Archives for May 2014

Cheaper Diaper Delivery: Amazon Prime, Diapers.com, or Target Subscriptions?

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pampers1With the announcement of Target Subscriptions, I wanted to run a quick price check to see how it stacks up with competitors Amazon.com and Diapers.com. We’re expecting another baby, so we’ll be needing lots of diapers soon (cloth just didn’t happen). Below is a chart of prices, data table, and recap. All shopping methods offer free shipping unless otherwise stated. Prices are as of May 6th, 2014.

diapersub

Shopping method Pampers Swaddlers Diapers Size 1, 216 count Huggies Snug & Dry Diapers Size 3, 222 count Notes
Diapers.com $46.89 $48.39 Ignores first-time customer promotions
Amazon $45.97 $45.99 immediate ship
Amazon
Subscribe & Save 5% off
$43.67 $43.69 auto-delivery
Amazon Mom
Subscribe & Save 20% off
$36.78 $36.79 20% off all diapers with Amazon Mom + Amazon Prime.
Target $45.99 $45.99 immediate ship, must spend $50 for free shipping
Target
Subscriptions 5% off
$43.69 $43.69 auto-delivery
Target
Subscriptions 5% off +
Target REDcard 5% off
$41.51 $41.51 auto-delivery + must pay with REDcard.

 

Recap and Notes

  • Diapers.com has some good new customer promotions (currently $10 off first case, 20% off for 3 months on auto-delivery). However, on an ongoing basis their prices appear more expensive than Amazon or Target.
  • Amazon Subscribe & Save with Amazon Mom technically offers the cheapest price, but you’ll need Amazon Mom (free trial) and thus Amazon Prime. Amazon Mom gives 20% off all diapers and wipes, and you can get 20% other Subscribe and Save items with Mom if you reach at least 5 subscription items per month. (If you just have 5 items and no Prime/Mom, you get 15% off.) As of right now, that isn’t a problem for us as we use it every month. Keep in mind that Amazon is always fiddling with pricing so it’s wise to keep an eye on them.
  • Target subscription prices are generally competitive, but don’t appear to beat Amazon significantly and their selection is still much more limited. I did include a line with the 5% off with Target REDcard discount, but note that you can also use a rewards-earning credit card at Amazon.
  • Sales tax is another consideration, as Target may charge sales tax in your state while Amazon may not if it doesn’t have a physical presence in your state. Amazon is gradually starting to charge sales tax in most states, however.
My Money Blog has partnered with CardRatings and may receive a commission from card issuers. Some or all of the card offers that appear on this site are from advertisers and may impact how and where card products appear on the site. MyMoneyBlog.com does not include all card companies or all available card offers. All opinions expressed are the author’s alone, and has not been provided nor approved by any of the companies mentioned.

MyMoneyBlog.com is also a member of the Amazon Associate Program, and if you click through to Amazon and make a purchase, I may earn a small commission. Thank you for your support.


Sustainable Withdrawal Rates from Merrill Lynch Wealth Management

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Here’s another data point in the debate about safe withdrawal rates, or how much money you can safely withdraw from an investment portfolio each year without running out of money. Merrill Lynch Private Banking recently released a whitepaper on “sustainable wealth” aimed at high net worth individuals. Supposedly, in more than 67% of rich families, their wealth fails to outlive the generation following the one that created it, and 90% of the time, assets are exhausted before the end of the third generation.

Rich people problems? Sure, but one of the reasons for this high failure rate is that many people don’t have a reasonable idea of what makes a sustainable spending strategy. This applies to anyone who will eventually draw income from a portfolio for an extended period of time. Making a portfolio last generations is very similar to planning for early retirement. As we are talking about percentages, the numbers apply just as well to smaller portfolios.

Here are the results from a survey of wealthy families ($5M+):

ml_swr1

Here are the safe withdrawal rates they calculated for a 60% stocks, 35% bonds, 5% cash portfolio based on “Merrill Lynch capital market and fee assumptions”.

ml_swr2

I couldn’t find where they state what their confidence level is or what their “fee assumptions” are but I would assume they would at least be in the neighborhood of 1% annually. If you invest in low-cost index funds, that would theoretically mean you could increase the provided withdrawal rates by another 0.8% to 1%.

