Sunk Costs Are Irrelevant

$2 for most $25 Restaurant.com Gift Certificates!

Slug — Wed, 22 Feb 2012 19:37:30 +0000

Wow an even better deal from Restaurant.com. Just use the coupon code "MEMORIES" at checkout now thru 2/28!

You have to like the math that leads you to 92% off. This is no-brainer if any of your favorite restaurants participate.

Please make sure to read the fine print though. Many restaurants do require a minimum purchase and add in gratuity. Still, if there are restaurants that you frequent listed, you should be all over this.

$3 for most $25 Restaurant.com Gift Certificates!

Slug — Sat, 18 Feb 2012 22:20:32 +0000

Here's another good deal from Restaurant.com. Just use the coupon code "BEADS" at checkout now thru 2/21!

You have to like the math that leads you to 88% off. This is no-brainer if any of your favorite restaurants participate.

Big Banks Declaring War on the Poor

Slug — Thu, 09 Feb 2012 01:40:57 +0000

The New York Times Buck's Blog is reporting that some big banks are starting to offer payday-like loans. After reading the article, I was scrolling the comments and saw that Cindy from Baltimore wrote:

There is no support for this. Our society has declared war on the poor at every front and it diminishes all of us as people.

I really couldn't disagree more. There is absolutely a place in our society for these types of financial instruments. Short term cash crunches happen, and it's good that reputable banks are starting to offer this service in addition to the other payday loan establishments.

How does having big banks offer payday-like loans help us?

It legitimizes the financial instrument. Some people see payday loans as something only offered by predatory lenders. I know that big banks have a bad reputation right now, but they do have a little more credibility than the average loan shark.
It de-stigmatizes the user. I have a friend who needed a loan like this once. He was embarrassed (and a little scared) to go to one of those neon-lighted establishments with bars on the windows. Now, with big banks offering this service it would be much easier and feel much safer to go through the process.
It creates competition. By adding new, big players to the game, there is the potential that APR will fall for payday loans as a result of these institutions competing for business.

As anything other than a short-term solution, these loans are definitely bad for your personal finance, but in a time of need, they can be a lifesaver. So, although I tend to abhor the tactics of big banks in general, I truly think their entry into this market could be a positive.

What do you think? Ever taken out one of these loans? How did you feel? Would having the option of turning to a big bank bring you more ease?

Upromise Review

Slug — Mon, 06 Feb 2012 14:54:31 +0000

A note from Slug: This is another guest post from Noreen who last week wowed Sunk Costs Are Irrelevant readers with her discussion of the impact of federal regulation D on online bank transfers. This week she's written a nice review of Upromise. It's hard to contextualize exactly what Upromise is. Upromise is a rewards program, a passive investment strategy, a credit card, a savings tool. To me it's also $1,692.78. That's the amount of money I've basically gotten for free by participating in the Upromise programs since October, 2002. I think signing up for Upromise is another no-brainer. I don't use the credit card much anymore due to the low rewards, but I still have all my grocery cards linked.

Is the Upromise Rewards Program for Real?

Having reviewed too many rewards program to count, it’s clear that the majority vary little from one another, each using the same formula of cash rebates and merchandise rewards to appeal to budget conscious consumers. On the other hand, a minority are geared toward a specific target audience, like frequent flier mile programs. But the Upromise program by Sallie Mae is an especially unique program, offering the opportunity to earn cash from everyday purchases that can be contributed to college saving accounts.

Overview of the Upromise Program

Launched in 2001, 10 million Upromise members have received more than $625 million in college savings accounts. By joining Upromise, you’ll earn rebates that can be credited to a college savings account on purchases from thousands of retailers, restaurants, grocery stores, gas stations, travel services and companies. Every time you purchase an eligible good or service with an Upromise contributing company, a portion of your purchase price will be rebated to your account. Take advantage of special merchant offers for free or reduced shipping rates for their Upromise customers to save even more. Designate one or more of your children as beneficiaries and begin earning.

The program is free to join at Upromise.com and provides multiple ways to earn cash.

Retail loyalty cards – Register all your loyalty cards, groceries, drug stores, office supply stores, etc. and receive a percentage on those purchases.
Credit and Debit cards – Register your credit and debit cards; make purchases with those cards and rebates from thousands of participating vendors will automatically accumulate.
Upromise online store – Get even bigger rewards by shopping through Upromise.com and get 1%-25% back from eligible purchases at more than 600 online retailers.
Eat at participating restaurants – Get up to 8% back from more than 8,000 restaurants as a Preferred Diner when you pay with a registered credit or debit card.
E-coupons – Visit the website, choose your coupons and they’ll be instantly applied to that stores’ loyalty card. Purchase the items and the coupon will be applied when the loyalty card is scanned. The receipt will shows the savings and your account will reflect it, as well. Coupons change monthly.
Family and friends – Send a personalized email to friends and family inviting them to sponsor your child by enrolling and designating your child as the beneficiary. Members who have people helping them earn on average over 2 times more than members who don't.

