Money and Financial Business

I got my booty spanked today in the game of "Switch checkout lines". I thought for sure the line with one person in it would be faster than the line with six.

It was not to be.

I watched a poor little guy run four credit cards and three zip codes through the credit card machine before he apologized in broken English and walked away.

I felt sorry for him but at the same time he was trying to buy a $227 digital camera and printer. I should have told him that the photo printer was not the way to go. At $0.17 to $0.24 cents each it is cheaper to have the pics printed than to buy printer supplies. You also get better quality having them done. I just don't see an advantage in having a photo printer.

Anyway, back to my spanking, I watched the six people in the other line walk out the door. Then about two others after that. By then I was just smiling on the inside. I knew I was beaten by Murph's law (thats no typo, Murphy and I are on nickname basis) of "You Will End Up in the Slowest Lines Possible When You Are In the Biggest Hurry."

I've been ruminating on this concept for several weeks. Ideas are like "convertible hair".... when the wind stops flowing you have to spend some time working the kinks out....I like these elipses thingys....

Anyway, this "Out of Debt In a Day" concept is one of those lines of thoughts that really brings tears to my eyes. The thought of being out of debt in a day gives one the feeling one gets when they hear their national anthem or when they see a new born baby or go to a wedding or get an extra check in the mail or hear the "I have a dream" speech (man, I love that speech).

Think about the statement: "I can be out of debt in one day." If you are in debt what does that do to your emotions? How does that make you feel?

OK, let's get past the feelings part- unfortuneately feelings don't pay the bills.

Here is how this works................... If you wake up tomorrow and never go another dime in debt for any reason then you are out of debt.

Thats right you are out of debt. You no longer use your credit cards to get by on or (cringe) finance furniture. The plastic has no more power over you because as of today you are out of debt.

You keep using your credit cards because you feel like you are so behind anyway that you have no other choice or because your minimum payments "make you have to use your cards." No more. You are out of debt starting now.

From this day forward you are out of debt and have started your savings plan. What's great about your savings plan is that you may be earning a 30% return on your money! Whatever you are paying in interest you get to keep a little more of with every payment you make.

You are not in debt any longer. You are now a saver.

Congratulations on getting out of debt today!

So here I am, starting my very own personal finance blog. After browsing several others for the past few weeks, i have to say that many of you have inspired me to share my own journey in a similar fashion. Essentially, the short version of the story is that I'm 26 years old, have a well paying job, and a whole bunch of debt. Over the past six months or so I've been getting more and more serious about attacking my debt issue (which isn't nearly as bad as I'm probably making sound right now) and getting myself on a plan to be debt free in a reasonable amount of time, and now I'm finally really starting to do it.

I have debt in three places: student loans, a car loan, and credit card debt. The first two I don't mind in principle because they don't really stem from living outside my means and/or being sloppy with my money. The credit card debt, however, is essentially from exactly that. The amount of debt is roughtly $19,000 in student loans, $3,600 that I still owe on my car, and somewhere around $7,000 on the credit card. A ballpark total of nearly thirty thousand dollars of debt. Ick.

One last thing is that right now I have nearly no savings to speak of, no retirement savings, etc etc etc... I'm living paycheck to paycheck, and I'm sick of it. It's time to break the cycle and start charting my progress to a debt free life of building net worth in the black, rather than the red.

HSBC is what i call an aggressive bank, they work hard to give the best interest rate to their customers. They have increased their rates again (now its 5.05%). Couple of good things about HSBC are (from our experience)

1. Gives the highest interest rate (They always matches or exceeds competitor's rate within a week's time )
2. The online system works without much hassle or downtime.
3. No minimum balance or fees
4.They dont come out with deals for new customers alone. in their world every customer is equal
5. 24 hr customer serivce.

The bad side
1. Painful Fund transfer mechanism. it takes 3 days to transfer fund to or from your HSBC account
2. The design of the website could have been better. after all that is the only interface thru which you interact with HSBC online savings account. So some thought on improving the usability is required.
3. The account setup procedure is werid. First they send the account information in postal mail. then after one week username is send, then after yet another week the password comes!.

Other than that, i have no complaints. All in all, we believe opening account with HSBC has been an excellent decision.

So I signed a Purchase Agreement to buy a loft in Midtown Detroit and I kind of want to throw up. I thought I was getting a sweet deal due to the awesome tax abatements I am receiving but the stupid association fees, for the most part, negate any saving. The Purchase Agreement is still contingent on a walk through of the building so that helps me sleep at night. I kind of want to just rent a dilapidated shack some where and live ghetto fabulous for the rest of my life. That way I could still piss away money on stupid things instead of doing boring things like investing in real estate or becoming an adult. I think I'll check into it.

So, how'd this month go? When I started this blog, these are the areas I wanted to get under control. Just putting everything into Quicken helped me to see exactly where everything was going. While this month was bad in other expenses, here are my big bad categories:

My past spending: Feb-April

June

Gas- $101.07

Dining-$106.04

Entertainment-$120.91

Groceries-$142.52

June numbers are good. Yes, we were pinched, but we still did good considering my birthday was this month :)


I didn't post May, last month...so here are the bad numbers


May

Gas- $108.63

Dining-$221.05.66

Entertainment-$114.07

Groceries-$162.09


May was a bad month in terms of spending on crap, but we had friends in and we went to two of our favorite restaurants. Ouch.

I finally realized the other day that in order to truly see a difference in my life I'm going to have to make some life changes. It dawned on me that if I continue to live the way I've been living I'm only going to find myself in more debt - and since my goal is to get *out* of debt, something's gotta give.

