M4 Support

How to get freebies by signing up for credit cards – and then canceling them

Posted January 21, 2014 at 2:11 pm

By Brett Arends, Wall Street Journal

Free is good.

Over the years I have obtained free round-trip tickets from Boston to London, Miami and New York, free hotel rooms, free cash and free gift cards. All thanks to credit-card companies and a little nifty footwork.

If you want to know just how much money credit-card companies make from their typical customer, take a look at how much they are willing to offer as an incentive to sign up. The initial bonuses—in reward points, frequent-flier miles and even cash—are generally far more lucrative than the continuing rewards for established customers.

They are one of the best freebies around, and, what’s more, they are getting better.

“The card companies continue to up the ante to attract the best customers,” says Odysseas Papadimitriou, chief executive of Evolution Finance in Washington, which operates consumer-finance websites CardHub.com and WalletHub.com. The value of initial sign-up bonuses has increased steadily since the end of the financial crisis, he says, and is at a record high now.

The average bonus for new customers on a cash-back card is now $84, up 27% from a year ago, according to CardHub’s figures. The average bonus on a frequent-flier-miles card is up 25%.

These averages understate the opportunity for the savvy deal hunter, too. For example, new customers for the Chase Sapphire Preferred card will get $500 in travel rewards, or $400 in cash, if they spend $3,000 or more during the first three months. And new customers who spend $3,000 on a Hilton HHonors Surpass Card can get points redeemable for up to 12 nights at Hilton hotels.

As a general rule, I like to keep my finances as simple as possible, and I avoid gimmicks. I mostly avoid credit cards and spend cash—I find I spend far less when I do. But over the years I’ve made an exception for these sign-up bonuses because they can be so lucrative. I have saved myself several thousand dollars in the past few years, with very little effort.

It hasn’t always worked out, though. And over time I have developed some simple rules to make this strategy work better.

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How Financial Woes Change Your Brain (And Not for the Better)

Posted January 13, 2014 at 1:01 pm

By Maia Szalavitz, Time Magazine

Worrying about making ends meet, it seems, can occupy enough of the brain’s  finite thinking power that it makes it difficult to think clearly.

According to the latest research published in Science, just thinking  about shaky finances can drop IQ by the equivalent of 13 points. That may help  to explain why poverty can become a vicious cycle, with lower income people  tending to make seemingly irrational and risky decisions, particularly when it  comes to money.

To determine how budgetary concerns affect thinking, the researchers examined  the effects of financial strain among both a group of shoppers at a New  Jersey mall and impoverished sugarcane farmers in rural India.  The  mall visitors had household incomes ranging from $20,000 to $150,000, with a  median income of $70,000. The farmers were relatively flush with cash at  harvest— but desperately poor for most of the rest of the year.

The shoppers considered a range of financial difficulties, from having to  take small pay cuts to larger ones, or to suddenly being faced with minor or  more expensive car repairs. They were asked about how they would cope with such  problems— by borrowing, cutting spending or skipping the car repair and hoping  for the best. Then they took tests to measure IQ and their cognitive skills.

When confronted with relatively minor financial problems, the lower income  people performed equally well on the tests as higher income folks. But when  faced with more serious financial concerns, the lower income individuals did  much worse than their wealthier counterparts. In fact, in one version of the  experiment where participants were paid for each correct answer, the rich earned  18% more than those who weren’t as well off.

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Does an Aging Brain Mean More Financial Troubles?

Posted January 4, 2014 at 1:20 pm

Aging Brain, More Trouble With Financial Decisions?

By Randy Dotinga

Years of research have produced conflicting findings on aging’s effects on brainpower. Now, a new study says that people aged 65 to 90 are significantly less likely than their younger counterparts to make what researchers define as rational decisions regarding money.

Not surprisingly, they’re also more averse to financial risk than middle-aged people, but not in all situations, the investigators found.

