Nonsense Means No Cents

Student Loans Domination

2007-10-22T09:07:00.000-05:00

I wrote earlier about my student loan problem(s). To refresh any one's memory:

1. It turns out I have $2,000 more in student loan than originally thought; this loan was left out of my consolidation so once I get the official paperwork, I'll have to deal with this.

2. I needed to enroll in auto-debit to receive a 0.25% reduction in interest rate. I enrolled, but also prepaid some principal down with a surplus cash on hand I had. This payment (significantly more than multiple months of the minimum payment) postponed my next due date very radically. Thus, I was never officially enrolled in the auto-debit because they hadn't yet withdrawn any amount from the linked-account!

After speaking with "Judy" from the Sallie Mae call center in India (yes, I asked), I was able to sort things out. It took a while, as Judy was failing to understand my complaint and frustration with Sallie Mae's inability to allow auto-debit enrollment and pre-payment simultaneously if the money is coming from the same account.

It took a bit of finesse coupled with sternness, but I got my point across. As if by magic, I received notification that I have become officially enrolled in the auto-debit program and I have immediately received the 0.25% drop in interest. Big win!

Credit Card Reward Points

2007-10-17T21:25:00.000-05:00

...talk about good timing. I just wrote about how my promised reward points still hadn't registered, and after posting, there they were! Sorry for "jumping the gun" but really it had taken over a month and a half to get fixed!

It's not exactly as much as I had hoped for, but still probably more than I deserve!

...MORE student loans?!!??!

2007-10-17T21:09:00.000-05:00

In an earlier post I mentioned how I paid off $2,000 of my student loans in about two months. My father recently contacted me about some loan information for $2,000.

I'll save you the detective work: the loan company mis-filed the paperwork on the new $2,000 loan, and it was actually supposed to be assigned to me. So it skipped the loan consolidation AND, of course, I'm back to where I started because it adds the $2,000 back to my total payment.

The "good" news is that the new $2,000 loan is set at a rate or 5.00%, lower than my consolidated rate of 5.50%. Once the correct paperwork comes to me- I'll have to see if consolidating that loan with my other loan will average the rate between the two.

Either way- Sallie Mae (my loan consolidator) has been troubling me. By enrolling in automatic debit my interest rate was supposed to drop from 5.50% to 5.25% but my automatic debit still appears as pending.

I imagine that the pending status changes once the first automatic debit is withdrawn. This was originally set for November. I couldn't wait to start paying off the loans, so I made some prepayments (two thousand in two months, as you read) from the same electronic account my monthly debit will draw from.

While the prepayments have helped in the long run- trimming down the principal to save long term on total interest, it also pushed back my first automatic debit all the way to January and thus- its status, pending. This means the rate drop has not gone into effect yet.

I'm hoping to call them on Friday and see if they'll drop the interest rate for me since my prepayments were drawn from the same account anyway and besides- my prepayment of $2,000 was ridiculously higher than my first several automatic debits would have been combined!

Hopefully they'll budge. I'll talk to them about that first....then throw in the new loan for consolidation hope.

Update

2007-10-17T20:47:00.000-05:00

As I predicted with my September Payday Update, this month has been filled with some pretty heavy spending. It's been pretty costly:

A trip back to Iowa to visit friends (mostly gas was the expense)
Anniversary (Gift and nice, fancier-than-usual date dinner)
Bulls Game (free ticket, but parking etc.)
Miscellaneous expenditures ...ambiguous, I know

I'm not complaining about any of the expenses, they were all mostly wants not needs, but they have severely cramped my style.

The thing is, I was really hoping to use October to calculate and track an actual budget. Of course, with all these one-time, luxury purchases, it has just become to much to go through all my records and pick apart everything effectively.

As if that weren't bad, I received some sour news regarding my student loans (post coming soon). I still haven't received my promised credit card reward points as told in an earlier post.

Worst yet, I won't be paid again for like two and a half weeks!

Pinecone Research Working

2007-10-17T20:35:00.000-05:00

Thanks to an awesome referral from SavingDiva at Saving for a Home of My Own, I have signed up as a survey-taker/product panelist for PineCone Research. I have filled out three surveys and have already received two checks (in the snail mail) for $5 each. I know it's not my millions yet, but it will at least pay for my haircut tomorrow (in addition to a coupon I'll use)!

...Yes, I'm still here.

2007-10-17T20:27:00.000-05:00

It has been an unusually busy couple of weeks. To my two readers, sorry for keeping you in the dark about my updates! It made me smile, at least sympathetically, to read that others like Ms. M&P have similarly been swamped with other things and their blogs have taken similar hits.

Cheers. Here's to my revving back up!

