Archives for September 2017

Amazon Prints Promotional Code: 50 Free 4×6 Photo Prints + Free Shipping

Posted on September 14, 2017 // 4 Comments

azprints

New code for 50 free prints. Amazon Prints is offering another round of 50 free 4×6 photo prints, with free shipping for Prime members. Use promotional code FREE50PRINTS by September 17, 2017 11:59pm PT. This current code should work again even if you already got 50 free prints using a previous code. Supposedly the actual printing is done by Snapfish.

Amazon Prime Photos includes unlimited online photo storage, plus 5 GB for videos and files. These free prints are a little push to get you to upload your photos with Amazon instead of Google, Apple, Facebook, Shutterfly, etc.

Filed Under: Deals & Offers //

Surprise! A Few Reasons for Hope and Optimism

Posted on September 14, 2017 // 7 Comments

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The amount of negative information that surrounds us can sometimes feel overwhelming. To be sure, there is plenty to be concerned about. However, here are some reasons to be hopeful. You probably won’t find them on the front page of any major media site, or even homegrown conspiracy site.

The Energy Problem. I found positivity in an unexpected source: the reputed curmudgeon Charlie Munger during a Berkshire shareholder meeting in the University of Berkshire Hathaway book (emphasis mine):

However, Munger beamed that Berkshire’s best days of contributing to civilization are ahead. He noted that mankind is getting close to solving the technical problem of our time -solar power. Cheap, clean, storable power will change the world. Munger said, “As I get closer and closer to my death, I get more cheerful about the future I won’t see.”

Munger may have surprised the crowd with a list of things he is quite optimistic about: The main problems of civilization are technical and solvable, all with energy, with huge benefits for civilization. Berkshire’s culture will continue to work for years to come. He likes to see people rising rapidly from poverty, and that is happening in China and India.

The Population Problem. I ran across this chart in The Economist that tracks the relationship between fertility and per-capita GDP. Keep in mind the replacement rate is 2.1 births (where the population just stays constant).

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This reminded me of an older Economist article that explores some of the reasons that birth rate drops with relative wealth. As the world population continues to develop out of poverty, the overall birth rate will fall.

The Food Problem. The population will still go up for a while before it goes down. So read this NatGeo article about how the Netherlands became the second biggest exporter of food in the world despite being small and overcrowded. They have made great strides in sustainable farming technology.

While progress may turn out to be slow and hesitant, in the meantime I will feel inspired knowing that there are folks out there working hard on solving these problems.

[Image source]

Filed Under: Inspirational //

No Consensus on International Stocks: Make Any Decision, Just Stick With It

Posted on September 12, 2017 // 5 Comments

globeHere are some updated thoughts on holding stocks based outside the US in your portfolio.

There is no “ideal” amount of international stocks that experts agree upon. You have numbers ranging from 0% (US only) to 50% (market-cap weighting). For a good summary of this situation, check out these two recent articles from Christine Benz and John Rekenthaler of Morningstar.

The world continues to change, and the market weights will change with it. Here’s an interesting infographic by Jeff Desjardins at VisualCapitalist about world GDP breakdown for the last 2,000 years. The time axis is kind of wonky from 1-1900, so I’d focus on just 1900-now. GDP is not the same as market value, but the point is that the world will not look the same in 30 years.

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Right now, in terms of valuation, US stocks are relatively expensive and International stocks are relatively cheap. Via this ETFTrends article by Chris Konstantinos at RiverFront Investment Group, via TRB:

Looking a 12-month forward P/E ratio at the MSCI All-Country World Ex-US index, we are currently at the largest valuation gap between US and non-US markets in the 15+ years of data to which we have access.

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My take: Make a decission and stick with it. I don’t feel too strongly about this topic. If a Belgian company buys Budweiser, does that change how the business works fundamentally? If you go with 100% US stock and wait 30 years, you’ll probably be just fine. If you go with 50% US and 50% International and wait 30 years, you’ll probably be just fine. One choice will do better than the other, but nobody knows which one. These days I’ll be happy if we manage to avoid nuclear war.

I personally like buying a bigger haystack with all the needles and thus I like 50/50. If you want to hedge somewhere in between, consider that Vanguard Target and Lifecycle All-In-One funds are 60/40 now but they used to be 80/20 and then 70/30. It’s more important that you pick something and stick with it, as opposed to bailing out when one does a lot better than the other.

