Archives for June 2013

Investment Returns By Asset Class: Mid-2013 Update

Posted on June 30, 2013 // 5 Comments

We’ve reach the midway point of 2013, and here are the returns of the major asset classes as benchmarked by passive mutual funds and ETFs. Return data was taken after market close at the end of June 2013. I’m still tweaking the format, in the hopes of making it easier to understand. Below is a chart of the all the trailing total returns for year-to-date, trailing 1-year, and trailing 10-year periods.

Market Commentary

The big news recently is the Fed talking about possibly tapering off its quantitative easing. Since that drove interest rates up, bond prices fell. I think this was a good reminder that we are in abnormal times, with the super-low interest rates being artificially depressed and that one day we will revert back to the mean. Even though my bond holdings fell as well, I’m fine with that if that’s a result of a healthy stock market and it means higher interest rate payouts in the future.

Stocks prices have pulled back a bit recently, but are still well above levels from a year ago. If you bought and held since 2009, you’re still happy. Gold has dropped nearly 30% since the beginning of the year. I just don’t understand gold prices, which is why I don’t own it. I can see a place for it as a diversifier, but it just seems too volatile and speculative to be considered “real money”.

The details:

[Read more…]

Filed Under: Investing, Monthly Updates //

1,000 Bonus Citi ThankYou Points for Linking to Amazon.com

Posted on June 27, 2013 // 11 Comments

If you have a Citi credit card that earns ThankYou points, you can get a 1,000 free ThankYou points for linking your Citi card with Amazon.com for future redemptions. Simply log into your account at ThankYou.com and go to Overview > My Account > Enter a Promotional Code and type in TYAMCAZON2 into the *bottom* Bonus Registration Code form field. You should see the following text:

Thank you. Your code has been submitted. You are ALMOST DONE! Now just click on “Continue” below (or go to amazon.com/citi) to link your ThankYou® and Amazon.com accounts. Offer expires at 11:59 PM ET on 6/30/2013 or until the first 20,000 members have linked-whichever comes first. Once you link, bonus points will be posted to your ThankYou account by July 10th 2013.

I’ll take the bonus points, but I won’t be using this rewards option as it only yields 0.8 cents per point. See previous post on the Best Value for Citi ThankYou Points Redemptions.

Filed Under: Deals & Offers //

Fandango $6 Movie Tickets, $5 for $10 at Target

Posted on June 27, 2013 // Leave a Comment

Quickly, here are some limited-time Groupon deals:

Filed Under: Deals & Offers //

Mint.com Budgeting Tips & Tricks

Posted on June 27, 2013 // 12 Comments

While I don’t believe everyone necessarily needs a tracked-down-to-the-dollar budget, I do think a major problem is that many people simply don’t know where their money goes. That makes it quite hard to know if your spending habits match up with your priorities. I’ve been using Mint.com (free, ad-supported) to track our household spending for a while. (I used to be a Yodlee guy, but they’ve been left behind with slow and clunky updates.) For those starting out, here are some practical tips that may be useful.

Using Credit and Debit Cards
The primary advantage of using a service like Mint.com is that if you pay for things with a linked credit or debit card, then important stuff like the date, merchant, and amount are immediately recorded so you don’t have to do it manually. No receipts, no typing, no writing. That’s a lot of time and mental energy saved.

Auto-categorization Training
After Mint imports your transaction information, it will provide its best guess as to the proper spending category. McDonald’s will be “Fast Food”, for example, but it also thought my water company was a clothing store. You can correct the category, and also create a rule that always changes the category to what you prefer. For example, I always set Sam’s Club and Costco as “Groceries” because that’s mostly what I buy there.

minty1

[Read more…]

Filed Under: Budgeting, Frugal Living //

The Perfect Thing: What Is Your Little Obsession?

