February 5, 2012

Posts Comments

Invest Like A Second Grader

Allan Roth shatters the myth that investing is too complicated for ordinary people in his new book How a Second Grader Beats Wall Street. His common sense, easy to understand guide can save you money on your investment costs and maybe your investments.

Some quotes from the book:

“Design a portfolio composed of a few basic building blocks than can be ‘tweaked’ to fit your personal needs.”

“Reengineer your portfolio to stop needlessly paying taxes.”

“A simpler approach to today’s market can put you on the path to financial independence.”

“Morningstar’s ability to turn large amounts of data into simple, understandable information helps investors make better decisions.”

“Cut through the baloney that Wall Street wants us to believe and return to basic simplicity.”

“It is what we learn after second grade that turns out to be so destructive.”

“Kevin’s magic portfolio: Vanguard Total Stock Market Index Fund; Vanguard Total International Stock Index Fund; Vanguard Total Bond Market Index Fund.”

“By ‘Wall Street,’ I mean everybody who’s after your money, not just the large brokerage houses.”

“Our emotions consistently steer us toward the path that leads only to giving away our hard-earned nest egg.”

“I’m a strong believer in the KISS principle (keep it simple, stupid).”

“There are two types of investors when it comes to predicting next year’s stock market: 1) Those who don’t know. 2) Those who don’t know they don’t know.”

“Over a 20-year period, the stock market has always bested inflation.”

Filed Under: Financial Planning

It Pays To Shop In The Money Aisle

MoneyAisle.com is a new online service that allows small and medium size banks to compete for your business though internet auctions.

money_aisle

You enter the type of savings product you want and watch the auction unfold in real time as banks compete for your money. In about a minute you’ll have the best possible rate and can open an account online or by phone directly with the winning bank. You can even access the advanced features to ladder CDs for one of the safest ways to invest your hard earned dollars. The service is free and every participating bank is FDIC insured up to $250,000 per account.

MoneyAisle makes it easy too.

PICK YOUR PRODUCT

Select your financial product (CD or High-Yield Savings), the amount of money you wish to invest and, if you’re investing in a CD, the maturity duration.

BANKS BID LIVE

Within seconds, MoneyAisle generates a live auction among the participating banks for your business.

MoneyAisle captures the highest rate offered by these banks and then repeats the process to see if any other participating banks will beat it. Each auction round pushes the rate higher.

This process is repeated as many times as necessary until one bank is left. If two or more banks tie for the winning bid, MoneyAisle will break the tie on a random basis. The winning bank’s rate is the highest rate offered during your auction. The entire live process typically takes only a couple of minutes.

You watch the auction live and see the number of rounds, the number of bids and the increasingly higher rate appear in real-time.

GET A GREAT RATE

You get the highest rate available at the moment you apply for your CD or High-Yield Savings account.

If you are satisfied with the rate and wish to complete the transaction, provide your contact information and accept the rate.

Once you’ve entered your contact information, a representative from the winning bank will contact you about opening your CD or High-Yield Savings account.

WORKS FOR ME!
I just scored 2.87% on a one year CD! Sure beats my local BofA branch. When every dollar counts, this site sure helps find the winners.

Filed Under: General

It’s Called Green For A Reason: Conserve Cash While Conserving Natural Resources

Individuals aren’t the only ones seeking to conquer their debt. Businesses too must come to terms with their spending and eliminate any and all waste in order to maximize profits and stay afloat.

As part of its makeover series, Fortune Small Business sends specialists to one small company in order to provide cost-saving recommendations. Absolute Tile & Stone in St. Louis is FSB’s current focus.

One of the key points in the feature on Absolute Tile & Stone is how the company can save money by going green. Jean Ponzi, green resources manager at EarthWays Center, suggests that the company find a way to reuse or recycle thousands of pounds of stone remnants that currently go to landfill.

“Zero waste is a sustainability principle,” Ponzi says. “So you need to find uses for these pieces of stone.” She suggests that Absolute sign up with a local industrial-materials exchange, an online listings service that pairs waste producers with waste users.

“You’d have to sell at a low price, and there may be transportation costs, but hopefully you’d spend less than you do for disposal,” she says.