It looks like 3% is a good number if you want to be safe for 50 years, which is close to my investment horizon. Unfortunately, it is just a matter of luck whether you really need to take things that safely. From this other Merrill Lynch paper, starting with the same portfolio balance you could have taken out 5% a year (67% more income) starting in 1974 and your portfolio would have lasted just as long as if you withdrew only 3% starting in 1972. That is the potential effect of retiring just two years apart.

ml_swr3

If I do use the 3% sustainable withdrawal rate, that works out to putting aside 33 times my annual expenses. To increase flexibility, I also like the idea of making the withdrawal rate somewhat dynamic (adjusts with investment returns) similar to how Vanguard Managed Payout Funds are structured.

Merrill Lynch whitepaper (via BusinessInsider)

My Money Blog has partnered with CardRatings and may receive a commission from card issuers. Some or all of the card offers that appear on this site are from advertisers and may impact how and where card products appear on the site. MyMoneyBlog.com does not include all card companies or all available card offers. All opinions expressed are the author’s alone, and has not been provided nor approved by any of the companies mentioned.

MyMoneyBlog.com is also a member of the Amazon Associate Program, and if you click through to Amazon and make a purchase, I may earn a small commission. Thank you for your support.


Too Busy To Buy Paper Towels and Soap? New Amazon, Target, and Groupon Shopping Services

My Money Blog has partnered with CardRatings and may receive a commission from card issuers. Some or all of the card offers that appear on this site are from advertisers and may impact how and where card products appear on the site. MyMoneyBlog.com does not include all card companies or all available card offers. All opinions expressed are the author’s alone.

Who knew that the next big thing would be toilet paper and soap? We must be running out of things to “disrupt”, as everyone wants to deliver household and grocery products to your doorstep. What’s next, door-to-door milk delivery?

Amazon Prime Pantry. Amazon has been in the game for a while already with their Prime and Subscribe & Save services, but with Prime Pantry you can buy individual products in everyday sizes (not bulk), up to 45 lbs in a box, all for a flat $5.99 shipping fee. Must be a Prime member.

primepantry

Target Subscriptions. Target just started its own regular delivery service that offers an additional 5% off and free shipping with no minimum purchase requirement. You can still get another 5% off by paying with the Target REDcard. Newly expanded but still limited selection compared to Amazon. No membership fee.

targetsub

Groupon Basics. Groupon’s new bulk shopping service offers 100+ household products with free shipping on orders $24.99 and up within the continental US. Currently, get 5% back in the form of Groupon Bucks which can be used towards future purchases. Limited selection that is more focused on certain brands, but supposedly growing soon. No membership fee.

grpnbasics

My Money Blog has partnered with CardRatings and may receive a commission from card issuers. Some or all of the card offers that appear on this site are from advertisers and may impact how and where card products appear on the site. MyMoneyBlog.com does not include all card companies or all available card offers. All opinions expressed are the author’s alone, and has not been provided nor approved by any of the companies mentioned.

MyMoneyBlog.com is also a member of the Amazon Associate Program, and if you click through to Amazon and make a purchase, I may earn a small commission. Thank you for your support.


Savings I-Bonds May 2014 Interest Rate Update: 0.1% Fixed, 1.84% Variable

My Money Blog has partnered with CardRatings and may receive a commission from card issuers. Some or all of the card offers that appear on this site are from advertisers and may impact how and where card products appear on the site. MyMoneyBlog.com does not include all card companies or all available card offers. All opinions expressed are the author’s alone.

savbonds4Update: The official announcement states that effective May 1st, the new fixed rate on Series I savings bonds is 0.1%. The variable inflation-indexed rate is 1.84% (as predicted), making a composite rate of 1.94% for the first six months. After that, you will earn a composite rate of 0.1% plus the current inflation-indexed rate updated every 6 months.

Original post below:

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My Money Blog has partnered with CardRatings and may receive a commission from card issuers. Some or all of the card offers that appear on this site are from advertisers and may impact how and where card products appear on the site. MyMoneyBlog.com does not include all card companies or all available card offers. All opinions expressed are the author’s alone, and has not been provided nor approved by any of the companies mentioned.