Hence the "Life Change" part of the title of this post. I'm sure these life changes will be difficult... but my hope is that if I do just one or two at a time, and then get used to it, after awhile they will be habits and I can move on and make even more life changes.

So, in line with the previous post, the first life change I want to make is to walk more. It's free, healthy and doesn't pollute. Also, it forces me to slow down and enjoy some quiet "me" time.

Generally when I walk I listen to my ipod, from podcasts to audio books to music. So, since it looks like I'll be using it more in the upcoming months, if you have any good recommendations for things to listen to, leave a comment and let me know!

I have decided to sign up with Geico and ditch my State Farm plan. I have been with several insuruers due to circumstances beyond my control, but now plan to stick with this one for a while.

Measuring the quality of people's daily lives via surveys, the results of a study published in the June 30 issue of journal Science reveals that income plays a rather insignificant role in day-to-day happiness.

Although most people imagine that if they had more money they could do more fun things and perhaps be happier; the reality seems to be that those with higher incomes tend to be tenser, and spend less time on simple leisurely activities.

My fico score is up to 773! I nice increase from the low 700's in the past couple of years. I plan to reach over 800 within the next few years. The only thing counting against me now is time.

Just wanted to let everyone know, I’ve created a new website, gregcerveny.com, that serves as a central hub for all my projects.

I just canceled another one of my credit cards this week.  It had a zero balance, but I just kept it around.  That was partly out of laziness and partly out of a warped sense of security.  The good news is that I’m running out of cards.  What scares me is that I have a very small emergency fund, [...]

Its said vanguard offers good index mutual funds with low expense ratios. While that is true, there are couple of things about vanguard that I don’t like. 1. for IRA (roth) you need to keep above $5K and for index fund you need to have atleast $10K in account. I invested the money equally among naesx and vhgex Its been about 3 months now and I am unhappy with the performance of naesx. Vhgex is a more broader fund and I can live with its return. The bigger question is that I hear reports that the bull run is ending. After all it started in 2003 and can not go on for ever. Assuming that the bear is coming, I think putting money in a broader fund would be a better choice. I need to do more research before I make the final call, but I sure am tending towards it.

He Said

I think me and my better half are having too many investment account with little money in them. We got 2 Roth IRA accounts, 1 Roth 401K account, 1 ESPP account and 1 normal investment account. By next year we will have 2 401K accounts, 1 HSA account and 1 more normal account. Currently we deal with Vanguard (Roths IRA) and fidelity (Roth 401K, ESPP and normal account). I am thinking on starting an account with share builder too. I am not sure whether it is the right strategy to spread our little money across all these accounts. Only vanguard account seems to have the minimum restriction. Taking heed to the advice dont put all your eggs in one basket, i think we will have to live with these many accounts. The plan for the moment is to use automatic portfolio management except for 401K and normal investment account. For 1 roth IRA i decided to focus on symbol vhgex and for the other maybe total international stock index. roth 401 k would be managed using retirement plan year 2045 fund. My HSA account would most likely be automanaged. Comments anyone?

Finaly, someone speaks up about Jim Cramer and his show "Mad Money." Being a strong believer in the Efficient Market Theory, and Modern Portfolio Theory; I think Cramer is doing a diservice to his followers by having them move in and out of stocks. I would never recommend buying an induvidual stock with a significant ammount of money, esspecially with so many great ETF's around. The Story....

Here's some obvious, but amusing, advice from Wiki on how to retire in your 30s. Number 3 is always good advice:

3. Lower your expenses. The #1 reason people in high paying salaried jobs are still working hard when they are fifty is because they can't keep their spending under control. To soothe their agony regarding their dull, demanding job, they placate themselves with toys that fail to make them happy: a penthouse apartment, a fancy car, a diamond ring. Resist the massive pressure to dress, eat and shop like your peers, and live a modest lifestyle. Focus on work, as your play will come later. Some keys to not spending:

* Rent a modest apartment. You will be at work all the time, so do not splash out on housing. Clean and small will do just fine.
* Don't eat fancy dinners. Unless you are a gourmet connoisseur, you have to admit that a $5 burrito tastes 90% as good as a fancy steak served on fine china.
* Keep a budget. Track your expenses. Set goals for saving and celebrate when you meet them.

Obvious, sure, but valid. It's a renter's market right now, and it's always a $5- burrito market.

English teachers abroad are in very high demand and just by being a native English speaker you are qualified to get some pretty high-paying jobs in foreign countries like Thailand, Korea and China. I say high-paying because while they may not be as much as you can make in the States, the cost of living in these countries is extremeley low. Even if your income was about $30,000 you could get by easily on $10,000 a year, especially if they provide you with housing. You can command even more money if you have a TESOL certification and can make money on the side working as a private English tutor.

Not only will you be able to save up money but you'll be able to experience another culture first-hand. You can never truly grasp a country in 1-2 weeks while on vacation and you never get below the surface of the tourist traps to see how people really live. Plus you won't have to go away on vacation because there will be plenty of exciting places to explore in your new home.

Living abroad is probably not for everyone. You'll most likely have to live without a lot of the creature comforts that we take for granted in the States like huge living spaces and air conditioning wherever you go, but once you live without them for a while you realize that you don't really need them and you appreciate them a lot more when you do have them.

I most likely won't be able to save up loads of cash while I'm living abroad because I plan on doing a lot of traveling around Asia but the good thing is I won't have to go into debt to it!

Today's credit card offer is from Discover. Inside the envelope is a faux plastic card with some sort of blue bubble design. Very attractive, I'd be happy to see this pretty little card coming out of my wallet, but of course I don't apply for credit cards willy nilly. Let's see what Discover is offering today...