Simplifying my Sharebuilder Account

2007-10-08T00:53:00.000-05:00

By now you've realized a couple things about my Sharebuilder Account:

1. It's poorly funded and poorly allocated (see my Net Worth updates).
2. It was poorly managed early on, and I am only now beginning to fix things (see previous post).

I have $250 in QQQQ Nasdaq's ETF and $13 in XLE Energy Index Spider. These, my only two investments in Sharebuilder now come after a string of purchases and sell-offs including pennystock KMA (no longer owning). Paring down my investments to two has been therapeutic and helpful, not to mention easier to follow. Eventually, I hope to sell my XLE stake and stick with the Nasdaq ETF, but I need it to get over $15 so I can make a bit over the commission for selling. Needless to point out really, it will be a wash and I will consider it lost money.

I have only been actively calculating monthly returns for the last month and a half (after I sold off various distractions). Despite my low amount, I have made about 8% over the last 6 weeks--Not bad at all! This leads me to think I should invest a bit more (solely in QQQQ) and then not worry about this account anymore. I can revisit it in several months time and hope that I've passively accumulated some decent money.

Correcting my Sharebuilder Portfolio

2007-10-08T00:18:00.000-05:00

I opened my Sharebuilder Investment Portfolio in March 2007 with the intention of making the $50 "free money" promotional gift and possibly even making some investment profit. The problem is that I just rushed into it without very much consideration and ended up losing a lot of potential money by wasting money on commission and dividend possibilities.

Here are the basics:

I have invested a total of $215.
I received the $50 commission.

My current portfolio as of 10/08/2007 totals $263. That's a $2 loss! I could have just made the minimal investment, waited for the promotional money then won a nice little prize. How am I $2 worse off?

Sure, I still am making a profit if I just consider the $50 promotional money into my profit. However, I've made numerous trades since March-- my ownership of equities should have risen to put me over a mere $50 threshold.

How did I mess this up so much?

Sharebuilder lets you purchase equities for $4 per trade, provided you let Sharebuilder automatically purchase the stocks on a Tuesday (you can select which Tuesday, and how often even).

I messed this up early by making a few real-time purchases at $15 commission per trade! For trading such a small amount (again, my portfolio isn't even over $300), $15 takes a huge chunk of change!

Sharebuilder lets you purchase percentages of a share. Simply setup the amount of money you wish to deposit into an equity and Sharebuilder purchases that amount (even if it is a fraction of one share).

I messed this up by trying to do too much with too little. For the little amount I've been trading, I was foolish to purchase multiple equities. I spread my pennies too thin with my early purchases that the commission equated to too high of percentages. Even when I used scheduled purchases, $4 of a $15 purchase is like a 27% commission charge!

I have learned a lot since the early days of my Sharebuilder. After quickly learning the errors of my investing, I dramatically simplified my account portfolio. Besides, I suppose I should just be happy that I haven't lost my starting costs, my deposited $215...

The return of my capital is more important than the return on my capital.

Retirement Account has Started!

2007-10-04T12:29:00.000-05:00

My 403(b) has finally begun with last month's paycheck. The following is the breakup by investments. As you will see, this is a largely aggressive portfolio- i.e. a lot in international.

The next signal of my portfolio's aggressiveness is the asset class breakdown. You'll see how basically everything (international and domestic) is held in equities (stocks rather than bonds).

Before I go on, let me state the obvious- none of this should be taken as financial advice, all investments carry significant risk including the loss of your money (and I can risk more than most at such a young age). See a licensed professional before making any decisions about funds, stocks, etc. That being said, you want the specifics?... These are my funds of choice (all through Fidelity).

Quick Teacher Story

2007-10-02T10:16:00.001-05:00

For anybody interested in quick teacher stories, I've started publishing on Associated Content. I'd like to write a book someday with my experiences (yes, I'm young, but it seems like I have a million already.) You can read the (true) story here. It's about an 8th grader I met during student teaching. Meet Freddie.

Payday Net Worth Update

2007-09-29T02:32:00.001-05:00

Payday arrived and it was (far) below expectations. I had assumed my August paycheck was for two weeks of work (..as school just began), so I had planned/hoped/misguidedly thought that my September and consequential paychecks would be double for a full four weeks worth.

Unfortunately, I was wrong and my "full" September check was the exact same as my August check. In fact, it was a bit lower because of my first ever retirement account reduction. Fortunately, I also got paid for my coaching stipend at the 2nd school and it was higher than I expected that to be.

