Wednesday, June 21, 2017

Watch Out For These Two Sneaky Tricks When Moving!


There are two things I really, really hate – painting and moving. I will happily fork over piles of cash for someone else to do those jobs for me. So in preparation for our move to Washington, I called up a couple moving companies to get quotes for the move. I asked for the works – not only moving our stuff, but packing everything up as well. We were able to afford this little extravagance because my wife’s job offer included a rather generous relocation allowance. When you relocate for a job, moving expenses are tax deductible, so this this means we can pay for the move with tax-free money that was basically given to us from my wife’s new employer.

Trick Number One

I’ve heard all kinds of horror stories about moving companies. People’s stuff gets lost or damaged. Or the movers show up at the new house and demand thousands of dollars more before unloading your stuff.

It’s that last thing I want to talk about. It happens because people unknowingly agree to it.

How Your Cost Is Determined

Moving prices are based on two factors – distance moved and weight of items moved. The distance is fairly straightforward and easy to determine. Weight, however, is a different story. When the movers send someone out to your house to give you a quote, that person walks through the house, looking at all your stuff. He or she makes an estimate of how much all that stuff weighs and that is used to come up with a price. But you need to be careful.

Not All Estimates Are Equal

See, there are two types of estimates movers can give you: binding and non-binding. As the names imply, a binding estimate is one that the mover must adhere too. They may charge you less, but they cannot charge you more. A non-binding estimate is exactly that – a general amount that may not end up anywhere close to what you will eventually be asked to pay. Unless you specify which type of estimate you want, guess which one you’re likely to get?

My Experiment

Because I write a personal finance blog, I thought this would be a good opportunity to run a little experiment. When I got my two quotes, I asked one company (Company A) for a binding estimate. When I spoke with the other company (Company B), I played dumb and did not specify which type I wanted. Company B did not tell me I had two options for the estimate. Both companies sent someone out to look at my house in person. They came on the same day, about 4 hours apart, so the contents of my house were definitely the same for both estimates.

Company A’s quote, the binding estimate, came in at about $15,000. Company B’s quote came in at $10,000. Wow! Company B is 33% cheaper! I should go with them, right?

Wrong. Look at the small print in the estimate:

Click to enlarge

If that’s too small for your to read, here’s the important bit: “The Non-Binding Estimate shows the estimated cost… The total cannot be determined until all of the packing and origin services have been performed, … the van loaded and the actual weight of the shipment has been determined.”

You might as well just hand them your wallet. That paragraph gives them a license to steal. It’d would be so easy for them to claim that the person giving the quote did not correctly estimate the weight of the shipment or the amount of work it would take to pack everything up. It’s so easy to fib here and there to come up with a low-ball quote to get your business, then sock you with a huge bill when they deliver all your stuff. And if they did that, there would be nothing you could do about it. Their estimate says they can do that.

Compare that to the language of the binding estimate:

Click to enlarge

No wiggle room there. You will pay the estimated amount or less. (I seriously doubt anyone ever will pay less…)

Trick Number Two

Another little trick they use to come up with a lower quote is with insurance. When you pack and move stuff, things sometimes break. It happens. To provide some protection, all movers offer some sort of insurance. There are typically two types – full replacement value, which will reimburse you for the amount it takes to replace something that’s broken, and flat rate, per pound coverage. The former is more expensive. The latter is cheap. So cheap, in fact, it’s usually offered for free. You know why? Because they typically reimburse you at 60 cents per pound!


Think about that. Your brand new, $1,500 washing machine gets damaged? Well, those typically weigh between 150 and 200 pounds, so the most the mover will have to pay you if that gets damaged is $120. Your collection of rare stamps got damaged? Sorry, Those are pretty light, so you’ll probably be lucky to get $5.00.

Again, unless you specifically ask, guess which one will be included in your quote?

Look again at the language of the binding estimate. When you get a binding estimate, that default insurance coverage jumps from $0.60 per pound to $6.00 per pound. That still might not be enough to cover the full replacement cost, but it’s better than 60 cents per pound! About 10 times better, I’d say.

Be Sure You Are Comparing Like Estimates

I wanted to make sure I was comparing apples to apples with these estimates, so I called up Company B again and asked for a binding quote with a specified amount of insurance coverage. When I got that quote back, their price went up to around $15,000, just like the other company.

Think about that. Their estimate increased by 50% when they knew they would be forced to abide by it! If that doesn’t tell you the first estimate was a bait-and-switch, I don’t know what would.  Is it any wonder people get mad at moving companies?

So get educated and know your options and your rights. Read the fine print. Save yourself from nasty surprises!

Have any of you used movers recently? What was your experience like?

Wednesday, June 14, 2017

Thoughts On Gifts - Do We Really Need More Stuff?


Father's Day is coming up. I'm a father. Therefore, I will likely be getting gifts - from my daughter and my parents. Not my wife though. She knows me too well.

I don't want gifts. I've got enough stuff. I don't even want a card. Have you seen card prices lately? They're $5, $7, some even reaching as high as $10! For something that will sit on a shelf or desk for a couple of days or a week tops, then get tossed out. That's crazy!

If you want to let me know you are thinking of me, don't send a card. Send a text or an email. The effect is the same, the delivery is instant, and the cost is nothing.

There are exceptions to the no gift rule, of course. Anything homemade is welcome. Something that took work to create is infinitely more cherished than something store-bought. My daughter will likely make me a Father's Day card rather than buy one from a store. Awesome. That will be saved far longer and appreciated far more than a store bought card would.

But no gifts, please. Unless you have a crystal ball and know exactly the make and model of something I want, odds are I'm going to return it, re-gift it, sell it, or give it away to charity. Let's just save everyone time and money and avoid all that, OK?

What Happened?

Somewhere along the line, gift giving transformed from trying to find and buy something you might think a person would enjoy, to asking that person for a list of things they want and picking something off that. What's the point? How is that thoughtful? That's no different than grocery shopping.

