Bing Cashback is an online shopping cashback rebate service offered by Microsoft. Microsoft announced the program will end on July 30 at 9:00 pm Pacific Time. Before it bids farewell, Bing Cashback offers 40% off shoes at Endless.com. I’ve been buying from Endless.com through Bing Cashback for some time now. At times it was 25% off or 30% off. 40% off is the best I’ve seen so far.

Some shoes are hardly ever on sale anywhere. For those shoes, 40% off at Endless is a great deal.

Here’s how it works. You start at Microsoft’s search engine bing.com. Search for "shoes". Click on the ad on the top of the search results that says 40% off at Endless.com. Give an email address to Bing Cashback if it asks you. Shop at Endless.com as usual. When you are done, you will get an email from Bing Cashback about your rebate. Your rebate will be paid to an Amazon Payments account in about 60 days. You can redeem the rebate as an Amazon gift card or withdraw it to your bank account. For more information, read Bing Cashback FAQs.

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I was feeling pretty good about having my tourist dollars help a minority-owned small business until Friday evening when the real owners showed up. They arrived in two separate cars; one of them was a Lexus LX470 full-size luxury SUV. They also brought a maid, who cooked for them.

Although their arrival totally blew my fantasy of helping a struggling single mother, I was able to talk to the owners, who speak English. It turned out that they were a hardworking couple before they became capitalists who earn their living from their money as opposed from their labor.

They worked in the United States for nearly 30 years before they returned to their home country. The husband worked as a security guard; the wife as a nurse in nursing homes. They sent home money they saved and kept buying land over the years. Now they own many acres of land. The value exploded due to tourism.

Luck and saving money diligently both played out to their favor. Others would probably say buying land is super high risk but it paid off for them. If I can choose between luck and smart, I would choose luck. However because I can’t count on luck, I have to take the slow road saving money. If that couple didn’t save money like crazy, they wouldn’t have the money to invest to begin with. When they had money, they were able to take advantage of more opportunities, like getting a loan to buy the B&B in a tourist area and making more money off it, whereas the single mother and daughter could only work for wages. The rich gets richer and all that.

This encounter also piqued my interest in retiring overseas. It seems you can boost your living standard by quite a bit if you retire overseas. Cost of living is so much lower. When I went to the bank to get cash, I saw a sign specifically targeted at Social Security recipients. It must be quite common for Americans to retire there. I will look into that option when I’m ready to retire.

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This is not a sponsored post. American Express or anyone else doesn’t pay me anything if you apply. I’m just passing along the deal.

I knew about this card for some time. I didn’t apply until now because of its $45 annual fee (waived in the first year). Now the signup bonus will cover the annual fee for the next 10-15 years.

Purchases on the SPG AmEx card earn one SPG point per dollar spent. Again, at a value of $0.02 per SPG point, it’s at least as good as the Schwab Visa card (no longer accepting new applications).

Given that you can get a Fidelity AmEx card any day with 2% cashback and no annual fee, the SPG points you earn have to be worth more than $0.02 per point to make the SPG AmEx card worthwhile. At the  price point I usually spend on a hotel room, Starwood’s Category 2 hotels are a very good value for 3,000-4,000 points a night. If I were to pay for a room in cash, I’d have to pay about $100 a night including all taxes. That makes a SPG point worth 2.5 to 3.5 cents.  Instead of getting a 2% reward in cash, I’ll get a 2.5%-3.5% reward in hotel points.

Hotel points are much easier to use than airline miles – it seems airlines never let me use miles on the dates I want. However, I never had any problem with finding a room when I wanted to redeem hotel points. SPG specifically advertises no blackout dates.

Unlike booking through Priceline or Hotwire, you can cancel a hotel room booked with SPG points, usually up to the date of arrival or the previous day. You also know for sure which hotel you will be staying at, versus taking a chance with having a bad one assigned to you by Priceline or Hotwire.

