My Quest to Build an Empire - Personal Finance Blog

Rewards from Charles Schwab 2% Credit Card

admin — Sun, 08 Feb 2009 15:00:59 +0000

Well, A few months ago I applied and receivied a credit card from Charles Schwab, the credit card has pretty much the best rewards program from any credit card I have seen in the past. This week I received my first rewards deposit on my Schwab One Account. I received $126.08 which is a nice chunk of change and immediately I bought into one of the Schwab funds that had a low entry point so I can keep track of my credit card rewards and what other potential benefits I can see from using a credit card to our benefit by taking the reward and investing that into the market. I have two other credit cards that also provide rewards and I’ll be transfering their amounts into Schwab One Account also for that purpose.

I picked the Schwab Target 2040 fund since they had no 2050 yet. The first purchase yielded me 16.364 at $7.70/share. The symbol is SWERX and it has 5 stars from Morning Star which is also a plus.

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Networth Update for January 2009

admin — Sat, 07 Feb 2009 15:04:23 +0000

Well, January overall was a good month for me, I was able to cut down on some more spending that I had been analyzing that were no longer needed and managed to pay a little bit more towards credit card debt.

Cash	$7,138	$738	11.53 %
Stocks	$7,027	$1,417	25.26 %
Retirement	$6,332	$63	1.00 %
Home	$389,500	$0	0.00 %
Cars	$31,500	$0	0.00 %
Total Assets	$441,497	$2,218	0.50 %

Debts		$ Diff	% Diff
Home Mortgage(s)	$405,115	($435)	-0.11 %
Other Mortgage(s)	$25,889	($429)	-1.63 %
Credit Card	$9,132	($4,384)	-32.44 %
Car Loans	$46,635	($883)	-1.86 %
Total Debts	$486,771	($6,131)	-1.24 %

Net Worth	($45,274)	$8,349	15.57 %

My net worth in January increased by 15% do to some adjustments and good stock performance on my brokerage account. So far so good into my resolutions for 09.

I am also in the process of moving my brokerage account from Zecco over to MB Trading, so far the process has been very good on MB Trading’s part. I have called Customer Service and tried their Live chat and seems to be very well knowledgeable people on the other side. The one thing that I felt was missing was the option to add ACH Acct from their web site instead of having to mail in a voided check. Once the whole process moves along, I’ll review the account then.

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Extreme Disappointment at Zecco!

admin — Mon, 02 Feb 2009 18:47:04 +0000

After about a year that I have an account at Zecco and recommended to a bunch of my friends, I received awful news, that the new minimum to trade for free has now increased to $25k. Since I do not have $25k in my brokerage account yet, it does not sound as appealing as before. This is horrible and an apparent bait and switch scenario. Now all existing customers including me have no way of getting out without incurring costs which last time I checked was $50 ACAT OUT.

After doing research on this matter over the weekend, I am one of the customers that is moving on, I have decided to move to MB Trading. For $1/trade up to 100 shares is a good deal for me, probably the best around and they have been around more than a few years like Zecco. Lets see how this ACAT goes and I’ll be updating everyone on it.

Another note on Zecco, it is sad that they want to ditch all these new customers, instead if they slowly increased the new threshold, it would not be so bad on the end. I wouldn’t stay with them even if they matched the fee from the other brokers, if they are doing this now, imagine in a few months after they increase the ACAT out to $100 or so.

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Why Its Important to Set Goals!

admin — Tue, 27 Jan 2009 18:23:29 +0000

The most important thing anyone can do is set goals, short-term and long-term goals guide us each day by keeping us motivated and focus. Setting goals and working hard to achieve them helps us become a better person on the end.

Long-term goals motivate us by offering constant reminders of what we are trying to achieve. They should be realistic, challenging and meaningful. Many people fail to reach their goals by setting goals to control things that are beyond their control, this creates frustration and needless stress. If you have a hard time setting goals on your own, seek the help of a friend that you can trust, together you should be able to come up with something that will work for you. Once you know what you want to achieve, write it down! By putting words on a piece of paper, they went from being an idea to a commitment. By putting this piece of paper where it’s clearly visible, for example on your computer monitor, and take a few minutes every day to think about it to help you stay focused. In my experience, I have been able to cut down on my credit card debt by constantly reminding my self that I do not want to be in debt for the rest of my life. I also made a commitment to contribute to my Roth IRA come rain or snow on a weekly basis right out of my paycheck.

While long-term goals seems that that the end will never come, short-term goals are the steps that take us progressively closer to this desired destination. It’s the present that leads us to the future, and these short-term goals serve as road maps to where we want to go. Small goals also help build self-confidence. Achieving even the smallest goal gives us an energy boost to keep fighting. Before you go to sleep at night, ask yourself, what will be my focus for tomorrow that will take me closer to my goal? Giving every day a purpose helps us not loose sight and stay focused.