MyMoneyBlog.com is also a member of the Amazon Associate Program, and if you click through to Amazon and make a purchase, I may earn a small commission. Thank you for your support.


Amazon Mom: Buy $45 in Gift Cards, Get $5 Free

My Money Blog has partnered with CardRatings and may receive a commission from card issuers. Some or all of the card offers that appear on this site are from advertisers and may impact how and where card products appear on the site. MyMoneyBlog.com does not include all card companies or all available card offers. All opinions expressed are the author’s alone.

azgcAmazon Mom is running a gift card promotion where if you buy $45 or more of selected gift card packs, you’ll get a free $5 gift code by June 15th. Give them as gifts or use them yourself and essentially get 10% off $50 in gift cards. This offer is good ONLY to Amazon Mom members with a free trial or paid membership to Amazon Prime. While supplies last.

Amazon Mom is a program that has some nice perks for parents (open to anyone… mom, dad, grandparent, or caretaker). The main draw is the 20% off diapers & wipes as well as baby food and other household items (5% Subscribe & Save discount + 15% Amazon Mom discount) and the fast shipping.

If you already pay for Amazon Prime at $99 a year, you can sign up for Amazon Mom for free. New Prime/Mom members are eligible for a 3-month free trial of Prime (must not have had free trial previously on your account) where you’ll also get the free 2nd-day shipping of Prime but not the video streaming or free Kindle book borrowing. Canceling is easy, you can even cancel the trial ahead of time while still getting the remainder of your 3 months.

Also see my Amazon Mom Subscribe & Save program tips. I use Amazon Mom and get an S&S delivery every single month.

Student with .edu e-mail? Get a 6-month free trial of Amazon Prime and then 50% off after that with Amazon Student.

My Money Blog has partnered with CardRatings and may receive a commission from card issuers. Some or all of the card offers that appear on this site are from advertisers and may impact how and where card products appear on the site. MyMoneyBlog.com does not include all card companies or all available card offers. All opinions expressed are the author’s alone, and has not been provided nor approved by any of the companies mentioned.

MyMoneyBlog.com is also a member of the Amazon Associate Program, and if you click through to Amazon and make a purchase, I may earn a small commission. Thank you for your support.


Flickr Photo App: 1,000 GB Storage Free + iCloud Replacement

My Money Blog has partnered with CardRatings and may receive a commission from card issuers. Some or all of the card offers that appear on this site are from advertisers and may impact how and where card products appear on the site. MyMoneyBlog.com does not include all card companies or all available card offers. All opinions expressed are the author’s alone.

flickrapp2Photo site Flickr recently updated their iPhone and Android apps. This just happened to coincide with me running out of space both on my Apple iCloud and Dropbox accounts, so I took another look at the Yahoo-owned site and found it actually fit my needs at a great price point – free!

As they say, the best camera is the one that you have with you. Since the birth of our first child, we’ve quickly racked up over 20 GB of pics on our phones alone, and much more from our point-and-shoot. iCloud only gives iPhone users 5 GB of free storage, so I found myself paying $40 a year for the 25 GB upgrade (with a discounted iTunes gift card of course) but ate through that as well. Since I keep both USB hard drive and online cloud backups, I was also running out of room even on my free Dropbox account. I used to pay for an unlimited photo service called Everpix, but they shut down last year.

In comparison, Flickr offers everyone 1,000 GB of free photo and video storage at full resolution with no caps or image compression. (I figure that should last us until kindergarten…) 100 GB of space runs $100 a year on both Dropbox and iCloud – I know there are cheaper options but these have the most convenient sync software.

flickrapp4My favorite iCloud feature was the ability to automatically and continuously backup the photos on my phone. Nothing to remember, just take pictures. With their updated free app, Flickr can also auto-upload and sync your iPhone photos taken with the default Camera app. (I’m assuming the Android app has a similar feature.) It doesn’t appear to upload any of your old pictures automatically, just the ones taken after you install the app and enable the Auto Sync feature (see screenshot). Auto-uploaded pictures are always set to Private by default (viewable by you only).

The new Flickr app also has several new features like an in-app camera with Instagram-like filters, sharing feeds, and better photo editing tools. After I manually back up the old photos, I plan to downgrade my iCloud account back to the free 5 GB level.