What I do want is time. Time with family and friends. Let's go out for a meal or get together at home and just hang out. Let's give each other something that money can't buy.

Not Everyone Feels This Way

I know someone people just don't feel right not exchanging gifts on a holiday. I get that. I know it's hard to change years of tradition. To be sure, sometimes gift giving is still appropriate. Kids should get gifts. Christmas is still gift giving time (although restraint is the order of the day there). Major life events like weddings or graduations call for gifts. But other times? Not so much.

I'm 48 years old. I don't need a gift for Father's Day. Or Valentine's Day. Or my birthday. If you really think about it, you probably don't either.


Wednesday, May 31, 2017

Goal Update: End Of May 2017

At the end of each month, I post an update of my goals, including a brief discussion of any notable events that might have occurred during the month. The latest month's figures can always be found under the Featured menu in the menu bar at the top of the blog.

Last updated: End of May, 2017
Current value: $31,585
Change from last month: +$489
Percent of Goal:  29.05%





Note that the funds in this account are invested in stock, so there will be fluctuations in value that are outside my control. I never withdraw money from this account, so any dips are purely due to stock price changes.

This month's figures are a week early. I'll be heading out for Las Vegas for our annual summer visit and I wanted to get this posted rather than wait until I get back.

Events Of Note Last Month:

First off - last month, I transposed two digits while transferring figures to my spreadsheet. My account value at the end of April was $31,096, not $31,906 as I originally posted. Bummer. Taking that into account, I saw an increase of almost $500 this month. Net income from my online courses was $72.14. My hard money loan generated $133.33 in income. I received $2.30 in eBook royalties and I also picked up $10.61 from doing a couple surveys at Amazon Mechanical Turk.

Relocation Update

Our house is still up for sale. No offers yet, but we are getting more showings. I've lowered the price a bit and also increased the buyer's agent commission from 3% to 4%, which was trick I learned when I was flipping houses a decade ago. The 1% increase will cost me less than dropping the price by $5,000.

Net Worth Update 

For May, our net worth rose by $10,572.


April 2017May 2017
Note: Mint.com categorizes our HELOC as a credit card debt, not a loan, hence the apparently high credit card balance.




















Our cash took a dive, but so did our credit card balance. It's not really credit card debt, but a home equity line of credit that Mint categorizes as a credit card. I used some cash that I had in a hard money loan to pay down the HELOC in preparation for selling the house. I mentioned this was in process last month.

Not much else going on right now. Everything is basically in a holding pattern until our house sells.

If you have any questions or suggestions for topics, please drop me a line in the comments section!

Wednesday, May 24, 2017

Stockpile: Give The Gift Of Investing


If you've never invested in stocks before, getting started can be an intimidating prospect. You may think you need a pile of cash to get started. After all, a single share of Tesla sells for $300 (at the time of this writing). You might only have $100 or $50 to invest. What can you do?

Enter Stockpile. A traditional broker will only allow you to purchase shares of stock in whole increments and often their commissions are high enough that it's not financially feasible to buy less than 10 or so shares of stock. Stockpile is a company that lets you purchase partial shares of stocks for a low commission - the lowest I've seen anywhere.

For example, if you wanted to own Tesla stock, but only had $30 to invest, with Stockpile you can buy one tenth of a share with your $30 plus an insanely low commission of $0.99! Sweet! Stockpile allows you to buy stock based on a dollar amount you have available, not multiples of a share price.

They also offer dividend reinvestment for free, so you can take advantage of compounding by plowing dividends right back into the stock.

Stockpile doesn't offer shares of every single stock in the market, but they do offer shares of more than 1,000 companies, including every stock in the S&P 500. You can check to see if they offer shares of a company you are interested in here.

Their Real Advantage - Gifting

But what is really exciting about Stockpile is their gift card program. Gift cards can be electronic or physical and they allow you to give someone a certain dollar amount of a company's stock. For example, if you want to give your graduating nephew $50 of Apple stock, you can buy them a gift card for that.

But this is the cool part - if your nephew doesn't want to own stock in Apple, they can use that gift card to buy $50 worth of any other company stock Stockpile offers. Or, if your nephew isn't into stocks at all (how is this guy related to you?), he can exchange it for a $50 gift card to some other retailer, such as Amazon, for the full face value! This is one gift you know will be used!

The gift card recipient always gets the full face value of their gift card. If they use it to buy stock, they are not charged a commission - that is paid for when the giver purchased the card. If they exchange it for a gift card from another retailer, they get full credit. Gift cards also never expire.

Given the huge flexibility of their gift card program, I can't see any drawbacks to giving Stockpile gift cards!


Open An Account Today And Get $5!

If you are interested in opening an account, use this link and you'll get $5 worth of your choice of stock for free!

You can fund your account by linking your bank account to your Stockpile account (this is free, but can take 3 to 5 business days) or by supplying a debit card number (costs vary from $0.25 to 2%, based on your bank, but Stockpile will tell you the fee before you are charged - and this provides instant funding business days between 7 AM and 8:30 PM Eastern).

Stockpile offers a great value. In addition to the crazy low commission, Stockpile does not charge a monthly fee to have an account. I don't see any downside to getting started with them!

This page may contain affiliate links. Please read my disclosure for more information.

Wednesday, May 10, 2017

Is This The Latest Trend In 401(k)s?


I received an email from my employer's HR department a while ago that notified me of some coming changes to our 401(k) offerings. They are removing some of the higher cost funds and replacing them with similar lower cost funds. This is a great news because most people don't even realize how much funds are charging them.

The flip side of this is that now participants of the plan will be assessed a quarterly fee to make up for some of the losses. As the memo from my company put it:

Effective June 1, 2017, we have chosen to adopt a lowest cost investment approach within our retirement plan; see the attached notice.  With these changes, the Plan will now receive less fee revenue from certain investments that have been used to offset administrative costs associated with the Plan. As a result, you will see a change in the way investment and administrative fees are managed. You will also have greater visibility to the administrative fees since they are no longer embedded in the higher share class investments – creating more transparency and reducing overall expenses.