Unfortunately it appears this is a worse offer than I could get from Discover if I just applied online. They're giving me the lowest interest rate shown online and the standard 5% back on Get More purchases (the offer would be more attractive if they made it clear upfront exactly what these Get More purchases will be throughout the year) as well as the "up to" 1% Cashback Bonus on everything else.

HOWEVER, they're only offering me a 0% rate on purchases until February of 2007, when they offer a full year online. They are offering 0% balance transfers until September of '07, which is an upgrade over the online offer by about 3 months, but I don't need a BT. Maybe I shouldn't say this is a worse offer than what is online, it's just different, worse for me but maybe better for someone who's got a big balance to move to a 0% home.

I also received an American Express Membership Rewards booklet, geared toward electronics. I've only got about 10,000 points at the moment, let's see if I can get anything... ooh, if I had 520,000 points I could get this 50-inch plasma TV. What could I spent another $510,000 on really fast to get to that level? Hmmm. I'm going to have to ask for an increase in my credit line.

The only thing I can get in this catalog at the moment is a Panasonic 256MB SD memory card. Looks like that's for a digital video camera, or maybe a regular digital camera? Says "...lets you save video, digital still images, music and more." So could I use that in my regular digital camera? Sounds like it, but I'm not sure.

The only other thing in this catalog I'm close to is the Panasonic Clock Radio with built-in CD player for 11,000 points. Says it's MP3 compatible. I don't care about that; I just want it to wake me up.

Why's everything Panasonic? Or is that just on the low end of the rewards? Oh, wait, the whole catalog's Panasonic stuff. They must have some sort of deal with Amex to push their stuff in a separate catalog. I knew this wasn't all the stuff from Membership Rewards.

I love rewards.

For those of you that are in the habit of paying yourself a portion of your income each month (hopefully for the purpose of investing and growing your wealth), I have a question. What do you do if there is some financial emergency during the month that makes it impossible to pay yourself a portion of that month’s income?

For example, one month my car died and I had to replace the engine. I used the money in my checking account - not savings - to cover the expense, but was then unable to pay myself 20% of that month’s income (20% is what I try to pay myself each month). My budgeting system still shows that I owe myself for that month and I intend to pay it off as my checking account recovers from the car expense. I would like to hear what others do in similar situations. Do you keep a running self-debt balance or do you just forget that month and start paying yourself next month when cash isn’t as tight?

If you are new to investing and trading and you are looking for a good online stock broker to use, my article Choosing An Online Stock Broker may help you decide. Choosing an online stock broker is a guide to help you find the best online stock broker for your needs and requirements. Read the full article [...]

I have pulled more money out of savings this month than in a long long time. Thank goodness the end of the month is approaching! I will post the numbers and see where it all went.
I have spent $420 on my new tattoo. I had $400 put away for it. I made that money through doing a little side work for the reason of getting this tattoo. So, I shouldn't feel so bad about that.

Next, $452 went towards auto insurance. Thank goodness I upped my premiums!

Next, $275 went towards our financial advisors (my other half paid the other half :) - and this lasts us for a year.

$1147 more than normal!!!

Total I took out of savings? $1,100. Pretty on target. I just saw that when I got paid I put $350 into savings. So, really I took out about 750 for this month. Not AS bad.

I also paid an extra $200 towards my auto loan.

So, savings went down this month :( and my check engine light is on. Can I get a break??? Please!!

Over the past year I have cleaned out my room on at least 4 different occasions. This past weekend made it 5. Slowly but surley I have been throwing away junk and clutter. The bulk of it is gone, however, it does help me to get rid of it little by little.

I have taken a vow to live clutter free. No more nick-nacks, brick-a-bracks or frivilous chachkis!

Here's a great rant on the shortsightedness of the average investor and the poison that is the instant gratification mindset.

Danger! 'Mad Money' and the 'Power of Now'
Need for 'instant gratification' is undermining American investors

"It's instant gratification in both cases. And yes, I'm talking about Jim Cramer and Eckhart Tolle. Total opposites, yin and yang. But they do have something in common."

"Both are helping people ignore, dismiss and deny reality."

"Step back: If you look past the myopic narcissism inherent in what those two preach you'll see America's economy and stock markets at a crucial turning point. Reminders of 2000 are exploding all around us, examples like:"

"Yale economist Robert Shiller, author of "Irrational Exuberance," says America's housing bubble is the worst since 1890, a totally psychological bubble unlike the post-WWII boom which was based on strong fundamentals and demographics."

"And in his latest Forbes column, economist Gary Shilling says the coming "house-price collapse will be far worse than the 2000-02 bear market on Wall Street and will bring a serious global recession.""

"And yet we're psychologically oblivious of the coming storm. From Washington and Wall Street to America's 95 million investors, our collective psyche seems clueless and unprepared for the coming bear."

"Unfortunately, this focus on the "NOW" is an insidious long-term trend undermining America, our economy, our markets and our future as a world power."

"This trend is headed downhill. During the same 25-year period America has fallen from a nation saving 10% annually to taking on massive foreign debt to feed our obsessive short-term consumption and make up for our zero-saving rate. In short, America's obsessive need for instant gratification is weakening our ability to think long-term, beyond instant pleasures. And that's weakening America by weakening individual Americans."

click here to listen to episode 24

Jeffrey is more than just a personal finance blogger. He's the founder of SavingAdvice.com, a rich and varied resource for savers and bloggers, as well as over a dozen other sites related to personal finance and saving money. His passion for helping others handle their personal finance challenges has turned into a full-time venture for him, and I'm very glad to have him on my podcast.

