Archives for 2015

Elon Musk: Tesla, SpaceX, and the Quest for a Fantastic Future (Book Review)

November 2, 2015 By Jonathan Ping 3 Comments

After reading many reviews including from Bob Lefsetz and Brad Feld, I had to add Elon Musk: Tesla, SpaceX, and the Quest for a Fantastic Future by Ashlee Vance to my reading list. I can recommend this book to anyone who likes biographies about interesting and unique people, especially entrepreneurs and technologists. (Also available on public libraries linked up with Overdrive e-Books.)

Musk has grand vision, relentless drive, and a confrontational style. As a result, he is usually either loved or hated. As someone with an engineering background, it is impossible not to be impressed that he is a critical force behind promising companies in solar power (SolarCity), electric cars (Tesla), and space travel (SpaceX). Here is a brief selection of quotes from the book that I wanted to share.

Consider the difficulty of his pursuits:

For most of their histories, SolarCity, Tesla, and SpaceX have been the clear underdogs in their respective markets and gone to war against deep-pocketed, entrenched competitors. The solar, automotive, and aerospace industries remain larded down by regulation and bureaucracy, which favors incumbents.

He’s not making Snapchat or Tinder. He wants a legacy:

“I really like computer games, but then if I made really great computer games, how much effect would that have on the world,” he said. “It wouldn’t have a big effect.

On Tesla Motors:

Had anyone from Detroit stopped by Tesla Motors at this point, they would have ended up in hysterics. The sum total of the company’s automotive expertise was that a couple of the guys at Tesla really liked cars and another one had created a series of science fair projects based on technology that the automotive industry considered ridiculous. What’s more, the founding team had no intention of turning to Detroit for advice on how to build a car company. No, Tesla would do what every other Silicon Valley start-up had done before it, which was hire a bunch of young, hungry engineers and figure things out as they went along.

The guys like Straubel who had been at Tesla since the beginning are quick to remind people that the chance to build an awesome electric car had been there all along. “It’s not really like there was a rush to this idea, and we got there first,” Straubel said. “It is frequently forgotten in hindsight that people thought this was the shittiest business opportunity on the planet. The venture capitalists were all running for the hills.” What separated Tesla from the competition was the willingness to charge after its vision without compromise, a complete commitment to execute to Musk’s standards.

On SpaceX:

The more he thought about space, the more important its exploration seemed to him. He felt as if the public had lost some of its ambition and hope for the future. The average person might see space exploration as a waste of time and effort and rib him for talking about the subject, but Musk thought about interplanetary travel in a very earnest way. He wanted to inspire the masses and reinvigorate their passion for science, conquest, and the promise of technology.

Who knows if any or all of his companies will ultimately be successful. I still appreciate that he is a force of hope and optimism, not some doom-and-gloomer telling everyone to get ready to live in caves and learn how to shoot each other.

Filed Under: Book Reviews

Last updated: April 25, 2019

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Your Employer Took Your Money, Invested For Retirement, and You Liked It

November 1, 2015 By Jonathan Ping Leave a Comment

Below is a chart taken from this WSJ article about employer-run 401(k) retirement plans and how the default settings have changed over the last decade:

The trend: Employers are making you save more initially by default, making you save a little more every year by default, and putting it in a pre-mixed target-date fund of stocks and bonds. Employees can opt out of any of these things at any time. But they aren’t.

Credit Suisse braced for complaints last year when it upped its initial automatic savings rate for new employees to 9% from 6%. It did so after years of experiencing lackluster interest from the firm’s roughly 8,500 employees—specifically younger workers—in the U.S. when meeting to discuss increasing retirement savings, said Joseph Huber, chairman of the bank’s pension-investment committee.

But Mr. Huber said the bank heard concerns from only two people, who weren’t previously putting any money into their 401(k) plans. Credit Suisse also decided to automatically increase the default rate by 1% a year until an employee reaches 15%. It doesn’t match contributions up to the highest rate, although it contributes $3,000 to $10,000 for each employee annually.

“It’s companies’ biggest fear and it was radio silence,” he said.