The Plan will shift the administrative expenses previously covered by higher cost share funds to a per-participant fee each quarter. This fee, which is currently estimated at $7.50 per quarter, will begin in January 2018 and may vary in future years after annual costs associated with the Plan are determined.


Initially, I was a bit peeved. This seems like they are just passing the costs on to me and the other participants. But really, they are not - we were already paying these fees but they were just hidden in the expense ratios of the funds. (See my previous posts about selecting funds with low expense ratios in your 401(k).)

Overall, this is a big win for investors. My plan replaced 9 funds with lower cost alternatives. Here are the changes:


Old fund Old Expense Ratio New fund New Expense Ratio
PGFIX 0.85% AFGFX 0.61%
REREX 0.85% RERGX 0.50%
DISSX 0.50% VSCIX 0.07%
JDVVX 0.77% JDVWX 0.70%
LLDYX 0.40% LDLVX 0.33%
HIEMX 1.33% VREMX 1.20%
BPRIX 0.35% BPLBX 0.30%
DEVIX 0.99% DVZRX 0.77%
PNCYX 0.62% JHBSX 0.45%

With the exception of the one change to a Vanguard fund (VSCIX), most changes resulted in about a 0.2% reduction in expenses. Some were almost not worth the change, in my opinion (i.e., just a 0.07% reduction from JDVVX to JDVWX), but I still have to appreciate the sentiment.


The new fee participants are being charged is $7.50 per quarter, or $30 per year. So if you have invested more than $15,000 and changed to some of these new plans, you'll likely come out ahead (because 0.20% of $15,000 is $30.) Depending on which funds you are in, you may come out ahead with even less invested. For example, if you switched from DISSC to VSIC, you'd start coming out ahead at just $6,976 invested due to the 0.43% reduction in fees.

But Wait, That's Not All!

The other positive thing about his change is that a percentage fee is being replaced (at least in part) by a flat fee. This means that your fee is still $30 a year, no matter if you have $10,000 or $75,000 invested. With the old fee structure, higher balances would pay more.

Let's Hope This Is A Trend

I am hoping that people are becoming more aware of the hidden and not-so-hidden costs of mutual funds. I'd love to see more companies make changes like this. I'm worried that my perspective my be a little skewed though. I work in the financial services industry, so my fellow employees could be more educated about these issues, which might force HR to be more aggressive at lowering 401(k) expenses than HR departments at companies in other industries.

Has your company done something similar?

Wednesday, May 3, 2017

Goal Update: End Of April 2017

At the end of each month, I post an update of my goals, including a brief discussion of any notable events that might have occurred during the month. The latest month's figures can always be found under the Featured menu in the menu bar at the top of the blog.

Last updated: End of April, 2017
Current value: $31,906 $31,096
Change from last month: +$1,314 +$504
Percent of Goal:  29.34% 28.60%




Note that the funds in this account are invested in stock, so there will be fluctuations in value that are outside my control. I never withdraw money from this account, so any dips are purely due to stock price changes.

Events Of Note Last Month:

(Update: I discovered I made a typo when transferring figures to my spreadsheet. The value of my account at the end of April was $31,096, not $31,906. I adjusted the figures above, but not the chart, because I'm lazy.)

Net income from my online courses was $90.00. My hard money loan generated $133.33 in income. I received $2.30 in eBook royalties. And lastly, I received a $50 check from a class action lawsuit relating to my old Whirlpool washing machine.

Income from my online courses seems to be tapering off. This is likely because newer versions of SQL Server have come out and, although my course content is still applicable to the newer versions,  I suspect people want to always learn on the new shiny.

I remember going to one session at a SQL conference that was titled something along the lines of "Best Practices for SharePoint and SQL Server 2016." The very first thing the guy said was that his session was exactly the same as ones he had done for previous versions of SQL Server, but if he didn't put "SQL 2016" in the title, no one would show up. I walked out, not simply because this pissed me off, but because the year prior, I had attended his session for SQL 2012, so I wasn't going to waste my time sitting through the same session.

I could go through and update my courses to show SQL 2016, but really, for the stuff in them, nothing changed. I'm not going to be as disingenuous as that speaker was by re-branding my courses with something like "Now includes SQL 2016!" So my options are to make a new course based on features of SQL Server that are only found in the new versions, or just accept the declining revenue. Not sure which way I will go yet.

I mentioned back in February that my hard money loan was coming due and I was selling my stock in anticipation of rolling the funds from that into a new loan. I sold my stock, but then found out my loan was extended by three months (which I agreed to), so I've been sitting on about $11,000 cash earning next to nothing for a couple of months. Not ideal, but not the end of the world either.

Relocation Update

Man,  real estate agents can be like sharks smelling blood in the water. I opted to fire the one agent I was using to sell my house (I only had 1 showing in 7 weeks) and hire another. As part of that process, I had to take my house off the market. Immediately, I got barraged with calls from agents trying to get me to list my house with them. The house went off the market on Friday night. On Saturday morning, I received 5 calls in 15 minutes! On Monday, I received about 15 calls in the hour between 8 AM and 9 AM. Because I had actually already signed with a new agent, there was no point in my talking to these people. I basically stopped answering my phone for 2 days if the call was from a number I did not recognize.

Taxes

Taxes this year were about the same, on a net basis, as last year. We ended up owing about $1,000 federal and $500 state, for a total of $1,500. Last year, we owed $1,900 federal and got a $400 refund from the state, for a total of... $1,500. I am nothing, if not consistent :-)

It could have been worse but I had been making quarterly tax payments to lessen the blow. I put aside 15% of the income I receive from my hard money loans, royalties, and online courses for taxes and send that in each quarter. Last year that came to about $600 in payments.

I used to want to end up owing a small amount each year because getting a refund means you have been lending money to the government interest-free for a year. I still feel that way, but after doing our taxes this year, I went ahead and increased our W-4 additional withholding amounts for 2017. My goal now is to end the year somewhere between getting $200 back and owing $200 in taxes. But since tax laws are constantly changing, it's a hard target to hit. It'll be made even more difficult for 2017; my wife's new job pushed us into a new tax bracket, but we are also moving (which gives us some tax deductions) to a state that has no income tax.