As for me, this is where I stand:

$5,264 in Cash and Savings
$254 in the Stock Market (still poorly allocated, but made a decent 4.6% return for the month)
$550 in a 403(b) -- this is setup for a very aggressive portfolio that I'll detail next week
--------
$6,078 in Assets
--------

$0 in Credit Card Debt (I just payed the last statement, but I plan on keeping October's statement lower than it has been)

$15,730 in College Loans / Total Liabilities
--------
Roughly about -$9,600 of Net Worth

The problem is that I need my liquid accounts to last me for the full month of October before I get paid again. What's worse, I've got some additional spending I'll need to undertake. Namely- anniversary with the girlfriend and an apartment-warming present for the best friend. My cash and savings accounts are going to decrease dramatically this month. I have no source of income for 30 days. Hopefully I can finish off some big surveys at MySurvey to make a bit of change.

The good news is that my retirement account with Fidelity is more aggressively invested and now better funded than my Sharebuilder account so I can expect to start seeing some dramatically higher returns than I have been. Also, I managed to squeeze out approximately $2,000 to pay off approximately 11% of my student loans. That is a significant chunk of change, though I know it will go a slow slower now as I build up my cash and savings accounts.

I'll be posting another Net Worth Update Mid-October with any changes...

In Defense of Capital One....

2007-09-27T11:54:00.001-05:00

This post is probably premature. Within two business days I expect my information to be incomplete or inaccurate. I've been meaning to write this post for several days now. I often read online, direct money market and savings account comparisons. Typically, HSBC and other top two-percent interest payers win-out. Capital One, though never really in the top three for interest pay-outs, still stands out in my book.

Now I'm writing this the day that HSBC dropped their interest rates significantly. As of 11:56 am central time, Capital One Direct High Yield Money Market still boasts 5.00% APY. Even if....er....when interest rates drop for Capital One following suit with HSBC, I think Capital One still deserves high honors.

The benefits, to name a few, are:

5.00% APY Even when their rates drop, they remain amongst the top group.
Interest Compounds Daily, Paid Monthly (the law of compounding)
Free Check Writing
Free Transfers (the monthly limit is too enormous for anybody with debt writing a blog to be concerned with)
ATM card with no fee (but the fee from the bank you use it at)
EXCELLENT customer service on the telephone
Great, easy to use website.

That being said... they just started offering a new deal: a money market account that accumulates rewards! Right now it offers 4.66% APY and an additional 2,500 miles for signing up for the program. THEN, you earn 1 mile for every $20 of your average balance for the month. These miles are actually points that you can redeem for airfare, cash, or merchandise!

I appreciate the innovation Capital One showed in offering this new type of account. For now, my account doesn't have enough money in it to make it worth the lower APY, so I'm going to stick to the traditional Capital One Direct High Yield account.

Extra Income with Pay Per Post?

2007-09-25T14:26:00.001-05:00

I've been seeing PPP appear on various other blogs and I think I'm going to try it out to see if I can make any side income from this. Even small amounts would help out. I scanned my student loan account (because, I'm paranoid you know) and saw that the account has accrued $10 interest since September 21st. !?!?!? WHAAAAA ?!!??!

Does anybody have tips or hints to maximize my PPP money making ability?

*As a note, the blog is "under review" but once I'm able to start, I'll make sure to put clear disclaimers up to let everyone know it's a sponsored post.

Tips for Talking to Creditors

2007-09-25T14:26:00.000-05:00

Sick of Debt from Goodbye Debt! wrote an update about the creditors "chasing them down." I pressed for more details in the comments and I've decided to post his response. The following are great reminders and tips for talking to creditors when they start/keep calling. Thanks Sick of Debt!

- Keep every piece of paper you get from a creditor that makes an offer. Just because they say it is only good for 30 days doesn't mean they won't accept it after that.

- When you call them, ask right away if they will accept a settlement. Very often they will then go into the specifics of what they can offer (at least their first offer).

- If they won't go into specifics, start tossing out settlement numbers less than 50%. This will at least get them passing counter-offers.

- If your just able to only make a payment, ask them how that payment will benefit you and if it can be applied to a final settlement in the next couple of months.It all depends on the creditor. This one I talked to was relatively ok (compared to other creditors) and after we got to the acceptance of a set payment for that day, they were open to answer any questions I had.

Shifting Savings for the Fed Rate Drop

2007-09-25T09:33:00.001-05:00

Everybody and their mothers seem to be writing articles about what to do in light of the Fed's recent interest rate cut. After all, the online/direct savings accounts we have all come to know and love are expected to lower their rates in tandem from the now typical 5%. What's a frugal saver to do?

Brief Answer (According to Most People):

Secure those 5% Certificate of Deposits while you can!

Hurry before those interest rates drop!

My Reality:

1. I don't like feeling rushed to move lots of my hard earned money without a thorough study of options and evaluation. In other words, stop making me feel so frantic about losing a potential 5% interest rate down to a 4.5 or 4.0, whatever it will be. It's not the end of the world!