The demand for Absolute’s waste could be great. Several emerging firms make green countertops out of composite materials. The use of these coutertops can satisfy a green building guideline established by the U.S. Green Building Council’s LEED (Leadership in Energy and Environmental Design) certification system, which awards points to builders who use local scrap materials.

Filed Under: Recycle, Reduce, Reuse

EFK Today!

Dr. Kathleen Connell, a professor at Haas Graduate Business School at University of California, Berkeley writes in The Christian Science Monitor that “many American families are forging a new frugal lifestyle, shopping in second-hand stores, using coupons, and sharing housing.”

She also addresses the need to “reboot” the American dream and offers seven rules for regaining your financial security:

1. Manage risk.
2. Secure your short-term financial stability.
3. Make time your ally.
4. Create a net worth profile.
5. Adopt an ‘unretirement’ mentality.
6. Establish priorities to protect your retirement.
7. Engage in a lifetime pursuit of financial knowledge.

She adds, “Don’t be a spectator in a volatile economy. It is essential to respond to life’s challenges with energy, focus, and knowledge.” I like that. Energy, focus and knowledge (EFK).

Filed Under: Financial Planning, Frugality

Travel Save

Have you heard of Yapta.com? It’s an information service that exists to save people who travel serious money by making sure they do not overpay for airline tickets.

yapata_savings-copy

If the price of your airline ticket drops below what you originally paid, Yapta alerts you when you’re eligible for a refund from the airline. Yapta.com also alerts travelers when a frequent-flier award seat becomes available on the flight they want. Just do a normal online search for airfare on the site and click ‘include award tickets’ to begin tracking the flight. So far, award-seat alerts are offered for five major airlines: Alaska, Continental, Delta, United and US Airways.

Yapta links travelers directly to the awards section of an airline’s Web site to redeem miles and book tickets, according to The Seattle Times.

Airlines typically release award seats 11 months in advance but can release more at any time based on cancellations, changes or demand. Carriers often release seats a few days before a flight’s scheduled departure.

“One of the biggest frustrations for frequent travelers is not knowing when they can actually redeem their miles to book an award seat,” said Tom Romary, a former Alaska Airlines executive and president & CEO of Seattle-based Yapta.

Filed Under: Budgeting, Frugality

Your Quarterly Rebate Is In The Mail

A new website called Hoopla Doopla is partnering with hundreds of top brand-name companies to offer online coupons, bargains, promotional offers and other deals to help you save money on everything from pharmacies to flowers, car rentals to clothing, popcorn to pet supplies.

When you buy merchandise from these retailers Hoopla Doopla pays you cash back.

Hoopla Doopla simply earns a commission for referring you to each company’s site and gives you more than HALF back in quarterly rebate checks. Commissions vary by retailer. For example, rebates are 4% on purchases at Aeropostale, 4.8% at Barnes & Noble, 9.6% at Cable Shopping Network, 8% at drugstore.com, 10% at Famous Footwear, 1.6% at Marriott, 5.6% at Omaha Steaks and Target.

You needn’t share any of your credit card or bank information with them. Payments can be made to you by check or through Paypal.

If you shop online, like to save money and the idea of getting quarterly rebates on what you do spend, check out this new service.

Founded in 2008 by Frank DeBlasi and Tom Cangley, Hoopla Doopla is a San Diego-based company.

Filed Under: Budgeting, Coupons, Frugality

Become The Chief Fun Officer

Enough with the doom and gloom.

Last night, President Obama in his second nationally televised press conference said things are tough; yet, by working together we will make things better. He reminded us that the glass is half full and life will go on and good things will happen including getting ourselves out of debt, both individually and collectively.

With this unity of purpose in mind, and with the April 15 tax deadline looming and budgets stretched to their limits we could all use a boost in morale. Don’t you think? How about this for a suggestion? Throw a “Hard Times” Party!

Yes, change your title to Chief Fun Officer and throw a “Hard Times” party on April 15th. Our dear friends have one annually and although we’ve only attended once many years ago, the memory lingers as one of the most unique and enjoyable parties I’ve taken part in.