Well, perhaps I shouldn’t be pointing this out because the current inaction may be a good thing. The only problem is that nearly half of US workers don’t have an company-sponsored retirement plan. The bigger your company, the more likely you have one as an option.

wsj_vg_bw

The takeaway? Try using this behavioral psychology trick on yourself. Commit to saving more through automatic, recurring transfers. Use a savings account or an IRA if you don’t have a 401(k) match. Set the amount such that it hurts a bit. You can always change it back later (but hopefully you won’t need to).

Filed Under: Behavioral Economics, Retirement

Last updated: November 1, 2015

Consumer Reports Online Discount: 50% Off

October 27, 2015 By Jonathan Ping 6 Comments

crapp

Updated October 2015. I’ll try to keep this post updated with any current discount on Consumer Reports subscriptions. Send me a message if you have a tip.

Groupon has Consumer Reports digital edition for $15 a year (50% off). You can also pay $29.50 for 1-year of print + online. Not valid for current online or print members or renewal memberships. Limit 1 per person, may buy 3 additional as gifts. If you see this by 10/27/15 you can try code SCREAM3 for an additional 20% off. Otherwise just look for a banner with any current promo code and try to stack them.
Reader Ryan comments that you should also check you local library to see if you can get free online access to Consumer Reports articles.

I seem to always go in waves with Consumer Reports. I don’t use them for a year, and then I find myself constantly checking out stroller reviews, appliances, used cars for a friend, etc.

Filed Under: Deals & Offers

Last updated: October 27, 2015

William Bernstein: Picking The Right Bonds For Your Portfolio

October 26, 2015 By Jonathan Ping 12 Comments

pie_flat_blank_200 Author and investment advisor William Bernstein wrote a thoughtful WSJ piece on bonds, which I think is useful for the DIY investor. The overall theme is that you should take minimal risks with the bonds in your portfolio. Taken in isolation, some types of bonds are likely to provide higher long-term returns than others. However, you should consider how they fit into your entire portfolio. Historically, it has been more efficient to take your risk with stocks and use your bonds for their stability. Bonds become the “dry powder” you can use to buy more stocks after a crash (rebalance!).

I found myself breaking down the article into three main categories. The types of bonds he recommends most, the ones he considers acceptable, and the rest which should be avoided. These are my short notes; read the article for the supporting arguments.

PREFER

Individual US Treasury bonds, manually laddered.
US Treasury bond mutual funds, for smaller balances.
Top-yielding FDIC-Insured Certificates of Deposit, manually laddered.
Short-term or intermediate-term, higher-quality municipal-bond funds, for large taxable balances.

OKAY

“Total bond index” mutual funds, as they consist mainly of high-grade, government-backed bonds.
US Treasury bond mutual funds for larger balances.

AVOID

All corporate bonds, but especially avoid lower-grade and/or longer-term corporate bonds.
Lower-grade and/or longer-term municipal bonds.

I would point out that inflation-protected bonds (TIPs) are not mentioned directly, I guess because they aren’t directly comparable to these nominal bonds. Either that, or he just considered them to be the same as traditional Treasuries. He talks about TIPs a lot elsewhere (including his books), so a little specific advice would have been helpful.

My other opinion is that running your own bond ladder is quite doable but only the most DIY of DIY investors would do it better than a low-cost bond fund. I own individual TIPS and it’s not hard but not a ton of fun either to keep track of auction dates and avoid cash drag. Vanguard charges only 0.12% annually for their short-term government bond ETF (VGSH) and Admiral fund equivalent. $12 a year per $10,000. $120 a year for $100,000. I’d rather just pay that unless I had millions or I had a lot more free time. However, if you’re already paying a financial advisor, I would let them manage an individual bond ladder as part of their fee.

Filed Under: Investing

Last updated: October 21, 2015

Consumer Reports Car Brand Reliability Rankings 2015

October 25, 2015 By Jonathan Ping 10 Comments

cr_carcover Consumer Reports recently released the results from their 2015 Annual Auto Reliability Survey of over 740,000 vehicles owned by its subscribers. Below are the complete rankings from Consumer Reports, including the change from last year. Taken from this CNBC article. Lexus and Toyota remain on top. In terms of big movers, Honda went down 4 spots, while Kia moved up 4 spots.