2. I don't think that 5% is enough of a return on my investments*. 'Nuff said.

*I am assuming that people have reached both their emergency funds as well as their spending allowances budgeted. Don't go for the risk below if you're still building your "every-day" liquid money accounts.

The solution:

I am planning on putting $1,500-$2,000 in a mutual fund. Mutual funds act like stocks with relatively equal volatility, but are relatively safer (all investments assume a fair amount of risk, so be warned). Mutual funds are automatically, inherently diversified investments. Also, if done correctly, it can be a pretty cheap investment (as far as fees are concerned).

I'll be posting more specifically about my investment of choice next week once the paper work is going through so stay tuned for a bit more info about my direction, more information about mutual funds, and some key things to remember if you're considering their purchase.

As a teaser, I am looking at a very diversified mutual fund, a collection of previous funds, for which I plan to buy C-Class shares. C Class means I won't pay any commission up front and as long as I hold onto the the fund for (only) one year, I won't pay commission on the sale!

...My fund of choice is up 6% Year to Date, and expects to make 20% if held for a full year. Certainly beating 5% of a CD! Just saying...

Retirement Blunders

2007-09-25T09:10:00.000-05:00

USAToday has an excellent article online about typical retirement mistakes and "If I knew then what I know now" type advice from a great panel of experts.

Even financial professionals — people who are paid for the wisdom of their
judgments — commit financial blunders they live to regret.

Here is a sampling of my favorite mistakes (ideas for improvement) from the article:

1. Buying Timeshares - I have yet to be sucked into a timeshare high-pressure sales pitch on any vacations, but I imagine it can be overwhelming. This expert got sucked into two purchases at different times. Talk about being bamboozled! If you're going to invest in real estate, do it the right way.

2. Overconfidence - You have to appreciate anytime somebody, especially a professional, admits to ego-interference. Basically this guy's overconfidence in his ability to beat the market and take exceptionally heavy risks made him lose some serious change. Always be suspicious of things that seem too good to be true or "the sure thing."

3. Letting Savings Languish - You must beat inflation. Even at 5%, online money market and savings accounts really don't make you that much money. Take out taxes and inflation and you're only making a couple percents at best. That's why everybody needs to start building and increasing their investment portfolio once their emergency fund is finished. Even ETFs, index-linked CDs or Mutual Funds can offer you significantly higher interest rates without the complete risk of the stock market. You have to spend money to make money; take a risk with some savings to earn double (at least) interest.

Blogs I am currently reading...

2007-09-23T11:40:00.001-05:00

I haven't officially put up a list of links to other blogs in my sidebar yet but some people have been asking me which (personal finance) blogs I check out. To preface the list below, I want to stress that I have these blogs bookmarked and I check them out at least daily. I probably have too much free time in front of the computer, but I'm able to check them out often during school and at night. Besides, many bloggers write with no regularity in post times. The point is that I came across these blogs at some point, and keep coming back as a return customer.

A keen observer may note that many of the following have been writing comments on this blog and that's no coincidence. It is indicative of the active role these bloggers have taken not just with their personal blogs, but within the greater blogging community. Without further ado, the following is in no particular order at all.

Chief Family Officer: This blog features not only personal finance articles and news, but also captures all topics regarding family (very important to me). For any mothers-to-be, this is an especially great site!

Goodbye Debt!: This chronicles a couple in Joliet, Illinois (home state shoutout) and their struggle to get out of debt. What I appreciate most about this blogger, is that they are pro-actively, always working hard to make more money and accomplish their goals quicker. Besides the usual side-jobs, they rent out rooms in their place- something I'd like to do eventually.

Fabulously Broke in the City: This blog beautifully balances financial planning and fiscal responsibility with having fun, shopping, and giving yourself a break every now and then. She updates the site early and often, yet I'm always wanting more!

My Money and Politics: The name says it all! The greatest part of this blog is Ms. M&P's ability to simplify complex stories in news and politics for the average reader (take for example her excellent post about Hillary Clinton's health care proposal!). Having graduated with a Political Science degree, I think this blog captures important news and personal finance spot on.

Saving for a Home of My Own: This blog is great for personal, relevant posts. Equally important is how they often find other articles across the web that I inevitably go to. Great at finding additional extra reads!

Thoughts from a SF renter: I really like how personable this blog feels. Personal stories intertwined with advice, guidance and finance news make this a wonderful, easy read. Always a delight!

Hopefully I didn't miss anybody that I often read. In general, I'm surfing about 10-12 per day.

Ranking Financial Newspapers

2007-09-23T11:22:00.000-05:00

I commented on another blog a while back about my opinions on which newspapers I recommend for monitoring financial news. As a social studies teacher, I find myself reading newspapers more than the average bear, so I hope this short list of the top five papers can guide anybody interested in picking up some nice reads.

