feel comfortable. It doesn’t matter if it’s $100 or $1,000. I don’t even care if it’s $10.

The hardest part is starting. You can always change your mind later, it’s still your money. But hopefully, in several months you’ll wake up to a big chunk of money you didn’t even realize you saved.

See the rest of my 2010 Instant New Year’s Resolutions here!

Filed Under: Budgeting, Goals //

Ooma Landline Phone Number Porting Timeline & Review

Posted on January 8, 2010 // 23 Comments

oomahub

You may recall that I recently bought an Ooma VoIP Telephone system since it offers me unlimited phone service for an upfront price of about $200. Porting your landline phone number over to Ooma costs $40, but can be worth it for some folks. (It’s also free with a 1-year $99 subscription to Ooma Premier service, which includes a second phone number.)

Although Ooma warns that it can take up to 4-6 weeks, the results are highly dependent on your local telephone company. I thought I would share the timeline of a friend’s successful port which took 19 days.

Day 1 – Filled out port request online.

Day 3 – Faxed/e-mailed in required paperwork, which required some signatures and a copy of recent phone bill.

Day 9 – Received the following e-mail from Ooma. Emphasis is mine.

You’ve recently requested your phone number to be ported to ooma. We have submitted all of the information you provided to your current Carrier and are still awaiting confirmation. We will notify you via email once we have confirmation of the actual completion date.

Please keep in mind that if you have DSL on the same number that you requested to port, you will lose your internet connection when your number is ported. ooma will not work without a broadband connection, so this is a friendly reminder to insure you do not experience down time.

Day 12 – Another e-mail from Ooma.

You’ve recently requested your phone number to be ported to Ooma. The expected completion date of your request is scheduled for 12/29/09 [Day 19].

Day 19 – Final e-mail from Ooma.

Thank you for placing your order with ooma, your porting request has been completed. Please reboot your ooma hub so your account will be updated with this number. You may also contact your local carrier to cancel your account with them.

As promised, on Day 19, the regular landline phone went dead. If you called it, it said “This number is no longer in service.” But after rebooting the Ooma unit, all calls were immediately picked up by the new Ooma line. After calling the telephone company to cancel, they said that everything was already terminated and that the final bill would come in shortly. I guess since the number was already gone, they had no reason to try and convince me to stay.

In general, I think Ooma did a very good job of providing regular updates during the process. The overall process was as smooth as could be expected, with the worst part being that it still took 3 weeks total.

Filed Under: Frugal Living //

Free Incorporation / LLC Service From MyCorporation

Posted on January 7, 2010 // 11 Comments

Update: This offer has expired, but there is a coupon code CABIN-20D good for an additional $20 off their $49 dollar LLC or Incorporation filing package. Net price under 30 bucks!

In case your plans include formalizing your business ventures, MyCorporation is offering their LLC formation and incorporation filing services for free until 1/31 with the coupon code MYFREE. You must still pay shipping fees and the filing fees charged by each state.

Free Corps & LLCs: Regular price of $149 is being waived when coupon MYFREE is used to obtain discount. Document shipping, state fees, publication fees, and additional product fees are additional. Discount valid for orders placed for a new corporation or limited liability company only. Prices subject to change without notice. Limit one discount or coupon per order. Coupon is not valid on any other product or service. You must enter/mention the coupon code at the time your order is placed. Coupon or discount is not valid on previous orders. Refunds/credits/adjustments will not be issued on prior orders.

MyCorporation is owned by Intuit, makers of TurboTax and Quicken. I view such online incorporation services as similar to TurboTax for taxes. Yes, you could fill out your 1040 tax forms manually, but it’s much easier to go through a question-and-answer software that walks you through it and explains the steps. However, if you’re talking about a huge business or something that is complex, then you should hire a professional to handle it (accountant for taxes, lawyer for incorporation).

