So I turned to a private student loan to supply the deficiency.

“After students have considered scholarships, grants and federal student loans, their next step is to find private student loans,” says Beatrice Schultz, a licensed College Planning Relief specialist and co-founder of Westface College Planning.

“Private loans come from many sources, including public banks, private group, or individual lenders,” she continues. “All will require a co-signer, ideally with good credit.”

Once you move into the realm of private student lending, your credit becomes more important. My private student loan was co-signed by my in-laws. I’m happy to say that they haven’t had cause to regret that decision.

From banks to credit unions to P2P lenders set up to match students with interested lenders, it’s possible to find private student loans. Unfortunately, though, you need to be careful. The interest rates and repayment terms on private loans aren’t as generous as what you find with federal student loans.

There are also networks that can help you find private student loans, if you are having trouble getting a loan through your bank or credit union. Schultz recommends SoFi (which connects students and alumni through a lending pool) and Private Student Loan Marketplace (which allows direct side-by-side comparisons of loan rates and terms). She also suggests that students consider student loans based in religious organizations.

You can also get help through Slice Finance and TuitionU, which are both social-based student lending web sites. Crowdfunding is moving into the student loan space — and why not? It’s a trillion dollar business now.

What to Look for in Private Student Loans

Many financial planners and college planning experts insist that there is no such thing as a “good” private student loan. However, if you have to get a private loan to close your college funding gap, you should be careful and shop around.

“When comparing loans, make sure to consider not only APR, interest rate, total cost, monthly payment, borrower benefits, fees and repayment options, but also co-signer requirements,” Schultz says. “Also find out how soon after the student starts paying the loan back a co-signer can be removed from the debt.”

It’s important to keep in mind that your co-signer is on the hook if you default, so you need to be considerate to your co-signer.

Bottom Line

Private student loans should be your last resort. You should do what you can to plan ahead by saving up in a 529 plan, and then try for scholarships and grants. After those routes are exhausted, turn to federal student loans. You can also turn to family and friends to see if they can help you. Finally, if there is still a funding gap, private student loans can provide a bridge.

Private student loans don’t come with the same protections and terms that you get from government resources, so it’s important to think long and hard before turning to them.

Image: Rennett Stowe

Where Can You Find Private Student Loans? from personal finance blog Bargaineering.com.

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A little bit of background (self-reported, I only asked because I told him I was going to write a post about it) – he has no credit card debt, has pretty good credit, has a car loan and a mortgage. The letter he received wasn’t written in a way that asked him if he wanted the increase, it simply told him that it was increased. (in theory, he could call them and ask to have it reduced but the default was acceptance).

So should he accept it?

Why He Should Accept an Increase

Credit utilization is one of the factors in a credit score and it’s calculated based on your credit usage. Total credit used divided by total credit available. The smaller this number is, the better your score is. Even though my friend carries no debt, he uses his credit cards and so a statement balance is reported each month. By increasing his total limit, he’s reducing his utilization.

They never give you credit when you need it! There might come a time when you’re in a jam and you need to rely on that (expensive) credit. Maybe you’re traveling, without much cash, and you need a few thousand bucks for some emergency. The credit is basically free, it’s there if you need it, so why not have it in your back pocket? Emergencies happen and having a card that unlocks thousands of dollars of spending power, without you having to carry thousands of dollars, might come in handy someday.

More credit, more rewards. The above reason cited emergencies but sometimes it’s nice to make large purchases on a credit card and get those rewards. Buying some furniture soon? Put it on your card, collect some rewards, and then pay off the statement when it’s due. You won’t get rich this way but every little bit counts.

Why He Shouldn’t Accept an Increase

These reasons won’t apply to my friend specifically but they’re valid reasons.

More credit may result in more debt. If you’re someone who carries debt on your credit cards, you may want to decline the increase because you might accumulate more debt. You know that friend (or it could be you!) that complains about how money seems to fly out of his wallet? If he carries cash, he’ll spend it? Maybe you’re like that with credit. If that’s the case, decline. None of the reasons above are valid if you’re paying double digit interest on credit card debt.

If it’s an offer and not an automatic increase, check if they’ll do a hard inquiry. My friend got a letter informing him that an increase had occurred, but sometimes you may get a letter that says you “may be eligible for an increase.” If that’s the case, double check that the credit card company will not do a hard inquiry before giving you more credit. Hard inquiries will hurt your credit score. Oftentimes, if you request on via an online form, a quick response will mean no hard inquiry. If they ask for more information, it’s usually so they can pull your credit. Pass on those.

Were you recently offered an increase? Did you take it?

Should I Accept a Credit Line Increase? from personal finance blog Bargaineering.com.

