Personal Money Finance Blog

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2012-08-23T14:35:00.002-07:00

Plantronics M50 - Bluetooth Headset - Retail Packaging - Black

Citibank Shell Master Card 5% cash back NO MORE

2011-08-04T10:01:00.000-07:00

I have the Shell MasterCard® from Citi® Cards that used to offer 5% cash back on purchase spend on gas at Shell gas station. It's been working good until about a month or so ago they changed the terms and conditions bla bla bla... you now have to spend up to $500 a month to begin getting some money back. No thank you!

And when I logged on to the account at https://www.accountonline.com/cards/svc/Login.do?siteId=SHELLCREDITCARD, there is another message:
Please Note: Due to upcoming system changes, the AutoPay feature will not be available after July 22, 2011. After July 22, you must pay your bill each month online, by mail, through your bank or using a bill payment service. For more information, please contact Customer Service.

No auto-pay? Inconvenient you customers and hope to collect more late payment fee?

I called their Account Assistance at 1-866-743-5562 24/7 and canceled my card.

Netflix price increase - are you canceling?

2011-07-12T14:19:00.000-07:00

Just got the notice from Netflix that they are increasing their price, so much for last resort of cheap entertainment.
I am serious considering canceling the service, since we just had a baby and the last DVD sat on our kitchen counter for 3 weeks. Hmmm... suddenly RedBox sounds pretty good.

Here is the e-mail I received from Netflix today:

We are separating unlimited DVDs by mail and unlimited streaming into two separate plans to better reflect the costs of each. Now our members have a choice: a streaming only plan, a DVD only plan, or both.

Your current $9.99 a month membership for unlimited streaming and unlimited DVDs will be split into 2 distinct plans:

Plan 1: Unlimited Streaming (no DVDs) for $7.99 a month
Plan 2: Unlimited DVDs, 1 out at-a-time (no streaming) for $7.99 a month

Your price for getting both of these plans will be $15.98 a month ($7.99 + $7.99). You don't need to do anything to continue your memberships for both unlimited streaming and unlimited DVDs.

These prices will start for charges on or after September 1, 2011.

You can easily change or cancel your unlimited streaming plan, unlimited DVD plan, or both, by going to the Plan Change page in Your Account.

We realize you have many choices for home entertainment, and we thank you for your business. As always, if you have questions, please feel free to call us at 1-888-357-1516.

–The Netflix Team

Unlimited streaming does not include all the latest and greatest movies, just selected one like they have now.

Will you cancel Netflix with this price change?

Read more about this price increase in this Netflix blog.

Quicken Premier 2011

2011-04-22T10:26:00.000-07:00

Argh, what a drag! Intuit is stopping the support for Quicken 2008 line of products. That means I have to spend around $50 on the 2011 version of Quicken Premier if I want to continue to download info. from my banks, credit cards and investment accounts.

I've been using Quicken for 12 years, and by reading the commnents on Amazon.com, I am not really thrill about getting the 2011 version, but what other choices do I have? There is no competitive product out there.

If you don't know which version of Quicken is right for you, visit Intuit's web site.

I got my copy of Quicken Premier 2011 through Amazon.com for $48.99, seems to be the best price around.

Amazon.com Widgets

Baby: Wipes

2011-04-13T23:34:00.000-07:00

Now you have the diapers, don't forget the baby wipes. These you can buy a lot, you'll need them until your child is potty trained.

Best price I could find is on Amazon.com, with subscribe & save, they come down to $0.02 per wipe.

Buying a portable stereo with CD mp3 usb SD

2011-04-07T08:26:00.000-07:00

I have been looking around for a portable stereo (easy to carry aruond for my study room and to play music for my infant son) with the ability to play mp3-cd, usb flash drives, SD cards and with AM/FM radio. Turns out it is pretty hard to find but I found one on Amazon: NAXA NX-250 Portable AM FM Radio USB Port MP3 CD Player Boombox Stereo

* Top Loading Programmable CD Player
* AM/FM Stereo Radio
* USB/SD/MMC Input
* Two High Performance Speakers

The reivews are mixed, but I am willing to give it a try. I will see how it turns out. Now if they make one that also has chargable iPod/iPhone dock, that would be golden!

