Wednesday, August 9, 2017

Credit Cards For People With Bad Credit

I'm not one who plays close attention to credit card offers or constantly applies for new cards to get the sign up bonuses. I tend to find a few cards that provide good rewards for my needs and stick with those. There are many websites devoted to tracking credit card offers and rate and promos. NerdWallet in particular does a yearly roundup of such deals.

The cards with the best offers or bonus tend to be mainly for people with good credit. What do you do if your credit is not so good or even outright bad? For those people, finding a credit card is less about finding one that provides good perks, but more about finding one at all or one without a crazy high interest rate.

A Great Credit Card Guide

U.S. News & World Report has recently published what is the most comprehensive guide for credit cards for people with poor credit that I have seen. You can check it out here. It's a lengthy read, but full of good information, especially if you have poor credit and are looking for advice on how to improve it.

The article starts at the beginning, defining what a credit score is, how to get yours, and how to improve it. It then moves on to specific credit cards to look at and compare. What I really like is the article also lists what credit cards to avoid.

If you have poor credit and are looking for ways to change that, this article is well worth the time it takes to read and study.

New Credit Card Offer

Despite having started this post saying I don't follow credit card offers too closely, I will say I received an announcement for one that made me sit up and take notice. USAA has come out with a new card that offers either 1.5% cash back on all purchases or 2.5% cash back on all purchases. This caught my eye because most cash back card will give you 2% back on all purchases, sometime up to 5% from specific stores that change each quarter. That extra 0.5% could add up! (Note: The higher return requires a checking account with direct deposit at USAA.)

Not everyone will qualify for this. Besides the regular credit card approval process, you also have to be eligible to join USAA. This generally means you or someone in your family must have been in the military at some point. Full eligibility details can be found here.

I use USAA for insurance and some banking. They are a great company with fantastic customer service. *


So what do you think? Do you have poor credit? If so, what are you doing, if anything, to improve it?

* Although I have not received any compensation for anything mentioned in this post, please see my disclosure statement for full details.

Wednesday, August 2, 2017

Goal Update: End Of July 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 July, 2017
Current value: $32,282
Change from last month: +$621
Percent of Goal:  30.26%

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 saw an increase of $621 this month. Net income from my online courses was $117.68. No news on the hard money front. My partner still has more money than he has deals to invest in. Last month, I mentioned I was thinking about investing in RealtyShares. I haven't pulled the trigger on that, mainly because I've been busy moving to Washington and selling my house. I haven't had much time for research.

I'm also looking at generating income from selling cash-backed puts. This means someone pays me for the right to buy their shares of stock at a certain price. The folks at Early Retirement Now have done a good job writing about this strategy here. Check it out for more info. Right now, I'm testing the waters by just trading on paper and seeing how things work out.

I don't have enough funds to invest in both RealtyShares and cash-backed puts, so I've got to make a decision on which I want to do.

Relocation Update

My house closes escrow on Thursday. At this point, all appears to be going well. The house inspection is over and we worked out a deal where I credit the buyer with about $750 instead of me making some repairs he wanted. Then, because the buyer is getting a VA loan, there was another requirement from the VA that I re-paint the stem wall, which had some paint that was peeling off. The quote for this was $275 and the buyer didn't want to pay it, which I felt was ridiculous. It's his lender demanding the repair. He was ok with it not being painted because he didn't ask for it after his inspection. But whatever. He agreed to split the cost with me, so I'm ending up only crediting him with $612.50 instead of $750.

Last week, I packed up my daughter, dog, and a bunch of our stuff and made the three day drive to Washington. Our Prius was pretty full!

My dog wonders what's going on.

Net Worth Update 

After dropping, $7,788 last month, our net worth rose in July by $7,618, so we're pretty much back where we started two months ago.

June 2017July 2017
Note: 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, July 26, 2017

It's Moving Week!

No post this week. We're moving to Washington!

Wednesday, July 19, 2017

Two News Stories That Illustrate How Stupid People Can Be With Money

Look, I know not everyone is a financial genius. I'm certainly not. But I would like to think that most people have some basic level of knowledge, some grasp of rudimentary concepts of what constitutes a good or bad financial decision. A financial equivalent, if you will, of common sense. Like "poking yourself in the eye is bad."