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The biggest difference is that Alliant pays 1.5% interest on the checking account balance versus others paying near zero. There are no minimum balance, no interest rate tiers or cap, and no debit card usage requirement. To get the 1.5% rate, you only have to get paperless statements and have one electronic deposit a month (ATM, direct deposit, or transfer from another account).

As I mentioned in the previous post, anyone can join Alliant Credit Union by joining a PTA or by donating $10 to Orphan Foundation of America. Alliant doesn’t pay me in any way if you join.

Although Alliant doesn’t reimburse ATM surcharges, there are many free ATMs around me — all ATMs at US Bank branches are free; so is the ATM near the cafeteria at work. Some of those free ATMs can take deposits even though they are run by someone else. It’s quite amazing to be able to deposit a check at a different bank’s ATM and have it show up in the credit union’s account instantly. It makes Alliant Credit Union feel more local.

While doing the setup for the checking account, I also learned why a credit union isn’t for everyone. Having used some mega banks in the past, I see banks do many things better than a credit union. Whether you care about those things is a different matter. I already mentioned a few small things in the previous post. Here are a few more.

Vague Email

Look at this odd email Alliant Credit Union sent to me:

From: skybranch@alliantcreditunion.com
To: customer@example.com
Subject: Add Payee Notification

This e-mail was generated to notify you that your ACH account has added a new Payee.

That’s the whole email; I only left out a confidentiality notice footer. Can you tell what the email is trying to say? I have a checking account and a savings account, what exactly is my ACH account and why did it decide to add a new Payee? Who is this new Payee? Alliant Credit Union’s domain is alliantcreditunion.org. How come the from-address is alliantcreditunion.com? Is it real or phishing?

If you guessed the email was triggered because I added a payee in online bill pay, you’d be wrong. Try again.

Debit Card Activation Asks for SSN and Date of Birth

I received a debit card in the mail. When I called the toll-free number on the sticker to activate it, I was asked to punch in the full debit card number, my Social Security Number and date of birth. I’m not sure if the activation toll-free number is operated by the credit union itself or a vendor. If it’s operated by a vendor, did the credit union give out my SSN and date of birth to the vendor?

I did call from my home phone. For cards issued by some other banks, I only had to enter the last four digits of the card number and the activation system used caller ID to validate against my home phone number on file. It was faster and more secure.

Frequent Security Challenges

When I log in to online banking, more than half of the time I’m challenged to answer a secret question. It doesn’t matter if I’m logging in from the same computer with the same IP address. After a while, it gets annoying. I also wonder if the frequent challenges will make the secret questions less effective. The more often I answer them, the more opportunities for criminals to intercept my answers.

Online Bill Payment Always Shows Payment by Check First

When I add a payee to Alliant’s online bill pay, it always shows it will be paid by check. It doesn’t show when it will be delivered. There’s no online directory to search for known billers for electronic payments. I learned from FatWallet forum that the system will update the payment method (electronic transfer or paper check) only after it makes the first payment. Until then, you have to schedule more lead time and assume it will be paid by a paper check.

You see providing a checking account is more complicated than doing a savings account or CD. I don’t know if Alliant Credit Union is typical among credit unions. Being one of the largest, it should be better than average. There are still rooms for improvement in many areas. That’s why a credit union isn’t for everyone.

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Does your state have a sales tax? According to Wikipedia, only five states don’t have a sales tax: Alaska, Delaware, Montana, New Hampshire, and Oregon. There is a sales tax everywhere else. For purchases from an out-of-state store that does not collect sales tax, the states usually have a use tax, with the same rate as the sales tax. You are supposed to report and pay the use tax for these out-of-state purchases.

Have you?

According to Wikipedia again, 22 states including New York, California, Ohio, and Virginia have a specific line for use tax on the state income tax return. If your state income tax form has a line for it, what did you put down on that line? Did you leave it empty? Did you include everything you bought online? If not, is that cheating on your taxes?

