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.
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.
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.
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.
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.
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.
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).”
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.
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.
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.
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.
Posted August 14, 2013 at 8:00 am
I hate buying houses. I don’t “hate” many things. But I’ve lost millions of dollars buying houses.
The stress is unbearable when you need to sell. And you have no money when you need it.
It’s a prison. The white picket fence is the prison bars. The bank is the guards looking in. And the need to protect your family keeps you in a solitary confinement of guilt and anxiety and stress.
I won’t give all the reasons. Google “Altucher” and “home ownership”. I wrote about it a few times. Then someone wrote against my arguments and I responded to those. On and on.
BUT, some people simply MUST own homes. I will no longer argue with them. They have good reasons:
• a lawn for their kids (somehow lawns costs a $100,000 down payment and huge interest rates)
• a place where they KNOW they can be there for 20 years (even though, on average, Americans buy new houses every five years)
• they love the neighborhood and there are no rentals in the neighborhood
• they think it’s an investment.
• it’s the “American Dream”. Blah.
Fine. Buy a house.
But please at least do the below checklist before you make this decision. You have to say “YES!” to all of the below. And then it might be a decent choice for you.
A) YOU LOVE TOILETS. Or talking about them. Or talking to people who love toilets.
Because, I hate to be the one to break this to you, but you are losing your hair. And clumps of hair will get in your pipes. And then your toilets will stop. And when guests are over the toilet will overflow and “stuff” will go all over the floor.
It will happen. Good luck.
YOU LOVE HOME DEPOT. Love it!
It’s so amazing: empty aisle after empty aisle. It stretches to infinity. And nobody seems to work there.
It’s like an abandoned Death Star. Where did all the Storm Troopers go? Is there one goddamn person who can tell me where the air conditioners are? And then the bug spray? And the shovels? I need a shovel. NOW! But there’s nobody.
C) YOU DON’T KNOW HOW TO ADD. I have nothing against that. A lot of people can’t do basic addition.
I’m one of them (see above: lost millions).
If you don’t know how to add I have a solution below that makes it so you don’t need to know how to add.
But first, what is the true cost of your house:
OWN = down payment + size of mortgage, + all the interest payments, + all the taxes (which can’t be calculcated since taxes will go up in unexpected ways) + all maintenance (which also can’t be calculated) + opportunity cost of time (which is minimal because you love Home Depot and toilets).
RENT = All of your rental payments added up MINUS what you would make buying bonds with the money you would’ve used on a downpayment.
Then compare the two. Which one is more? Don’t do the choice that adds up to more. (Unless…see parts D and E)
You can argue that I should also MINUS what one would make from the rising value of a house. But it’s basically unpredictable and people put that money into buying the next house anyway.
Housing prices in many parts of the country are still down from ten years ago. So who knows? And housing has not gone up faster than inflation over the past 100 years.
And if you believe in housing as an investment you can Rent and then take what would’ve been your downpayment, borrow 100% against it (this is allowed in any bank) and buy a residential REIT on the stock market.
Then it’s liquid and you can sell any time regardless of how the economy is doing. So if you truly believe that housing is going up from here (e.g. you are a prophet from God and somehow know these things when nobody else does) then you can rent and put all your money times two into a REIT.
So ” a house is a good investment” is never really a good argument… unless…
D) YOU LOVE DEATH, DEBT, AND DIVORCE WHEN IT HAPPENS TO OTHERS.
There’s no way to predict if housing is going up or down. So you need to get Death, Debt, or Divorce on your side. These are basically the ONLY ways you can guarantee you are getting a better deal than anyone else.
If every house in an area is going for $400,000 then you want to make sure you don’t pay more than $200-250,000.
That’s called “good investing”. Good investing is not about predicting the future, it’s about getting a deal. This is an important concept no matter what you are investing in and it’s the concept everyone forgets.
You get a deal when someone dies (and the kids don’t want to handle the hassle).
You get a deal when two people get divorced (and they need to quickly sell their house, regardless of price).
And you get a deal when someone gets into too much debt (and, for instance, is foreclosed on).
That’s it. Sometimes you get a deal when someone has to move for work also but in these days, this is usually related to Debt.
Don’t buy a house unless you are getting a deal, even if you’ve convinced yourself you will living there for 30 years (remember: you can’t predict the future).
Well, you don’t need a deal if….
E) YOU HAVE A LOT OF CASH. If you buy a house, have 4x the amount of the mortgage sitting in cash in your bank account.
That seems like a lot, right? Why not just buy the house in cash?
Because then you might run out of money. Particularly if there is a prolonged economic slump (again, unpredictable but why risk the worst-case scenario when you don’t have to). I don’t like to risk bad worst case scenarios.
I don’t think there will be a big slump. But why take a chance with your life?
Worst case scenarios are too scary! You can die!
Cash is a beautiful thing. Having cash in the bank keeps you calm when everyone else is committing suicide.
Treat your cash nice so it treats you nice. Don’t throw it all into a down payment on a house. As I explain in prior posts, that’s a very nasty thing to do to your cash.
So there, that’s my checklist.
I assume you do all the other things whether you rent or buy: look for good schools, live in a nice area, etc.
This is not an argument against buying a house. I respect that many people want to own a home for whatever reason.
This is an argument to keep you sane so you can focus on other things in your life.
Follow this checklist and whether you rent or own you will preserve enough of your sanity to be able to be creative and explore the world.
Be an explorer, not a prisoner.
Posted July 31, 2013 at 8:00 am
By Simon Zhen
Overdraft fees have earned a reputation of being an extremely expensive and very common bank fee.
According to economic research firm Moebs Services, banks generated $32 billion in revenue from overdraft fees in 2012, up from $31.6 billion in 2011. And those numbers are likely to rise as banks change their overdraft fee policies.
In August, U.S. Bank plans to impose a flat $36 overdraft fee – replacing a more consumer-friendly tiered fee policy. When your balance is close to $0, buying a cup of coffee that results in an overdraft fee of $36 is a hefty penalty for spending more than you have in your account.
More often than not, consumers don’t incur just a single overdraft fee. Without any warning that you have insufficient funds, you can easily make multiple purchases and be shocked when you see hundreds of dollars in overdraft fees the next time you check your account.
You can avoid having this happen to you by implementing these preventative measures:
Posted April 27, 2012 at 12:58 am
by Gerri Detweiler
Before I tell you what those words are, let me first state that I am not a bankruptcy attorney or credit counselor, and I don’t run a debt relief firm. I consider myself first and foremost an educator, and my goal for the last twenty+ years has always been to try my best to provide consumers with reliable answers to their credit questions.
The method they choose to resolve their debt problems makes no difference to me personally.
With that out of the way, here are those six dangerous words:
“Bankruptcy should be your last resort.”
By taking these words to heart, many consumers have caused themselves needless heartache and enormous financial pain. Yet, these words are perpetuated by the news media, financial advisors, and creditors every day.
If you hear these words, put up your guard, and question carefully whether they are true.
[ Details / Source: Above is our hand-picked KEY excerpt(s) from this full article: "Six Dangerous Words If You Are In Debt" ]