Sadly, the astoundingly high levels of credit card debt the average American carries (over $8,000!) seems to indicate otherwise.

The First Story

Take this story, published, appropriately enough, on the Fourth Of July:

The average length of an auto loan reached 69.3 months in June. That's over five and three-quarters years! For a car loan!

Let me put this another way: That's an almost six year loan to pay for something that has a crazy high depreciation rate! Someone who takes an auto loan for this amount of time will be underwater on the loan immediately and will continue to be underwater for probably 3.5 years, minimum. Yay, America!

I know not everyone can pay cash for a car. I get that it's tough to save money. But come on! If you have to take out a six year car loan in order to get the monthly payments to be something you can afford, then guess what? YOU CAN'T AFFORD THE CAR!

The Second Story

This one is even worse. Actually, there are a couple headlines, but they all say the same thing:

Sweet mother of god!

Are you serious?

People are actually putting their retirement savings into a virtual currency? Into.. nothing?! Why don't you just invest your life savings in tulips?

I have no words. When you start seeing headlines like these, you know we are in a bubble.

Please please please. PLEASE. Do NOT invest your retirement savings in cryptocurrency!

I'm not saying cryptocurrencies won't last or won't take off. In the interest of full disclosure, I recently purchased a bit of one cryptocurrency - Etherium. But I bought a small amount using money I could afford to lose. I bought it with gambling money, not my retirement savings!

Because that's what cryptocurrencies are right now - a gamble!

How'd you like to have your retirement savings invested in Etherium and wake up to this (actual) headline:

Come people. Start making smart financial decisions. Stop poking yourself in the eye.

Wednesday, July 12, 2017

The Model 3 Is Released! Prepare For The Negativity!

The Model 3 officially went on sale last Friday. Prepare yourself for a flood of negative press for the next couple of weeks or months.

I don't expect the car to be bad. In fact, quite the opposite. I expect the car will be very high quality. But I am expecting a lot of news stories about problems with the car. Furthermore, I'm betting almost all of these so-called "problems" will be driver-related.

When Model 3s start rolling out their new owners, there will be a flood of people who will be getting their first taste of electric vehicles. There will be a learning curve and many people will flounder around against that curve for a bit.

Here are the types of stories I expect to see:

Cost-Related Stories

First, expect stories about how the typical Model 3 costs closer to $50,000 than $35,000. These stories have already appeared and I expect more of them to crop up.

The gist of these stories will be "the car isn't really low cost. It's still more expensive than the typical Toyota / Nissan / GM car."

Well, no.

The price goes higher than $35,000 because, just like every other car on the market, you can upgrade the options it comes with.

The base price for a bare-bones Prius is $23,475. But if I trick it out and add a bunch of options, I can get the price up to $32,646. That's a 39% increase over the base price.

Based on pre-order data, the average Model 3 sales price is $50,000. The increase from the Model 3 base price of $35,000 to $50,000 is 43%, so the Model 3 upgrades are comparable to upgrades on other mass-market cars.

Range-Anxiety Stories

Current owners of Model S and Model X Teslas have had time to adjust to driving an all-electric car. They know taking long road trips takes a bit of extra planning. You can't just throw some suitcases into the back and set out on a three day road trip. Tesla's network of Supercharger stations is large and growing larger every week, but they still aren't as ubiquitous as gas stations.

New drivers will face a learning curve. Instead of miles per gallon, they will have to learn about kilowatt-hours and power regeneration. They will see the car's displayed "miles until empty" counter vary based on speed and elevation changes much more so than in a gasoline powered car.

Expect lots of stranded motorist stories. This isn't a problem with the car. It's a problem with the driver not understanding that driving an electric vehicle will be a little different.

Keep in mind, the vast majority of driving is done locally and range anxiety will not be an issue at all.

Crash-Related Stories

This has happened already with the Model S, so there might not be as many of these. But the Model 3 includes the Autopilot functionality and many people will try it out and push it to its limits. The name is somewhat unfortunate because it's not yet a truly driver-less system and the driver still needs to pay attention to the road.

However, as with anything that goes mass-market, there will be those users that don't follow directions or read the manual. Those people will cause crashes. Again, it won't be the fault of the car. It will be driver error.