We have to remember that no matter how badly we want to achieve something or for a major change to occur, it occurs slowly, and only when we are prepared for the possible setbacks we face. If we prepare for those obstacles now, they will not come as such a surprise to us in the future.

In the end, we cannot afford to stop thinking about things that are unpleasant.

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Do We Need Another Stimulus?

admin — Mon, 26 Jan 2009 16:21:09 +0000

The Short answer is No!

The first stimulus check that we received last summer did only a small blip on the radar, why waste more money with more pork? Why not let the market forces do most of the work? While I am for stimulating the economy and keep people working, and in reality, I would not mind receiving some free money from our Government, I truly do not consider this to be free money, and I would really like to know where all of this money is coming from. Another problem we face now is lack of confidence, people may not spend a tax cut, but use it to pay off debts or increase their savings. Therefore, consumer spending may not increase.

Other Factors May Outweigh tax cuts. A cut in income tax may increase spending. However, this positive effect may be outweighed by the decline in house prices and the consequent negative wealth effect.

Higher government spending on public works is likely to be more effective than tax cuts. This is because public spending directly affects output and jobs, whearas tax cuts may just be saved and not spent.

One thing, spending doesn’t produce prosperity. Spending comes from prosperity. Trying to reverse the natural order can last a while - as history has shown, one can keep on piling up debt and spending for quite some time - but when it ends, prosperity will just disappear.

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How to Prosper in a Declining Economy

admin — Sun, 18 Jan 2009 17:15:53 +0000

The media keeps hammering daily that our economy is unstable and vulnerable. People are looking their homes, others are getting laid off from jobs they have been working most of their life and now have to settle for lower-paying jobs. While these facts are true, what we are experiencing is not new. There are a few things that you can do to stay motivated during this downturn.

Capitalize on your most valuable assets, your Family.
Prioritize your debt, making sure you don’t compromise your home or your transportation. Work the ladder, stop building more debt and paying existing one down.
Downsize if it puts you in a better cash position to weather the storm.
Have a garage sale to generate extra cash to pay down debt. Most people have extra stuff they can sell on a Garage Sale, eBay or craigslist.
Cancel the extras that you don’t need to survive such as Cable/Satellite.

When the recession is over, you will be a better person than when you started, one step at a time is the best way to go, keep motivated by thinking long term.

Remember, “A prudent man sees danger and takes refuge, but the simple keep going and suffer for it.” (Pv 22:3)

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What to do During a Recession?

admin — Thu, 15 Jan 2009 19:08:54 +0000

We are in a recession. No matter what the Illuminatis do, companies will fail, people will loose jobs. Unfortunately this is how capitalism works and we need to learn what to do so we least affected possible.

If you are spending more than you make, now is a good time to stop. You want to get started with a Budget right about now.

If you haven’t bought a house yet and you have money saved for a down payment, now is the best time, average 30 year mortgage rates are below 5% now

If you are in the stock market don’t sell, buy more. By buying more of stock or etf of a solid company that has fallen below the price where you bought it when it falls, you average-down your original purchase price. If you are not in the stock market yet, and you want to start now, if you have at least $2,500 to start, Zecco is a great place to open your account.

Don’t day trade. Invest for the long term. When your house price or value falls, do you sell and move?

If you lost your job, during recession, do not buy into these infomercials promising you an income every month while you sleep, most of these are scams or selling product in a market that is already cluttered, if its such a great idea, they would be selling the products themselves instead of hiring you as a middleman. Consider starting a business, someone with the determination and right frame of mind can be successful. You have low overhead, no employees, you can outsource, using the internet to your advantage for marketing just to name a few.

And the best for last, Be patient, things will turn around. It is not the end of the world yet.

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Outlive the Recession!

admin — Tue, 13 Jan 2009 19:47:29 +0000

2009 probably isn’t going to be a lot of fun. We’re still going to be in recession and probably a deep recession. But there will be some opportunities. Stock Market is heavily discounted, Home prices are at a bargain, combine that with low interest rates and you can not ask for more, other than higher interest rates on our savings account, but we can’t have everything on this near perfect storm for anyone that played everything by the books in the past few years can finally go in head first.

If you are not able to participate in this perfect storm to buy a house, there are 10 simple things that can be done that will make you better prepared for the next storm.