Families, doctors and other caregivers “should be aware of these profound differences” in how older people make decisions compared to younger people, said study co-author Ifat Levy. She cautioned that the tests used in the study have limitations, however, and “further research is needed to directly relate these measures to real-life behavior.”

At issue is the ability of seniors to consider risk when it comes to money.

There’s some evidence that some types of decisions in general actually do improve with age. “It seems that older adults may be better in decisions that rely mainly on prior experience and knowledge,” explained Levy, an assistant professor of comparative medicine and neurobiology at Yale University.

Indeed, another study published recently in the September issue of the journal Psychology and Aging found that seniors can make better decisions than younger people because they know more. But their brains also work more slowly, and they need more time to figure out complex financial situations, that study also found.

In the new study, researchers gave test questions to 135 people in the age groups of 12 to 17 (adolescents), 21 to 25 (young adults), 30 to 50 (midlife adults) and 65 to 90 (older adults).

“Some of the choices were between gains: For example, would you prefer to receive $5 for sure or to play a lottery with a 50 percent chance to win $20?” Levy said. “Other choices were between losses: For example, would you rather lose $5 for sure or take a 25 percent chance of losing $50?”

One question had a “correct” answer, she noted. It asked participants to choose between winning $5 for sure or playing a lottery that would award $5 or nothing. “A participant who is interested in making money should always go for the sure amount in this case,” Levy said

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10 Easy and (Mostly) Painless Ways to Save Money

Posted October 9, 2013 at 10:00 am

By Anisha Sekar, NerdWallet

Times are tough, but a little effort to save now will help you weather future emergencies and set yourself up for financial success down the road. Whether the money you save goes into a rainy day fund or your 401(k), it’s always worth it to put a little extra aside. That said, it’s hardly easy when there are so many demands on your pocketbook. Here are 10 easy ways to save money and get you on the path to financial fitness.

1. Enroll in automatic deductions One of the easiest ways to save money is by enrolling in automatic contributions to your retirement account. As soon as your paycheck comes in, part of it will automatically go to your 401(k). If your employer doesn’t offer retirement benefits (or if you just want to save even more), you can set up an automatic transfer from your checking account to a high-yield savings account, serving the same purpose.

2. Share everything You’ve probably heard the term “share economy” bandied about more than you can bear, but taking part does have some merit. You don’t necessarily have to rent out an extra room, but consider sharing nannies with another family, renting a friend’s equipment instead of buying your own, or joining a grocery share group to buy in bulk.

3. Keep the change As much as people don’t like Bank of America, its old “Keep the Change” program was one of the best ways to get people to save automatically. Whenever you made a purchase with your enrolled account, B of A would round up to the nearest dollar and put the remainder in your savings account. For example, if you spent $1.45, the bank would charge you $2 and put $0.55 into savings.

You can approximate that yourself by paying in cash — bills, specifically — whenever possible, and keeping the change in a separate bag that you empty at the end of the day. It may seem small, but every little bit helps.

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Ten Things Your Boss Doesn’t Want You To Know

Posted October 8, 2013 at 10:00 am

By Donna Ballman

Your boss is secretly smiling. He knows things you don’t about your workplace rights. And what you don’t know about those rights can destroy your career or even get you fired. Understanding those rights can help you wipe that smile right off his face. Here are 10 things you need to know.

1. You have the right to discuss working conditions with co-workers. The National Labor Relations Act or NLRA guarantees most non-supervisory employees in the private sector the right to talk about working conditions with co-workers. Does your company try to keep you from comparing salaries or benefits with co-workers? They may be breaking the law. If you have a contract or policy saying you can’t discuss wages and benefits with coworkers, you can file a Charge Against Employer with the National Labor Relations Board (NLRB).

2. You have the right to complain or protest about working conditions. Ever wonder why the Wal-Mart strikers last Fall weren’t fired in one swoop? That’s because they were legally protected. The NLRA says you have the right to protest and object to workplace conditions. If you do it on just your own behalf, you aren’t protected. So make sure, if you complain, to discuss how the policy or working conditions affects co-workers.