Posted on June 20, 2013 // 9 Comments

I’ve been thinking about another excerpt from investor Charlie Munger’s biography about his father Al Munger:

Though he could not be described as a lavish spender, Al Munger savored just the perfect thing, whatever it was he needed. Al had learned the joy of artful living from his mother. She shopped for the very best coffee beans, then took great pleasure each morning in grinding them for fresh coffee. It was a Tao philosophy, Midwestern style. In the Tao Te Ching, Lao-Tse urged seekers to regard the small as important and to make much of the little. “The little obsessions,” Charlie called them.

This is an appealing idea. Only a select few can afford a Ferrari or Bentley, but most people reading this can afford a great cup of coffee. Instead of focusing your energy on the crazy-stupid-expensive “bests” like an Hermes leather handbag or Patek Philippe watch, why not enjoy the best cheesecake in the city?

Personally, I’m not sure I connect with this philosophy. I like good coffee, but I just buy whatever is cheap and nearby on the days that I need it. I like craft beer, but will drink Bud Light happily. Maybe I have to work on this artful living thing. 🙂

On the other hand, I did buy what may be the world’s best nail clipper for under $16. Also, my wife makes what I truly think is the world’s best roast chicken based on a really simple recipe by famous chef Thomas Keller. Follow the directions carefully, and it will turn out amazing. Bake some root vegetables alongside it, and you have a perfect meal for under $10.

Do you have an example of something that you enjoy the best of, but it still costs say under $25?

Filed Under: Frugal Living, Simple Living //

MYGA Deferred Fixed Annuities: Maximize State Guaranty Coverage Limits

Posted on June 18, 2013 // 6 Comments

A recent article by Scott Burns talked about investing in deferred fixed annuities with CD-like qualities, an example offered a 3% yield guaranteed for 5 years plus no surrender charges (similar to early withdrawal penalty) after 5 years. This is a better rate than current bank CDs offer, and annuities can grow tax-deferred for those saving for retirement (withdraw as early as age 59.5)*. After the 5 years, you roll the annuity over to another company if the new rate is no longer good enough. These are also referred to as MYGAs (multi-year guarantee annuities). The catch? The annuities that have the best rates often don’t have the highest credit ratings.

A possible solution? Make sure you stay under the coverage limits of your state’s Life & Health Guaranty Association. From NOHLGA.com:

State life and health insurance guaranty associations are state entities (in all 50 states as well as Puerto Rico and the District of Columbia) created to protect policyholders of an insolvent insurance company. All insurance companies (with limited exceptions) licensed to sell life or health insurance in a state must be members of that state’s guaranty association.

These are not federally-backed like FDIC insurance. Instead, all the member insurance companies agree to cover each other in cases of insolvency up to the policy limits. In order to be a licensed insurer, you need to maintain a certain level of financial stability. But just like banks, some insurers are stronger than others. So if you’re going to go over the limits, the standard advice is to go with a top credit rating from AM Best, Moody’s, or S&P. However, credit ratings can go down over time, and you may be holding these annuities for many years. Therefore, it’s still safest to stay under the limits.

(You may not hear much about these guaranty associations because it is illegal for insurance brokers to use them in advertisements as a reason to buy annuities. I find this somewhat ironic, considering all the misleading statements they are allowed to make about equity-linked or equity-indexed annuity products.)

While they vary from state to state, virtually all states offer at least $100,000 in coverage for withdrawal and cash values for annuities. (Connecticut and Washington offer $500,000 in coverage. In California, the limit is 80% not to exceed $250,000.) Look up your specific state’s limits here or here.

In order to maximize your coverage, the process is similar to that for FDIC insurance – spread your money across different institutions and use different ownership titles. Let’s say you have $100,000 in state annuity coverage. The details may vary by state, but for many states that number is per owner designation, per company. The Mr. Annuity website has a helpful article [pdf] about how to structure your annuities to maximize your coverage.