In terms of psychology, you can always twist the situation as needed. If you are 100% US, you could be happy with US outperformance over the last decade. If you are 50/50, you can take solace in the valuation gap and that any mean reversion from this point onwards will lead to future international outperformance.

Filed Under: Investing //

Equifax Hack Check Tool, Free Year of Identity Theft Protection and Credit Monitoring

Posted on September 7, 2017 // 23 Comments

equifaxlogoEquifax announced that they were hacked between May-July 2017, exposing the personal information of potentially over 143 million people. As one of the three major credit bureaus, they have a lot of data: credit card numbers, social security numbers, birth dates, addresses, and driver’s license numbers. Essentially, everything you need for identity fraud.

Equifax has a Potential Impact Tool that lets you check if they believe your information has been exposed. You must provide your last name and the last six digits of your Social Security number. It seems that unless they say “you’re not affected”, then you should assume you were affected. No matter what, they are offering everyone a free year of Equifax TrustedID Premier service, which includes:

  • 3-Bureau credit monitoring of Equifax, Experian and TransUnion credit reports
  • copies of your Equifax credit report
  • the ability to lock and unlock your Equifax credit report
  • identity theft insurance
  • Internet scanning for Social Security numbers

They’ll give you a date and you’ll need to come back to activate. I suppose they need to make a queue with that many new “customers”. Equifax also set up a dedicated call center at 866-447-7559, open 7 days a week, 7am–1am Eastern time.

So the business that gets to collect all my personal data (and then charge me for a credit score based on that data) lost my data, and as an apology gives me a temporary subscription to their own identity protection service (which people pay for because… their data gets hacked). Does anyone else feel like there needs to be more of an incentive not to get hacked? This benefit only lasts for a year, so you may want to sign up for other free credit monitoring services. Also see the Big List of Free Consumer Reports on how to get a free full copy of your credit and other consumer reports.

Filed Under: Credit Cards, Deals & Offers //

Plastiq Promotion: Pay Mortgage With Mastercard for 1.5% Fee

Posted on September 7, 2017 // Leave a Comment

plastiq_logoPlastiq has a new 1.5% promo rate (standard fee is 2.5%) if you schedule 3 or more mortgage payments with your Mastercard by end of this 2017. You must pay the standard 2.5% first, and then discount will come in the form of a rebate check sent by January 5, 2018. The check will be sent to the name and billing address associated with your Mastercard used for the promotion. Max rebate is $200. Their instructions:

  • Schedule 3 or more monthly mortgage payments by checking the box next to recurring.
  • Use a Mastercard.
  • Set up the first 3 payments so they are set to process between September 5, 2017 and December 31, 2017 11:59 p.m. EDT.
  • Look for a notification of eligibility on the payment review screen.

Here are some ways that this promo may be useful…

Sign-up bonus spending requirements. Sign-up bonuses on credit cards usually have spending requirements. For example, you might get a $500 value bonus but need to spend $3,000. Well, that’s effectively 16.7% back so if you need a little help to get over that hurdle, it’s okay to pay a 1.5% fee.

2% cash back credit cards, or similar. If you have a rewards credit card that offers 2% cash back (or equivalent value in points), then you can still make a slight profit by putting them on your credit card. A current example is the Citi Double Cash Card. For example, if you have a mortgage bill of $5,000 and you earned 2% cash back while paying a 1.5% fee, your net 0.5% is $25. You could also get another month or so of “float” before the your credit card bill is due.

Combine a rewards card + 0% APR on purchases. Many credit cards offer 0% APR on purchases for an introductory period of 12 months or longer. If the card also has a half-decent rewards program on purchases, the combination of purchase rewards and spreading out the payments over a year at no interest could be attractive.

Referral program. Plastiq has a somewhat confusing referral program. If a new user signs up via a referral link and pays $500 worth of bills, they will then get $500 “fee-free dollars”. So first you’d have to pay the fee on a bill, and then on your next bill, $500 of it will be “fee-free” (at 2.5% that’s a $12.50 savings). The referrer will get $1,000 in fee-free dollars. If you take advantage of the promo above, that should trigger the bonus. Here’s my referral link. Thanks if you use it.

Filed Under: Credit Cards, Deals & Offers //

Absolute vs. Relative Standard of Living: What is Enough?