Jeffrey's main site is at http://www.savingadvice.com/

Links to sites mentioned in the interview:
Stop Buying Crap http://www.stopbuyingcrap.com/
How To Be Poor http://www.howtobepoor.com/

...not really. However, they are beneficial if you are diligent enough to pay your balance in full each month. Our AT&T Universal Cash Rewards card is discontinuing their program, and we received our last rebate check of $52 in the mail today.

We have since applied for and received a Citi Rewards card, with the same benefits. The card pays 1% back on all purchases, and a hefty 5% back on gas, groceries and pharmacy purchases. This worked well when we drove a U-Haul across the country for the move!

Since we pay the balance each month and don't rack up charges on things we can't pay cash for, it's a nice treat to use that money for something special. Perhaps a nice mexican food dinner with killer margaritas!

Or...this could fully fund our bi-monthly automated transfer from the checking account to our Vanguard Roth IRA. Tempting.

For you math nerds out there, yes, that means we are not fully funding our Roth IRA today. We'll save that number crunching for a later post.

This year's cost of living ranking of world cities is out. Moscow is now the worlds most expensive city. Tokyo, which had won for several years, dropped to third behind Seoul. New York City, which was chosen as the "zero", with a base score of 100, tied for tenth with Oslo.

Of greatest interest to me is the ranking of Chinese vs. US cities. Hong Kong (not quite China), ranked fourth, with a score of 116.3, meaning it cost 16.3% more to live in Hong Kong than in New York. Beijing ranked 14th, with a score of 94.9. So Beijing is only 5% cheaper to live in than NYC! Shanghai, ranked 20th, with a score of 91.2. Washington DC and Boston ranked 83 and 84, with cost of living scores of 77 and 76.8.

So what does all this say to me? That this ranking is complete bunk very subjective, and dependent on an arbitrary standard of living. Based on what I saw in Shanghai, and anectdotal evidence, living in China is a LOT cheaper than living in DC, or Boston. So where are these scores from? From trying to live like a New Yorker while in China!

Parts of Shanghai were very much like New York. Expensive condos, western food, Porsche dealerships, etc. But why would you chose to live that way? By eating local food (Shanghai food was a bit greasy, but excellent), and buying things off the local economy, you can save enough to live like a king. Take taxis everywhere, have live-in help, whatever you want. Our standard of living will be higher in China than it is in DC, and it will cost less, because we won't insist on living within a pocket of DC while in China.

So I haven't been blogging about my credit card offers like I'm supposed to be. They're still paying me, but still I should probably do what I've been assigned. I've been saving them all in a stack for the last couple weeks. Here's what I got:

- Costco American Express Card - I get this one regularly. Not even gonna open it.

- Something from Capital One, with a return address from "Pat W. Johnston Director of New Accounts." Capital One is the king of crazy attempts to make their mail look important, as if the director has chosen to make personal contact with me. I'll at least open it, since they spent so much time... oh, jeez, it's the No Hassle Miles Ultra MasterCard. I've seen this one before.

- Here's another one. Hey, it's Capital One again, with the Same Pat W. Johnston return address. It's for the exact same card! But wait, the last one said 10,000 bonus miles, this one says 20,000! That's a lot of miles. I already ripped up the last one so I can't compare the rest of the offer to see if they differ in any other way. Oh, well.

- Chase sent me a $20 check if I'll get their Chase Payment Protector Plan. No thanks, guys.

- I've gotten two sets of those "convenience checks" from Chase as well. One set offers a 1.99% APR and 4.99% APR while the other set offers a 0% APR and 5.99% APR. I'm not even going to look at what those are for because I get these checks constantly, but it's interesting to see how they vary the offers to try to get you to bite.

- Another one fromn Pat W. Johnston at Capital One. Let's see what Pat's got up his/her sleeve this time... It's that darned No Hassle Miles Ultra MasterCard again! This time the come on is that I'll earn miles 25% faster. I'm too rushed for time to learn how. I admire Capital One's perseverence.

- Citi sent me one. I don't get much from them as I have a Citi card already. This is for their Diamond Preferred Rewards card. Looks like the standard offer, but a 9.99% interest rate, which I totally deserve, but doesn't really move me because I don't carry balances.

- Advanta BusinessCard. This the 2.99% for life balance transfer offer card. Don't need that.

- Another from Capital One. As you may have guessed, I hold no Capital One cards, and they'd like me to. This one not from Pat W. Johnston, and has some fancy calligraphy-like lettering. Oh, it's a small business card, that's why. Don't have time to open it.

- Finally, another from--guess who--Captal One. Fifth one from them in the last 2 weeks. This one looks very industrial, sort of a Nine Inch Nails theme to the envelope, whatever that means. I don't even know what I'm talking about anymore. You'd have to see it to know what I mean. Unfortunately, I have to go to the bathroom and won't be able to open this one, either. I promise I'll open them next time, Capital One!

"Sniping" on ebay is to bid during the closing seconds of an auction in an attempt to win the auction by denying others time to out bid you. This method is extremely popular and I personally see it happen with most of my auctions. In fact, there are many programs that will even do the last minute bidding for you.

But just how effective is this method? USAToday has an article that shows, mathematically, that "it pays to snipe." Apparently a bunch of South Korean physicists did some research on this matter and concluded that:

...the probability of submitting a winning bid on an item indeed drops with each bid. "Our analysis explicitly shows that the winning strategy is to bid at the last moment as the first attempt rather than incremental bidding from the start."

So, the question is, do you ebay snipe to win auctions? I personally don't. If I see an item I want, I just bid the price I'm willing to pay and see what happens. However, since I hardly win any auctions, maybe my bidding strategy is severly flawed.