This is in order [1 being the best, 5 being the worst (of the best)]:

1. The Financial Times (of London); This is largely considered the most reputable newspaper with a global perspective. Not just for finance, but this has always been my number one favorite. It is also printed on salmon colored paper as to make the text jump out at you...easier on the eyes! The Financial Times does a great job of covering American political and financial news but again with an international perspective.

2. The New York Times; The fact that news and politics often influence money and finances is a central reason I put the NYT above #3. For American newspapers, there is simply no better comprehensive newspapers. Also, as many of you know, its online version is free for now and probably forever.

3. The Wall Street Journal; This is pretty self-explanatory. They are under new leadership now and working on rehashing old formulas to reinvigorate the newspaper. I'm excited to see what they produce. Also free online for now and probably forever.

4. The Washington Post; This is clearly the least respected out of this group of newspapers, but the WP packs a mean punch with their invaluable insight into D.C. political spheres of influence. It all depends on the nature of the stories, but WP is a great alternative to the others, basically like the first three on this lists' little brother.

5. The Economist; I know this isn't a newspaper as it is a magazine, but people ask my opinion of it all the time. This comes from across the Atlantic again and in my eyes it sometimes shows. There is a pretty big bias sometimes in their articles and editorials. Never the less, the Economist is a provocative and in-depth look at the often chain-reaction events in the political and financial realms.

Speculating the Dollar?

2007-09-22T16:00:00.000-05:00

A number of great bloggers have been responding to news of Canada's money reaching parity with the US dollar, like Ms. M&P. That is to say, the American dollar's value seems to just keep dropping with no end in sight.

What I have been failing to understand is why the speculation market hasn't seized the opportunity in scales large enough to start bringing up the value of the dollar. Why isn't supply and demand working for US currency?

If US dollars are very cheap on the international market, shouldn't foreign investors be gobbling these up in hopes of future returns?

The fact is that in many regards, they have been. China primarily, has been purchasing most of our debt and money holdings via T-Bills and Notes etc. Yet, the value of American dollars keep tumbling.

Something isn't working here: either the laws of supply and demand don't pertain to Currency prices or there still aren't enough people buying our debt / money to satisfy the market place.

If I were a wealthy international investor, I'd consider speculating U.S. currency. After all, debt assumed by the U.S. government is considered one of the most reliable. Save a revolution or international apocalypse, I think betting on the US Dollar would be a safe, speculative investment. If such a thing exists....that is.

Hello College Debt!

2007-09-22T15:37:00.000-05:00

My consolidation officially went though Sallie Mae and yesterday was the disbursement date. That means it's now starting to accrue interest again. At least I set up the automated withdrawal from my Capital One account to get down to 5.25%

My first payment wasn't due until November 20th but the fact of the matter is that the interest on this debt is higher than the interest in the savings account. I'm also pretty anxious when it comes to money management.

I set up an early payment (it will go through early next week) with just enough money to bring the total from $17,650 to the high $16,000's mark. I'm hoping the thousand-digit drop will add the psychological fuel to my fire and reinvigorate my determination to pay off the debt "early and often."

Speaking of paying often, I get paid again (finally) next Friday. You may recall that I get paid monthly, so I am much relieved about this. I'm hoping to be able to save about $2,000 into my Capital One Account, keep around $1,500 in my liquid checking account and pay about $1,250 into the college debt.

Of course, these are only estimates. This will be my first paycheck that will feature my retirement account, 403(b) reduction. Obvious budget, net worth updates to come.

Extra Stipend Money

2007-09-22T13:35:00.000-05:00

It was hard to restrain my jealousy when all of my friends graduating with business degrees were being inundated with competing offers for signing bonuses, relocation bonuses, etc. After all, teachers' salaries are negotiated by our unions. My friends were being seduced by corporate parties, limousines, and free airfare to interviews; I was driving myself to interviews in an old pickup truck for jobs I knew I would never receive any bonuses.

I finally got my taste of feeling wanted and competed for!

I helped coach a competitive event for a summer camp a couple of months ago. It was presumed, then that I would be retained during the school year in-season for a stipend of $1,200 and with an additional $100 per week payment.

This was great. It was prior to even getting a full-time job so I was happy to know I'd get something. The school was about 30 minutes away, and I enjoyed the other coaching staff (and students).

I notified my Alma Mater, also a nearby school about my plans to coach for this other school. (I had always returned during school breaks to help "coach," so I maintain a history of communication with the head coach.) Well, she wasn't having it! No way would they let me help another school now that I was officially on the job market!

Long story short- I have no accepted the external coaching position with my Alma Mater, 5 minutes away with students, coaching staff, and overall program I am comfortable with!