Baby: Diaper Genie

2011-04-05T10:27:00.000-07:00

I consider anything that I spend money on that go straight into the trash is a waste of time and money.

But parents are suckers for all things baby related. For example, Diaper Genie. It doesn't give me 3 wishes, it burns a hole in my wallet instead - continuously.

The the worst thing is, you have to continue to buy refill. You can get the Playtex Diaper Genie II Refill (Pack of 3) at Amazon.com at $5.52 (with Subscribe and Save) each. We burn through 1 refill the first month. But here's the catch: The bigger your baby gets, the bigger her diapers get, and the faster you burn through those refills.

This is one thing I don't recommend if you are on a budget. It's a nice to have, not a must have. If you don't like smelly diapers, put them in free grocery plastic bag instead and take the bag outside.

Baby: Diaper

2011-04-04T08:49:00.000-07:00

What's a good price for diaper?
Diaper $.16 - $.17 per count is a good price.

Find good deal on diaper
I signed up for Amazon mom program (15% off, free to join) plus use the Subscribe and Save (15% off, free to join automatic recurring shipment but you can just use it and cancel it right after) to save a total 30% with free shipping. I believe there is no tax for some states. I tried Huggies and Pampers, we perfer Pampers. Also not all diapers are available for Subscribe and Save program, I did some searches for you, these are the one you can use Subscribe and Save.

For examples:
Pampers Swaddlers Dry Max Diapers, Size N, 84 Count

Price: $21.25 $14.87 (after 30% discount -- includes the standard 15% Subscribe & Save discount plus an additional 15% discount for Amazon Mom members.) = .17/count
We bought 3 boxes of size N and our son out grown them in 4 weeks.

Pampers Swaddlers Dry Max Diapers, Size 1, 216 Count
Price: $41.99 $29.39 (after 30% discount -- includes the standard 15% Subscribe & Save discount plus an additional 15% discount for Amazon Mom members.) = $.14/count
Bought 1 box.

Pampers Swaddlers Dry Max Diapers, Size 2, 184 Count
Price: $41.99 $29.39 (after 30% discount -- includes the standard 15% Subscribe & Save discount plus an additional 15% discount for Amazon Mom members.) = $.16/count
Bought 1 box. Lasted exactly 2 months.

Pampers Swaddlers Diapers Economy Plus Pack, Size 3, 174 Count
Price: $45.99 $32.19.39 (after 30% discount -- includes the standard 15% Subscribe & Save discount plus an additional 15% discount for Amazon Mom members.) = $.19/count
Bought 1 box.

Pampers Baby Dry Diapers Economy Plus Pack, Size 4, 192 Count
Price: $44.45 $31.11 (after 30% discount -- includes the standard 15% Subscribe & Save discount plus an additional 15% discount for Amazon Mom members.) = $0.16/count

Pampers Baby Dry Diapers Economy Plus Pack, Size 5, 172 Count
Price: $44.84 $31.39 (after 30% discount -- includes the standard 15% Subscribe & Save discount plus an additional 15% discount for Amazon Mom members.) = $0.18/count

Pampers Baby Dry Diapers Economy Plus Pack, Size 6, 140 Count
Price: $44.44 $31.11 (after 30% discount -- includes the standard 15% Subscribe & Save discount plus an additional 15% discount for Amazon Mom members.) = $0.22/count

I have seen Parents magazine with $10 off coupon inside for Amazon diapers.

I also know other people use diapers.com, I believe you get $10 off on first purchase, but my research shown prices are about the same after that.

Are you able to find a better deal on diaper? Please leave a comment and share.

Baby: It's a boy!

2011-04-04T08:39:00.000-07:00

Our son was born couple weeks ago, with that comes a bunch of expenses and new experiences. So I am going to blog them as times go by AND when I am not sleep deprived.

I am going to put baby related blog posts with the word "Baby" in the title, so you can search for them easily.

So here we go!