If a client has $300,000 and wants to make certain all the money is protected, including future interest earnings, while taking advantage of the highest rate possible, we set up 3 contracts in Company A for $80,000 each. In annuity 1, the husband is the Owner and Annuitant. In annuity 2, the wife is the Owner and Annuitant. In annuity 3, the husband and wife are Joint Owners with the husband as the Annuitant. Then, we’ll put $60,000 in the next highest rate we can find in Company B, normally with the husband as Owner and Annuitant. That way, as the money grows, it will be protected under the guaranty laws because they are covered up to $100,000 per owner designation, per company.

I made a quick illustration of this theoretical example:

annuitysafe

Notice that you need to leave some room for growth, that way your future earnings are covered as well.

* I’m not saying these annuities are a great deal for everyone. If you are in a situation with a high-income and are already maxing all your other tax-deferred accounts like IRAs, 401ks, and are still looking for safer retirement investments with steady growth then this might be an option to consider due to the ability to get tax-deferred growth with rates competitive with current bond yields. I’m still in research mode.

Filed Under: Annuities, Banking, Investing //

Home Depot Coupon Code: $10 off $100+ Purchase

Posted on June 17, 2013 // 7 Comments

HomeDepot.com has a coupon code JUNEHD that will take $10 off any purchase of $100 or more. Expires 6/23/13. You can have the item shipped or pick up in-store.

Get another 3% or so rebate via a cashback shopping portal like eBates ($5 new customer bonus), Mr. Rebates ($5 bonus), and BigCrumbs.

Stack the discounts even more with the 5% rotating cash back available currently on home improvement stores from the Citi Dividend and new Discover It card. Or, buy a Home Depot gift card at a grocery store using the Blue Cash Preferred® Card from American Express which offers 6% cash back at US supermarkets, or buy a Home Depot gift card for 7% off at a secondary market like Raise.com.

Filed Under: Deals & Offers //

Chase Ink Bold Review: Business Card Bonus Worth $500 Cash, $625 in Airfare

Posted on June 16, 2013 // 37 Comments

Chase Ink BoldThe Ink Bold® Business Charge Card is a premium small business being offered by Chase, directly competing with the biz cards from American Express. If you have a small business including freelance or online eBay/Etsy sales, using a business card allows you to separate your personal and business expenses as well as get some nice rewards in the process. Just to get you to try it out, Chase is offering 500 bucks in the form of 50,000 bonus Ultimate Rewards points after spending $5,000 in the first 3 months your account is open.

50,000 Ultimate Rewards points can be redeemed for $500 cash (real money, via statement credit or check) or 25% extra = $625 when used towards airfare, split up however you like into multiple tickets. If your total is more than $625, you simply pay the difference. I’ve used this feature and it’s very easy and flexible to book airfare using their points (system and prices are like Expedia, Travelocity, etc). Here’s an example of combining cash and points:

If you prefer, you can also transfer points to British Airways Avios miles, United Airlines miles, Hyatt hotel points, and Marriott hotel points. 1 Chase point = 1 mile/hotel point for these transfers, so that’s 50,000 miles.

You’ll also earn up to 5 points per $1 spent on the first $50,000 spent annually on eligible business purchases:

  • Earn a total of 2 points for each $1 of net purchases made at merchants that classify themselves the following categories: gas stations and hotels stays booked directly with the hotel. (on the first $50,000 spent annually)
  • Earn a total of 5 points for each $1 of net purchases made at merchants that classify themselves the following categories: wireless/telecommunications services (excluding equipment such as phones and fax machines), cable and satellite television services, office supply stores and wholesale distributors of office supplies. (on the first $50,000 spent annually)
  • All other purchases will earn 1 point for each $1 of net purchases.

Getting 5X points back at Office Depot, Staples, and Office Max also means that you get 5X points back on the gift cards sold at these office supply stores. This includes places like Home Depot, Lowe’s, Kmart, Starbucks, TJ Maxx, and more.

There is no annual fee for the first year, $95 after that if you decide to keep it. You also get a free annual membership in Lounge Club, which gets you 2 complimentary visits to participating “first class” airport lounges each year and discounted rates on future visits. After you get the Ink card, register at loungeclub.com/inkcard. The Ink Bold Business Charge Card is a business charge card where you must pay in full each month after a 30-day grace period with no interest.