I'm curious, do any of you guys have a particular ebay bidding strategy you use? AND on the flip side, what about any particular selling strategies to counter ebay sniping?

“We are not so sensible of the greatest health as of the least sickness”—Ben Franklin (Read profit for health and loss for sickness)

People want to make money not only for the need of it but also for the identity it creates for the person who makes it. After all in today’s world to be successful is to be rich. When so much is at stake it is only natural that the very prospect of ‘loss’ makes people anxious. And the best way to deal with it is not psychological denial but by taking appropriate measures to handle those emotions.

“Distrust and caution are the parents of security”—Ben Franklin

As an investor I think that the intensity of emotions become stronger after we commit ourselves to a particular stock. Because once we commit ourselves to a stock it becomes a case of mistaken identity (ie) we identify the stock as a reflection of our ability and its success for ours. In short, the quality of the result becomes more important than the quality of the process, which can be misleading when trying to work out in a complex system such as stock market. And the best way to deal with the anxieties arising out of mistaken identity is to realize it and incorporate certain antidotes in our investment philosophy.

Stocks Does Not Know That You Own It:

“If you know that the stock doesn’t know that you own it, you are ahead of the game. You are ahead because you can change your mind and your actions without regard to what you did or thought yesterday; you can start out with no preconceived notions. Every day is a new day providing a new set of continuously measurable options”—Adam Smith (of ‘The Money Game’)

A stock does not know us and it has nothing against us or for us. It is we who, by means of our action, try to make profit through that stock. And what guides our action is the ability which leads us through the whole process. And ability is the result of what we have learnt about the game and nobody can learn it in its entirety, just that we can keep on improving. To improve we need to realize our mistake when we have made one and that is not possible unless we are ready to question the validity of an investment. And to question an investment it is necessary that we zoom out and see it for it is rather than what we think it is. And to do that it is necessary that we emotionally detach ourselves from the stock by overcoming the anchoring bias.

Overcoming Anchoring Bias:

The reason I think that people find it hard to book losses is that they substitute the intrinsic value of the stock with their purchase price and thus end up comparing current market price with price paid thus leaving value out of the equation, which leads to all sort of irrationalities. But we can learn to avoid making that mistake by listening to Philip Carret,

"The investor should seek so far as possible to re-analyse each commitment from a detached standpoint. Psychologically this is a very difficult thing to do, to consider dispassionately a venture in which he risked his funds. Nevertheless, the investor should make a determined effort to do just this. If he has 100 shares of a given stock, for example, which is selling at 90, he should disregard entirely the price that he paid for it and ask himself this question: "If I had $9,000 cash today with which to purchase some security, would I choose that stock in preference to every one of the thousands of other securities available to me?” If the answer is strongly in the negative, he should sell the stock. It should make not the slightest difference in this connection whether the stock cost 50 or 130. That is a fact that is entirely besides the point, though the average individual will give it considerable weight”

Conclusion:

“Those who will not face improvements because they are changes, will face changes that are not improvements”—Munger.

And realizing a loss when faced with one is an improvement as compared to ignorance or inaction.

• You buy on the way down, and it keeps going down (should have waited), or
• You sell on the way up and it keeps going up (should have waited), or
• You buy on the way up and it keeps going up (you should have bought earlier), or
• You sell on the way down to stop losses and it turns around, or
• You don't buy at all (opportunity loss), or
• You don't sell at all and hold those losses, or...

Finance writer Greg Karp has an article today about haggling over credit card interest rates that I thought was amusing.

Karp quotes from an e-book called "Credit Card Insider Tips" by financial coach Cindy Morus. Basically the article tells you that it's just fine to call your credit card company and ask for better terms on your interest rate, credit line, etc.

What I found amusing was the script that apparently is in the e-book, which tells you exactly what to say over the phone. I've used phone scripts for various reasons in my life, and they always crack me up, because they are always written in ways that are completely un-conversational. This one's no exception. From the article:

You: "Hi, can you tell me what my current interest rate is?"

Operator: "Your current interest rate is X percent."

You: "Hmmm. I would like you to lower my interest rate now, please." Don't say another word.

The ball is in their court, and they'll fill the silence with an offer.

Operator: "OK, I can lower it to X percent."

You: "That's not enough, but I will take that for now. Thank you for your help. I'd like to tell your supervisor how helpful you've been. Could you pass me over?"

Supervisor: "How can I help you?"

You: "First, I wanted to let you know how helpful the operator was. She/he did an excellent job of helping me.

"Now, can you tell me what my interest rate is?"

First off, I don't believe they're going to lower your interest rate just based on your robotic "Hmmm. I would like you to lower my interest rate now, please." What it's actually going to take are threats. And this pass-off-to-the-supervisor thing to get a second shot at lowering the interest rate? Not going to work. If you got the reduction in the first place, do you really think the supervisor isn't going to know you just got a reduction and say, "we just gave you a reduction"? These companies track everything--you're not going to fool them that easily."

Here's a script that is more likely to work for you...

You: My interest rate is 15% right now and I'd like to see about getting it reduced.

Operator: Well, sir/ma'am, that's the interest rate we've determined is correct for you. I can't do anything about that. I'm sorry.

You: OK, well, I think I'm just going to transfer this balance to another credit card. I got a pretty nice zero-percent offer in the mail yesterday......"

Operator: Well, let me see if there's anything I can offer you.... O.K. I can actually offer you a 13 percent interest rate."

You: Mmmmm....

Operator: Does that work for you?

You: Mmmm...

Operator: Sir/Ma'am?

You: Mmmm...

(Awkward silence.)