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Many of us may daydream about what we would do if we won the lottery, but the hard part of Brewster’s challenge is that he can have no assets. What is not completely clear is if you can buy assets for others, since he does shower his friends with clothing and jewelry. If I had to blow through $30 million in 30 days, there are several ways I would spend it. (Let’s just ignore the fact that $30 million in 1985′s dollars is now the equivalent of $64.5 million in 2012 dollars, according to the U.S. Inflation Calculator.)

1. Give to charity. Right off the bat, I would donate my 5% to charity, though I would not take the other 5% and gamble. Brewster had the unfortunate luck of having friends who invested for him, earned him money, and then he had to get rid of even more money.

2.  Travel. I would take a week or two to travel and fly via private jet and stay in the most opulent lodgings available. While there, I would pay people a handsome salary for any task I could think of so I could get rid of as much money as possible.

3.  Buy things for others. I’d buy things for others such as clothes and other things they needed. If I could give them assets, I would buy a nice house for my mom and some other relatives. I would buy them expensive cars. However, I’m not sure if this would be against the rules, but if it isn’t, that would be an easy way to drop a few million.

4.  Buy meals for everyone. Every time I was in a restaurant, I’d buy meals for everyone in the restaurant.  I’d give the servers, cooks, etc. huge tips. I’d make sure to try to do this for every meal to go through a good chunk of money.

5.  Set up a state of the art research lab.  My husband does DNA research, so I’d set up a state of the art research lab at his employer’s university. After all, I wouldn’t have the asset at the end of the 30 days; the university would.

Brewster had several creative ways to burn through his money including buying a stamp worth almost a million dollars to send a postcard and running for public office.  Running for office was what ultimately helped him get rid of so much money.  Unfortunately, I’m not as clever as Brewster, so I think I’d have to hire someone to help me think of creative ways to get rid of my money while not buying an assets.

Thinking how you would spend $30 million is fun and overwhelming at the same time when you realize how much money it is.  To spend it without accruing assets would be difficult and would certainly make one appreciate the value of money, as Brewster’s uncle wanted Brewster to learn.

How would you burn through $30 million in 30 days?

What Would You Do With $30 Million Dollars? Revisiting Brewster’s Millions with Melissa from personal finance blog Bargaineering.com.

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The main plot point of the movie is that Brewster has to spend $30 million in 30 days in order to get an inheritance of $300 million. Of course, he does have the option to accept $1 million up front and avoid trying to spend all that money. If he takes the $1 million, the rest goes to charity (minus a fee for the law firm executing the will).

Personally, I’d take the $1 million. I can’t even think about what I’d do with $30 million, much less $300 million. Plus, I’d feel great about the money going to charity. But that would ruin the point of the movie, and, of course, a thought experiment for the rest of us. The 30-day challenge comes with the following rules:

• You can only donate 5% to charity.
• You can only gamble away 5%.
• You have to get value for services you receive (no extravagant tipping just to spend money).
• You can’t own any assets already not yours at the beginning of the challenge.
• You can’t tell anyone what you’re doing.

How Would You Spend $30 Million in 30 Days?

In order to make this work, you have to spend $1 million a day. The good news is that you could get a running start by donating $1.5 million to charity (5%), and then going on a crazy gambling spree in which you lose another $1.5 million. Boom! $3 million gone.

Of course, spending gets tough for the remaining $27 million. I would probably pay off my student loans and car loans, and then I’d have to ask the lawyers if paying off my home loan is the same thing as using the money to increase my assets. But, even if I was allowed to use the money to pay off my mortgage, we’re talking less than $300,000 for everything. Even if I remodeled house with the finest materials (questionable because of the asset issue), I’d still not  make a significant dent in the money I spend.

Another option is to give a few gifts out. In 2012, you can give up to $13,000 to an individual without having to pay the gift tax, and the lifetime exclusion through the end of this year is $5,120,000, so you could reduce your total amount by more than $5 million just using regular gift rules.

However, at some point you reach the limit of your generosity, so you have to start spending on other things. I would probably hire a personal chef to make healthy meals for me each night. We could buy all sorts of high-end Lord of the Rings collectibles for my husband. (But wait: Are those things assets? Maybe we couldn’t do that.)

And I’d go on vacation. I’m a big fan of traveling, so my family could take a great vacation, making sure that everything was done as luxuriously as possible. First class to various destinations around the world! Staying in the finest hotels! Eating the tastiest foods! But, still, I’m not sure that I could spend the $30 million in 30 days.

I just can’t imagine a lifestyle where I would use that much money. I know that it’s possible; fabulous wealthy people go broke because they spend like crazy. But I think about the lifestyle, and it just doesn’t do it for me.