When I formed my S-Corporation, I used one of their primary competitors LegalZoom and paid about $150 for the service – not including the state filing fees and shipping – so having it done for free seems to be a great deal. (I’m sure they’ll try to upsell you some additional services.) It was good to have someone look over the forms before submitting, while avoiding thousand of dollars of fees from a lawyer for our little venture.

The decision between staying a sole proprietor/partnership or forming an LLC/corporation is not always simple. If you’d like to dig into the details, I recommend the book LLC or Corporation? How to Choose the Right Form for Your Business from Nolo Press. I chose to go the S-Corp route primarily for the payroll tax savings.

(You can even have a LLC and chose to have it taxed as an S-Corp, as if things weren’t confusing enough!)

Filed Under: Deals & Offers, Entrepreneurial, General, Self-Employment //

15-Minute Resolution #2: Start Spending Consciously

Posted on January 6, 2010 // 17 Comments

Alright, now for a 15-minute 2010 Resolution that doesn’t make you spend less, just better. Huh? Achieving financial success doesn’t mean pinching every single penny all day long and watching your net worth ticker inch upwards. It means spending money on what you enjoy, and not wasting it on things that you don’t (like credit card interest).

An interesting exercise to help you focus is to list ALL your voluntary expenses, and then organize them by priority. When I say voluntary expense I mean that you should generally ignore bare expenses like rent for a single room and basic food. This is not a rigid exercise, but mostly to get you to think more about spending consciously. Again, don’t spend more than 15-minutes on this.

What is your most important expense?

What is your LEAST important expense?

For example, your list might look something like this, from most important to least important:

  • Mortgage on my dream house
  • Yearly travel
  • …
  • …
  • Monthly iPhone Bill
  • Dining Out
  • Daily Starbucks
  • Rounds of golf
  • Cable TV
  • Beer & Alcohol

You might think, well everyone is going to put housing first. No, in fact it may be at the bottom. Maybe you live in a luxury downtown urban condo right now, and would rather save $1,000 per month and share a 4-bedroom house with a bunch of friends and spend that money on private French lessons and wine. Only you know!

Now write down your list and place it somewhere visible. Make it your computer desktop background if possible. Next time you spend any money, you’ll think twice about whether you’d rather allocate it to something more important to you. You can now finish the rest of the 2010 with a better frame of mind.

In addition, the next time you run into a money hiccup, you’ll know what to cut first before dipping into savings or *gasp* stopping your 401k contributions.

See all the 2010 Instant New Year’s Resolutions here.

Filed Under: Frugal Living, Goals //

15-Minute Resolution #1: Save More For Retirement

Posted on January 4, 2010 // 11 Comments

Do you feel you aren’t saving enough for retirement? Worse, do you feel like what you should be saving for retirement is some huge number you’ll never reach? I think such daunting numbers are what kept a lot of my younger co-workers out of the 401k plan completely.

How about 1% then? Let’s see how much 1% is for a household with a single earner making $50,000 gross per year. For simplicity, let’s say they live in a state without income tax like Texas. If you are paid bi-weekly, putting away $500 pre-tax annually (1%) into a Traditional 401k amounts to an additional $19 reduction per paycheck. If you do live in a state with income tax, the actual paycheck difference will be even smaller.

I know that even this may be hard for some families, but keep in mind this money is still yours and you’re just using the 401k or IRA container to save you taxes. Now, if you’re convinced that you can handle this (and I hope you are), then go right now and either fill out the proper form from Human Resources or go online and submit for a change. As for the investment choice, if you are undecided consider just going for the target-date option for now until you learn more.

Most importantly, increase your contributions by 1% today! Now you can say in 2010 you started saving more for retirement.

Fine Print
I kept things simple above so you don’t get bogged down. You might be satisfied with your current contributions, or you might want to put away more than 1%. Even better, you might get a matching contribution from your company, which will boost your savings even further. On the other hand, what if my 401k has horrible investment options? Or what if you don’t have a 401k/403b at all? You can start an IRA with just a $50 per month commitment with a low-cost provider.