The hostess sent out invitations handwritten on scraps of brown paper bags. She instructed everyone to wear their oldest, most worn out clothes, preferable with holes, and gave prizes for the worst – or best, depending on your perspective. And very importantly, she instructed us to bring our income tax return to the party ready to mail.

As we arrived at the door, a mail carrier in uniform greeted us to take our tax return directly to the post office for that important post marked before the bewitching hour. With checks inside for taxes due, we were all feeling even a bit poorer which made the evening about to unfold even more enjoyable.

Old-fashioned homemade lemonade and other drinks were served in mason jars. Bean and ham soup was the main course, accompanied by corn bread and cole slaw. Tablecloths were assorted old quilts and napkins were mismatched worn washcloths. Dishes were from a variety of sets gathered and chipped over many years. A high school violinist played the fiddle. A North Carolina mountain clogging group danced on the back deck. It was simple, easy and lots of fun and gave us all something to laugh about as we commiserated about our financial woes.

Whether it’s a “Hard Times” party on April 15, or just old friends over for tuna casserole, remember it’s not about waiting until you have new living room furniture or until you can create a gourmet feast, or serve the latest martini in crystal Waterford. Be a CFO (Chief Fun Officer) this spring and invite friends to share their life with you. And then, things will be better!

Filed Under: General

Debt Settlement Is Mostly A Scam

I loathe predatory businesses like debt collectors. But debt settlers aren’t much better. Thankfully, Smart Money is running a great overview on why it’s a bad idea to work with debt settlement firms.

One of Smart Money’s warnings is be careful not to get sued.

Since debt-settlement companies instruct consumers to stop paying their bills while they’re saving for a settlement, their balances continue to swell with interest and late fees and their credit scores plummet. In order to get paid, creditors may even sue — and these days, companies do that some time in the second year of nonpayment. With most debt-settlement plans taking 36 months or longer to complete, the chances of getting sued are pretty high.

That’s a pretty serious warning, don’t you think?

Robby Birnbaum, an attorney and member of the board of directors of the Association of Settlement Companies estimates there are 600 to 800 such companies nationwide. With the economy the way it is that number is likely to go even higher.

AmEx Ain’t Havin’ It

American Express says it only works with debt-settlement companies when the company sends a “cease and desist” letter forbidding AmEx to contact the consumer.

“We really don’t think that there’s a service or benefit that a debt settlement company will offer our card members that they can’t receive directly from us,” says Desiree Fish, an AmEx spokeswoman.

Filed Under: Debt Management

Free Budget Templates on Google Docs

Google Docs has released a set of personal finance templates for use with their online word processing application, Google Docs. If you have a Google account of any kind, including a Gmail account, you are already set up to use Google Docs.

personal finance budget templates

Grab the templates: http://www.google.com/google-d-s/templates_finance.html
Direct Link to Google Docs: http://docs.google.com/

Filed Under: Budgeting, Financial Planning

Frugal Is As Frugal Does

Frugal Zeitgeist is written by a 40-year-old West Coast transplant to New York. She paid off a $200,000 mortgage in a little over six and a half years, and is now working to build long-term wealth.

She recently wrote about how frugality can go too far. For her, making her own yogurt to save money is going too far.

I don’t think of frugality as wringing the last possible financial gain out of a penny, especially if it means doing so at other people’s expense (like not putting enough into the shared dinner bill, or being a lousy tipper). To me, that’s not frugality; that’s just being cheap. I don’t do that, and I hope you don’t either. Instead, I think of frugality as having two underlying philosophies: 1.) Spending less than one earns, and 2.) Spending in accordance with one’s values.

Frugal Z did an interview with Living Almost Large where she gives her three most important personal finance tips.

  • Don’t give up what you want most for what you want right now
  • Take the time to understand your values and direct your spending accordingly
  • Always have a backup plan

Sound advice, although I’m not entirely sure about spending according to one’s values. To do that, I’d need to make sure my clothes were not made in a sweat shop. I would eat only grass-fed free range beef. My power would come from the sun or wind. My car would run on biofuels. And so on. As you can see my own values are tied to rather costly choices, which means I need to reduce overall consumption in order to afford the quality products I believe in.

I can live with that.

Filed Under: Frugality
« Older Posts