Net Worth Update 

For April, our net worth rose by $36,922. As I mentioned last month, this was mainly due to my wife's relocation bonus hitting our bank. Once I sell our house in Arizona and move to Washington, those funds will be used and our net worth will take a corresponding drop.


March 2017April 2017
Note: Mint.com categorizes our HELOC as a credit card debt, not a loan, hence the apparently high credit card balance.















Mint changed their charts. I miss the pretty colors and I think the new version is harder to read.

Our Property total dropped and our Cash went up. This is because I cashed out a hard money loan, which Mint tracks in the Property category. As soon as my bank clears the funds from the check, I'll be sending it to my HELOC, which Mint characterizes as a Credit Card. This is just me moving funds around trying to get ready for the sale of our house and upcoming move.

If you have any questions or suggestions for topics, please drop me a line in the comments section!

Wednesday, April 26, 2017

My Experience With Credit Card Rental Car Insurance


When my wife was interviewing for her new job, we flew up to Washington one weekend and rented a car so we could drive around and check out the area, looking for possible neighborhoods to live in. We were staying in a hotel with underground parking. I had booked the rental car through Dollar Rent A Car and choose the "mystery car" option. (They actually refer to it as the "Lock Low & Go" option.) This was the cheapest option and it basically meant we would get whatever car they decided to give us when we picked it up. It could be a compact. It could be a full size car. Could be anything in between. It turns out we got a minivan.

Because I had to return on a Sunday and my wife had to stay until Monday for her interview, I left a day before she did. Seattle has a subway that goes to the airport, so she could get to her flight without a car. In the meantime, I would return the car on Sunday and save one day of car rental charges.

Oops.

Our hotel had underground parking and the exit required a pretty tight turn to fit through the gate. Because my wife had been driving all weekend, I had very little experience driving the minivan and ended up misjudging the exit turn. I scraped a pillar on the way out. Crap.



When we rented the car, we declined the optional insurance from Dollar. Had we got that, there would not have been a problem. However, we knew our credit card provided rental car insurance coverage, so I declined it to save some money. (You should pretty much always do this - unless you are taking a trip you know will cause vehicle damage.)

This is one time we knew we were going to need the rental insurance. But that's a story for another day.

There's A First Time For Everything

This was the first time I ever needed to file an insurance claim for a rental car and here are a few things I learned:

  • The coverage is secondary. This means you must first file a claim with your own insurance company, find out what they will pay, and then the credit card will pick up whatever isn't covered. (If you do not have your own car insurance, say, for instance, you do not own a car, then the credit card coverage would be primary and cover all damages.) This also means you must pay out whatever is not covered and wait to get reimbursed from the credit card company.

  • Your primary insurance probably won't cover everything the rental car company bills you for. The bill I got from Dollar included not just the cost to repair the damage, but also charges for loss of use (the car could not be rented while it was being repaired) and an administrative fee.



  • Your deductible still applies, of course. I have a $1,000 deductible, so I was responsible for that much, at least.

  • Rental car companies get nasty when trying to collect. I got one letter with my initial bill. I submitted everything to my insurance and they said they would take care of and let me know the status. As with anything involving lots of paperwork, things move slowly and require almost constant follow up. After one month, I got a somewhat nastier letter from Dollar saying I had still not paid and hinted at legal action.

It turns out, my insurance company had approved the claim, but had not done anything with it. After another phone call with my insurance company, I found out there is an electronic system that insurance companies use to pay each other and they were waiting for Dollar to submit the request through that. Another call to Dollar to tell them this. But, they told me, Dollar isn't an insurance company, so they don't have access to that system. Yet another call to my insurance company to get them to mail a check instead.

Oh - did I mention you cannot call the Dollar claims department and speak to someone directly? Every time you call, you get a message saying their representatives are answering calls all day and to leave a message and someone will call you back. The message even says don't call multiple times, it won't make anyone call you back faster. Pretty cheeky.

It's Not Fast


This whole process took two months. It might have gone faster, but I was actually trying to minimize any loss on my part. The last thing I wanted to do was pay out any money and then find out I was not going to get reimbursed for some reason.

When I found out my claim was approved, I gave Dollar the claim number from my insurance company and let them contact the company and work things out. (Given the debacle with the electronic payment thing, that didn't go too well, it seems.) Then, as soon as I found out what my insurance did not pay, and therefore, what I owed, I called my credit card company and got them working on sending that amount to me.

I did not send my payment to Dollar until I had received the credit card payment. So the net effect was I never had to put out any of my own money. But the waiting game I played caused Dollar to send me a second nasty letter after they received payment from my insurance and were still waiting for mine.

Still, It Was No Cost To Me

All in all, it was a fairly painless process that did not cost me any money. My insurance company ended up paying $458.93 and the credit card company paid $1,339.20. It did require about an hour or two of my time just to follow up with all the companies involved and make sure payments were flowing as they should.

This was our first car insurance claim in at least 10 years. Because we've been accident free for so long, our insurance company had enrolled us in their accident forgiveness program. We are allowed one at-fault claim every five years without incurring a rate increase. I'm glad we had that.

Wednesday, April 12, 2017

17 Tips For A Successful Garage Sale


I live in a gated community that is governed by a home owners association. The rules of the HOA prohibit garage sales except for one day a year. This is actually pretty nice, as a community-wide garage sale attracts many more people than a single family garage sale. It is also a nice opportunity to talk to your neighbors and generally hang out in your front yard and shoot the breeze with people.

Our yearly garage sale took place last Saturday, which was pretty convenient because we will be moving soon and we've got some stuff we'd like to get rid of. Here are some of the tips I’ve discovered running garage sales over the years.