Jot business receipt management. Chase has now partnered with Jot, so now I can snap a picture of my business receipts with my smartphone and link it to my card purchases. No more shoeboxes or scanning, and it exports into Quickbooks. I haven’t tried this yet, but it sounds like a good backup in case the IRS comes knocking.

Business Credit Card Eligibility

Many people aren’t aware of the fact that they can apply for business credit cards, even if they are not a corporation or LLC. Why? Because any individual can be a business as well. The business type is called a sole proprietorship. Perhaps you sell items on eBay, Craiglist, or Etsy. Maybe you do some freelancing and/or consulting. You might have gotten a 1099 tax form and filled out a Schedule C. Boom! You’re a sole proprietorship. This is the simplest business entity, but it is fully legit and recognized by the IRS. On a business credit card application, you should use your own legal name as the business name, and your Social Security Number as the Tax ID.

In addition, Chase business cards won’t show up on your personal credit report. Now, this card will require you to personally guarantee that you’ll pay them back what you charge on the card, which means they’ll check your personal credit score like any other consumer card. However, it won’t affect your credit score otherwise, since it doesn’t change things like your credit limits, average account age, or credit utilization ratio.

  • Ink Bold® Business Charge Card Application Link

This card is essentially the small business version of the Chase Sapphire Preferred®Card, a consumer card which offers 50,000 Ultimate Rewards points = $625 in travel) Compare with the other $500+ Bonus credit card promotions currently available.

“Disclaimer: This content is not provided or commissioned by the issuer. Opinions expressed here are author’s alone, not those of the issuer, and have not been reviewed, approved or otherwise endorsed by the issuer. This site may be compensated through the issuer’s Affiliate Program.” 

“The responses below are not provided or commissioned by the bank advertiser. Responses have not been reviewed, approved or otherwise endorsed by the bank advertiser. It is not the bank advertiser’s responsibility to ensure all posts and/or questions are answered.”

Filed Under: Credit Cards, Deals & Offers //

$30,000 Beat-the-Benchmark Experiment Update – June 2013

Posted on June 13, 2013 // 5 Comments

Here’s a condensed June 2013 update for my Beat the Market Experiment, a series of three portfolios started on November 1st, 2012:

  1. $10,000 Passive Benchmark Portfolio that would serve as both a performance benchmark and an real-world, low-cost portfolio that would be easy to replicate and maintain for DIY investors.
  2. $10,000 Beat-the-Benchmark Speculative Portfolio that would simply represent the attempts of an “average guy” who is not a financial professional and gets his news from mainstream sources to get the best overall returns possible.
  3. $10,000 P2P Consumer Lending Speculative Portfolio – Split evenly between LendingClub and Prosper, this portfolio is designed to test out the alternative investment class of person-to-person loans. The goal is again to beat the benchmark by setting a target return of 8-10% net of defaults.
1306_btmsummary

Summary. Values are as of June 1, 2013. 7 months into this experiment, the passive benchmark portfolio remains the leader although last month it was pretty flat. The speculative portfolio is bouncing back quite nicely, almost matching the benchmark portfolio. The P2P lending portfolio is still rather young, but I’m satisfied with the current trend of having 5 out of 450+ loans that are over 30 days late.

$10,000 Benchmark Portfolio. I put $10,000 into index funds at TD Ameritrade due to their 100 commission-free ETF program that includes free trades on the best low-cost, index ETFs from Vanguard and iShares. The portfolio was based loosely on a David Swensen model portfolio. Screenshot, click to enlarge:

[Read more…]

Filed Under: Investing, Monthly Updates //

Free VIN Check Trick, Free Vehicle History Report

Posted on June 12, 2013 // 30 Comments

AutoCheck and CarFax are popular ways to check on a used vehicle’s history before buying or selling. They aren’t always 100% accurate, but can still be a useful tool and possibly worth the $30+ retail price. But AutoCheck also lets car dealers check show free basic VIN checks to show their customers, and people (not me) figured out you can piggyback on this feature rather easily.