Posted on September 5, 2017 // 20 Comments

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I’m currently reading University of Berkshire Hathaway: 30 Years of Lessons Learned from Warren Buffett & Charlie Munger at the Annual Shareholders Meeting by Daniel Pecaut and Corey Wrenn. As opposed to a rehash of the BRK shareholder letters, it contains highlights from listening to Warren Buffett and Charlie Munger live during the shareholder meetings in Omaha, Nebraska from 1986-2015. (The equivalent of a live Beyonce or Springsteen concert for investing geeks.)

I’ve always appreciated that Buffett and Munger are very rational and practical people, and one theme that I picked up from this book was the concept of absolute vs. relative standard of living.

What is enough? You’ve probably heard some variant of the phrase “live like a college student” when talking about how to save money. I certainly used this tactic successfully for many years, and Buffett explains why it makes sense:

Buffett contended that the average college student has the same standard of living as he does. Same food. No important difference in clothes, cars, TVs. After you have enough for daily life, all that matters is your health and those you love. Likewise in work, what really matters is that you enjoy it and the people with which you work. Munger concluded humorously, “What good is health? You can’t buy money with it.”

Ask yourself: Does this make me healthier? Does this let me spend more time with the people I love? Does it give me valuable knowledge? Think about how a large portion of the luxury world exists without actually improving your quality of life: luxury cars, designer clothing, fancy purses, fancy watches.

Stop comparing yourself to others. Buffett reminds us that envy is the worst among the seven deadly sins. You feel miserable with no upside at all. (The rest are gluttony, greed, lust, sloth, wrath, and pride.)

If someone else is getting rich, so what? Someone else will always be doing better. He asserted that the notion that an investor or investment manager should be “required” to beat everyone else is nonsense. The real key is to know what you really want to avoid and give those things a wide berth (such as a bad marriage, an early death, and so on). Do this and life will go much better, he advised.

I think this concept is under-appreciated in the investment world. You manage to lose a little less money than a benchmark and you still “win”? Think about the people who have quietly gotten rich with rental properties. They don’t worry about benchmarks, they just make sure the rent checks come in and the building is maintained. When they can, they buy another property. Over the long run, it works out just fine. You could do something similar by regularly buying a Vanguard Target Retirement Fund, Vanguard Balanced Fund, or even Vanguard Wellington Fund.

Money vs. Quality of Life. Make no doubt about it, Buffett enjoys having a lot of money. I imagine he treats it like a video game with dollars instead of points. However, he separates money and quality of life. That’s what has let him decide to give almost all of it away to charity. He’s donated over $27 billion already, with a total amount that could be over $100 billion (depending on the future value of Berkshire stock):

Buffett added that as far as he’s concerned, he hasn’t given up anything. He hasn’t changed his life. He couldn’t eat any better or sleep any better, so he really hasn’t given up anything. Someone giving up a trip to Disneyland to make a donation is the one making a real sacrifice.

These simple quotes can provide a basic outline for early retirement. First, try your best to stop comparing yourself to others, as that’s a game you’ll never win. Besides, if you act and spend like everyone else, then you’ll be working as long as everyone else. Next, decide what kind of daily lifestyle is “enough”. Does that require spending $30k a year? $50k a year? $80k a year? Now work to save 25 times that amount. $30k a year = $750,000. $50k a year = $1.25 million. (You might want to revisit the “enough” question after doing this multiplication…) That’s a nice rough number. Now work on the income side of the equation while keeping your spending side in check. In the meantime, enjoy your awesome quality of life. Appreciate the good stuff like nourishing food, hot showers, comfortable beds, nature, air conditioning, friends, and family.

Filed Under: Budgeting, Frugal Living, Retirement //

Best Interest Rates on Cash Savings – September 2017

Posted on September 4, 2017 // 17 Comments

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Interest rates are slowly waking up from their multi-year slumber, so I’m paying closer attention to the various changes each month. Don’t let a megabank pay you 0.01% APY or less for your idle cash. Here is my monthly roundup of the best safe rates available, roughly sorted from shortest to longest maturities. Rates checked as of 9/4/17.

High-yield savings accounts
While the huge brick-and-mortar banks rarely offer good yields, there are many online savings accounts offering competitive rates clustered around 1.0%-1.2% APY. Remember that with savings accounts, the interest rates can change at any time.