  1. People show up early. Like, really early. Technically, our garage sale starts at 8 AM. We got people showing up as early as 6:30 AM.
  2. Treat garage sales as an opportunity to simplify and declutter your life, not make money. Your goal should be to unload all the crap you no longer want. Any money you make in the process is icing on the cake.
  3. People expect great deals at garage sales, so be prepared for them to negotiate prices on virtually everything you have for sale. Your main goal should be getting rid of stuff, not obtaining top dollar. If that’s what you want, use eBay or craigslist. I don’t think I’ve ever turned down a sale from someone who wanted a lower price (but I have negotiated a price between my original price and their initial offer).
  4. Don't lay stuff on the ground. No one wants to bend over to look at something. Use tables and display your stuff in a non-cluttered fashion. Don’t pile everything on one table and expect people to shift stuff around to see everything. Use several tables (borrow them, if you don’t have enough) and spread out your goods. Make it easy for people to see everything you have for sale.
  5. Set up the night before. Park your cars on the street the night before and set up your tables and displays in the garage. Then, the morning of the sale, just open your garage door and, if you want, move the tables out into your driveway. Leave plenty of room for people to walk around the tables.
  6. Be prepared to make change. The day before, visit the bank and get a bunch of one and five dollar bills and quarters. I try to price items in increments of a dollar or a quarter, just to make it easy to give change.
  7. Put a price tag on everything. The exception might be if you have a bunch of small items. Put these in a box and put a sign on the box saying “$0.25 each” or whatever your price is.
  8. If you don’t want it and were planning to throw it away, put it out for sale, even if you think it’s something no one would buy. People will buy anything and you never know what someone is looking for. If you put it out for sale and it sells, great! If it doesn’t, throw it out. There’s no loss to you since you were planning to throw it out anyway.
  9. Get one or two dozen donuts and put up a sign saying if someone buys X dollars worth of stuff, they can have a free donut. My grocery store sells fresh donuts for $0.30 each, so this is a cheap incentive for people to buy more.
  10. Don’t be afraid to break up sets. One time I was selling a twin mattress and box spring. Someone only wanted the mattress. I was hesitant to break up the set, but I decided to (mainly because mattresses are a pain to get rid of). I left the box spring up for sale and an hour later, someone bought it.
  11. If you are selling furniture or large items, some people may ask for you to hold it until they return with a vehicle to transport it. In this case, I require the buyer to pay at least 50%. I provide a receipt and on the receipt I write that I will hold the item until a certain time (later that day, usually). If they don’t pick it up by then, they lose their deposit and I can sell the item to someone else.
  12. You will get some strange requests from people. Every year, there is one guy that comes to my garage sale and hands me a business card  and says “You selling anything like this?” The business card says he is a gun collector. Not sure why he asks that way because it makes it seem like he’s doing something illegal. I don’t own any guns and I’m not knowledgeable about the laws for selling them, so maybe he is.
  13. Prepare for traffic, especially if there are multiple houses participating. Cars will cruise the street, trying to see what you have for sale. It’s probably best to keep small kids and pets inside the house or in an area where they can’t wander into traffic.
  14. Post details of your garage sale on Craigslist.org one or two days before it happens. This is free advertising. If you have a lot of one type of item to sell, mention that. For example, if you have a lot of furniture or clothing for sale, be sure to say so. People looking for those items will make a point to visit your sale.
  15. Drop your prices near the end of the sale. When it gets down the last hour or so of your sale, cut the prices in half. You don’t need to re-label everything, but just tell people walking up that everything is half price.  Remember, your goal should be to get rid of stuff, not make top dollar.
  16. It helps to have two people manning the sale, but have one person be in charge of holding the money and making change. The other person can answer questions and keep an eye on things.
  17. Keep an eye out for people trying to steal things. I’ve never had this happen (to my knowledge), but if your sale is busy with a lot of people milling around, it might be tempting for someone to pocket an item or two.

Our garage sale went well this year. We made $407 and sold 70 of 95 items we put out. Not as good as last year, when we made just over $500, but we had a lot more stuff for sale then too.

I'm interested in hearing other people's experiences with running a garage sale. What are some tips you have?



Wednesday, April 5, 2017

Goal Update: End Of March 2017

At the end of each month, I post an update of my goals, including a brief discussion of any notable events that might have occurred during the month. The latest month's figures can always be found under the Featured menu in the menu bar at the top of the blog.

Last updated: End of March, 2017
Current value: $30,592
Change from last month: +$617
Percent of Goal:  28.13%







Note that the funds in this account are invested in stock, so there will be fluctuations in value that are outside my control. I never withdraw money from this account, so any dips are purely due to stock price changes.

Events Of Note Last Month:

I crossed the $30,000 threshold! That means I unlocked a new achievement!





Wow. It's been a long time since I unlocked an achievement - Seven months. I need to step up my game!


I received $8.10 in advertising revenue from my old real estate blog. Net income from my online courses was $221.99. My hard money loan generated $133.33 in income. And lastly, I received $2.70 in eBook royalties.


Relocation Update

My wife got paid her relocation bonus this month. It doesn't show in our net income figures because it's in the process of being transferred between banks. (I'm writing this on a weekend, so the receiving bank hasn't updated their figures yet.) It will probably be a while before we buy a new house in Washington, so next month, I expect to see our net worth jump when that deposit finally hits our bank account.


Net Worth Update

For March, our net worth rose by $10,797.




February 2017March 2017
Note: Mint.com categorizes our HELOC as a credit card debt, not a loan, hence the apparently high credit card balance.












Our cash went up quite a bit, mainly due to my wife's new, larger paycheck. Other than that, nothing major changed in our financial picture in March. Our house in Arizona is up for sale. It's a very slow market and we've had next to no showings.

If you have any questions or suggestions for topics, please drop me a line in the comments section!

Wednesday, March 29, 2017

Warren Buffett's Schizophrenic View Of The Internet


Warren Buffett made big news recently what it came out his company, Berkshire Hathaway, sold almost its entire position of Wal-Mart stock in the last quarter of 2016. There had been news in the past that he was selling his Wal-Mart holdings, but the scope of just how much he sold has just been fully disclosed - he sold virtually all of it - almost 90%. I'm willing to bet we'll see the last bit has been sold when Berkshire files its Q1 2017 disclosures.