3. You have the right to keep copies of documents you sign. Remember that pile of papers you signed without reading when you started this job, or that confidentiality agreement your boss shoved in front of you? Somewhere along the way you may have agreed not to work for a competitor; or not to solicit or communicate with clients, vendors and employees of the company for a year or two. It’s also conceivable that you gave up the right to a jury trial or agreed to arbitrate any disputes against your employer, rather than suing.

Whether you’re leaving the company, or plan to hang your hat there for a while, get a copy of everything you sign when you sign it. If it’s too late for that, ask to see a copy of your personnel file so you can get copies. If your company says they don’t have to give it to you, they may be right in some states; know your rights before you have a dispute. But you can still try saying, “How am I supposed to know what I’m not allowed to do if you won’t give me a copy of my agreement?”

If they still won’t give a copy, send the head of personnel an email or letter saying that you have asked for a copy of any agreement you signed; that the company has not provided it; and that you will proceed on the assumption that there are none unless they give you a copy within 72 hours.

4. You should read and get a copy of your employee handbook. This document is chock full of important information. Some companies have employees sign a paper saying they’ve received it, but never give it out. Others keep it locked away. Your handbook has important information about discrimination, harassment, sick leave, personal leave, and Family and Medical Leave.

You should read and be familiar with your rights and responsibilities before you have a crisis. You don’t want to be scrambling for information while you’re on the way to the hospital, after you’ve been groped by a supervisor, or if you’ve been subjected to illegal harassment.

5. Your employee handbook may have illegal provisions. Many handbooks contain policies the NLRB considers illegal. Some policies the NLRB has recently found unlawful include at-will employment (your employment is still likely at-will, but the policy might be illegal), prohibitions against discussing wages, prohibitions against saying negative or disparaging things about the company, confidentiality (to the extent it keeps you from discussing working conditions), and their social media policy.

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The Ways Your Wasting Your Money

Posted October 7, 2013 at 10:00 am

By Erin Burt and Cameron Huddleston | Kiplinger

Nearly everyone has holes in their budgets. And as with other kinds of leaks, you may have hardly noticed some of them. But those small drips can quickly add up to big bucks. The trick is to find the holes and plug them so you can keep more money in your pocket. That extra cash could be the ticket to finally being able to save, invest or break your cycle of living from paycheck to paycheck.

We’ve updated our popular list of money-wasters with even more tips and resources to help you cut unnecessary expenses from your budget. Consider these 28 common ways people waste money. If any of them sound familiar, start plugging your budget holes right away.

Paying Too Much for a Mutual Fund

ThinkstockMutual fund fees can weigh down performance. The average diversified U.S. stock fund charges about 1.3% a year in expenses. If your fund isn’t beating its benchmark, you’re better off buying a low-cost index fund or exchange-traded fund that matches the benchmark.

For example, you’ll pay an annual expense ratio of just 0.05% to invest in the Vanguard Total Stock Market ETF (VTI), which tracks the CRSP US Total Market Index. On a $50,000 investment, that’s a savings of $625 per year over the average managed fund.

It is possible to outperform a benchmark with a well-managed fund (although it’s not guaranteed). Stick with no-load funds, which can save you more than 5% in sales charges. See our favorite no-load mutual funds in the Kiplinger 25. And watch out for other nickel-and-diming, including low-balance fees or charges for paper statements.

Leaving Your Money in a Low-Interest Account

If you’re stashing your cash in a traditional savings account earning next to nothing, you’re wasting it. Make sure you’re getting the best return on your money. Search for the highest yields on CDs and money market savings accounts. And consider using a free online checking account that pays interest, such as ones offered by Ally Bank and EverBank.

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The rise of no-contract smartphones

Posted October 2, 2013 at 10:00 am

With Apple’s new iPhone 5S and 5C devices, the company joins others cutting the cord between mobile phones and contracts.