Avoid getting loans for things that loose value, such as cars - During a deflationary economy, prices will come down, the amount of your loan does not. Instead of creating new debt, get rid of existing debt so you can alleviate your financial fears during a recession.
Build an Emergency savings - Start with a small amount deducted from your paycheck every week, I know its hard to save when you are worried about loosing your job, that should be an extra incentive to spend even less.
Get a grip on your finances - Draft a budget. Take a big-picture look at how much is really coming in each month and where you want to go with it. Use a program such as Mint.com or Quicken Online which are free to use.
Shop Around - Every few months, comparison shop to see if you’re paying too much for services such as Internet, home phone and cable. Many times, companies will offer better deals to new customers. Switching to an Internet telephone service such as Vonage can save you big, especially if you make a lot of long-distance or international calls.
Too Much Insurance - Analyze your homeowners or renters insurance to see if there is any coverage that you can do without. I set aside $1000 for my deductible for my home and $500 for my car in case the unexpected happens on a online savings account.
Planning - Shopping after work for the day’s dinner gets expensive. Plan a weekly menu before shopping. . Grab your local supermarket’s weekly insert to see the weekly specials. You can save big by buying generic or other brands that are marked down rather than always buying the same brand. Beware of discount store syndrome. Just because you’re at a dollar store doesn’t mean you’re getting the best price on every item.
Change - Empty your pockets at the end of the day. Put all the change into a jar. During a recession, piggy bank sales skyrocket, I wonder why..
Fees - If you have been charged a fee for the first time at your bank, ask for forgiveness, including waiver of any fees. A bank will sometimes do that for goodwill.
Credit Card Fees - Don’t pay for any insurance on your credit card, $.89 for every $100 can add up. If your credit card is stolen, you are usually not liable for anything. Instead self-insure by saving money on a rainy day account. Start small, even $5 for every $100 you bring home can really add up.
Don’t buy something just because its on sale at 50% off, you can save 100% by not buying it.

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Switching Banks!

admin — Mon, 12 Jan 2009 17:40:31 +0000

Normally, when a someone has a problem with their bank or credit card, very simple: Find a new bank. Specially now with the speed of the Internet where you can compare accounts at the speed of light is making competition amongst the banks excellent for us.

I would start by browsing your new neighborhood if you have just moved in. But even if you have lived here for years and merely decided to change banks, you may not have noticed other banks if you have been with the same one for some time. As you drive to work everyday, keep your eyes open for banks in the area. Note their location and the convenience for driving through or stopping by for banking errands. This will give you an idea if the bank is convenient or not. I personally like Credit Unions and Online Banks. Most credit Unions are not for profit and attend to a specific group of people with something in common, such as a job or city where you live. Online Banks tend to give better deals, since they do not have branches to maintain, they pass that cost-saving into better rates for both deposits and loans.

Things to keep in mind when looking for a new bank.

Low costs - Look for a bank account with no transaction fees. Most banks are now dieing for deposits, so look for accounts that do not charge maintenance fees to how you money.
No transaction limits - You’ll want the flexibility of having a number of free transactions per month. Ability to write as many checks, withdrawals as you want without being charged.
Low or no minimum balance - Most bank accounts offer great deals for accounts that have a certain balance each month. Look for a bank account that has a low or no minimum balance with no fees attached to it.
Accessible ATMs - Choose a bank that has ATMs close to where you need them or re-imburse you for fees charged. Most online banks offer this..
Debit card - Debit cards are a convenient tool to use for purchases or ATM withdrawals. With most cards, you get the same protection as a credit card but don’t have to worry about payments or interest rates because it comes straight out of your account.
Online banking - Life will be much easier if you can manage your bank account online, Free Bill Pay is also a must.
Interest - There are some checking accounts that are interest-bearing like a savings account. But, most require a large average balance and should not be determining factor.

Bottom Line: Banking is an important part of our everyday lives. Take time to find the best possible new bank that can meet your family’s financial needs.

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Save, Save and Save Some More!

admin — Fri, 09 Jan 2009 16:59:37 +0000

Since the economy is shrinking as I write this, Alcoa laying off over 12 thousand employees, EMC laying another 2000 jobs, we also must do this and so does the government. Do not let the Government grow with more stimulus, the first one didn’t work, who guarantees that the second will?

Since all the politicians have their hand tied and are sleeping on the same bed with a lot of the corporations, you bailout one, you have to bail out the other right? The Constitution says we all have equal rights. If we do not stop this, we will become another bankrupt country in the world.

As much as I believe you have to pull yourself up by your own bootstraps, the government has to enable behavior that is stimulative to the economy, as opposed to actually injecting money into the economy to stimulate it and creating more inflation and punishing the savers, the people that have been playing by the book instead of speculating.

You can blow air into a balloon, but as soon as you stop blowing air, it will deflate, and that is exactly our government did when it sent out stimulus checks, in fact, it barely experienced any increase in the economy, because by the time the checks actually reached individuals, most of the money was used to pay off debt or was deposited into a savings account!

The best thing that I heard this week was that Credit Card spending decreased by over $7 Billion dollars, it is a good thing when we start saving and stop spending. It is the first step to a major improvement in our lives, a true opportunity to change our family tree. It is possible that there will be a lot of pain during this conversion to an economy of savers, but think about how much better every individual and family will feel about spending money when that expense is determined by how much of a dent it will make in the family savings plan rather than how much needs to be paid per month to a credit agency.

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