One of the trends they note is that fancy infotainment systems and complex transmissions (including CVT, 8+ speeds, and dual clutch) are a growing source of complaints. Many brands, including Acura, were significantly hurt in their rankings due to issues in these areas.

cr_reliability_2016

Here’s another view that takes into account the range of scores taken from individual models (the brands are ranked by averages). Taken from the public version of the Consumer Reports page.

cr_reliability_2016_2

Jaguar, Land Rover, Mitsubishi, Scion, Smart, and Tesla were excluded due to a lack of data on two or more of their models. However, Tesla’s Model S was individually given a reliability rating of “below average”.

Filed Under: Frugal Living

Last updated: February 9, 2017

BankAmericard® Credit Card Review

October 22, 2015 By Jonathan Ping Leave a Comment

Bank of America BT Card Bank of America is the issuer behind many different credit cards, but only a few of them carry the “BankAmericard” co-branding. I have written up reviews of the BankAmericard Cash Rewards™ Credit Card and the BankAmericard Travel Rewards® Credit Card, but this brief review is specifically to cover the “classic” BankAmericard® Credit Card.

Rewards programs. The BankAmericard® Credit Card does not come with a rewards program. There is no cash back, there is no points system.

There is no annual fee. The card also comes with chip technology for security and ease of use internationally.

Introductory 0% APR for your first 15 billing cycles for purchases and for any balance transfers made within 60 days of opening your account. After that, a Variable APR that’s currently 13.24% to 23.24% will apply.
$0 balance transfer fee for the first 60 days your account is open. After that, the fee for future balance transfers is 3% (min. $10).
No penalty APR. Paying late won’t automatically raise your interest rate (APR).
No annual fee.

Bottom line. Be careful with the naming structures when picking among cards. The BankAmericard® Credit Card is best if you are looking for the 0% APR with no balance transfer fee. Otherwise, if you are primarily interested in rewards cards then I would look at the BankAmericard Cash Rewards™ and the BankAmericard Travel Rewards® credit cards instead.

Filed Under: Credit Cards, Deals & Offers

Last updated: February 15, 2018

Overcast Podcast App, Premium Time-Saving Features Now Free

October 22, 2015 By Jonathan Ping 6 Comments

overcastapp If you like to listen to podcasts, or are thinking of starting, the full version of the Overcast app (iOS only) is now completely free while remaining ad-free. (There is a patronage option and much accompanying drama that I’ll ignore here.) All of the premium features that used to cost $5 to unlock are now free. Here are the best bits:

Smart Speed – skips the silences, saving time.
Variable Speed – can play back podcasts a little faster, also potentially saving time if you don’t find it annoying.
Voice Boost – adjust the sound so that you don’t have to keep adjusting your volume, saving annoyance.
Cellular Downloads – the free version previously only allowed you to download on WiFi.
Fast, timely downloads – this app always seems to download new podcasts right after they are available, unlike the default app. It does this using their own servers to help you use less data and battery life.
Sync – the app synchronizes across multiple devices.

The bottom line is that the Overcast app is significantly better than the default Apple Podcasts app, and now it’s free both to try and to keep. All upside. You can then decide whether it is worth supporting via the “tip jar” after considering its time-savings benefits. If you previously downloaded the stripped-down version, you may not have noticed that an update will unlock all the features. I do not consider myself a podcast enthusiast, but this app makes listening to them easy enough that now I do it.

I’m afraid I don’t listen to any financial podcasts at this time and thus have no personal recommendations to make. I’m sure there are plenty of good ones out there. For me, podcasts are for the lighter stuff like food and sports. My mainstay is the sports talk show Pardon The Interruption, and that one thing may allow me to drop ESPN TV completely (although I haven’t).

Filed Under: Deals & Offers

Last updated: October 22, 2015

SubscriptMe App Review: Watch Those Recurring Expenses!

October 21, 2015 By Jonathan Ping 1 Comment

subscipt_logo

“Subscriptions are forgettable by design.”

That is the opening line for the app description of SubscriptMe, a free iPhone/iOS app that help you track your recurring expenses.

How true. All the behavioral psychology-based personal finance tips out there have been used by advertisers forever. Automate your savings? The newspaper and telephone company has been automating the spending of your parents and grandparents for decades. Giving them the ability to automatically charge your credit card is icing on the cake.