Whether the state includes a special line on the tax return or it requires you to fill out a separate form, you are still on the hook for paying the use tax. If you haven’t filed the separate use tax form, that’s still cheating on your taxes, isn’t it?

No confessions please. I don’t want to get anybody into trouble.

Most people don’t pay the use tax as required by law. And the states know it. They can’t do much about it because they don’t have any records about those out-of-state purchases. And people know it. That’s why they don’t pay that tax.

So it shows if people know the authorities don’t have any records, they cheat. People choose to disregard the law when there’s virtually no chance of being caught. You wonder where else people cheat on their taxes.

If most people don’t want to pay the use tax, and the states are not getting much revenue from it anyway, should use tax be taken off the books? I think so. The law should reflect citizens’ will, right?

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I have two comments. The first one is:

Why should a checking account be free?

A checking account is a service provided by the banks. The service costs money to produce. There’s no reason it must be given out for free.

Free checking has been subsidized by overdraft fees. People on tight budget or those who don’t watch their balance carefully pay a much bigger share of the cost than others. That’s not fair, is it? The cost should be shared more equally among all customers. If that means there has to be a monthly fee, so be it.

My second comment is:

A checking account wants to be free.

That of course is a parallel to a famous declaration about information. While there might be an end to checking accounts absolutely free of any strings, I don’t see how the vast majority of customers will ever pay a monthly maintenance fee for their checking account.

The reason? Competition. A checking account is a commodity. There are more than 8,000 banks plus over 7,000 credit unions in this country. Someone, somewhere, will offer a free checking account for customers who refuse to pay a monthly fee. The incumbent banks know it. Therefore they will offer a way to make their checking account free: keep a minimum balance, open a savings account or CD, use online bill pay, use the debit card, get paperless statements, etc., etc.

When all is said and done, there will still be free checking. Don’t worry; it will not end.

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I bought a file cabinet from the office products store Staples a few years ago. I only used it for storing random things, not files. As such, I didn’t install the rails for hanging file folders. Now I want to use it for files, but I can’t find the rails. Maybe I threw them away thinking I would never use them. So I called Staples and asked if I can get the rails somehow.

I didn’t know what to expect but I thought I would try. "I’m sorry, but the rails only come with the cabinet" would be a reasonable answer. Or it could be "We don’t have the rails. Here’s a phone number for the manufacturer." I would be happy if they tell me "We sell the rails for $4.95 a pair. Would you like to order them?"

After I explained the situation, the customer service rep put me on hold a few times while he checked with others. Then he told me he arranged to have the rails delivered to me for free.

That’s exceptional service in my book. How often do requests like mine come up? I doubt very often. Solving such an edge case requires a substantial investment in computer systems and front line customer service agent training. The system has to be able to look up past purchases to locate the product I was talking about — I didn’t have the item number or exact name of the product. To me it’s just a file cabinet. The system has to find the associated accessories for the product, taking into consideration any model changes over the years. And finally, what’s the point of making all the investment when Staples doesn’t charge for the replacement rails?

You bet I’ll be a loyal customer of Staples. Among the three major office products chains, Staples, Office Depot, and OfficeMax, the prices are competitive anyway. Staples’ exceptional service basically comes for free.

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Harry Markopolos is the guy who sounded the alarm on Bernie Madoff’s giant Ponzi scheme. He submitted detailed evidence to the SEC several times over ten years, only to be ignored and deemed "not credible." After SEC finally conducted an investigation, they only asked Madoff to file some papers and register as an investment advisor. Madoff became more legit than he was ever before. He was able to claim he was examined and cleared by the SEC.

The most astonishing part of the story is that Madoff didn’t execute any trades in all those years. If only the SEC asked for trade tickets and double checked with the parties on the other side of the trade, the whole scheme could’ve been revealed very easily. SEC’s failure is bureaucracy and incompetence of the epic proportion.