Rewards can be deposited into a Upromise account, a tax-deferred 529 college savings plan, a Sallie Mae savings account or applied to an eligible Sallie Mae student loan. A cash rebate can also be requested to spend as you like, reward money is not required to be spent on college-related expenses.

Critics of cash back shopping argue that the eligible items are more expensive brand items and exclude store or generic brands. But is this different from the traditional coupons we use at brick-and-mortar stores? Go ahead and buy those items that are less expensive. Whether you purchase less expensive generics or store products or choose to pay more for brand names that qualify for a cash rebate, you’ll be saving money.

Another claim against the program is that retailers artificially inflate the price of those items that qualify for the rebate. But after doing my own bit of online research using my own Upromise account, I found that the prices remained the same whether I shopped through the website or strictly from my browser. One additional bonus I observed is when a merchant sends me a loyalty bonus email, say for free shipping, it is applied when I enter their site through the Upromise website. But keep in mind that the stores that partner with Upromise may not have the lowest prices among their competitors.

The Pitch for the Upromise® MasterCard

The Upromise MasterCard, issued by Bank of America, is offered to consumers with excellent credit. Begin saving with a $25 bonus deposited after your first qualifying transaction. The current introductory offer is for 12 months of 0% APR on purchases; the ongoing rate following that period is between 12.99% and 20.99%. Enjoy unlimited earnings, flexible redemption options and no annual fee. Receive between 1% and 3% cash back on eligible purchases: 1% on ALL your purchases, 2% EXTRA on eligible online purchases and an EXTRA 10% on eligible groceries.

My Opinion about the Upromise Reward Program and MasterCard

The program is a win-win situation for anyone looking for a simple way to contribute to a college fund. While the odds of the program covering the cost of tuition are unlikely, it’s possible to earn a couple hundred, or even a few thousand dollars. And who couldn’t find good uses for even less than that?

While it’s true that for most people only a small percentage of their purchases will qualify for rewards, with regular use, in addition to paying the balance in full each month, the savings can really add up. The more you shop with Upromise partners and take advantage of the hundreds of rebate opportunities, the more your savings will grow. In addition, by harnessing the power of grandparents, extended family and friends, earnings can be multiplied even faster.

The Upromise MasterCard is much like other cash back reward cards. The best interest rates are reserved for those with the best credit histories and the percentages used to reward for purchases are commonly used across the spectrum of the credit card industry. Review your account activity online to see where you make the most progress and watch the savings accumulate. Rewards may only trickle in, but patience and commitment will be rewarded in the long run. And as with all credit card reward programs, the only real rewards are those that come from paying off the balance each month.
The Upromise MasterCard is a good choice for anyone interested in making their credit card purchases work for them. In conjunction with the reward program, it’s simply a smart way to shop, as long as the credit balance is paid off each month.

About The Author: Noreen Ruth writes for ASAP credit card blog and several popular finance websites. She is interested in educating consumers about using credit responsibly and about legislative action that will affect their ability to borrow the money they need. She has contributed hundreds of articles to various online sites that provide content to educate consumers on credit card offers, debt relief services, loans and other finance related topics.

Quest for a Million – Net Worth – 2/2012

Slug — Thu, 02 Feb 2012 22:02:25 +0000

Month 1 of 2012 is done, and I rather think it's been a good one. The weather has been nice, I still have a job, and we've had no major illnesses or breakages of major household items or autos. The DW has had a relatively successful business month and finally got paid for all of her Medicaid clients. A welcome chunk of change. Additionally, I got my 401k match for 2011 this month so that was an extra $4k. I'm not fully vested yet, but once April comes along, I'll be 80% there which is closer than I've ever been at any company that makes you go through a vesting process. All in all a much better start to 2012 than in 2011.

ASSETS

On the asset side, my home value fell (again), but this is still meaningless to me. Zillow might be right or it might be wrong, but I just had another appraisal done in January that gives me a valuation ~$25,000 higher. If you're thinking new appraisal means a refinance, you win the gold star. I'm working on it now with a likely close in late February. I'll be providing a lot more detail on that process soon.

Investment and retirement accounts have shown some nice moves. Of course some of this is due to the 401k match and Roth funding. I really like seeing a quarter of a million dollars in retirement savings though. Let's hope we hold these gains and build on them.

LIABILITIES

For liabilities, it's the same ol' story. Credit cards are still getting paid off every month, variable rate student loans are still getting paid down aggressively, and 1.08333 mortgage payments are being made. Credit card accounts are significantly higher this month because I'm carrying the hotel bills for myself and two other employees as well as other travel expenses. I'll get reimbursed for those long before they come due.