It's-Not-As-Green-As-You-Think Stories

There will be a bunch of stories about how the Model 3, and electric cars in general, are not as great for the environment as you might think. There will be analyses showing just how horrible the batteries are for the environment and how long it will take to recoup the costs, etc. These stories have already appeared and seem to pop up every 1 or 2 years.

They are almost always false and written by people with a vested interest against seeing electric vehicles (or Tesla specifically) succeed. A common tactic is to include all the environmental costs incurred in the creation of batteries in the environmental impact of the car, but neglect to include all the environmental costs incurred in drilling, pumping, refining, and transporting gasoline in the environmental costs of a gasoline car.  Whenever you see these types of articles, read them critically and make sure the authors are comparing apples to apples.

The Union Of Concerned Scientists did an in-depth study (warning: PDF link) comparing the environmental impact of electric vehicles to gasoline vehicles. They concluded (emphasis mine):
"From cradle to grave, BEVs (battery-electric vehicles) are cleaner. On average, BEVs representative of those sold today produce less than half the global warming emissions of comparable gasoline-powered vehicles, even when the higher emissions associated with BEV manufacturing are taken into consideration."

So Stay Positive

Despite what I expect to be a deluge to negative-slanted stories, the overall benefits of electric vehicles, and the Model 3 in particular, are enormous.

What types of Model 3 stories are you seeing or expecting to see?

Wednesday, July 5, 2017

Goal Update: End of June 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 June, 2017
Current value: $32,282
Change from last month: +$697
Percent of Goal:  29.69%

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 saw an increase of $697 this month. Net income from my online courses was $100.50. My hard money loan generated $177.17 in income, which is a bit more than normal. See below for details. I received a check for $8.51 from a class action lawsuit settlement. I received $50 in gifts and I turned in a bunch of change for $58.45.

My hard money load was paid off, which means I got my principal back, plus some partial month interest for June. Normally, I would just leave this money with my partner and he would roll it into another loan. However, our biggest borrower has semi-retired, so we don't have as many requests for loans these days. My partner, who also works with other investors, has about $1.5 million in cash waiting to be loaned out and, as a result, he opted to return people's principal when this loan closed because he has no use for it right now. Business has shifted from lots of little loans on properties in not-so-great areas (the ones our biggest borrower specialized in) to fewer but larger loans on properties in nicer neighborhoods.

So now I'm looking for a place to deploy my funds. I still like the money lending business and I am looking at RealtyShares as a possible alternative. A couple of other bloggers I follow, Financial Samurai and Financially Alert, have invested with them. Their initial reports were positive, but I emailed them asking for a follow up to see if their opinions have changed.

One of the things I am concerned about is preservation of capital. If an investment goes south, I'm OK with getting a zero percent overall return as long as all my principal is returned. My hard money lending partner is also very concerned about this and the loans he makes are always at 75% loan-to-value or lower, so if the borrower does stop paying, we can foreclose, sell the property, and still get all our original investment back. I've got a 15 year track record with him. Investing with someone else brings a new set of risks and unknowns. How confident am I with their borrower screening process? With their property valuation methods?

Relocation Update

My house has finally sold! The official close of escrow is August 3rd. The contract was just accepted, so we still have to get through the home inspection. My buyer is pretty solid, so I'm not worried about him not getting a loan. He's pre-qualified for a $250,000 VA loan, but he's making a large down payment and will only need a loan of about $100,000. He put up $10,000 in earnest money, which is a large amount. His offer is also not contingent upon him selling another property. So basically, once we get through the home inspection and come to terms with whatever it finds, the sale should be pretty much a sure thing.

Net Worth Update 

For June, our net worth dropped by $7,788. This is the first time it has dropped since October 2016 and only the second time it has dropped since I've been tracking it.

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

It's hard to determine where the drop occurred from just these numbers because I'm in the process of moving money around. Because my hard money loan ended and my principal was returned, that money moved from the Property category to the Cash category. From my examination, it looks like the drop has mainly come from a decrease in the value of my house.

My net worth is going to jump around a lot the next couple of months. I'll be selling my current house, which will cause it to jump way up. Then, a little bit later, we'll be buying a new house in Washington, which will cause it to drop quite a bit as we take on a much larger mortgage. It's going to be a bumpy ride!