Have you added up much your Netflix, Amazon Prime, Spotify, and Dropbox subscriptions are costing you every year? Subscript.me can scan your phone for apps as well as your emails if you let them. They then present you with a pretty list of your subscriptions, letting you set alerts for upcoming bills if you like. The only paid subscription that I have that it found was my $99 annual fee for Amazon Prime. (I have the free versions of Dropbox and Evernote.) Some screenshots:

Ideally, if you are constantly reminded of what you’re paying for, you’ll only keep what you really want. Of course, the free app is paid for by showing you other new services that would like your money.

My main concern is that even if you let it rummage through your e-mails (which already makes me uncomfortable), the app still doesn’t do a good job of finding traditional monthly bills like telephone, cellular, cable, DSL, electricity, gas, trash, etc. It found none of mine. More screenshots:

A neat concept, possible useful for those with a lot of these hip new monthly services like Dollar Shave Club, Blue Apron, or Birchbox. However, since I don’t have many subscriptions, it feels a little niche.

Filed Under: Frugal Living

Last updated: October 21, 2015

Kashi “All Natural” Class Action Settlement

October 20, 2015 By Jonathan Ping 3 Comments

kashi_logo Here’s another class action settlement involving a popular food which may affect you. Kashi and Kelloggs settled a lawsuit claiming that they mislabeled products as “all natural” or “nothing artificial”. As usual, they don’t admit wrongdoing but they are removing “all natural” claims from their products that contain GMO ingredients.

You qualify if you purchased any one of the Kashi products listed here [pdf] between May 3, 2008 and Sept. 4, 2015 (for personal or household use). Kashi makes a lot of stuff besides cereal (GoLean bars, TLC bars, Kashi pizza, Heart to Heart).
You must be a resident of the United States, but you can’t be from California (separate lawsuit).
If you DO NOT have receipts proving your purchase, you can still file a claim for 55 cents per item, for up to 50 items ($27.50 max total).
If you DO have store receipts, you can get back your purchase price with no limit. If you bought Kashi online, definitely search your e-mails or Amazon/store accounts.
You must certify under oath that your claim is truthful.

Here is the online claim form, which you must submit by January 19, 2016.

Filed Under: Deals & Offers

Last updated: August 9, 2018

Free $5 Starbucks Gift Card for AT&T Wireless Customers

October 20, 2015 By Jonathan Ping 4 Comments

sbux_cup Ting.com has a limited-time promotion offering AT&T customers a free cup of coffee (in the form of a free $5 Starbuck gift card) if they check their phone compatibility with Ting. You’ll need your AT&T phone’s IMEI and your phone number. Limit of one $5 coffee gift card per email address and per active AT&T device checked. Says you should enter by 10/22 but it could end earlier.

Ting mobile service is a simple idea that is saving people a lot of money on their monthly cell phone bills. Check your AT&T phone to see if it will work on Ting and we’ll give you a $5 Starbucks gift card,
no strings attached.

I’ve reviewed Ting before, so you may know they are an MVNO for both Sprint and T-Mobile that works on a pay-only-for-what-you-use basis. With a referral link (that’s my parents phone), new customers can get free $25 in Ting credit towards your phone bill.

But hey, if you have an AT&T phone, why not pick up that cup of coffee? Smartphone users can usually find their IMEI under phone settings very quickly.

Filed Under: Deals & Offers

Last updated: August 9, 2018

BeFrugal.com: Another Cashback Shopping Portal

October 20, 2015 By Jonathan Ping 7 Comments

$10 refer-a-friend bonus is back. BeFrugal.com is yet another cashback shopping portal that gives a percentage back on online shopping purchases made through their links. Right now it’s also offering a $10 sign-up bonus for a limited-time to get you started. You’ll need to accrue $25 total in cash back within 90 days to withdraw your rewards. This is more restrictive than previous promos, but if you have enough purchases coming up (holidays?) it might be worth a shot. Promotion expires 11/30/15.

To qualify for a $10 Refer-a-Friend bonus, a) new referrals must click on your unique Refer-a-Friend link and sign up as a BeFrugal.com member through that click-through; b) new members must also confirm their BeFrugal.com account and earn $25 or more in Cash Back (not including bonuses and earnings from non-purchase activity) within 90 days of account creation.