...as if the intrinsic value of this new position wasn't enough, I'll be getting paid an extra $250 more than the other school's total package! Oh to be loved!

Paid to Take Surveys

2007-09-21T16:42:00.000-05:00

I was always very skeptical about bloggers' promotions of online survey companies. I hate spam mail. But I've been working hard to secure some extra money (supervising athletic events at school, etc.) and I finally cracked and decided to try one. I have more free time during the day than you would expect, so it's very easy for me to be completing surveys in my spare time.

I strongly recommend checking out MySurvey

The best thing about it is that I haven't received any spam or junk mail, only relevant emails about new available surveys. Even then, the emails have been minimal (maybe 1 every 4 days ).

The surveys don't take too much time at all, usually less then seven minutes. I can't promise loads of extra money, but it's nice additional "gift money."

I've only been a member for like 8 days, and I have 650 points. 1,000 Points equals $10. You redeem points for cash or gifts or gift cards. I figure it will be a nice way to secure some easy gas money (gas cards).

As a disclaimer: I do earn points if you register for MySurvey through the links or advertisements on this site, so if you prefer to register without giving me credit just hit up www.mysurvey.com No offense taken!

Should I spend or should I save?

2007-09-21T08:32:00.000-05:00

As if we're playing a delightful game of tag, I've decided to elaborate on my comment on a post from Saving for a Home of My Own. Ironically, that post is a reflection from An English Major's Money. Ok now that I have all of the citations done, let me summarize:

At hand is a personal challenge to squeeze more money into your savings account. This is true for all of us. But, what about the times when your next pay period is right around the corner? If you have leftover, "cash on hand" can you reward yourself with it or should you be sending that money to your savings a.s.a.p?

For me it depends on the nature of the account. How often does it compound? How long does it take for the transfer of money? The more often and quicker, respectively, the more likely I'd be to rush that "extra" money away.

If the hassle (I use the term lightly) isn't greatly outweighed by the rewards (extra money), consider it a small reward for having not blown your budget! Treat yourself to something marvelously delicious like Mrs. Fields Cookies!

Two Misconceptions Regarding Credit Card Negotiations

2007-09-19T20:10:00.000-05:00

Misconception #1
It's easier to negotiate for lower interest rates if you always pay your balances on time, in full.

The Real Deal: Credit Card companies make more money off of those that carry balances over from month to month and thus, are more willing to work with them (negotiate) to ensure continued service.

There is certainly some truth in the fact that credit card companies love customers (like myself) that pay our complete bills with the utmost punctuality and thoroughness. We serve, essentially, as guaranteed monthly payments for them. Yet- what sets us apart from people that maintain balances every month? Only our "guaranteed" return.

The real money for credit card companies comes from customers who maintain balances bearing high interest rates. Those customers are the ones giving them money on top of principal. Yet- these customers are a bit riskier. Higher returns but higher risks... sound familiar?

It's just like the investments; higher risks yield higher returns. So think like a credit card company-- Ideally you want to retain all customers, but don't you think you'd be willing to negotiate with customers who end up paying you more money? Certainly! Don't let your history of payments stop you from trying to get a better deal!

Misconception #2
Interest rates are the most important aspect of your credit cards and as such, it is the only thing you should try to negotiate with the companies.

The Real Deal: Interest rates are certainly a chief concern to all (especially those with higher interests). Still, a very important thing to ask for is higher credit limits. And you can ask for both at the same time!

If you've accumulated some pretty massive credit card debt, then your cards' interest rates are probably paramount in your thinking. However, people far too often overlook the fact that you can ask for credit limits at anytime! Here are the sub-misconceptions:

Credit limit increases are only automatic: A careful observer will note that you sometimes receive credit limits automatically; you can tell by checking your statements. Don't be misled. You can ALWAYS ask for a credit limit increase.

Credit limit increases suggest financial peril: Since sometimes it seems like you need a credit limit when you're reaching the current limit (more often than not?), it's easy to fall for the psychological trap that you don't need a limit increase. You can and should ask for limit increases occasionally.

If you don't need the money, no need to increase the limit: This completely false. One factor in your credit score is your debt-to-credit availability ratio. How much are you owing to how much you could be owing? If you're able to increase your limit but not change your charging habits, that helps your credit!

The truth is that you shouldn't feel inhibited when talking to credit card companies. You're paying them all this money anyway, at least make them work for it! If you're going to be asking for an interest rate decline or a credit limit increase, don't feel bashful about asking for both!

*As a quick word of advice, I wouldn't recommend negotiating with the same card company frequently. You don't want to nag (they'll write down in their notes that you're just a beggar). Besides, you can't expect something for nothing. You have to "reward" their compromises by another good duration of payments. I'd say about 7-9 months of consecutive good payments would be enough to warrant another phone call. If that is too excessive- definitely once a year.