Chase Freedom credit card policy/term change

2010-02-25T16:48:00.000-08:00

I received a letter from Chase yesterday regarding changes to my ChaseFreedom card. It has been my primary credit card for a couple years now mainly because I also have a Chase checking which together the card gives me the following benefits:

MORE REWARDS. Chase Freedom gives you 3% cash back on your top 3 Everyday categories. As an active Chase Checking Customer, you'll earn 3% cash back on your top 5 Everyday categories – a Chase Checking account lets you earn in 2 extra Everyday categories!

NO EXPIRATION. Rewards don’t expire when you have an active Chase Checking account, so save up and redeem when you’re ready.

REWARDS QUICKER. You can redeem at the standard $50 level, or as an active Chase Checking Customer redeem $10 in rewards for a $10 check!

A nice option to receive a $250 check for $200 in rewards.

But starting on or about March 31, 2010, my reward structure will change to:

Earn 1 point for every $1 spent on all purchases
If you also have a Chase checking account, you'll earn 10% extra points on every purchase dollar you spend, plus 10 bonus points every time you use your card for a purchase.
Earn 2 points per $1 spent on air travel when you book online using the Ultimate Rewards Booking Tool (Yeah right, like I am going to remember that when I book a ticket).
Redeem for checks now starts at $50 instead of 10.

So, no more 3% cash back on top everyday categories and basically they made it harder and slower for customers to get the rewards. Google it and you'll see other similar postings about the changes since last year. Hmmm... I just got the $250 check, maybe Chase has been doing this only to people who choose to receive that $250 check? Possible. My wife also has the same card, we'll see if she get the same letter soon.

I probably will hold on to the card for now and see how the reward points turn out in few months.

How to keep buying in your 401(k)\IRA even if you loose your job?

2009-10-22T09:14:00.000-07:00

This is a continuation to my last blog entry -Buy-Low-Sell-High: Getting over your fear.

I truly felt vulnerable and afraid when I was under unemployment for 2 years during the dot-com bust. With no job, I could not contribute to a 401(k). I could have contributed to my IRA, but with tight budget and not know what the future hold, that was a low priority. All my investment activities came to a haul. Big mistake!!!

If you are a true believer and practitioner of buy-low-sell-high, you should be investing during a market recession (the probable cause of you loosing your job), not when the market is doing well (when you probably have a job).

So, how to keep investing when you don't have a job or when you feel afraid? The solution is simple, but it requires some planning ahead and some work.

This is what I do:

When I have a job, I contribute to my 401k\IRA with 100% in a money market fund. Yes, 100% in money market fund! Forget about what the investment reps. tell you at your company 401(k) meeting about asset allocations for now.
If I loose my job, guess what? It's time to buy (market recession) and I have all the cash I need in my money market fund. At that time, I decide my asset allocations and setup a contribution schedule to exchange from my money market fund to other funds.

Sounds simple, right? Yes, but like I said, it requires some rethinking and planning ahead. You don't have to invest 100% in a money market fund, but my point is: you need to make sure you have enough cash to keep buying when the market is in recession and when you are out of a job. How long will a recession last? Nobody knows. But if say the recession will last 2 years, and if I exchange $100 a week from my money market fund, that's a total of $10,400 (2 years * 52 weeks * $100). That's a lot of cash I know, but that's what it take.

Next time I will compare some companies 401k\IRA that work best (tools, fees, etc.) for this strategy.

Buy-Low-Sell-High: Getting over your fear.

2009-10-22T09:09:00.000-07:00

This blog entry is rather simple. I want to keep it simple so you can remember it!

There is a big difference between a believer and practitioner of buy-low-sell-high when it comes to investing. The majority of us let our fear get a hold of us.

Fear immobilize our abilities to act, to make changes and to make the right decisions.

Think about watching a fund keeping going down to half of its price, could you still press that buy button?

Well, keep this in mind: Most people are wrong! Most people are not financially secure! So next time you feel fear, don't act like most people. You should be running instead of hiding.