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

Wednesday, June 28, 2017

Coinstar: Get Rid Of Your Spare Change

Photo credit

Coins seem to be the one form of money nobody wants. They're heavy and not worth much. Many people have a jar or a piggy bank or some sort of container they throw spare change in each day. I use an old acrylic fish tank I got back when I was in college, like this one:

For years, every day, when I got home, I would throw all my change into it. I never managed to fill it, which was probably a good thing. The fullest I ever got it was about 25% and that sucker was heavy! I could barely lift it with that many coins in it. If I ever managed to fill it completely, I never would have been able to get it out of the house!

A Penny Here, A Penny There...

The great thing about doing this is that all that change adds up. When the tank was about a quarter full, those coins would be worth somewhere around $250 to $350! And it was like free money! I just threw in a few coins here and there that I never missed each day. After a couple of months, BAM!! Jackpot!

In fact, when I was newly married, my wife and I routinely used our coin fund for gambling money when we went to Vegas.

It takes a lot longer for me to save up change these days because I rarely pay with cash. Instead, I charge everything so I can earn cash back rewards on my credit cards.

Even Banks Don't Seem To Want Coins

There have been a lot of other changes that make saving coins a bit more of a hassle than it used to be. Many banks no longer accept coins unless you have sorted and rolled them yourself before bringing them in. Few banks have coin counting machines these days and, if you bring in a bunch that are not rolled, they may have to ship them elsewhere to get counted. And, of course, they will likely charge you a coin counting fee.

Back when I worked for a credit union, we had a branch that had a coin counting machine in the lobby that our members could use for free. Eventually, that was done away with because it didn't get much use and the maintenance on the machine was too much.

Enter Coinstar

But there are still a lot of coin-hoarders out there and where there is a need, there is a business opportunity. Coinstar saw that need and filled it.

I'm sure you've seen their machines in grocery stores - big green kiosks with a touchscreen and a metal tray to pour your coins into. It's self-service, which I like, and grocery stores are open for more hours than banks are, so it's easier to find time to cash in your change.

When you use a Coinstar machine, you have three options on what to do with your money: you can get cash, get an e-gift card for one of many online retailers, or donate the money to one of several charities.

Option 1: Cash

Getting cash is the most expensive option. Coinstar charges 11.9% to exchange your coins for dollar bills. Probably some of this goes to the hosting grocery store, because the machine doesn't actually dispense cash. You get a receipt, which you then have to take to a checkout register or service desk at the store to redeem for cash. This is a pricey option and I never use it. I would suggest you avoid it as well.

Option 2: eGift Cards

The e-gift card is the option I always choose. If you go this route, there is no service charge and you get 100% of the value of your coins converted into a gift card for one of many online stores. I always choose Amazon because I buy a lot of stuff from them in my day-to-day life. (Is there anyone who doesn't?)

Option 3: Donate To Charity

I have never used the charity option, but Coinstar does provide you with a receipt and your donation is tax deductible. I do not know if there is a service charge if you choose to donate your funds.

Today, I cashed in the small amount of change I had accumulated. It was only $58.45 and that was after close to a year of saving. (I told you I don't use cash much anymore!) I converted that to an Amazon gift card to avoid the service fee, saving me about $7. I then transferred that same amount from my bank to my Tesla fund.

Coinstar And Its Like Are Affecting The U.S. Mint!

There is a ton of money just sitting out there in jars and couches. In fact, Coinstar has been so successful in getting people to turn in their piles of coins and get them back into circulation, that the Government Accounting Office has determined that the U.S. Mint has been able to reduce the number of coins it produces!

Coin recycling machines found in grocery stores, retail stores, and some depository institutions have made it easier now than it was in the past for the public to trade in coins for currency or some form of credit, such as a gift card. In some districts, coin recycling has returned large volumes of coins to circulation.

In fact, that same report says the number of coins returned to circulation from services like Coinstar increased from $1 billion in 2000 to $2.6 billion in 2006.

$2.6 billion!!! That's a lot of coins!

What do you do with your spare change?

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: 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 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: 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.


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 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?