What about Traditional vs. Roth? Check out this Video Post: Roth IRA vs. Traditional IRA.

You may find that if you haven’t maxed out your Roth IRA for 2009 or 2010, then you may want to do that instead of the 401k because Roth IRA contributions can be taken out at any time without penalty (but not earnings).

See all the 2010 Instant New Year’s Resolutions here.

Filed Under: Goals, Retirement //

This Week: 15-Minute 2010 New Year’s Resolutions

Posted on January 4, 2010 // 7 Comments
credit to Bill Waterson

This time of year, it is trendy either to make New Year’s Resolutions or to talk about how resolutions are stupid. I know, because that’s what I usually do…

I thought I’d try something a little different this time – something I was going to call the “instant” resolution, or “single serving” resolution. The idea is that this is not something huge that you’ll have to tackle over an entire year, but something significant that can be done today and then you’ll be done!

So I’m going to put up one per day this week, and challenge you to finish it in that day. They won’t be earth-shaking or surprising. The goal is gradual improvement and motivating action, not becoming some super-saver overnight. I hope it works!

2010 Instant Resolutions

  1. Save More for Retirement
  2. Start Spending Consciously
  3. Check Your Free Consumer & Credit Reports
  4. Automate Your Emergency Fund
  5. Check the Asset Allocation of your Investment Portfolio

Filed Under: Goals //

2010 Savings Account & CD Rate Updates

Posted on January 2, 2010 // 30 Comments

Interest rates are still pretty low as we enter 2010, but I remind people that high nominal rates aren’t always better. Would you rather earn 3% with no inflation or 7% with 5% inflation? In any case, most of us have a chunk of cash and we should still try to earn the most no matter what the rate environment is like right now.

High-Yield Reward Checking Accounts
These are checking accounts that are still fully insured and pay a very high interest rate, as long as you jump through certain hoops each month. This also means that if you make a mistake you’ll forfeit virtually all your interest for that month, so it can be tricky. But for the very diligent, their rates are still averaging around 3-4% APY up to a certain balance limit. Here are a couple of the highest current account available nationwide:

  • Royal Bank of Missouri has their Majestic Checking paying 4.30% APY on up to $25k, which requires 10 check card purchases each month, a direct deposit or ACH transaction per month, and online statements only.
  • Sierra Reward Checking at 4.09% APY on up to $25k, which requires 12 check card purchases each month, a direct deposit/auto-withdrawal, one BillPay per month, and online statements only.

Online Savings Accounts
These accounts pay a yield that at least a full percentage point (1%) higher than any current money market fund, while still providing easy access and safety with minimal hassles. The primary drawback here is that you are limited to a maximum of 6 withdrawals per month, as it is a savings account. Here are account that represent the range of the best current rates.

  • EverBank is offering 1.10% APY for the first 6 months for new accounts. This rate is higher than any 6-month certificates of deposit currently available, which being available for withdrawals at any time. The rate is guaranteed stay in the top 5% of competitive accounts.
  • Alliant Credit Union has a non-promo savings account rate of 2.00% APY. Membership is restricted to people with affiliation to a qualifying organization, but the cheapest way around this is to become a member of a PTA or PTO.
  • Ally Bank Online Savings offers their “no fine print” savings account rate to 0.85% APY as of 11/12/13. No minimum balances, no monthly fees.
  • Veteran online bank Capital One 360 holds up the lower end at 0.75% APY.

Certificates of Deposit
If you are willing to restrict access to your money for a while, your yield can go a bit higher, but not that much. On the other hand, if you think rates will stay low, it may be worthwhile to lock some rates in. Keep an eye on the early-withdrawal penalties if you do think you’ll need to withdraw.

  • 3-Year CD at Pentagon Federal Credit Union will get you 3.0% APY. (6-mo. early withdrawal penalty.)
  • 5-Year CD at Pentagon Federal Credit Union will get you 3.5% APY. (6-mo. early withdrawal penalty.)
Filed Under: Banking //
« Previous Page