You: Well, I've got an offer for a 10.99% card. I don't really want to switch because it's a hassle and I don't like opening up all these credit lines. Think you can match that & I'll just leave it alone?"

Operator: Can you hold please?

You: Sure.

(Short hold period while operator pretends she's getting authorization from a higher power to give you new, amazing low rate.)

Operator: Sir, Ma'am?

You: Uh huh.

Operator: I'm happy to tell you that I can offer you the 10.99% rate you requested.

You: Great.

I should really write an e-book on this stuff.

Hiya. I'm back from my very first visit to China. Thank you all for your comments on my last entry. China was a lot of fun, and even though I hit 7 cities, it was only a small fraction of things to see and learn in China. I am already thinking of another trip to discover the southern regions.

We started out in Beijing where it was obligatory that we checked out Tiananmen and also the Great Wall. Then, we flew to Urumqi (I have never heard of it nor knew it was a major city in China before this trip!!) where we began our Silk Road Tour which included the following cities: Urumqi, Kashgar, Turfan, Dunhuang, Lanzhou, and Xian. The Silk Road Tour was awesome and we saw many amazing things. We even visited local families and took pictures with them. In the very western part of China, where Kashgar is a major city, most people look middle eastern and spoke Uyghur, which is a Turkish based language. However, many of them also spoke Mandarin so that was kinda shocking. There are over 56 nationalities in China in which Han Chinese is the majority, sometimes referred to as "descendants of the Dragon", which is what I am. The Chinese currency note has the words "People's Bank of China" as well as the denomination in the Uyghur, Tibetan, Mongol and Zhuang languages on the back. All of this was so fascinating to me.

Overall, things were pretty cheap when converted back to USD. A Big Mac value meal was 15.50 rmb, which is less than $2. Local foods were even cheaper. A complete meal can be purchased for about $1. When buying touristy stuff, one must haggle! I hated the whole process but my friends enjoyed it so much. By the end of the trip, we were such experts that some of us were able to purchase things at 15-20% of asking price. Woah!

Of course, my sick real estate addiction made me ask all the tour guides how much an apartment costs in each of the cities we visited. In Kashgar, a 100 sq. meter apt (1076.39104 sq ft) costs roughly $15,000. In Lanzhou, the same apartment would cost about $30,000. That is the price for a 3 bed 2 bath apartment in a highrise building!!! Something similar would cost $1.25 million in Manhattan. I thought about FIRE and living in Lanzhou, but naah.. the air is too polluted. Speaking of pollution, Beijing was the worst! I got an upper respiratory infection and red eyes while the gf got a sinus infection. We had to be confined in the hotel 1 day because we were that sick! Uhm.. don't go to Beijing. That's my advice. And Beijing real estate was ridiculous. Some apartments were just as expensive as Manhattan condos, in USD!

I spent quite a bit of money on my trip but it was worth it. I am making it a goal to take at least 1 long trip a year. The only drawback on being on the other side of the world for a long time is the amount of time it takes to get readjusted. For the first few nights since I got back, I've gone to sleep around 8pm. Working got a lot tougher too. There was also the "Vacation Withdrawal Depression" I kept feeling, which made me an unpleasant person to be around.

Well.. good to be back. I'm all refreshed and ready to earn/save/invest so I can fund my early retirement and many trips along the way.

The Washington Post has a great article by Keith L. Alexander about frequent flyer programs, and how people are using credit cards to build up miles to earn trips. Charging funeral expenses, new cars, and -- Fidelity Observer has a friend who did this -- kids' college tuition costs are ...

Read more news like this from PFBlog Network, the personal finance bloggers' network..

My company offers very good health insurance packages including the HSA. I have decided to enroll in the scheme starting next year (yeah, take the risk). In short, HSA concept is to combine an affordable qualified High Deductible Health Plan (HDHP) with a tax-favored health savings account (HSA). The reasons to join include

1. Company provides a contribution ($700/yr for individual)
2. i can make tax deductable contribution of $1200/yr
3. i dont have much health related problems so i think i can afford to take that risk
4. i intend to treat HSA as any other investment account and make the money grow for my retirement medical expenses (which is a long way to go)
5. I still get my free annual checkup, allowing me to check my health conditions every year and decide whether to continue with HSA or switch back to normal insurance.

I decided not to enroll my better half into my HSA account for two reasons

1. Her company provides very good medical insurance
2. i am not comfortable with the amount of risk invovled in putting both of us on HSA.

I will keep updating on how this plan works out!

This post is an update from Copper & Precious Metals Futures, published in the evening on June 21, 2006.

If you had followed the general trading recommendation for silver in my last post directly below is an idea for a stop. I working from the assumption you would have initiated a short position at the SR resistance zone of 10.59 via July Silver.

After falling to a low on Friday of 9.96 Comex silver futures rebounded in the afternoon to close on the highs of the day. However, it appears this strength is nothing more than the market testing a neckline that was formed from an ascending triangle. This neckline should establish enough resistance for the market to begin another down leg.

Based on this resistance area look to establish a stop in the 10. 50 area. If stopped out at this area you would witness an approximate profit of $450.00/ per contact.

Yesterday my friend and I had a garage sale to get rid of as much stuff as we possibly could before we move to Thailand. I've never been much of a garage-saler, mostly because I am never up early enough to make it to them on the weekends. I knew people would be cheap and would try to haggle, but I wasn't quite prepared for the extent of people's audacity for bargaining.

First of all, I set off going around my apartment thinking that I would get rid of nearly everything so that all my material belongings would be able to fit into one suitcase. I soon found out that parting with things was harder than I imagined. Things that I hardly noticed on a daily basis took on a sudden sentimental value. I vowed to be strong despite my over-emotional reactions because I figured it would be worth the temporary pain to be divorced from any material longings.