Businessman in car with smartphone Image Source, Image Source, Getty ImagesBuried in Apple’s announcement of not one but two new iPhones last week was news that anyone can buy one of the devices without having to sign up for a two-year contract.

The news makes Apple the latest company loosening the connection between phones and contracts to make their products and services more appealing to customers.

That’s not to say the new iPhones are a bargain. Buy the top-of-the-line iPhone 5S with a two-year contract, and you’ll pay $199 for a basic 16-gigabyte model. Without a contract, the same phone is $649.

Prices for the less tricked-out iPhone 5C, built with a candy-colored plastic case instead of glass and aluminum, start at $99 with a contract. Without a contract, you pay $549.

Apple’s move is being taken as a sign of its renewed push to sell products in places like Japan and China, where buying a phone without a contract is more common than in the United States. When Apple starts shipping new iPhone 5 models to U.S. customers on Sept. 20, shoppers in China and elsewhere for the first time will be able to pick one up the same day, instead of waiting weeks or months.

Before the new iPhones were introduced, analysts and Apple watchers had expected the company to debut a cheaper phone specifically for consumers seeking a noncontract device, so the relatively high price of the iPhone 5C surprised some.

“We view the lack of a true ‘low-end iPhone’ as disappointing,” Merrill Lynch analyst Scott Craig wrote after the announcement. “We believe the 5C is unlikely to be competitive in the lower-end smartphone market, where phones tend to be under $300 (prepaid phone with no contract).”

No contract, more flexibility

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Taking Out Student Loans? Do It Right With These 8 Tips

Posted October 1, 2013 at 10:00 am

By Laura Shin

If you or your child is applying to college, then your main worry right now is most likely getting into the top choice school.

But considering that the average student loan borrower graduates with more than $26,000 in debt, you probably want to reserve worry for something else: the price tag.

The rising cost of tuition — and student loan debt, which reached $1 trillion a couple years ago — prompted Pres. Barack Obama this summer to lay out a comprehensive plan to fight rising college costs and student loan debt. However, the particulars of that proposal — which include income-driven repayment plans and tying financial aid to college performance — won’t be in place before you or your child enrolls next year, which means you need to think about cutting costs and how student loan debt could affect your or your child’s quality of life after graduation.

“Every dollar for student loans is a dollar less for other priorities like buying a car, buying a house, getting married, having children,” says Mark Kantrowitz, senior vice president and publisher of edvisors.com, publishers of more than a dozen websites about planning and paying for college. “All that costs money and you’ll have tighter finances if you’re paying your student loans.”

3. When you have to borrow, go with federal loans before private loans.

Every year you attend school, fill out the Free Application for Federal Student Aid, or FAFSA, form. With this information, the Office of Federal Aid can help you identify federal grants, loans, and work-study funds to help you pay for school, and schools will base their financial aid packages on this form.

Federal loans offer many advantages over private loans. First, they have fixed interest rates, whereas private loans offer variable rates. Even if you find a low rate from a private lender, nothing will stop it from jumping up the next month. Additionally, having a fixed rate provides some predictability to your budget. Now, there’s even more reason to go for a federal loan: This summer, rates for subsidized and unsubsidized Stafford loans for undergraduates dropped from 6.8% to 3.68%. For graduates, rates on graduate Stafford loans and on parental PLUS loans dropped from 7.9% to, respectively, 5.41% and 6.41%. “That closes the gap between some federal and private loans — parents were seeing private loans that were lower,” says Michael Clancy, director of financial planning at Drexel University College of Medicine and a certified financial planner. These rates apply for the life of the loan — if rates go up next year, those rates will only apply to loans taken out next year.

Federal loans also offer the advantage of a deferment period, in which the borrower doesn’t have to make payments such as when he or she is enrolled in school or unemployed. Some private loans, on the other hand, ask you to begin repaying the loans immediately. Additionally, federal loans do not require a cosigner who will be obligated to pay the loan back if you can’t, whereas most private loans do. “It’s better to not need a cosigner,” says Clancy. “But you might not get that lower rate without mom or dad signing as a cosigner.”