The articles written about his sales all point to the same reason - he says it's just too hard for traditional retailers to compete with internet companies like Amazon.

Personally, I agree. While I never shop at Wal-Mart because I disagree with the way they treat and pay their employees, I have noticed that I tend to buy more things at Amazon than I do at other traditional retailers. The internet makes it easy to shop for the lowest price (which isn't always at Amazon) and get things delivered straight to your door.

One Eye Open, One Eye Closed

But this is where Buffett's schizophrenia kicks in. He has acknowledged the internet is destroying traditional retailers, yet he can't see that it's doing the same thing to traditional news companies. He still holds large positions in, and is still buying newspaper companies.

Talk about a last century business model! I haven't subscribed to a newspaper in at least a decade and I can't think of anyone I know who currently does.

Granted, Buffett has acknowledged that he has an "unnatural love" for newspapers and he does seem to see the writing on the wall - that only those few newspapers with a viable internet model will survive. However, at what point will he reach the same conclusion about newspapers that he did with retail stores - that the internet will wipe out the vast majority of them? When will we be reading stories about his sale of newspaper companies?

Wednesday, March 22, 2017

I'm Interviewed At Rockstar Finance

The team over at Rockstar Finance did an article on the types of cars personal finance bloggers drive. I was pleased to be asked to participate. Sadly, when they asked for pictures, I was out of town, moving my wife to Washington, so that's not actually my car in the photo, but it looks pretty darn similar. My wife has a silver one and mine is blue.

And Jesse from You Need A Budget - I am soooo envious of your Tesla Model S!!!!


Wednesday, March 15, 2017

The Sneaky New Trick Banks And Credit Unions Are Using


As my family gets ready for a move to a new state, I've spent some time looking for a new bank or credit union to handle our finances in our new location. Currently, I use a local credit union for my day to day banking needs and, although it is possible to perform most transactions at out of state credit unions through a program called Shared Branching, I don't want to use this as a long term solution for my banking needs after I relocate. (One reason is that I wouldn't be able to get a mortgage on an out of state property.)

Deceptive Advertising?

So I've been researching various financial institutions, looking for one that provides the services that I need at rates that are competitive. During this process, I came across this advertisement for rates on checking and saving accounts:



Holy cow! Over 4% interest on checking and savings accounts! I haven't seen rates that high in over 15 years! My current vanilla savings account pays 0.05% and my checking pays nothing. Even online banks are only paying around 1%.

And then I noticed the fine print:



Clicking the link for more details, I found out that high interest rate only applies to the first $500 in your account. Any balances over $500 earn just 0.1%. (Although low, that is still double what my current credit union is paying me.)

(Click to see the whole image)

The Carrot Instead Of The Stick

Initially, I was upset with what seemed like a blatant bait-and-switch, but then I started thinking about it more and came to the conclusion that this is actually a positive for the consumer. This particular credit union has free accounts - really, truly free with no minimum balance requirements. The high interest rate on the first $500 appears to be an incentive for people to maintain a minimum balance. I much prefer this to what most institutions do - create a disincentive for people by charging a monthly fee for a low balance.

Kudos to this credit union for taking this approach! They just earned my business!

Wednesday, March 1, 2017

Goal Update: End of February 2017

At the end of each month, I post an update of my goals, including a brief discussion of any notable events that might have occurred during the month. The latest month's figures can always be found under the Featured menu in the menu bar at the top of the blog.

Last updated: End of February, 2017
Current value: $29,975
Change from last month: +$688
Percent of Goal:  27.56%






Note that the funds in this account are invested in stock, so there will be fluctuations in value that are outside my control. I never withdraw money from this account, so any dips are purely due to stock price changes.

Events Of Note Last Month:


In something of an unexpected event, I received $7.50 in advertising revenue from my old real estate blog. It's unexpected because I am not writing new posts there anymore and haven't for quite some time. I guess it's still got enough traffic to attract some advertisers. Net income from my online courses was $115.10. My hard money loan generated $133.33 in income. And lastly, I received $3.77 in eBook royalties.

I crossed another milestone in February - I have now earned more than $9,000 from my online courses! Not bad for a total investment of $149.

My hard money loan is due to be paid off any day. My plan is to roll those funds into a new loan and add in the funds I've saved up over the past year.  Those monies were invested in Realty Income stock, which has dropped in value over the past several months. I was worried I might have to sell at a loss to cash out. I put in a limit order several weeks ago at a price that would allow me to more or less break even. I didn't think it would trigger, but a few days ago, the stock price jumped briefly and I sold my shares for a net gain of about $25. Not much, but better than the loss I was expecting. And that figure is not taking into account the roughly $235 I received in dividend income throughout the past year.

Relocation Looms!

Major big news this month! We will be moving! My wife got a fantastic job offer from the University of Washington and it was too good to pass up, so we're leaving the Phoenix area and heading to the Seattle area. In fact, when this is published, we'll be on the road driving up there! After she's set up in an apartment, I'll return to Arizona for a bit with our daughter. We're going to have her finish the school year our here while I work on selling the house.

The housing market in Seattle is crazy. Single family home prices range from $450,000 to over one million. I'm having a hard time getting my head around that. Currently, we've got about $165,000 outstanding on our mortgage and we were on track to have it paid off in 15 years - which was perfect because that would be just about when we hit retirement age. Now we will be going to be back to a 30 year time frame with a much higher balance. The crazy smart folks over at Early Retirement Now are helping me get used to this idea with posts like this one (see item #4).

This is a major life change and the number of things that has to be done to move your entire family and life to another state is crazy, so posts here might be sparse for a while. I also am getting prepared for our net worth figures to bounce around wildly for a couple months. My wife's new employer is giving her a bonus to relocate and that will inflate our numbers one month, then they will decrease as we pay the moving bills when they come due. It will also take some time to adjust our budget as we get used to living in a place with a higher cost of living than Phoenix.