  • The Mega Money Market accounts of both Redneck Bank and All America Bank (they are affiliated) are paying 1.50% APY on balances up to $35,000. Note that amounts over $35,000 earn only 0.50% APY.
  • Other sample top rates without a balance cap: DollarSavingsDirect at 1.40% APY, Synchrony Bank and Goldman Sachs Bank are at 1.20% APY. Notice that BankDirect was 1.35% APY last month, but today is now only 0.15% APY! Boo.
  • As I’ve been “bait-and-switched” a few times myself, I’m still sticking with my Ally Bank Savings + Checking combo due to their history of competitive rates (including CDs), 1-day interbank transfers, and a overall user experience. I also like the free overdraft transfers from savings that let’s me keep my checking balance at a minimum. Ally Savings is at 1.20% APY.

Money market mutual funds + Ultra-short bond ETFs
If you like to keep cash in a brokerage account, you should know that money market and short-term Treasury rates have inched upwards. It may be worth the effort to move your money into a higher-yielding money market fund or ultrashort-term bond ETF.

  • The Vanguard Prime Money Market Fund has increased their SEC yield now to 1.10%. The default sweep option is the Vanguard Federal Money Market Fund, which only has an SEC yield of 0.97%. You can manually move the money over to Prime if you meet the $3,000 minimum investment.
  • The following bond ETFs are not FDIC-insured, but if you want to keep “standby money” in your brokerage account and have cheap/free trades, it may be worth a look. The PIMCO Enhanced Short Maturity Active Bond ETF (MINT) has a 1.55% SEC yield and the iShares Short Maturity Bond ETF (NEAR) has a 1.57% SEC yield while holding a portfolio of investment-grade bonds with an average duration of ~6 months. More info here.

Short-term guaranteed rates (1 year and under)
I am often asked what to do with a big wad of cash that you’re waiting to deploy shortly (just sold your house, just sold your business, legal settlement, inheritance). My standard advice is to keep things simple. If not a savings account, then put it in a short-term CD under the FDIC limits until you have a plan.

  • Ally Bank No-Penalty 11-Month CD is paying 1.50% APY for $25,000+ balances and 1.25% APY for $5,000+ balances. The lack of early withdrawal penalty means that your interest rate can never go down for 11 months, but you can always jump ship if rates rise.
  • Advancial Federal Credit Union has a 6-month CD at 1.63% APY ($50k min) and a 12-month CD at 1.78% APY ($50k min). If you don’t otherwise qualify, you can join this credit union with a $5 fee to Connex Professional Network and maintaining $5 in a Share savings account. Via DepositAccounts.

US Savings Bonds
Series I Savings Bonds offer rates that are linked to inflation and backed by the US government. You must hold them for at least a year. There are annual purchase limits. If you redeem them within 5 years there is a penalty of the last 3 months of interest.

  • “I Bonds” bought between May and October 2017 will earn a 1.96% rate for the first six months, and then a variable rate based on ongoing inflation after that. While that next 6-month rate is currently unknown, at the very minimum the total yield after 12 months will around 1% with additional upside potential. More info here.
  • In mid-October, the CPI will be announced and you will have a short period where you will have a very close estimate of the rate for the next 12 months. I will have another post up at that time.

Prepaid Cards with Attached Savings Accounts
A small subset of prepaid debit cards have an “attached” FDIC-insured savings account with high interest rates. The negatives are that balances are capped, and there are many fees that you must be careful to avoid (lest they eat up your interest). The other catch is that these good features may be killed off without much notice. My NetSpend card now only has an eligible balance up to $1,000.

  • Insight Card is one of the best remaining cards with 5% APY on up to $5,000 as of this writing. Fees to avoid include the $1 per purchase fee, $2.50 for each ATM withdrawal, and the $3.95 inactivity fee if there is no activity within 90 days. If you can navigate it carefully (basically only use ACH transfers and keep up your activity regularly) you can still end up with more interest than other options. Earning 4% extra interest on $5,000 is $200 a year.

Rewards checking accounts
These unique checking accounts pay above-average interest rates, but with some risk. You have to jump through certain hoops, and if you make a mistake you won’t earn any interest for that month. Rates can also drop quickly, leaving a “bait-and-switch” feeling. But the rates can be high while they last.

  • Northpointe Bank has Rewards Checking at 5% APY on up to $10k. The requirements are (1) 15 debit card purchases per month (in-person or online), (2) enrolling in e-statements, and (3) a monthly direct deposit or automatic withdrawal of $100 or more. ATM fees are rebated up to $10 per month.

Certificates of deposit (greater than 1 year)
You might have larger balances, either because you are using CDs instead of bonds or you simply want a large cash cushion. Buying finding a bank CD with a reasonable early withdrawal penalty, you can enjoy higher rates but maintain access in a true emergency. Alternatively, consider a custom CD ladder of different maturity lengths such that you have access to part of the ladder each year, but your blended interest rate is higher than a savings account.