What would you do if you had to spend $30 million in 30 days? Could you do it?

(this afternoon, we’ll see what Melissa would do with $30 million!)

(Photo: suburbandollar)

Brewster’s Millions: Could You Spend $30 Million in 30 Days? from personal finance blog Bargaineering.com.

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This plan allows you to put money to work on behalf of your child. With a 529, money grows tax-free — as long as it is used for qualified education expenses.

But could the 529 be a little too effective? What happens if the account grows just enough that assets affect eligibility for financial aid? Depending on the situation, the 529 might be good enough to help out, but not quite enough to completely cover the costs. But if there is too much in the account, you could lose some of your  ability for the financial aid you need.

Who Owns the Account?

According to Travis W. Freeman, Certified Financial Planner and President of Four Seasons Financial Education, the real question is who owns the account. “If a parent owns assets such as cash or stock, these parental assets are assessed at an amount of 5.64% toward aid eligibility,” he explains. “However, if the same cash or stock is owned by the student, it will be assessed at an amount of 20%.”

“In other words,” Freeman continues, “if a parent owns the assets, less will be considered ‘available’ for college, thus increasing the chances of receiving aid. If
possible, a child should not be the owner of any assets that may be meant for college.”

Set up the 529 account so that you own it, but your child is the beneficiary. And be careful about what assets you transfer into the 529. Assets from your child’s  savings account and other custodial accounts that are moved into a 529 still “count” as theirs, so be aware of that.

Another scenario to watch out for is if neither you nor your child owns the account. “Distributions from a 529 plan may have an impact on Financial aid, especially if the 529 owner is not the college student or the parent,” says Peter Donohoe, Certified Financial Planner and Wealth Manager at PRW Wealth Management. “This most often occurs when a Grandparent opens a 529 for the grandchild.”

“A 529 registered in the name of a Grandparent for the benefit of a grandchild should not show up on the first financial aid application the grandchild completes before attending college,” Donohoe continues. “Once a distribution is made from the 529, the distribution does get included as income to the grandchild on the next financial aid form they complete for the following school year.”

Once the income is considered the grandchild’s, it counts heavily against eligibility for financial aid. Donohoe suggests that the 529 account ownership be changed from the grandparent to the parent in order to avoid this issue. Another possibility, he says, is to “wait until junior year to access the 529 for college expenses. By waiting until after Jan 1 of junior year, you will most likely avoid having the income show on the last FAFSA form the grandchild completes.”

Bottom Line

Freeman and Donohoe agree that a 529 is one of the best ways to save money for college. While the account will affect the asset count no matter what, the best way to cushion the blow to aid, though, is to be aware of how ownership of the account affects aid, and assign ownership in the most advantageous manner.

Image: Alex Guerrero

Could a 529 Plan Mess Up Your Child’s Financial Aid? from personal finance blog Bargaineering.com.

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So who makes up the top five? Tiger Woods, Roger Rederer, Kobe Bryant, LeBron James, and Drew Brees. Total take? $322.3 million. If you add the second half of the top ten, total earnings is $552.50 million. In fact, if the top ten were a country, it would be 189th on the GDP list according to the United Nations.

How are the sports represented?

• Baseball: 27 athletes, $588.4 million in total earnings.
• Basketball: 21 athletes, $547.7 million
• Boxing: 3 athletes, $92 million
• Cricket: 2 athletes, 53.5 million
• Football (American): 13 athletes, $397 million
• Golf: 5 athletes, $194.9 million.
• Motorcycle: 1 athlete, $22 million
• Racing: 7 athletes, $162 million
• Soccer: 14 athletes, $347.3 million
• Tennis: 5 athletes, $192.5 million
• Track: 1 athlete, $24.2 million

In the top ten, we have two golfers, one tennis player, two basketball players, two football players, and three soccer players. The two football players, Aaron Rodgers and Drew Brees, took the fewest dollars in endorsements at $6 million and $11 million respectively, while every other athlete had at least $20 million in endorsements.