Not convince? Take this "Let's Make a Deal" test (based on The Monty Hall Problem on probability and statistic) and see how fear of change affects your decision making skill. You can go on and read the explanation of the problem.

Still afraid? Next entry I will share my strategy to help me get over that fear.

Time to switch to Quicken as Microsoft discontinued Microsoft Money as of June 30, 2009.

2009-09-10T08:03:00.000-07:00

Wow, guess Microsoft can't squeeze out a buck from their Microsoft Money. I can't believe the software giant would discontinue MS Money just like that with years of development down the drain, not to mention the effects on loyal MS Money customers\users. Read the discontinue notice from Microsoft.

Luckily, I don't use MS Money. I have been using Quicken since 1996 and it's been doing a good job. It's been helping me to keep track and give me a big picture of my finance. Quicken has evolved over the years and some of the changes I must say were not really necessary. It's not prefect but it does the job, and with Microsoft discontinuing MS Money, there are really not that many other choices out there when it comes to personal finance management software.

I recommend it if you are shopping for a gift for recently college graduate. It's a gift that's keeps on giving.

Greenberg v E*TRADE: IMPORTANT LEGAL NOTICE – CLASS ACTION SETTLEMENT

2009-09-10T07:46:00.000-07:00

Got this in my e-mail today, wondering if this is legit, the following is a excerpt of it:

If you reside in California, Florida, Maryland, Massachusetts, Nevada, New Hampshire, Pennsylvania, or Washington and (1) received a telephone call from E*TRADE FINANCIAL Corporation or its related entities (“E*TRADE”) during the period from September 3, 2003, to May 22, 2009, and/ or (2) you made a call to E*TRADE’s Beverly Hills, California branch office on August 15 or 16, 2006, and your telephone call was recorded without notice or consent (hereinafter, the “Settlement Class”), you are a Class Member and a proposed class action settlement (“Settlement”) could affect your legal rights.

PLEASE TAKE NOTICE that if you qualify to be in the Settlement Class, you are a Settlement Class Member (hereinafter, “Class Member”) and may be entitled to payment of money from the Settlement Funds.

There is now pending in the Los Angeles County Superior Court a lawsuit entitled Greenberg, et al. v. E*TRADE FINANCIAL Corporation, case no. BC 360152, which involves allegations that Defendant E*TRADE FINANCIAL Corporation (“Defendant”) recorded telephone communications without the knowledge or consent of all of the parties to the communication. Defendant has denied and continues to deny any liability and there has been no finding that Defendant has violated any laws.

It goes on to say:

Subject to the approval of the settlement by the Court, if you want to participate in the settlement, you must complete and submit online the Claim Form that is available on the Internet at the following web address: www.GreenbergClassActionSettlement.com no later than September 25, 2009.

If you choose to participate in the settlement by submitting a Claim Form, you will be bound by all of the provisions of the Settlement Agreement and Release, including a full release of claims that will prevent you from separately suing Defendant and its agents.

I stopped once they ask me for my SS#. Who knows where that information going to go? Not worth the risk\trouble and the few bucks I might be getting over the next N years.

The Perfect Alarm Clock!

2009-08-27T10:42:00.000-07:00

For god sake this is 2009, you would think they must have developed the perfect alarm clock by now. Well, me and my wife were trying to find one but ended up doing days of research and calling different stores for availability so we can go there to try them out.

We finally bought the perfect one yesterday - Emerson CKS9051 SmartSet Dual Alarm Clock Radio. It got everything we are looking for and more:

Weekdays\weekends\everyday alarm function for EACH of its 2 alarms. We set up alarm 1 @ 6a.m. on weekdays (for me), alarm 2 @ 7:30a.m. (for her) on weekdays, therefore no alarm on the weekends. No more forgetting turning off the alarm on Fri. night and wake up by the alarm clock Sat. @ 6a.m ever again!
The most amazing thing is the SmartSet(R) technology. That the clock will set itself to the correct time and date when you plug it in, first time or not, also work in the event of a power outage. The alarm will preserve the alarms' settings. So in case of a power outage in the middle of the night, when the power comes back on, your alarm clock will continue to function as before. What a great idea! You don't have to manually reset it again, and worse, miss your morning alarm.
Individual settings for each alarm wake up to a gradually increase buzz or radio.
The clock has a high/low light setting. If you think the display is too bright, set it to low.
The display is very clear, showing time and day of week and alarms on/off.
Warning light when the backup "button" battery is low.
The radio is very clear compare to our existing radio alarm clock.
Aux input jack for your iPod or MP3 player.
The price is cheapest given it functions.