Other sites that I have successfully cashed out from are eBates ($10 new user bonus after any purchase of $25+), Mr. Rebates ($5 new user bonus – minimum cash-out balance is $10), and Chase Ultimate Rewards (no bonus, but can be good value if you use these points).

Filed Under: Deals & Offers

Last updated: November 18, 2015

Owning a McDonald’s Franchise: Purchase Cost vs. Annual Profit

October 19, 2015 By Jonathan Ping 20 Comments

mcfranchise_logo Despite their negative media attention, the McDonald’s franchise that I drive past every day is packed all the time. I rarely eat there (especially since my diet bet), but I used to think to myself that if I were going to buy a franchise, I’d buy a McDonald’s. My impression was always that McDonald’s were always pretty clean with consistent food (even if you consider it consistently unhealthy), while Burger King’s were often dirty with inconsistent food.

A common knock against purchasing a franchise is that you are “buying a job”. A recent Businessweek article broke down the gross sales, gross profits, and net profits of the average McDonald’s franchise in the US. I found the numbers very interesting:

mcfranchise_income

Average annual profit per franchise: $150,000 a year, roughly. Okay, but how much does this franchise cost? From the official McDonald’s franchise website:

Initial Costs
$45,000 Initial Fee paid to McDonald’s

Equipment and Pre-Opening Costs
Typically these costs range from $944,352 to $2,172,045. The size of the restaurant facility, area of the country, pre-opening expenses, inventory, selection of kitchen equipment, signage, and style of decor and landscaping will affect new restaurant costs. These costs are paid to suppliers.

Average cost of new franchise: At least $1 million roughly, with a minimum of $500,000 in cash and non-borrowed resources. Other sources state $750,000 minimum in liquid assets. You must be able to cover 40% of the costs of a new franchise location. You must be able to pay cash for at least 25% of the cost of an existing franchise, with the rest financed over at most 7 years.

Average hours of work per week as an owner/operator? I could not find reliable statistics, but here is an excerpt from a Reddit AMA from a businessperson from New Zealand who has owned a total of three McDonald’s franchises and recently sold the last one.

How much work was required of you per week on average? If my goal were to own one McDonalds and do the minimum amount of work possible, while also running it well, how low do you think I could get that weekly number of hours? And what would I be doing in that time?

I would work 9am – 5pm, 6 days a week. Mostly I’m at my office sorting problems remotely from there. I liked to pop down to my couple stores at least a couple times a day and check on them – make sure they’re clean, and to check on the Restaurant Manager about any issues. Typically I used to work hard for 4-6 hours a day, with the rest out in the stores just checking on them.

Exit / Selling price? One would imagine that if your franchise is doing well and churning out good numbers, someone else would readily buy it. If your business is struggling, then both your annual income and total business value will drop. The same Reddit user above reported selling for “just above” NZ $1.4 million, or US $916,000. I’m a bit confused by the purchase price, but it appears that he paid NZ $550,000 via business loan, 12 years ago.

In the end, owning a McDonald’s franchise is still a business which means you take on risk for potentially significant gains or losses. But if you spend 40 hours a week and only keep tabs on one location, it might really feel like you bought a job. These statistics help explain why most franchisees own multiple locations; Businessweek says the average is six.

Filed Under: Career, Entrepreneurial, Investing

Last updated: October 19, 2015

Archives for 2015

Elon Musk: Tesla, SpaceX, and the Quest for a Fantastic Future (Book Review)

Your Employer Took Your Money, Invested For Retirement, and You Liked It

Consumer Reports Online Discount: 50% Off

William Bernstein: Picking The Right Bonds For Your Portfolio

Consumer Reports Car Brand Reliability Rankings 2015

BankAmericard® Credit Card Review

Overcast Podcast App, Premium Time-Saving Features Now Free

SubscriptMe App Review: Watch Those Recurring Expenses!

Kashi “All Natural” Class Action Settlement

Free $5 Starbucks Gift Card for AT&T Wireless Customers

BeFrugal.com: Another Cashback Shopping Portal

Owning a McDonald’s Franchise: Purchase Cost vs. Annual Profit

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