Million Dollar Idea: Forever Stamps

2007-09-19T13:11:00.001-05:00

I've got a great, long-term investment strategy that might just make my millions! The cost of U.S. Postage Stamps seems go up all the time. (Now at 41 Cents). However, as most of you know, the government created a stamp to silence critics: the Forever Stamp. You buy forever stamps right now for the same cost as regular stamps. No matter what happens to the every-increasing cost of postage, you can slap that stamp on regular mail and it will be sent without worry!

So what's the Million Dollar Idea? Purchase 10,000 Forever Stamps at $0.41 Wait about 10-15 years and never use those forever stamps. In about 15-20 years, prices for postage will be very high. Suppose regular stamps will cost $1.00 in 2027, you then sell your forever stamps (on eBay or something) for $0.95 a piece. Bada-Bing! Over $5,000 profit, just maximize the initial Forever Stamps purchase to increase profitability.

Is it legal? - Probably, since people trade/buy/sell stamps all the time for collections; you'd essentially be on an honor code pretending you're simply selling to collectors.

No, I don't really think this is feasible. Looks like I'll just have to stick to real work and savings. Back to the drawing board.

Student Loan Consolidation Luck

2007-09-19T08:01:00.000-05:00

My application with Sallie Mae for consolidation of my federal government DIRECT loans seemed like it had been in limbo for a month. I finally called the representatives last night to determine the status of the application and all the gritty details: interest rate, disbursement date, total loan amount, monthly payment, et. al.

$17,700 in consolidated debt
5.50% Annual Interest Rate
5.25% Annual Interest Rate if I have it automatically, electronically withdrawn monthly (which I will gladly do for the lower rate)
$150 Minimum Monthly Payment
10 Approximate years to pay off the debt if only paying the Minimum Monthly Payment

But I was further surprised to hear this great news. Because I electronically signed for the loan (way) before this past Sunday the 16th*, I am eligible and qualify for an additional interest rate reduction if I make 36 consecutive, full payments!

*According to very new legislation passed by Congress, student loan lenders are required to pay more money to the government for Pell Grants (student aid). In order to fund this increase in Pell Grant money, student loan consolidation companies are getting rid of benefits for consolidated borrowers. Such benefits include the standard 36 consecutive payment reduction! (Sallie Mae is starting/started eliminating this additional reduction benefit as of the 9/16/07.)

According to Sallie Mae, all loan consolidating lenders are eliminating benefits to fund the legislation requirements. If you have outstanding student loans and think you might have missed the consolidation deadline, I still recommend calling the company and asking (begging) for the benefit(s). I never hurts to ask!

Credit Card Graduation

2007-09-18T13:27:00.000-05:00

I've only had my credit card for about 10 months now, but having graduated- I knew it was time to move onwards and upwards with the card. After all, we all know that it's easy to negotiate with credit card companies for lower rates and higher account balances anyway.

Prior to my talk(s) with the credit card company:

College Student Credit Card with Rewards
$1,000 Credit Limit
18.86% Annual Interest Rate
----------------------
After speaking with the card company the first time:

Visa Platinum Select Rewards
$1,000 Credit Limit
12.24% Annual Interest Rate

I ended the conversation content (albeit not overly enthusiastic) about my results. After all, I matured my credit card out of college. The new "Platinum Select" Rewards plan mirrored my college rewards program [point per dollar] and most importantly to me for now-- the interest rate was lowered pretty significantly.
----------------------
Then I noticed via my online banking management software that a few purchases that happened during and shortly after the transition period between my credit cards were failing to show up. So I called the credit card company for a second time. I asked for an explanation. Meanwhile, the representative told me that she could get me an interest rate of 9.68% and I gladly accepted. She also mentioned I was pre-approved for a credit limit increase of $1,500. Boo-Ya!

So to my understanding my account now meant:

Visa Platinum Select Rewards
$2,500 Credit Limit
9.68% Annual Interest Rate
----------------------
A couple days later, I realized that my pre-existing rewards accumulated prior to my card switch completely vanished on my Internet banking management site. I could further use my Scooby-Doo deduction skills to realize that the interim and continuing purchases I had been making on my credit card were not collecting rewards either! So I called the company for a third time.

It turns out that the offer to lower my interest rate was not simply a rate decrease, but a new credit card altogether-- a rewardless credit card with a "great" interest rate! Needless to say I started complaining, eventually talking to a supervisor (though at the time they were busy and had to call me back; this upset me even more).