  • Advancial Federal Credit Union (see above) has an 18-month CD at 1.89% APY ($50k min) and a 24-month CD at 2.00% APY ($50k min). The early withdrawal penalty is 180 days of interest.
  • Ally Bank also has a 5-year CD at 2.25% APY (no minimum) with a relatively short 150-day early withdrawal penalty and no credit union membership hoops. For example, if you closed this CD after 18-months you’d still get an 1.64% effective APY even after accounting for the penalty.
  • Hanscom Federal Credit Union is offering a 4-year Share Certificate at 2.50% APY (180-day early withdrawal penalty) if you also have Premier Checking (no monthly fee if you keep $6,000 in total balances or $2,000 in checking). HFCU also offers a 3% APY CU Thrive “starter” savings account with balance caps. HFCU membership is open to active/retired military or anyone who makes a one-time $35 donation to the Nashua River Watershed Association.
  • Mountain America Credit Union is offering a 5-year Share Certificate at 2.60% APY ($5 minimum) with a 365-day early withdrawal penalty. Anyone can join this credit union via partner organization American Consumer Council for a one-time $5 fee.

Longer-term Instruments
I’d use these with caution, but I still track them to see the rest of the current yield curve.

  • Willing to lock up your money for 10+ years? You can buy certificates of deposit via the bond desks of Vanguard and Fidelity. These “brokered CDs” offer the same FDIC-insurance. As of this writing, Vanguard is showing a 10-year non-callable CD at 2.65% APY (Watch out for higher rates from callable CDs.) Unfortunately, current long-term CD rates do not rise much higher even as you extend beyond a 5-year maturity.
  • How about two decades!? Series EE Savings Bonds are not indexed to inflation, but they have a guarantee that the value will double in value in 20 years, which equals a guaranteed return of 3.5% a year. However, if you don’t hold for that long, you’ll be stuck with the normal rate which is quite low (currently a sad 0.10% rate). You could view as a huge early withdrawal penalty. You could also view it as long-term bond and thus a hedge against deflation, but only if you can hold on for 20 years. Too long for me.

All rates were checked as of 9/4/17.

Filed Under: Banking, Deals & Offers //

Discover Card: Free Social Security Number Monitoring and New Account Alerts

Posted on September 1, 2017 // 9 Comments

disc_ssnDiscover has a new free alert service available to Discover cardholders on an opt-in basis. I must have missed the initial announcement. This is not complete identity protection (which usually costs a monthly fee of $10 or more) but the following subset:

  • Social Security Number Monitoring. Discover scans the internet including the “dark web” where stolen SSNs are often traded and sold for the purposes of identity theft and fraud. If your SSN is found, you will receive an alert.
  • New Account Alerts. Whenever a new account (credit cards, mortgages, car loans or other credit accounts) is reported on your Experian credit report, you will receive a notification. If you don’t recognize the new account, that can be an indication of identity theft.

You must authorize Discover to access your credit report, but since they are doing so on your behalf, this will not affect your credit score in any way. Opt-in and activate these alerts here. You can choose e-mail and/or text alerts. Deactivate here.

Bottom line. If you are a Discover cardholder, this is a free service that alerts you to new accounts and thus potential identity theft. I keep my Discover it card open for its rotating 5% cash back rewards.

Filed Under: Credit Cards, Deals & Offers //

Free 3-Month Tidal Premium Subscription Voucher Code

Posted on September 1, 2017 // 1 Comment

tidalReady for more music? Groupon is offering a free 3-month subscription of Tidal Premium music streaming service, which usually costs $9.99 per month. The standard free trial offer is only for 30 days.

Promotional value expires 30 days after purchase. Amount paid never expires. New subscribers only. Limit 1 per person. Claim codes cannot be resold, transferred for value or redeemed for cash. This promotion may not be combined with other offers. Limit one per customer and account. To redeem, must register credit card with merchant. After the 3-month promotional period, plans will automatically renew to $9.99 a month, unless canceled with merchant.

After purchase, you must view the Groupon PDF which will contain a unique voucher code needed to activate your free 3-month subscription. I’m not sure if you can cancel early to prevent auto-renewal after the 3-month period. I plan on waiting on redeeming this code until my other free music trials end, as my main concern is maximizing my listening time without ads.

Filed Under: Deals & Offers //
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