Here are some other interesting statistics:

1. The total earnings of the top hundred is $2,623.4 million. Total endorsements is $784.8 million, or 29.9% of total earnings.
2. Tiger Woods was at the top with $78.1 million, Samuel Eto’o (Cameroon soccer player) rounded out the list with $16.4 million.
3. If Tiger Woods were a country, he’d be the 194th country in the world by GDP ahead of Kiribati, Nauru, Montserrat, and Tuvalu. If you recognize any of those countries/territories, pat yourself on the back.
4. Youngest athlete in the top ten is Lionel Messi (25) and Phil Mickelson is the oldest (42).
5. On the broader list, the youngest is soccer star Neymar with $20.5 million at the age of 21. The oldest is Ernie Els at 43 with $19.5. Mickelson is just a year younger and third oldest is forty year old cricket player Sachin Tendulkar with $22 million.
6. In the top ten, one is divorced, two are single, five are (happily) married, and two are engaged.
7. Highest ranked single athlete? Aaron Rodgers at #6. Christiano Ronaldo is also single, if you’re willing to go down to #9.
8. Baseball was the most well represented sport in the list but their top guy, Alex Rodriquez, was ranked 18th. I’m sure he had some help.
9. The highest sport average per athlete on the list was golf ($38.98 million per) followed by tennis ($38.5 million per) – this is definitely representative of the sporting average though.
10. The top three sports in terms of endorsement dollars are Basketball ($164 million across 21 athletes), Tennis ($150 million across 6 athletes), and Golf ($143 million across 5 athletes). Honorable mention goes to soccer with $128 million across fourteen athletes.
11. Two athletes had $0 in endorsements, Carl Nicks (Offensive lineman for the New Orleans Saints) and Floyd “Money” Mayweather.
12. The two highest salaried athletes are both football quarterbacks, Aaron Rodgers took in $43 million and Drew Brees settled for only $40 million. Flacco was #3 with $35.9 million.
13. I don’t know what to call it but Floyd Mayweather fought just once in the time frame of the survey and pocketed $34 million for his time in the ring.
14. Of the 13 football players, there are seven quarterbacks, three wide receivers, one running back, one defensive lineman and one offensive lineman.
15. I’ll give you one guess who the lone track star was. (Hint: he’s fast)
16. Derrick Rose was 12th, netting $37.4 million, without playing a single game this NBA season.
17. Andrew Bynum, out this year with bone spurs in both knees, took 97th with $16.7 million.
18. Amar’e Stoudemire pocketed $27 million in salary and endorsements, missing 88 games in two years (61% of games). His agent, Happy Walters, is going to change his name to Ecstatic Walters.
19. How is Gilbert Arenas on this list at $56 with $21.6 million? Oh yeah, he should thank the Washington Wizards and guaranteed NBA contracts (he currently plays the Shanghai Sharks).
20. Each of the Big Three of the Miami Heat are on the list. Lebron James at #4, Dwyane Wade is #23, and Chris Bosh is #75. Total earnings of $108.5 million.
21. In terms of “teams,” the Miami Heat weren’t #1. The highest goes to the Los Angeles Lakers with a total of $109.9 million with Kobe Bryant ($61.9 million), Dwight Howard (26.5 million), and Pau Gasol ($21.5 million).
22. The highest athlete in endorsements to salary/winnings ratio (endorsements/salary) is pretty obvious – Usain Bolt at 120. You don’t get paid when you’re in the Olympics but your home country’s Olympic committee can pay a medal bonus (last year, American golds were paid $25,000, silver got $15,000, and bronze got $10,000).
23. The next three athletes in endorsements to salary/winnings ratio are golfer Phil Mickelson (9.36), soccer star David Beckham (8.07), and cricket player Mahendra Singh Dhoni (8).
24. There are three women on the list, the rest are men.
25. Highest woman was Maria Sharapova at 22nd with $6 million in earnings and $23 million in endorsements. Second highest female was Serena Williams at 68th with $8.5 million in earnings and $12 million in endorsements.
26. Tallest in the list? I think it’s Dirk Nowitzki at 7 feet.
27. Shortest is a tie between Ray Rice and Li Na at 5′ 8″.

Most of the athletes were at least mid-twenties and usually in the early thirties. This is often the case with athletes of the major sports in the United States. Many sports have rookie contract salary scales and endorsements, so you need to perform before you get your “big money” 2nd contract. If you keep performing, you get into your third contract where we see many baseball and football players in the list.

Endorsements are often performance driven and strong performers in individual sports with high visibility get the most endorsements. Is it a surprise that Tiger Woods and Roger Federer take numbers one and two? Tiger was #3 last year and Federer was #5 (#1-#2 last year were Floyd Mayweather and Manny Pacquiao on the shoulders of their winnings). In fact, if you took out the two boxers, you pretty much have the same names shuffled around in the top ten.

Fun facts! Did you see any fun facts in that list that bears mentioning?

(Credit: Keith Allison)

Fun Facts about the Forbes 2013 World’s Highest Paid Athletes from personal finance blog Bargaineering.com.