So I show up and put my whole life on display. I figured people would be quite impressed. I was selling some nice stuff, some stuff was practically new, never been used and of course, I bought it so it was of the highest quality. Boy was I wrong. There is something infuriating and humbling to see someone pick through your belongings and see them turn up their nose at it. Or when someone asks you how much you want for something and you say $1 and they put it back down and walk away. What? Was $1 too much for you? I paid $20 for that thing! Were they expecting that I would say, "Free for you!" You can't buy anything for $1 anyways. Even a pack of gum costs more than $1!

I never got the whole bargaining thing down either. I would try to start off high expecting them to counter offer and they would just walk away. And if I started low they would try and haggle. This one lady came up with her arms full of stuff and offered me $4 for it all! She must have lost her mind. I thought well I'll try and haggle because I needed to get rid of the stuff anyways so I countered with $7. A whoppin $3 more and she looked at me like I was crazy and said "I said $4." I was tempted to tell her to stop wasting my air and get out of my face, but I decided to take the polite route and told her that her offer was too low. For that amount of money, I would rather donate it to the Goodwill so that the money will go to a good cause instead of some cheap rich lady who's husband was waiting for her in their nice car with the engine running.

I ended up making nearly $60 which isn't bad because nobody bought the major stuff I was selling. And to be honest I don't even remember what I sold. The rest of the stuff will probably end up at the good will, hopefully to homes that will get some good use out of them. And the extra $60 will go to payoff the debt and/or my savings account!

I’ve written about student loan consolidation before, because the date that loans go up is July 1st.  I know one couple that has had to make sure they consolidated their student loans in order to avoid the rise in loans rates.  They’re trying to reduce their debt load as much as they can, and this [...]

I made a big decision. To celebrate getting out of debt I'm going to make a drastic change. I'm moving to Thailand to teach English. I've already been offered a job there at a private school and a good friend of mine will also be teaching at the school with me. I'm very excited about the change.

It seems like now would be the perfect time to do something like this. I'll be debt free, I'm just getting out of a long relationship and I have no job so I have no obligations to keep me here. I'm young and have no mortgage and I'm in good health and adventurous. How many times in my life will I be this free?

I did some calculations and decided to make a major personal finance faux pas: I'm going to cash out my 401k to pay off the remainder of my debt. I guess Henry's comments were right; once you start toying with the idea it's hard to give up. I'll have to pay the 10% penalty and taxes but I figure I'll have to pay taxes when I retire anyways and the 10% is worth the peace of mind of not having debt hanging over my head anymore.

I'll also be selling my car when I move so that will give me enough money to pay off my student loans and have a couple thousand left over for emergency money. I'll be completely debt free, no credit cards and no student loans and with money in the bank. I didn't think that would be possible for another couple of years. I'll also be selling my portion of the furniture to my ex-boyfriend and I'm selling all my books and DVDs on Half.com. Everything that I own will soon be able to fit into a couple of suitcases.

After being in debt for so long and having material possessions tie me down, it'll be an interesting experience to live without any of those constraints. For me, the whole point of getting out of debt was to be able to experience freedom again. The freedom to go where I want to go and do what I want to do and to have freedom from any worries about things.

For example, a couple of weeks ago someone hit my car and left a scratch on my bumper. I was so mad that someone could hit my car and not leave a note. I was angry because I would then have to either fix it or just accept the loss. It sounds silly but when you have things you always have to worry about them breaking or getting lost or having to replace them. I want to be in a place where none of that matters.

I probably won't move until mid-August so I'll have enough time to take care of all the loose ends. I'm not sure how accessible the internet will be but I'm hoping to continue to blog, probably not solely about personal finance but also about my travels and experiences in Thailand!

After an almost 2 week hiatus and far too many online purchases, the guilt was finally starting to overwhelm me. Earlier this week I got started with tracking my spending in an excel spreadsheet. I hoping that I will somehow shock myself into spending less. So far nothing, but I'm optimistic. I had a hairy situation with my bank account a couple of weeks ago, but I'm happy to report everything is back on track. Sometimes I feel like I'm managing my money properly, but there are times when I make slip-ups and that of course throws everything off. I wrote out a little check list of things I need to take care of this next month. First being rolling my 401k from my old job to my new job and getting my contributions set up. After that's taken care of I need to open my ING account and get funds set up for my HSBC account. I want to put 10% into 401k and 50$ to each savings account each pay. That ends up being about 450$ saved each month, which is managable for me right now. I still have many more month of my Debt Management Program (especially since I missed a payment last month), so I want to try and pay double on that every month. Right now my biggest challenge is buying crap online. I am seriously considering ordering a new debit card from the bank because I've memorized my # and that just makes things way to easy.

In the past week I've ordered:
Skin Care Products - 25$
3 Art Prints - 70$
Car Charger for my phone - 25$
25+ Songs from iTunes - 25$


I could've saved that :(

Well, I've finally completed the rollover of my previous 403b retirement account with Fidelity. I had previously posted on this process which began about 1 mos ago. Overall, a pretty smooth process, most of the delay occurred from me getting the necessary signatures from my previous employer. Again, while I prefer Vanguard over Fidelity, I have decided to keep my retirement funds with Fidelity since my current employer retirement plan is also with them.

A few comments about the whole process:

-Fidelity had great service.... very accessible, polite people that actually were helpful.

-As part of the rollover process, they are supposed to provide some guidance with investing options... I found this not as useful. I think it depends on your level of knowledge with mutual funds. For a beginner, it is great...I consider myself intermediate so not that useful. It seems that they mostly promote their Freedom Funds (i.e. fund of funds) which seems reasonable especially since my overall balance is not so large.... however, don't expect much in terms of guidance for individual funds to makeup an overall appropriate asset allocation.