I also found this Emerson CKS1702 SmartSet Alarm Clock Radio. It looks exactly the same as CKS9051 but cheaper.

Buying Tips: The backup battery could be dead if the clock has been sitting on the retail shelf for too long. Make sure you take it out from the box, plug it in and set the time zone at the store in order to make sure the backup battery is still good.

These are the other alarm clocks that we researched:

Emerson Radio Jumbo Triple Display Dual Alarm AM/FM Clock Radio with SmartSet Technology
Also made by Emerson. I was going to get this one, but I tried it at a store and it can tip forward as you reach in from hitting the snooze button. Also, some of the buttons are small. CKS 9051's design is more stable\sturdy.
You might also want to consider these Emerson alarm clocks as well.
Sangean RCR-22 AM/FM Atomic Clock Radio
Too expensive.
RiteAlarm Triple Weekly Alarm Clock (R) for Weekdays, Saturday and Sunday, Automatic Extended Daylight Saving Time, Automatic Snooze, Adjustable Volume, Gentle Sound Pattern, Simple Buttons, Pushing Backlight and Battery Operated
Too small, for travle maybe.
Timex Nano Color
This could work, but we prefer larger display and not background lit ones.
Sony ICFC180 AM/FM Clock Radio
Could work but couldn't find it at a store (Target\Sears) to try. Dispay might be too small.
American Innovative Neverlate 7-Day Alarm Clock
Might work but don't like the dial, display too small, not available at local stores. A little expensive. But if you have one, I would like to know your comment. Let me know if you tried any of the above alarm clocks.

$150 cash bonus - open a U.S. Bank checking account by August 31, 2009

2009-07-08T23:16:00.000-07:00

Got a flyer in the mail today for $150 cash bonus when you open a U.S. Bank checking account with direct deposit. Seems simple enough... a $50 minimum deposit is required. Get your bonus when you open a new consumer checking account by August 31, 2009 and setup a recurring direct deposit of at least $100 within 60 days of account opening. Your bonus will be reported as interest earned on IRS Form 1099-INT and will be credited to your new account within 6-8 weeks after direct deposit is established assuming account is open and in good standing. Only one cash offer per household.

Stop by your nearest branch, call 800-720-BANK, or visit usbank.com/checking today.

I went to usbank.com/checking to check out their Free Checking account. It seems like there might be a monthly service fee depends on your zip code, but for my zip code, there is none.

Free money is hard to come by these days, seems like a great offer.

Money lessons learned from Michael Jackson & Ed McMahon

2009-06-26T10:28:00.000-07:00

According to this Fox news article:

Yet after selling more than 61 million albums in the U.S. and having a decade-long attraction open at Disney theme parks, the "King of Pop" died Thursday at age 50 reportedly awash in about $400 million in debt, on the cusp of a final comeback after well over a decade of scandal.

Jackson lived like king but died awash in debt. Just days ago, it was Ed McMahon, the co-host of NBC's The Tonight Show with Johnny Carson for 30 some years. They all had talents and opportunities that most of us dream of. However, if you are not in debt, you are richer than both of them and many of the celebrities. Think about it! You can honestly say "I am richer than Michael Jackson." Now that is powerful.

Lessons learned from most celebrities:

They spend more than they can afford. Simple: earn $1, spend $2, then you are in debt. People get that rule, but most choose to ignore it.
They entrusted the wrong people. Mike Tyson & Don King anyone?
Bernard Madoff, A Con Man for Our Times and all the celebrities and investor entrusted their money with him? Know who to surround yourself with: friends or foe.
Finance education is important. It helps you make better money decisions for yourself. Actors\musicians are good at what they do, but not necessary on business\financial decisions.