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Here were our tips:

1. Get your child a consultation with a financial adviser. This is an idea shared during the tweetchat (Thanks Fatwallet!) and I thought it was brilliant. Why not schedule a consultation where the adviser can help your child get their finances in order? Their situation shouldn’t be complicated and it gives them a leg up.
2. Help, but don’t support. When you first go out on your own, there are a lot of up front costs. If you had an apartment, the first month’s rent and a security deposit was a big deal. I remember my first month’s rent was a share of $1200. Security deposit was something like $500-800. Give your child a hand but don’t support them for too long.
3. Teach them the value of networking. This isn’t directly financial but teaching your child how to network and helping them expand their network is crucial. Whether it’s trying to find a good mechanic for their car or finding their next job, your personal network is invaluable. It can save you a lot of time and a lot of money.

Do you have any suggestions for parents of new graduates?

Your Take: Teaching New Graduates About the Real World from personal finance blog Bargaineering.com.

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However, diversification isn’t just about asset class and sector. Diversity also includes geography. For true diversification, you need to consider the where of your investments.

For some investors, it’s possible to do this by investing on a foreign stock exchange. A foreign market can provide you with access to different companies and opportunities.

What are the Major Foreign Stock Markets?

Most developed countries and emerging countries have stock markets that you can trade on — if you meet the requirements. Andrew Schrage is a former hedge fund analyst with experience investing in foreign markets. “The top five foreign markets to invest in so far for this year are the Philippines, Kuwait, Argentina, the United Arab Emirates, and Japan,” he says.

However, in terms of ease, Schrage recommends the London Stock Exchange. “It’s fairly easy to find a broker here in the U.S. who can offer insights and tips for how to invest effectively in the London Stock Exchange. It has also experienced gains somewhat similar to those of the New York Stock Exchange so far this year.”

Other popular foreign markets include:

• Toronto Stock Exchange (Canada)
• Frankfurt Stock Exchange (Germany)
• Saint Petersburg Stock Exchange (Russia)
• Hong Kong Exchange (Hong Kong)
• Korea Exchange (South Korea)
• Taiwan Stock Exchange (Taiwan)
• Australian Securities Exchange (Australia)
• BM&F Bovespa (Brazil)

There are also a number of stock exchanges owned by Euronext throughout Europe (Euronext merged with NYSE in  2007, and the result was the first global equities exchange), including locations in Amsterdam, Paris, Lisbon, Belfast, Brussels, and more.

Should You Invest on a Foreign Stock Exchange?

“Investors need to understand that volatility exists everywhere,” says Schrage. “Foreign stocks can often change course without warning due to civil unrest, political instability, and a host of other in-country factors.”

He also points out that there might be expensive transaction costs. Additionally, “you may also find yourself simply unable to gather much information about a foreign stock, as reporting requirements in foreign nations can differ greatly from those in the U.S.,” Schrage continues.

You should also be wary of liquidity issues that can affect your ability to sell investments bought on foreign exchanges, and be aware of the possibility of currency risk.

Theodor Tonca, a principal at Graham Theodor & Co., and organizer at the Vancouver Value Investors Club, points out that “one needs a larger than average margin of safety when investing in foreign locales.” Tonca agrees with Schrage that Japan is a good choice right now. “The Bank of Japan’s misguided monetary policy of quantitative easing has…helped push equity valuations much higher.” He also points to the fact that many Japanese companies listed on the Tokyo Stock Exchange have more than a decade of profitability behind them and little debt on their balance sheets. Plus, “in a lot of instances [these companies] pay a dividend to boot!”

While Tonca also suggests Malaysia as an interesting option, he also cautions those who aren’t experienced with reading balance sheets and understanding how to find a true bargain.

The good news is that you don’t have to go directly to a foreign exchange to add foreign investments to your portfolio. Consider your situation and the risks, and then decide if investing in a foreign exchange makes sense for you.

(Photo: StockMonkeys.com)

Should You Invest in a Foreign Stock Market? from personal finance blog Bargaineering.com.

The post Should You Invest in a Foreign Stock Market? appeared first on Bargaineering.

Below, you can find a recap of the entire chat:

Tweetchat Recap: Investing Strategies for New Graduates from personal finance blog Bargaineering.com.

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After clearing the Supreme Court last year, mostly intact, Obamacare is getting ready to roll out in full force in 2014. Some of the provisions have been phasing in gradually, but 2014 marks the year that the provision to buy coverage or face a fine goes into effect.

Are you ready for Obamacare? Here are a few things that you need to know before January 1, 2014:

Where Will You Get Health Insurance?

For most people, Obamacare doesn’t change much about where they will get insurance. Insurance will still be connected to work for most people, and you will be able to get insurance on an individual basis and with the help of public programs. It really doesn’t change the way we get insurance at the most basic level; the main difference is that you will be required to have it, and large employers will be required to provide it, or face a fine.