What happened?
My card is reverted back to a rewards card. 12.24% interest rate (this never really bothered me since I pay all my balances on time in full). 1 point per dollar spent. $2,500 Credit Limit

They will be crediting my account "back" with 2,000 rewards points. (This is laughable and confusing, because I somehow think my rewards were only around 500).

Finally, as a little cherry on the Sundae- they will give me an additional 250 points for my complaint.

All that hassle? Well worth it!

20 Timeless Money Maxims

2007-09-18T00:19:00.000-05:00

As a teacher, I am alway fascinated by quotes and maxims. Lucky me, I stumbled upon TMAC at My Financial Odyssey who found CNN's 20 Timeless Money Maxims. TMAC chose his top 5.

I agree with his choices, but also like the maxims regarding diversification. Any list of financial recommendations has to include the usual fare of "its now what, but where you invest" type lessons.

Check out TMAC's take on the list here.

Google Adsense Earnings Calculator

2007-09-17T23:37:00.001-05:00

I came across a great freebie web tool for anybody trying to make (any) money by blogging. Check out this nice Google Adsense Earnings Calculator! Why use it?... You can use the handy estimates to reevaluate your advertising strategy / campaign.

The reasons I love it are as follows:

It's clear -- easy to use, easy to understand.
It's concise -- not loaded with frivolous extras.
It's free -- 'nuff said.

Whaddya do with found money?

2007-09-17T23:32:00.000-05:00

Fivecentnickel.com offers a standard, perennial dilemma for anybody (especially those of us in debt). What do you do if you find a stuffed wallet with loads of money?... more challenging is the spin that the wallet contains zero forms of identification. What do you do? Check out his blog and compare your answers?

Financial Goal # 1

2007-09-17T19:05:00.001-05:00

One of my primary financial goals is to secure approximately $25,000 in liquid spendable accounts by June 2008. At a little over $5,100, this is a very steep task, I am only 20% of the way there. I've been running the numbers, and although this is asking me to save a seemingly ridiculous amount per month, I have low expenses (live with my parents) and I am expecting various extra stipends and odd job cash throughout the year.

Lowballing, I am sure I can reach $15,000. A more realistic goal would be $21,000. So, the $25,000 is more of a challenge and goal. What are your goals and time lines?

Apartment Shopping? Compare Rents!

2007-09-17T11:22:00.000-05:00

My friend recently signed a lease for an intimate (small) two bedroom apartment in the Wicker Park neighborhood of Chicago for about 850 month without utilities. For the size, I say he could find cheaper places, but the neighborhood is safe and parking is ample (on street). There will be more future updates about him and his savings/costs.

Anyway, I offered this great rent comparison website that allows you to enter in your prospective numbers and see if the rent is too high or too low (can never be too low, right?) for the area. Turns out he's getting a pretty nice rate comparable to other surrounding places. Why the rush to move out into a Chicago apartment so soon after graduation when he works in the suburbs?... that's for another entry.

Can any readers living in apartments plug in their numbers and leave comments below on how accurate the website is?

This is where I stand...(9/16/2007)

2007-09-16T19:49:00.000-05:00

I think everybody interested in setting goals, tightening spending, or increasing savings needs to start calculating their net worth. Sure there are other important steps too (set budgets, track spending, etc.), but setting up a Net Worth spreadsheet really allows you to monitor your various accounts and keep you on pace with your expectations.

That being said, My Money Blog offers a great, free Excel template to accomplish this. Plug in your numbers and watch the magic start happening!

As for me, this is where I stand:

$5,100 in Cash and Savings
$245 in the Stock Market (poorly allocated, but revisions to come)
$0 in a 403(b) -- this will change at the end of September with my first paycheck reduction
--------
$5,345 in Assets
--------

$360 in Credit Card Debt (I pay my credit cards in full every month so this is never a problem)

$17,000 in College Loans
--------
$17,360 in Liabilities

Basically the above means that I'm worth a negative (-) $12,000. I get paid monthly so this will, of course, change in a couple weeks. I will (as should you all) update your net worth spreadsheets every month (at least)!

What, another one?

2007-09-16T19:26:00.000-05:00

I don't expect many people to ever read this. After all, I've spent the past several weeks reading dozens of popular personal finance blogs. What's left anyway?

Most of these blogs now feature authors in their thirties or older. (I'm a really recent college graduate). What's more, they all seem too conservative with their investment choices. I am not talking about conservative spending - watch for my future post on my buying season tickets for a professional sports team - but rather, most blogs' investment advice feature choices that ultimately seem to conservative for the typical, young investor.

I hope to offer some financial advice (future disclaimer forthcoming), showcase some great bargains and freebies, and highlight some cost-cutting and money saving tips for emerging professionals.

All the while I will be opening up my wallet and accounts as I slowly, but steadily climb out of debt.

Glad to meet you all!