Net Worth Update

For February, our net worth rose by $17,140.




January 2017February 2017
Note: Mint.com categorizes our HELOC as a credit card debt, not a loan, hence the apparently high credit card balance.












It's not as rosy as it seems. If you look at the numbers above, most of them took turns in the wrong direction by thousands of dollars: our cash dropped, our credit card debt rose, and our property value dropped. What offset all this was a big gain in our investments. Part of that was because I rolled over my pension from my prior employer into an IRA and invested that into an index fund, which saw some solid gains this month. The other part was that Realty Income stock made some significant gains, as I talked about above.

If you have any questions or suggestions for topics, please drop me a line in the comments section!

Wednesday, February 15, 2017

Rockstar Finance Directory


Real life is sucking up all my time lately, so just a short post this week.

Check out the Rockstar Finance Directory by J. Money. It's a list of most of the active financial bloggers in the personal finance community. He's also incorporated his Blogger Net Worth data into it as well. As usual, he's done a great job rounding up the interesting blogs from around the internet!

Lots of big changes coming up in my life, so posts may be sporadic for a bit. I will return, however!

Wednesday, February 8, 2017

Don't Leave Money On The Table: Changing Jobs With A Medical FSA = Free Money


Medical flexible spending accounts (FSAs) offer you a way to pay for certain medical expenses using pre-tax dollars. At the beginning of the year, you tell your employer how much money to put into this account for the year and, each paycheck, a portion of your pay is diverted into the account. The amount is divided equally over the course of the year. You get that money back by submitting receipts for covered medical expenses to the plan administrator, who then disburses the money from the account to you.

These accounts are use-it-or-lose-it accounts, meaning if you don't submit enough qualifying expenses during the year to use all your money, you lose whatever is left. (Recent changes allow your employer to offer you the opportunity to roll some funds over into the following year, but this is something your employer has to opt-in to, so check your plan details to see if this option is available to you.)

The IRS states these plans have to operate under Uniform Coverage Rules (PDF) for cafeteria plans. This means the entire amount of your yearly contribution must be made available immediately at the start of the year.

So if you elect to contribute $2,500 for the year, you can submit a qualifying medical claim for $2,500 in January and get the entire amount paid to you, even though you have not yet contributed that amount to the plan. (Remember, your contribution is spread out over all your paychecks for the year. So if you get paid twice a month, or 24 times a year, each paycheck you deposit $104.17 to the account.)

As I mentioned before, this is a use-it-or-lose-it account. If it gets to be December 31 and you have not spent $2,500 in qualifying medical claims throughout the year, you lose whatever excess funds are in the account. But...

What happens if you change jobs during the year?

Free Money Happens!

Because the plan must operate under Uniform Coverage Rules, employees have a way to get some free money though a loophole.

Suppose you elect to contribute $2,500 to your FSA account. In January, you go crazy and go to a bunch of doctors and buy all kinds of covered items. You manage to incur $2,500 in medical costs during the month. You submit the receipts and the plan pays you $2,500. On February 1, you change jobs.

Because you were only at your old job for one month, you only contributed 1/12 of $2,500 to the account. But they already paid you the full $2,500. Here's the loophole:

Your employer cannot recoup that money from you.

You just got $2,292 in free medical care! (That's $2,500 minus the 1/12 of $2,500 you paid in January.) This is the positive flip side of the use-it-or-lose it nature of the plan.

To make the deal sweeter, when you start at your new employer, you can start another medical FSA for the maximum amount and continue to submit expenses against that.

The Fine Print

There is one rule you need to be careful of: expenses have to be incurred while you are still covered under your old plan. So, in our example, if you quit your job on January 31st, the plan will only pay for medical costs incurred on January 31 or earlier. Depending on the plan, you may also have to submit receipts for reimbursement prior to your final day of employment.

This just takes a little planning. If you know you will be changing jobs, go on a spending spree to use up the full amount you elected to put away in your FSA. It can be hard to use up the extra funds solely from visits to the doctor (most elective surgeries do not qualify for reimbursement). However, look at the list of over the counter products that DO qualify:

  • Bandages
  • Blood pressure monitors
  • Cough medicine
  • Crutches
  • Alcohol swabs
  • Condoms
  • Eyeglasses
  • Non-cosmetic dental work
  • Saline nose sprays
  • First Aid kits
  • Reading glasses
  • Sunscreen
  • Lip balm with sunscreen

Those are just a few. A more detailed list can be found here. Your FSA plan administrator probably also has a list of all covered items. Most drug stores with pharmacies note on the receipt which purchases are eligible for FSA reimbursement.

So if you are planning on changing jobs, go a medical spending spree and use up all of your FSA funds, even those that haven't been deducted from your paycheck yet. And don't leave money on the table!

Wednesday, February 1, 2017

Goal Update: End Of January 2017

At the end of each month, I post an update of my goals, including a brief discussion of any notable events that might have occurred during the month. The latest month's figures can always be found under the Featured menu in the menu bar at the top of the blog.

Last updated: End of January, 2017
Current value: $29,287
Change from last month: +$703
Percent of Goal:  26.93%






Note that the funds in this account are invested in stock, so there will be fluctuations in value that are outside my control. I never withdraw money from this account, so any dips are purely due to stock price changes.

Events Of Note Last Month:


I received income from several different sources this month. Net income from my online courses was $217.25. My hard money loan generated $133.33 in income. I made $3.89 in eBook royalties and I received $14.48 from a class action settlement with Prosper.com.

Not much of note went on this month. We just keep on tucking away money in our various savings accounts. My wife and I are driving out to Las Vegas in February, so I'm looking forward to that. Also, my hard money loan is coming due and I'll look to roll that into a new one and add some funds to it at the same time.

Net Worth Update

For January, our net worth rose by $12,803. The gains came from a rising stock market and property values. No change in the Loans figure, which looks strange, but this was because I paid our January mortgage bill in December to get the extra month of interest to deduct on my 2016 taxes.