State exchanges are supposed to be up and running in 2014, providing you with a place to look for insurance if your employer doesn’t offer coverage. Plans are required to meet certain standards, and be “reasonably” priced — comparable to what you would get through an employer in most cases.

This isn’t government-run health insurance, although states are in charge of the exchanges (and can decide to run multi-state exchanges, or outsource running the exchanges) and some federal money is used as a start up. States cannot set premiums.

How Much Will You Pay for Health Insurance?

As is the case right now, health insurance costs depend on where you live, and the coverage you receive. Factors that are supposed to influence your health insurance premium under Obamacare include:

• Age (the older you are, the more you pay)
• Rating areas (your locale is rated according to health risk, and higher risk areas pay more)
• Number of people covered (as with a family plan)
• Tobacco use (higher premium for tobacco users, but this is optional)

Since you will be required to buy health insurance coverage or pay a fine, it’s important to understand how this will work. It is possible to apply for exemption from buying health insurance for a few very specific reasons, but most people will have to weigh the cost of insurance vs. the cost of the fine. For the first couple of years, it might actually be more cost-efficient in some cases to pay the fine. As Obamacare further phases in through 2017, though, the fine goes up.

You can also get help paying for your health insurance premiums. For those who are eligible for Medicaid, nothing changes. You’re still eligible for Medicaid. For those who don’t qualify for Medicaid, and make up to 400% more than poverty level, there are tax credits designed to help offset the cost. The Kaiser Family Foundation estimates that 67% of the population will be eligible for Medicaid or subsidy.

The tax credit can be applied for when you sign up for insurance. The government will determine how much should go toward your premium and pay the insurance company directly. You then just pay the remainder on a monthly premium basis. If you decide not to go this route, and pay your entire premium up front, you can apply for the tax credit at tax time and receive a refundable tax credit.

As 2014 approaches, get ready for the requirements. Read up on the law, and determine whether or not anything will change for you.

Photo: Bart Everson

Are You Ready for Obamacare in 2014? from personal finance blog Bargaineering.com.

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This year? It went for a million bucks plus a hundred dollars. It’s actually the lowest winning bid since 2007, the last time it was even under $1 million. Again, the winner is anonymous… only time will tell if he/she will be revealed.

Here are the last six winners and how much they paid:

• 2007 – $650,100 – Two investors, Mohnish Pabrai, of Pabrai Investment Funds, and Guy Spier of Aquamarine Capital Management LLC.
• 2008 – $2.11 million – Zhao Danyang, runs the Pureheart China Growth Investment Fund in Hong Kong.
• 2009 – $1.68 million – Courtenay Wolfe, president and chief executive of Canadian hedge fund Salida Capital.
• 2010 – $2,626,311 – Opted to remain anonymous (we later learned it was Ted Weschler, managing partner of hedge fund Peninsula Capital Advisors)
• 2011 – $2,626,411 – Opted to remain anonymous (Ted Weschler again)
• 2012 – $3,456,789 – Opted to remain anonymous (has remained anonymous)

Here’s the official auction if you’re interested in seeing how it all shook out.

(Photo: CNNMoney)

Power Lunch with Buffett Auction: 2013 Edition from personal finance blog Bargaineering.com.

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Your smart phone can act as a camera, GPS device, and do so much more than just allow you to talk to others. You can check email, complete banking transactions, and update your social media statuses.

But smart phones can also be expensive. I know. I finally ditched my prepaid cell phone and got a smart phone on a family plan with my husband. We didn’t want to lock in to a two-year plan, and we found that the contract-less deal offered by T-Mobile would save us money in the long run — even if we did buy the phones up front.

Others, though, are more about the cash flow than the long-term savings. And that can make sense if you aren’t prepared to shell out between $350 and $600 for a smart phone.

Where to Get a Free Smart Phone

Of course, while your smart phone is technically free, the reality is that you are still paying over time. In many cases, you have to sign up for a two-year contract in order to get the free phone. But it still seems like a good deal, especially if you are signing up for a family plan and you and your partner (and maybe a child or two) want smart phones.