(Update 7/22: You can still try using the instructions below, but it appears that Autocheck has closed this loophole. You can still get a basic free VIN check at AutoCheck.com that will show you the year, make, model, style and country of assembly for any VIN. It’ll also show you how many vehicle history records there are for this vehicle, but in order to see the details you’ll have to pay for the full report.)

To perform a another basic check of whether a specific car VIN has been reported stolen or has a salvage title, use this free NCIB.gov VINcheck tool. Together, these would provide a good initial check to any potential Craiglist used car purchases. If you wish to proceed, it may be worth it to go ahead and purchase a report.

Finally, there is also a more affordable option called VinAudit.com that sells their vehicle history report for only $12.99. They also include title registration records, junk/salvage records, insurance records, and odometer history. Data is from the National Motor Vehicle Title Information System (NMVTIS). States, insurance carriers, and salvage yards are required by federal law to report data to NMVTIS. Their sample report looks pretty much the same as the other guys, but Compare with $39.99 for CarFax and $29.99 for AutoCheck.

[Read more…]

Filed Under: Deals & Offers //

MMB Retirement Portfolio Update – June 2013

Posted on June 11, 2013 // 13 Comments

Here’s a mid-2013 update of our retirement portfolio, including employer 401(k) plans, self-employed retirement plans, Traditional and Roth IRAs, and taxable brokerage holdings. Cash reserves (emergency fund), college savings accounts, experimental portfolios, and day-to-day cash balances are excluded. The purpose of this portfolio is to eventually create income and enable financial freedom.

Target Asset Allocation

Since my last update, I made a minor change to our target asset allocation by removing Emerging Markets as a separate added weighting as it now includes some huge companies and comprises nearly 20% of the Total World ex-US (Total International) asset class.

aa_updated2013_all

[Read more…]

Filed Under: Goals, Investing, Retirement //

Part-Time Track Jobs For Mainstream Professionals?

Posted on June 7, 2013 // 15 Comments

bwfatherBusinessweek’s cover story this week is about how fathers do the work/family balancing act. The article talks about how men want to be more involved in family life as well as women but face their own unique obstacles yada yada, but this part caught my eye:

When Trombley [research engineer at Ford Motors] was expecting his first child, he and his wife, who also works at Ford, weren’t thrilled with the child-care options available, and she wasn’t eager to become a stay-at-home mother. Trombley remembered that a colleague from several years back had worked out a novel solution with her husband, with both taking part-time schedules to allow them to split the week up and each be home with their kids for half of it. Ford didn’t offer paternity leave, but it did offer a part-time track so long as an employee’s manager approved it. When baby Dylan arrived, Trombley went to his bosses and told them he wanted to drop down to 70 percent and work from home two days a week. […] There are now three other men in his department with similar part-time setups; there were none when Trombley started.

Is there a list of large, Fortune 500 employers that offer such a “part-time track” option? I only found some job board sites like 10til2 and FlexJobs. I did find this 2004 research paper Beyond the Mommy Track: The Influence of New-Concept Part-Time Work for Professional Women on Work and Family [pdf]. From the abstract:

Compared to their counterparts who worked full time, mothers who worked in these part-time positions reported significantly greater work/family balance and did not report significantly less career opportunity. The part-time group reported 47% fewer work hours and 41% lower income than the full-time group. These data support the notion that new-concept part-time work is a viable option to assist women in professional careers to successfully integrate their family career.

I’m selfishly fascinated by the idea of part-time work for salaried jobs (as opposed to hourly workers). I’ve met part-time doctors, engineers, professors, lawyers, even judges. For most of them it’s been a figure-it-out-yourself exercise, but hopefully the idea of breaking down the traditional “full-time” job into smaller pieces is gaining momentum in the corporate world. It would not only be great for mothers and fathers, but anyone who wants more control over their life.

Filed Under: Career, Family //
Next Page »