Personally, I also have one rule: I don't lend money to friends. Borrowing money is usually the easy way out and your should be aware of someone who are looking for an easy way out. But that doesn't mean I won't help a friend. I just think there are a lot of other ways to help someone. Help a friend to find a job, help a friend to move... better yet, help a friend to spot troubles before troubles find him.

I like Michael Jackson, he was an icon of my generation. I remember doing the moonwalk as a kid and watching his Thriller video over and over again. Good luck to his kids and may he rest in peace.

Cost of having a baby

2009-06-24T09:59:00.000-07:00

My wife and I are talking about having a baby. I saw this video on cost of having a baby today and frankly it sacred the crap out of me with those figures.

Diapers, stroller, car seat and those are just one time expense, adding reoccuring expenses like health care, life insurance, tuition and the numbers are staggering. Not to mention the lost of sleep and stress. I want to know who has that kind of money! People are having kids all around me, are they not telling me the financial situations they are in?

If your kid turns out OK, healthy and smart, that's great, but what if not? Be honest, anyone regret having a baby? Was it worth it? Leave a comment and let me know.

The IRS owns me money, now what?

2009-06-07T22:43:00.000-07:00

I got my 2008 tax refund about a month ago, however, it was about $250 short of what I filed on my 1040. Then I received a letter from the IRS attempting to explain the difference.

Turned out that all my calculations were correct, but during my 'copy and paste' process, I missed filling out the number on line 9b (qualified dividends). As you may know, qualified dividends are subject to a lower tax rate, and the IRS simply ignore my qualified dividends which in turn reduced my refund amount.

I called the IRS, after talking to the representative for 30 minutes, this is what she told me to do to reclaim the rest of my refund - fill out Form 1040x and send it to the same address where I sent my 1040, and then wait 8 to 12 weeks!

I guess I can't completely blame the IRS for this one. But 8 to 12 weeks for this? Com'on! Guess I learned my lesson on this one.

P.S. The IRS representative was very nice and patience. :)

Free Fax Service

2009-06-05T07:29:00.000-07:00

Need to fax a simple document from your computer but don't have a fax machine around you? That was my problem couple days ago. So I went goggling and found this simple and free fax service from FaxZero (http://faxzero.com/).

For FaxZero free fax service, you can send 2 free faxes a day and up to 3 pages per fax. FaxZero will include advertisement on cover sheet. But that's it! If you need to fax more pages, it is $1.99 (accept PayPal) per fax up to 15 pages.

So if you have something simple to fax, remember to use FaxZero free fax service next time.

Another great tool in your pocket! :)

P.S. Now I think about it, any fax service may/may not sell your 'fax to' number to third party and your 'fax to' number may/may not start receiving junk faxes. Something to think about before you use this kind of service...

Quicken: Washington Mutual (WaMu) to Chase personal account conversion

2009-06-04T21:45:00.000-07:00

If you have Washington Mutual (WaMu) checking/saving account like I do, and you are a Quicken user, you will find this post helpful.

Since WaMu checking/saving account moves to Chase, you'll need to modify your Quicken in order to switch your WaMu account to Chase account so that you can continue to download your transactions online.

I did the process tonight and it was fairy quick, took me about 10 minutes. To get complete instructions, go to this link on Quicken customer help web site.

Time is money - FREE Multilingual Speaking Clock for Windows

2009-04-18T09:43:00.000-07:00

Time is money.
If you ever had a "Oh my god, I can't believe what time it is" moment because you forgot to look at your clock, then this FREE Multilingual Speaking Clock is for you.

I have been using this speaking clock for over 10 years. It is one of my must have tools on my laptop/PC. It simply announce the time at a user defined interval. You minimize it and it sits quietly in your PC's system tray - until it's time to announces the time. This simple speaking clock has kept me on my feet and saved me numerous times from missing an appointment or meeting.

At times, I also found myself working long hours in front of the computer without any break, but ever since I installed speaking clock on my PC/laptop, I developed a healthy habit of getting off my chair and move around every time I hear a time announcement.