Here are some available smart phones:

• iPhone: Any carrier that offers an iPhone will give you some sort of a free when you sign a contract. Verizon and Sprint, as well as AT&T, offer free iPhones when you sign up for a plan. Pay attention, though. In some cases you will only get a phone with 8 GB, or you might have to settle for a refurbished phone.
• Samsung: For some people I know, it’s all about the Galaxy. You can find different versions of the Galaxy for free when you sign up for two years with Sprint or T-Mobile. It’s also possible to get a free Samsung Galaxy Exhilarate refurbished for free from AT&T.
• LG: There are a number of LG smart phones, from the Viper to the Lucid 2 to the Optimus G to the Escape. You can get a free phone with any of the major wireless carriers when you sign the two-year contract.
• HTC: HTC phones are gaining in popularity, and you can get the EVO or Droid Incredible if you sign up with Sprint or Verizon. AT&T offers the HTC First for $0.99 — which is practically free.
• Pantech: Get the Marauder or Pocket from a variety of wireless carriers for free when you are willing to sign a contract.
• Nokia Lumia: Want a Windows phone? You can get it free when you sign up for a Verizon contract. AT&T offers the Lumia 820 for $0.01 when you sign up for a package.

When you sign up for your free phone, make sure that you understand the entire process. You may need to pay a little up front (like $50) and then send away for a mail-in rebate. This is common practice with Sprint.

It’s also worth noting that, with T-Mobile, you don’t have to pay the entire cost of your smart phone at once. You can pay a small amount each month — interest free — over the course of two years. You aren’t locked into a contract, though, so if you decide to jump ship and you are on a payment plan with your smart phone, you’ll have to pay the entire balance. It’s not the same as the cancellation fee that you pay when you switch carriers before a two-year contract is up, but it’s still something to keep in mind.

Image: Carissa Rogers

How To Get a Free Smartphone from personal finance blog Bargaineering.com.

The post How To Get a Free Smartphone appeared first on Bargaineering.

My initial guess was that the results probably wouldn’t be that much different. Most personal finance bloggers are like me – we aren’t experts. We aren’t CFPs, we didn’t study finance in college, and we generally don’t work in the financial services industry. In fact, very few do because of the compliance requirements. The only two exceptions, of the bloggers I’m close to, I can think of are Jeff Rose and Neal Frankle.

Here were the winners of each category:

• Most Accessible: Liz Weston (34.09% of the vote)
• Most Entertaining: Ramit Sethi (34.09%)
• Most Helpful: Ramit Sethi (31.82%)
• Most Respected: Liz Weston (34.09%)
• Most Trustworthy: Liz Weston (25%)
• Overall Favorite: Liz Weston (29.55%)
• Least Favorite: Suze Orman (45.45%)

TMG: Liz Weston

I think it’s safe to say that Liz Weston can be crowned our PF Blogger Top Money Guru for 2013 as she took three of the five sub-categories as well as overall favorite. I credit this to her very active presence in the personal finance community, having attended our industry conference FINCON last year, as well as just being a prolific writer and generally a nice person.

I can’t say I’m surprised who our winner is!

TMG Runner-Up: Ramit Sethi

Ramit Sethi, who took Most Entertaining and Most Helpful, is someone I consider a friend and I’m not surprised he took those two categories.

Ramit’s work, whether though his blog or through his numerous courses, offer actionable advice you can use today to improve your life. He also does it in a way that engages and captures his audience, which is partly why his courses are so successful.

When I tell people I’m a personal finance blogger, 95% of the time they ask me if I know Ramit. I usually say no so I don’t have to smile and nod sheepishly while they tell me how awesome he is. It makes me sick.

TMG Caboose: Suze Orman

Suze Orman captured nearly half of the vote for least favorite TMG and I’m not surprised. When Orman came out with her prepaid debit card, a move copied by several celebrities since, she was slammed by the personal finance community because the card is a bad deal. Prepaid cards are never good, it’s the price you pay for bad credit and bad decisions, but she lashed back publicly and drew the ire of many personal finance bloggers.

It’s no surprise she took the first TMG Caboose. For what it’s worth, Robert Kiyosaki came in second with 31.82% of the vote.

Lastly, thank you to whomever voted me as their Overall Favorite. Very sweet of you.

Top Money Guru Results: PF Blogger Results from personal finance blog Bargaineering.com.

The post Top Money Guru Results: PF Blogger Results appeared first on Bargaineering.

However, there are downsides to online courses. First of all, with free courses, you won’t earn college credit. So if you are interested in getting a degree with online courses, you will need to pay for the credits, and do the schoolwork.

But if you are just looking for your own edification, free online courses can help you boost your knowledge base. Even so, there are still downsides.

Natalie Novoa, the co-founder and CEO of tech startup Teachmeo, has been researching how to address some of the issues associated with online courses. “We have been researching the space for a while,” Novoa says, “and found that the disadvantages of a free online course are many.”

