I just ran across an interesting article on the accuracy of personal finance writers in the Akron Beacon Journal of all places — gotta love Google News! The article correctly points out that personal finance books, news stories, etc. are often riddled with factual errors that might lead you to make bad money moves. How can you protect yourself? The article has several common sense suggestions. (more…)
A recent post over at AllThingsFinancial prompted me to reassess the way we handle our kids’ allowances. Thus far, we’ve been pretty lax/inconsistent about allowances, and our oldest son has recently been agitating for a more reliable stream of income. After mulling it over, we’ve settled on a new system. (more…)
Big news in the world of online DVD rentals… Wal-Mart has exited the business, and is throwing their weight behind NetFlix. In fact, if you hop over to the WalMart.com, you’ll see an ad for NetFlix plastered on their front page. Presumably their getting a kickback for customer referrals. It’ll be interesting to see what this does to the online rental market, as decreased competition generally doesn’t bode well for consumers. Then again, Wal-Mart was really only a niche player with around 300, 000 customers. For the sake of comparison, NetFlix weighs in around 3, 000, 000 customers, whereas BlockBuster.com has managed to build a customer base of a little better than 800, 000 in less than a year. Speaking from personal experience, NetFlix beats the heck out of BlockBuster in terms of both availability and turnaround time, and I can’t ever imagine switching back to BlockBuster.
Editor’s Note: This limited-time offer has expired.
As I’ve mentioned previously, I’m a big fan of CitiBank credit card rewards. In fact, I’m currently carrying a Citi Dividend Platinum as well as a Citi Driver’s Edge in my wallet. The former generates cash back, whereas the latter earns credit toward automotive services and/or auto purchases. A few weeks ago I ran across a post on PFBlog that mentioned that Citi had sent out a mailing indicating that they would be improving the Driver’s Edge reward program. This past week, I was cleaning off the counter when I ran across the same mailing in a stack of mail that I hadn’t looked at closely enough. So what’s changing?
The primary improvement is that they’re increasing the annual reward cap from $500/year to $1, 000/year. Likewise, the maximum redemption amount has increased from $2, 500 to $5, 000. On top of this, the reward rate will increase to 3% on gas, grocery, and drugstore purchases (the standard deal has been 1% on all purchases). This isn’t that big of a deal, as the Dividend Platinum card currently pays 5% for those same sorts of purchases (and 1% on all else). However, many of us got in on the ‘5% on all purchases’ promo, meaning that we can rack up this year’s $1, 000 pretty easily — my promo period doesn’t end until September, and I’ve already nearly maxed out the original $500 limit. [Note: The 5%/1% reward structure has since been reduced to 3%/1%.] The mailing also mentioned that you’ll earn ‘rebates for the miles you drive, ‘ but provides no further details — rather, they refer you to their website or a toll-free number. I poked around on their website a bit and didn’t see any further explanation, and I haven’t had the time nor the inclination to give them a call. The only downside seems to be that your rewards will now automatically expire if you don’t use your card for twelve consecutive months. All changes are effective May 23, 2005.
So how easy is it to redeem the Driver’s Edge rewards? It’s really easy. I faxed them the receipt from a recent oil change, along with a redemption form, and sure enough a credit soon showed up on my statement. This will definitely continue to come in handy for me, as I currently drive a fourteen year old car.
Unfortunately, the 5% promo seems to have dried up. But keep your eyes open — they seem to run special offers fairly frequently.
It seems that a common question for homeowners is whether or not it’s a good idea to send extra principal along with (or in addition to) their mortgage payments. The answer to this question varies from case to case, but here’s what I do… (more…)
I just ran across an interesting method of covering your tuition bills in an article on alternative ways of paying for college. They offer a number of alternative methods for paying for your schooling, but by far the most interesting of these was a service called MyRichUncle.com.
There’s not a whole lot of information at their site — just a bunch of gibberish about their ‘revolutionary’ scoring system, yadda, yadda, yadda. But according to the BankRate article:
MyRichUncle provides money from private investors to college students who need help with education expenses.
In return, a student agrees to pay a fixed percentage of their gross future income for a fixed period.
“They pay less when they make less, ” says Raza Khan, managing director of MyRichUncle. “They pay more when they make more.”
This is an education investment not a loan, so there’s no interest to pay.
For every $1, 000 of financial help, a student agrees to pay 10 to 40 basis points of future income. A basis point is one one-hundredth of a percentage point, so someone who receives an education investment of $10, 000 might agree to pay anywhere from 1 to 4 percent of future income.
Payment periods are 10 years for graduate students and 15 years for undergraduate students. Payments begin six months after graduation.
Once the payment period ends, a student’s obligation ends even if you end up paying back less than you were given.
“We’re actually taking a chance on a student, ” Khan says. “If a student succeeds, we succeed.”
This sounds like an interesting idea, but I’m not sure how I’d feel about being an indentured servant once I got out of school. This is fundamentally different from standard student loans, as you don’t seem to have the ability to accelerate your payments to rid yourself of the obligation. I guess such a plan could have a weird sort of upside, though — if you end up in a low paying deadend job after graduation, you could come out far ahead in terms of the cost of your college education.
I love Quicken. I’ve been using it to track our finances since January 1, 1997. During that time, however, I have noticed a few shortcomings. Perhaps the greatest of these is Quicken’s lack of support for certificates of deposit.
It doesn’t seem like it could be that hard for Intuit to build in straightforward, intuitive support for something as basic as a CD but, for some reason, they didn’t. I’m not sure if this problem persists in the newest versions — I’m still using Quicken 2002 Deluxe — but a couple of years ago I came up with a good workaround. (more…)
I’ve recently gotten interested in real estate investing, especially with regard to rental properties. Unfortunately, I know hardly anything about it. Thus, I’m really in need of a good education. So before going any further, I thought I’d start by reading up on the subject to see if it really sounds like something I’d like to pursue. There’s a lot of info on the web, but much of what I’ve run across is pretty short and fluffy. (I’ve compiled a list of a few such articles below.) What I really need is a good book or two (or a few). The problem is that there’s about a million books on real estate investing. Okay, that’s a bit of an overstatement… But a quick search on Amazon reveals that there’s more than 800 books on the topic. (more…)
I just ran across an article by Suze Orman on saving for your kids’ college education. Pretty run of the mill stuff, but good advice just the same. The take home lesson is that you need to prioritize your investment needs, and that you shouldn’t rank saving for college ahead of some other critical areas.
According to Orman:
“You need to listen up here: You must take care of your other financial needs before you save one penny for your kidsâ€™ college educations. That means getting rid of your high-rate credit card debt, contributing enough to your 401(k) to get the maximum company match, saving up for a home if you donâ€™t yet own one, funding a Roth every year if you meet the income eligibility requirement (under $95, 000 for a single tax filer, $150, 000 for married couples filing a joint return), and saving up an eight-month emergency cash fund. And when all of that is done, go back and max out on your 401(k) contribution and save a bit more for retirement in a regular taxable account.”
While opinions vary on issues such as the size of your emergency cash fund (eight months is on the high side of most recommendations), Orman makes a number of good points, particularly with regard to retirement savings… After all, your kid(s) can always get financial aid to help pay for college, but the same can’t be said for your retirement.
For all of you day traders out there… According to a recent CNN/Money article, you might want to try your luck investing on Friday the 13th. Over the past 50 years, the stock market (or at least the Dow) has performed better on this traditionally unlucky day than it has on a typical Friday.