My Money Blog has partnered with CardRatings and may receive a commission from card issuers. Some or all of the card offers that appear on this site are from advertisers and may impact how and where card products appear on the site. MyMoneyBlog.com does not include all card companies or all available card offers. All opinions expressed are the author’s alone, and has not been provided nor approved by any of the companies mentioned.

MyMoneyBlog.com is also a member of the Amazon Associate Program, and if you click through to Amazon and make a purchase, I may earn a small commission. Thank you for your support.


Betterment Retirement Income Review – Automated Safe Withdrawal Tool

My Money Blog has partnered with CardRatings and may receive a commission from card issuers. Some or all of the card offers that appear on this site are from advertisers and may impact how and where card products appear on the site. MyMoneyBlog.com does not include all card companies or all available card offers. All opinions expressed are the author’s alone.

bettermentlogoOnline portfolio manager Betterment recently rolled out a new Retirement Income feature that will help you withdraw money from your nest egg. Unfortunately, even though I have a Betterment account I couldn’t test it out directly as it is currently only available to customers with a $100,000+ balance that have designated themselves as retired. But through a combination of reading through their website materials, press releases, blog posts, as well as asking an employee specific questions, I was able to get a good idea of how this feature works.

Factors taken in account. Here’s what they ask about your individual situation:

  • Current portfolio value. You can add outside accounts manually.
  • Asset allocation (Betterment portfolios are built-in).
  • Inflation is assumed to be 3% annually.
  • Time horizon (age and entered longevity).

Dynamic withdrawal strategy. This is very important! Betterment’s calculations assume a dynamic strategy where you come back every year to and reassess to determine a new safe withdrawal amount. Dynamic strategies are more flexible and resilient than static strategies which simply set a number at the beginning of retirement and stick with it regardless of portfolio performance. However, as a result you’ll have to deal with varying income, and it does not appear that they perform income smoothing. Here is an example scenario of how income might fluctuate with (rather optimistic) market performance (source):

betterretire1

If you follow their advice, updating at least annually, Betterment estimates that there is a 1% or less chance of depleting your portfolio before the end of your designated time horizon. As with many similar calculators in the industry, their numbers are based on Monte Carlo simulations.

Sample numbers for 65-year old retiree. I asked Betterment Marketing Manager Katherine Buck about the following hypothetical situation: $1,000,000 portfolio, 60% stocks and 40% bonds invested at Betterment, with 30-year time horizon (age 65 to 95). In that case, the current model income recommendation would be $2,879 per month ($34,548 a year), or roughly 3.45% of the $1M portfolio.

Automatic withdrawals. To recreate a paycheck in retirement, you can set up an auto-withdrawal to deposit money into your linked bank account on a regular basis. You can go with their recommended amount, or you can adjust the amount as you wish.

Cost. The Retirement Income feature is included in their existing fee structure. At a $100,000 minimum balance, a Betterment charges 0.15% annually and that fee is inclusive of all trading costs and rebalancing costs. 0.15% works out to $150 a year per $100,000 invested. So a $1,000,000 portfolio would cost $1,500 a year. This is much cheaper than a traditional advisor from a major brokerage firm.

Overall, I think this is a smart move on Betterment’s part to start offering more features that a human financial advisor would offer that a discount brokerage like TD Ameritrade wouldn’t. The numbers appear to be reasonably conservative and the tool is definitely easy to use. A competing product that I’ve also written about is the Vanguard Managed Payout fund. In comparison with that product, I wonder if Betterment shouldn’t add a smoothing component to their recommended income amounts so that the withdrawal amounts don’t swing too wildly from year-to-year. Betterment has historically shown a good willingness to make changes in response to feedback, so I am hopeful they will consider it.

Also see my previous full Betterment review.

My Money Blog has partnered with CardRatings and may receive a commission from card issuers. Some or all of the card offers that appear on this site are from advertisers and may impact how and where card products appear on the site. MyMoneyBlog.com does not include all card companies or all available card offers. All opinions expressed are the author’s alone, and has not been provided nor approved by any of the companies mentioned.

MyMoneyBlog.com is also a member of the Amazon Associate Program, and if you click through to Amazon and make a purchase, I may earn a small commission. Thank you for your support.