-Entire process is done electronically. Recommend this so as to avoid any possible complications with taxes as you have 60 days from withdrawal of funds from a 403b to rollover your funds into an IRA before paying penalties to the IRS.

-Of note, while all the Fidelity mutual funds I owned rolled-over without hiccups, I had a PIMCO bond fund that did NOT rollover and went into a money market fund. I could repurchase this with my rollover; however, the minimum purchase is $2500 which is more than I wanted to allocate to a bond fund at this time. Given the current environment of rising interest rates, I think it's OK to leave my money in a money market fund for now (yield was 4.75%).....but kinda sucks to not have the same access to my previous Pimco fund.

New Economist is posting some interesting research on the inflation estimations and on the current fears:

New Economist: Inflation: a rational phobia?

Everyone is looking at the matter in his own way. Some argue, that inflation figures are underestimated due to hedonic measurement, others say statistical effects such as "owners equivalent rent" makes inflation rate looks higher than in real life...

It's not an easy issue. What I tend to is: inflationary pressures should come down to confortable levels after those long run in rising interest rates. From the corportae site there are still no worrysome signs. If inflation is in tendency lower than statistically shown, the real interst rate is higher and should lead to a harder landing.

This is a very timely post for me, since I’ve been sick for over a week now. Luckily I didn’t miss any work this time, but it has happened before. Bad things happen to good people. It’s important that you prepare now.

The most common excuse for carrying credit cards is “What about emergencies!” I’ve already shared my thoughts on this once, but it bears repeating. Your debt is an emergeny and using credit cards only makes it worse.

I think it’s important to first define exactly what an emergency really is. Once you’ve done that it will be easier to find ways to deal with those emergencies without resorting to credit cards.

There are basically only three things that a person needs to survive — health, transportation, and shelter. In other words, you need to be able to work, have a way to get to work, and have a place to go when you get off work. Beyond that, most things are more wants than needs.

A new car is not an emergency. Neither is a new CD or DVD. New clothes or shoes are not emergencies, unless your current clothes are so worn out you can’t wear them to work.

As long as you’re in debt, you need to ask yourself “Will buying this help me pay off my debt?” If the answer is no, then you probably don’t really need it right now and you certainly don’t need to charge it.

Here are a few ways to deal with real emergencies without having to resort to more debt.

Insurance

Problems with your health definitely classify as emergencies. If you don’t already have health insurance, you need to find a way to work it into your expenses as soon as possible.

Next, look into life insurance and disability insurance. Term life insurance is very affordable. Don’t leave behind a lot of bills for your family to take care of if the worst should happen to you.

Disability insurance is needed in case you’re ever unable to work. It will help pay your bills when you’re not able to pay them yourself.

Also, if you’re renting look into renters insurance. It’s usually reasonably affordable and will protect your possesions from things like fire or theft.

No one thinks insurance is very important until they need it.

Savings

You need to have some money in the bank for things that aren’t covered by insurance. If you’re in a car accident, your insurance will pay to have it repaired. If your car just breaks down, you’re out of luck.

Think of this money as a “cushion” between you and the rest of the world. Sometimes you will fall down, but this should be enought to keep you from hurting yourself.

Everyone always wants to know how much they should have in an emergency savings account. The trouble is different people have different needs. Anything is better than nothing. So if you don’t have a savings account, now is a good time to set one up.

I would try to save at least one month’s worth of bills as quickly as possible. This should be enough to keep you going no matter what happens.

I talked a few days ago about my favorite online savings account. Go back and read that post if you need some help setting up an account.

Barter

I saved my favorite way of dealing with emergencies for last. If you have a useful skill to offer someone, then bring it up when it comes time to pay your bill.

I’ve bartered with everyone from accountants to mechanics. They provide a service for me and I return the favor. In my case I work on computers, but I know other people who trade services like carpentry, painting, and even house cleaning.

I’ve also worked on people’s computers in exchange for food. I’ve been paid with everything from fresh vegetables to fresh fish. I’ve also had a few people prepare meals for me.

My family always jokes about washing the dishes at a restaurant to pay the bill. I’ve never actually done that before, but if I was hungry and broke I might ask the owner if that was an option.

The most important thing to remember is this: Now that you’ve committed yourself to getting out of debt, make sure that nothing can stop you. Obstacles will arise so be prepared to overcome them without bringing on more debt. Never charge again.

How about the fact my sister's blog- A Broad Studying in Ireland - is making more money then mine after about 3 weeks. Granted she has something interesting to talk about and a well defined niche. But, I have been at it for a lot longer and am capable of using complete sentences although I have mostly been concentrating on Shitty Stories lately. Once I am down working for the summer I do intend to get back to work. I can't lose to a girl who spends most of her time trying to find her way home for the pub...I mean work.

I wrote once before about using multiple streams of income, preferably from sources that you have control of, to reduce your vulnerability to loss of income. Here's an example in action:

My wife is a great scrapbooker. If you don't know what it is, think of photo albums with fancy embellishments. She has recently made a new website, My Crop Room, that she's going to make into the scrapbooking resource for beginners. In doing so, she plans to make a small amount of money.

It may only be a few hundred dollars a month, but it makes us that much more self-reliant and independent. As Martha Stewart would say, "It's a Good Thing." Chalk up one more for the Payne entrepreneurs.

Henry Rollins, host of the new "Henry Rollins Show" on IFC TV has a nice piece on Americans and how too many of us are living above their means... and for what?