Although the main story line is already well publicized in the press, the book provides a lot more details of the author’s saga with the SEC. I always prefer first-person accounts to third-person narration. Markopolos did a very good job. I gained a lot of respect for him, both for his intelligence and for his courage. You can watch his interview with 60 Minutes in these two videos.

From the book and the interview, I can tell Markopolos is mad at the SEC, and he ought to be. The entire book can be seen as a case study for how regulations based primarily on documentary compliance didn’t work. Such non-regulation gives investors a false sense of protection. It’s worse than no regulation.

After the Madoff fiasco, the SEC Office of Inspector General did a post-mortem and issued a 477-page report Investigation of Failure of the SEC To Uncover Bernard Madoff’s Ponzi Scheme. I read the 22-page Executive Summary. It corroborated with what Markopolos raised in the book.

[Except a review copy from the publisher's PR firm, I received no monetary compensation for this review. Links to Amazon.com are affiliate links. Amazon pays me 4% - 6.5% if you make a purchase within 24 hours.]

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Whenever the stock market gets a hiccup, there are always two schools of thought. Some worry a crash lies ahead. Some say it’s a buying opportunity. Fear and greed have been living with the stock market forever.

What should an investor do? If you believe a crash lies ahead, you should get out of the market, let it crash and get back in at a lower point. If you believe it’s a buying opportunity, you should buy more when stocks are on sale. If you believe neither or if you don’t know, you keep doing what you always do. Investing would be really easy if you know which way the market will go.

Because I’m still working and saving and investing, I tend to look for buying opportunities. I reason because I have to buy sooner or later anyway, I might as well buy ahead of schedule if prices are low. The overbalancing strategy I created for myself in 2008 worked well in the end although it felt like throwing money into a black hole in early 2009.

Is it a buying opportunity now? I looked at the prices of some ETFs that track the major asset classes.

Prices for international developed markets rolled back to the July 2009 level. I have bought some more.

Prices for the other asset classes only went back to levels last seen three or four months ago. I don’t remember much excitement about a buying opportunity at that time. So I don’t think they are low enough yet for me to do something out of the ordinary. To reach the July 2009 level like international stocks did, the US stocks will have to drop another 20%.

Is it the start of another crash? I don’t know. I wouldn’t mind having prices go back to March 2009 lows. That would be a buying an opportunity.

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$500 or $1,000 property tax deduction for people who don’t itemize. This was originally for 2008 only. It was extended once for 2009. See previous post. Now it will be extended a second time for 2010.

Sales tax deduction. This primarily benefits people in states without an income tax on wages: Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Washington, and Wyoming. Sales tax paid can be deducted on the federal tax return. The deduction was originally for only two years, 2004 and 2005. It was subsequently extended through 2009. Now it will be extended again for one more year through 2010.

College tuition deduction. A $2,000 or $4,000 tax deduction for college tuition will be extended one more year in 2010.

COBRA subsidy. The stimulus law provided a 65% COBRA premium subsidy to unemployed. The subsidy was going to expire after May 31, 2010. Now it will be extended to the end of the year.

For the small business owners who run their business through a subchapter S corporation ("S corp"), the bill will crack down on the practice of taking a small salary and taking the rest as dividends from the S corp or leaving the earnings in the S corp. Such income splitting reduces payroll tax. The rules against income splitting will affect S corps in "professional service business" defined as:

any trade or business if substantially all of the activities of such trade or business involve providing services in the fields of health, law, lobbying, engineering, architecture, accounting, actuarial science, performing arts, consulting, athletics, investment advice or management, or brokerage services.

There are many more obscure provisions in the bill. Altogether the bill extends 50 different tax breaks. Please read the CCH tax briefing if interested.

As I mentioned last week, once people get used to these tax breaks, it’s very difficult to remove them, even though they were originally supposed to be only temporary.

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