Overall, federal loans offer more predictability and stability. “They are cheaper, more available, and they have better repayment terms than private student loans,” says Kantrowitz.

7. Plan out your course-load. 

Once you know what degree you want to pursue, plan what courses you will take when from then until graduation, including all prerequisites and noting, for instance, when classes — especially requirements — are only offered once every two years.

Try to take on a heavier courseload each semester, or additional classes each summer, when classes may be discounted. Some schools charge a flat rate of tuition each semester no matter how many credits you take, so by taking more credits each semester, you may be able to finish a semester early and save on tuition.

Above all, try not to let four years turn into five. Don’t fail or repeat classes and try not to change majors too often.

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The 10 Most Expensive Homes For Sale (U.S.)

Posted September 29, 2013 at 10:00 am


There are plenty of gorgeous, high-end homes on the market; homes with infinity pools and wine cellars or over 10,000 square feet of living space. But then there are a whole different category of homes: residences that have amenities more likely in European palaces or 5-star resorts.

This year has been a strong year for those kind of homes. Not one but four listings have entered the market with price tags higher than $100 million — one nearing the $150 million mark.

From a massive Connecticut estate to a prime spread in The Hamptons, here are the 10 priciest homes currently on the market in the United States.

#1 $140 million
Undisclosed address, Greenwich, CT

When Copper Beech Farm first hit the market earlier this year at $190 million, it was far and away the most expensive listing, ever. Even with a recent price cut of $50 million, the estate is still the priciest home available in the U.S. The 50-acre estate holds a 13,519-square-foot home with 12 bedrooms and 9 baths on 4,000 feet of coveted waterfront facing Long Island Sound.

The home was built by the Lauder Greenway family (George Lauder was a partner in Carnegie Steel). It was sold 31 years ago to its current owner, John Rudey, who leads several timber companies.

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How To Get Half Of A Wharton Education For Free

Posted September 27, 2013 at 10:00 am

By Max Nisen, Business Insider

This week, Wharton announced that it would be the first business  school to offer much of the substantive core of its MBA program online for free.  If you have a whole lot of time on your hands, you can get a large hunk of the  education that MBA students pick up, and instead of paying six figures, you’ll  pay nothing.

In addition to the five electives already  offered through the Coursera platform, Wharton is offering what it’s calling the  “Foundation” series, made up of introductory courses in financial accounting,  operations management, marketing, and corporate finance, taught by some of its  best-known and most senior professors. 

The courses are made up of a series of  pre-recorded lectures and interactive exercises. They range in length from six  to 10 weeks, and take an estimated five to eight hours a week each. Students can  already enroll in the accounting course, and the other three start in staggered  two-week intervals. The next to begin will be operations management on September  30th.

Don Huesman, the managing director of Wharton’s innovation group, told Bloomberg Businessweek that those four courses alone  would replicate much of what a first-year student learns. Wharton  students who actually make it through the school’s rigorous  admissions process are required to take nine core courses, four of which are now  available online, and six electives.

The online versions replicate the content of the courses so well that some  professors are asking students to watch the Massively Open Online Course (MOOC)  versions of the lectures ahead of time so the in-class time can focus on  discussion.

Students can simply watch the courses casually without additional  work, but there are integrated quizzes, readings, homework assignments, and  final exams for the more committed. Coursera also gives the option of paying $49  to enroll in a “signature track,” which give students a verifiable online  certificate for completing the course should they meet the course’s  standards. 

Enrolling in the free track takes just a name, an email, a  password, and agreeing to Coursera’s  honor code. Someone looking to take their first MOOC might want to consider  the marketing course. It’s one of the less time intensive classes, and is team  taught by the three of Wharton’s top marketing professors, from a  department ranked as one of the world’s best.

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