This is especially true if you are serious about your learning. Here are some of the issues Novoa believes are inherent to free online courses:

• No one-on-one support: One of the biggest drawbacks to taking a free online courses is the lack of support. With a paid course, or a course connected to a degree, you can receive support via email, live chat, or other options. With a free course, you probably won’t receive support, unless you get a little help in the comments — and you can’t expect a fast response in that case. “The majority of free courses online don’t offer one-on-one support,” Novoa says.
• No customizations: In many cases, paid courses and university courses can adjust the work to your level. “Free online courses do not customize the course to your skill level and want.”
• Unprofessional: “Free online course video and audio tend to be non-professional and hard to follow at times,” Novoa points  out. While you can be sure that accredited college online classes are taught by professionals, a free course may not be properly vetted, and you can’t always be sure of the information.

What about Paid University Courses?

Even when you take a paid online course with the expectation of earning a degree at the end of it, there are still disadvantages to online courses. Yes, there is more flexibility, allowing you to study and work on your own time, but you also have to deal with some of the same issues that come with free online courses.

The biggest difficulty is the lack of support some university courses come with. While you do have access to an instructor, you don’t have that face-to-face interaction. Additionally, you can miss out on some of the classroom engagement and discussions that can prove beneficial in ways that go beyond just learning material from a book or doing homework exercises.

Some college online courses attempt to replicate some of these aspects of instruction by holding webinars and chats in real time, but there is no way to truly replace the experience of being in the classroom. While some learners thrive in such an environment, others need that in-person contact to really find success.

What do you think? Do think there are downsides to online courses? How do you learn best?

Image: nyuhuhuu

Are there Downsides to Free Online Courses? from personal finance blog Bargaineering.com.

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So the big question is, what if you mess up your taxes or fail to file returns… will you get time in prison? Or is this just a case of judges wanting to set examples?

A Mistake vs. a Cheat

The big difference here is whether you made a mistake on your tax return versus you willfully lied on your tax return. The basic idea is that if you’re a cheater, and the auditor suspects this is the case, they have the option of hitting you with a penalty or referring your case to the IRS criminal investigation division, the CID. Most of the cases will not go to the CID, you’ll simply be hit with a penalty and everyone will go on their merry way.

How do they decide if you made a mistake? It’s a little subjective but like what US Supreme Court Justice Potter Stewart said of obscenity… “I know it when I see it.” If you forgot to include interest income from a bank, you’ll get a CP2000 letter in the mail because the IRS already got the 1099-INT. If you kept two sets of financial books for your business and the auditor discovers it, chances are you’ll get a visit from the CID. If you mis-typed your Social Security Number, you’ll get a letter. If you used someone else’s Social Security Number, you’ll may get a visit.

Fines, Penalties, Interest

Even if the IRS suspects fraud, you may not get a call from the CID. The auditor has two options available to him or her when it comes to penalties. The first is a 20% penalty simply because you made a mistake (negligence). If they suspect fraud, you might get hit with the bigger 75% penalty, civil penalty for tax fraud. In both cases, you’ll owe interest on the tax due and the penalty. If you owed $10,000 and are hit with the 20% penalty, you’ll owe $12,000 plus interest. If you owed $10,000 and are hit with the larger 75% penalty, you’ll owe $17,500 plus interest.

In the vast majority of cases, auditors will not refer their case to the CID unless it’s especially egregious because it usually means a lot more paperwork and an open case. If the amounts are small, it’s simply not worth the IRS’s time to pursue. Adding a 20%/75% penalty is already a pretty good return on the time, dragging it out may not help. Most of the cases that go to the CID have other factors involved, such as drug trafficking or the numbers were simply too large to ignore. Wesley Snipes failed to pay $7 million taxes, that’s the kind of evasion that needs to be punished with prison time.

What Are The Crimes?

There are really only three crimes they ever charge people with:

• Tax evasion or tax fraud: This is when you intentionally try to evade taxes. It’s a felony with a maximum prison sentence of five years and a maximum penalty of $100,000.
• Filing a false return: Lying on your tax return in some way, it’s often used instead of tax evasion because it’s easier to prove (you don’t have to prove intent to evade taxes). It’s also a felony but with a maximum 3 years and $100,000 fine.
• Failure to file a tax return: The least serious of the three, this is a misdemeanor with a maximum sentance of 1 year and/or a $25,000 fine for each year not filed.

We get comments often on an old post titled “What Law Requires Us To Pay Taxes?” with plenty of folks chiming in that the government is a fraud and we don’t need to pay taxes. Even if you don’t believe the Internal Revenue Code, like Snipes and his accountant, believe the IRS in their ability to enforce it. You probably won’t go to jail for not paying your taxes but you’ll definitely get hit with hefty penalties.

(Credit: Hot Rod Homepage)

Can You Go To Jail for Not Paying Your Taxes? from personal finance blog Bargaineering.com.

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