Better time management + More healthy = More opportunities + Less health care cost = more money

Tips & Tricks
I have the alarm set at 4:30p.m., it's time for me to get things wrap up before leaving work.

I have the announce option set at every 55 minutes, then speaking clock announces the time on the 55 minutes of every hour (etc. 1:55, 2:55, ...). So, I will have 5 minutes to spare in case I forgot a meeting. By default, speaking clock also announces the time every hour. Hence, my speaking clock announces time at 1:55 & 2:00, 2:55 & 3:00 and so on.

Download FREE Multilingual Speaking Clock

P.S. I am looking for a programmable bedside alarm clock...
I am getting up at 5:45a.m. these days for work, I am looking for a bedside alarm clock that has following functions:

At least two alarm settings: one for weekdays and one for weekend.
Radio alarm (wake up to the radio)

Does not need to be fancy (no need for iPid dock or CD player), just needs to work. Unfortunately, my cell phone does not has the alarm settings function. Any good suggestions?

Follow up 8/27/2009: After months of search, I finally found my Perfect Alarm Clock.

$125 bonus from WaMu Free Checking account before 5/16/09

2009-04-07T21:43:00.000-07:00

I got this message when I log on to Chase site today. I actually did this a month ago and got a $100 bonus, should've waited to get extra $25.

Expiration Date: 05/16/2009

Get $125 when you open a WaMu Free Checking™ account and set up direct deposit by May 16, 2009.

It's easy to get $125!

Print this page and take it to your local WaMu branch by May 16, 2009.
Open a WaMu Free Checking™ account and set up direct deposit.
We'll deposit $125 into your new WaMu Free Checking™ account after your initial direct deposit.

Be aware when someone preaches you on compound interest

2009-04-01T21:15:00.000-07:00

Happy April Fools' Day!

I read an article on another blog yesterday titled "The Unrelenting Power of Compound Interest", I almost fell off my chair! I thought it was an April Fools' joke. The article has good intention explaining the power of compound interest, however, the examples in the article are totally base on fabricated, unrealistic assumptions which mislead its readers.

Young investors, be aware of the magical 10% compound example
Here are several quotes from the article:

"Assume you deposited $1,000 in a one-year bank CD that paid simple 7% per year interest..."

"He deposited it in an IRA investment account that earned 10% interest."

"She also earned a 10% compounded return on her savings."

Why 10%? Why not 100%? Why not -50%??? 10% is the magic number salespeople use: small enough to be believable to show the investment's "potential", but not big enough to alarm you as unrealistic, and yet not too small to loose your attention. Investors, especially young ones, if you hear or read advice that "assumes" a 10% return, you can pretty much guarantee that the person who gave that advise:

Has no idea what the real return is
He/She has something to sell you
He/she is just plain lying

I have nothing against compound interest but I have problem with "advisors" using the magical 10% to explain investment return or using it to plan your retirement. Investments simply do not grow on a compound line. In addition, those "advisors" usually conveniently leave out or skimp over the risk/lost factor. However, if you factor in potential lost and how long it would take to recover the lost (read my other post "Will the market and your investment ever recover? Do the math."), your investment return will most likely be flat or at a lost. Bye bye year-over-year 10% gain!

Ability to weed out bad advice is a great defense asset on your road to riches (so consider I just put some money in your pocket :), and that ability applies to other parts of life as well.

Well, here is a problem for you if you are bored: what is the difference between 10% (unreal) and 3% (a little bit more real) compound on $5000 over 30 years? Try that on your advisor and do not become an April Fool.

$150 bonus from U.S. Bank checking account before 5/31/09

2009-03-23T22:12:00.000-07:00

U.S. Bank is offering $150 cash bonus when you open a U.S. Bank checking account with direct deposit before 5/31/2009. A $50 minimum deposit is required. Direct deposit must be at least $100 within 60 days of account opening. This is by far the best deal of its kind yet. Open your chcecking account at http://usbank.com/checking. You can also call 1-800-720-BANK or stop by your nearest branch.