We reached our goal of saving $10,000 in an emergency fund. Rather than stop saving, we're just going to continue to put aside the same amount each week and keep growing it. We may decide to use the excess for something in the future. Besides, it never hurts to have some extra savings laying around!



December 2016January 2017
Note: Mint.com categorizes our HELOC as a credit card debt, not a loan, hence the apparently high credit card balance.












If you have any questions or suggestions for topics, please drop me a line in the comments section!

Wednesday, January 25, 2017

Alarming Misinformation About Alarms

These days, the subscription model for businesses is where the money is. Making a product someone pays for once is so passé. Why settle for a one time payment when you could be collecting money month after month from your customers? Understandably, some consumers are concerned with this trend, so marketers like to point out all the ways a monthly subscription will give you more benefits and may, in fact, even save you some money.

Alarm monitoring companies are huge promoters of the latter. If you have a monitored alarm system, they point out, you will likely receive a discount on your homeowners insurance. One figure widely touted is a savings of up to 20%! Check out these claims (click the images to be taken to the quoted site):

Home Advisor - How Alarms Systems Add Value While Keeping You Safe

http://www.homeadvisor.com/r/home-security-alarms/#.WH-QEH1WdP0

Home Advisor - 2017 Alarm Monitoring Costs

http://www.homeadvisor.com/cost/safety-and-security/hire-an-alarm-monitoring-service/


SafeWise - 8 Benefits To Owning A Home Security System

http://www.safewise.com/blog/top-8-reasons-get-home-security-system/


A Secure Life - Top 10 Reasons To Install A Home Security System

http://www.asecurelife.com/reasons-to-install-home-security-system/

Always Remember Your Source

The claim that a monitored alarm system can save you up to 20% on your home owners insurance seems to come from a 2011 study conducted by the Rutgers University School of Criminal Justice. However, further examination will reveal that the study was paid for by the Electronic Security Association, a trade advocacy group for manufacturers and sellers of security systems. That's a pretty good reason to view the findings with a critical eye.

A widely used quote from the president of the ESA is that the insurance savings can be substantial enough to offset a portion of the monitoring costs:

http://www.prnewswire.com/news-releases/survey-finds-insurance-carriers-offer-major-discounts-for-home-alarm-systems-116654399.html

Sounds good! I might be more likely to pay a monthly monitoring fee if I can recoup some of the cost via savings on my home insurance!

Turns Out, Those Savings Claims Are Wildly Optimistic

My house has a monitored alarm system and has had it since the day we bought it. The house was bought new and the alarm system was included, so I don't really have any installation cost to examine. However, I do pay a monthly fee for monitoring that runs about $37.75. I could pay only $32.75, but I cancelled my landline phone line eight years ago and had to switch the alarm system to a wireless receiver, which added $5 per month to my bill. The installation fee for the wireless receiver was $125, but I have long since recovered that cost from the savings I've obtained from not having a phone landline for eight years.

Several years ago, I thought about cancelling my alarm service. I even called up the monitoring company, but I was given a hard sell and was talked out of quitting. (I wasn't so financially savvy back then.) One of the things I remember the person on the phone telling me was that if I cancelled, they would have to call my insurance company and tell them, so my insurance rates would go up. That scared me - no one wants insurance rates to go up! It never even dawned on me that they didn't have a clue who my insurance company was, so they couldn't call anyone if they wanted to. Doh!

I Finally Crunch The Numbers


Fast forward many years to the present. Last week, I noticed my alarm panel was reporting an error code. I called and was told that my wireless receiver was no longer functioning. It used old wireless 2G technology and all the 2G cell towers in my area were decommissioned, so the unit had to be replaced with a unit that used the 3G network. I was told there would be a $79 fee for the change. I asked why I had to pay that, since it's their equipment, their service, and I had done nothing that required the change. I was put on hold and a few minutes later, was told that the fee would be waived. Score one for me.

Their brazen attempt to get me to pay a fee caused me to re-examine the whole alarm monitoring concept, so while I was waiting for the service tech to show up, I starting crunching the numbers.

Because my home owners insurance is billed annually, let's look at the alarm system costs on an annual basis. I pay $113.33 per quarter, or $453 each year to the alarm company. My city also requires all users of a monitored alarm system to pay a $10 annual alarm permit fee to my police department.

Total Annual Cost For Monitored Alarm: $463

My yearly homeowners insurance premium, including all discounts, is $635.06.



The discount I receive for having a monitored alarm is:



FIVE DOLLARS!

This was so far off from the "up to 20%" claim I had read, I actually called my insurance company to see if this discount was being quoted on a per month basis. Nope. That's per year.

My monitored alarm system is only giving me a 0.8% discount on my home insurance.

Is It Worth It?

No way. I'm spending $463 to save $5. Guess what service I just cancelled?

There Are Benefits - They Just Aren't Monetary

I'm not going to say that alarm systems have no benefits. My alarm system can be set so it beeps whenever a door or window is opened. This was really nice when my daughter was a toddler and we were worried about her walking outside without us noticing. The feature can also provide comfort when someone is home alone and worried about possible intruders.

My wife likes to open windows when it isn't too hot outside. Later, when it becomes too hot, I'll switch on the A/C. Because the control pad can tell me which windows are open, I use it to find and close any windows my wife might have opened to make sure I am not running the A/C with any open windows.

Additionally, an alarm system can provide security even if it is not monitored. If my alarm is triggered, an extremely loud siren goes off whether or not the system is monitored. That's going to scare away any thief.

The lack of monitoring does not make my system completely worthless.

It Comes Down To Your Peace Of Mind

Newer alarm systems can also monitor for fire, carbon monoxide, and all sorts of other dangers. Those features won't likely need to be monitored to work either. However, if you want the peace of mind that comes from knowing someone will call the appropriate authorities if your alarm is triggered, then go ahead and pay for a monitoring service. Just be aware of the true costs and don't be misled by inflated claims of potential savings.