What about you? How's your net worth shaping up this month? How does that look year over year?

Catch up on all my Net Worth posts here.

Stock Update (6 Months Later)

Slug — Wed, 01 Feb 2012 13:13:37 +0000

Back in August 2011, I went on a buying spree of sorts when the market was tanking. I had a lot of cash burning a hole in my pocket, and I went $PENDING! I also promised to re-visit that post in 6 months time. Well, here we are 6 months later. During those 6 months, the S&P 500 returned about 2%. Let's take a look at how I performed.

HIGHLY SPECULATIVE BUYS

Affymax (AFFY) – 900 shares at $5.78 – This was a huge position, and I grew increasingly disturbed because it was underwater for the bulk of the past 6 months. However, back in December there was some good news and a big run-up. I ended up selling for a nice gain. It's trading even higher right now, but I'm happy to be out of it.
Agenus (AGEN) – 1200 shares at .50 – Agenus has been a big disappointment. Despite recent gains, it's still underwater, and it did a 6:1 reverse split which decreases my ability to sell options if it ever does take off. I can't wait to sell. Hoping for break-even.

MODERATELY SPECULATIVE BUYS

Ariad Pharmaceuticals (ARIA) – 100 shares at $8.25 – Ariad is the only other stock I've sold. I actually sold a call on these shares so my actual gain is about $60 more than what's reported below. I got called out at $10. The stock is now trading in the 14's. This was meant to be a short-term trade all along, and I'm happy with the result.
Cree Inc. (CREE) – 25 shares at $28.50 – I got fooled by Cree. I knew it was oversold and felt vindicated when it rose up fast to $35 in late August. I should have locked in my gains and sold. I didn't, and it has trended down ever since.
Gastar Exploraion Ltd. (GST) – 100 shares at $4.00 – The research on this stock was probably the best of any on the list. I'm still not sure why it's performing this poorly. Since I can't articulate an answer to that it was probably a stupid purchase.

LONG TERM STOCKS

Altria Group (MO) - 45 shares at $25.03 – I continue to hold Altria. I have no reason to sell. High dividend and stable pricing makes this feel like a safe stock to me.
Chevron (CVX) – 10 shares at $93.25 – Chevron continues to be one of the best of breed in energy stocks with a dividend yield of 3.35% for me at this price.
Republic Services Group (RSG) – 50 shares at $25.65 – As I mentioned in my earlier post, this is a largely range-bound stock. It still is, and I'm quite happy with my 3.43% dividend yield at this price.
Triangle Capital Corporation (TCAP) - 21 shares at $16.30 - Triangle Capital Corporation, like my other conservative choices, has performed just fine during the period.
W.R. Berkley Corporation W.R. Berkley Capital Trust II (WRB-A) – 25 shares at $23.25 – Really, you can't find a better chart than this one to illustrate the opportunities in panic selling of conservative investments.

ETF'S ADDED - All of the ETF's I bought are up. They are all just sitting in my Roth IRA slowly growing through dividend reinvestment, and all of these trade commission free at Ameritrade!

STOCKS I WISH I HAD BOUGHT

LDK Solar (LDK) – I said this was a steal under $5. It still is. Glad I avoided this debacle.
Lululemon Athletica (LULU) - Lululemon has not been the juggernaut I expected, but I still would have been up 25% had I bought it at $50.

Here's a table of my overall performance. It actually looks pretty good. In spite of the paper losses, the overall return for this selection of purchases clearly outperformed the S&P 500 over the same period (8.5% vs. 2%). If I had to draw a single conclusion from this, it would be to focus on buying really good companies during panic selling periods. Every single one of the long term stocks I picked have turned out to be good investments while the more speculative plays generated nice returns in some instances (with lots of $ at risk) while others are still languishing and tying up my dollars that could be working for me in better positions.

I know this is a super long post. If you read this far, thank you. I'd love to hear your comments.

Impact of Federal Regulation D on Electronic Transfers

Slug — Mon, 30 Jan 2012 20:34:01 +0000

A note from Slug: I'm not a big fan of guest posts. I regularly turn them down because they are almost always more work than their worth. This is not the case with the current guest post. I had been planning on writing a post on the insanity of Regulation D for 8 months. She took the idea, researched it, and wrote a good post in 8 days. Thanks Noreen!

With advances in technology, how we handle our money has evolved from a hands-on to a more hands-off experience. More Americans are managing their finances over the internet, moving funds and making banking transactions with the simple click of a computer mouse or tap on a smartphone. The changes are coming so fast that security measures are sometimes less than adequate. In an effort to help protect consumers, the Federal Reserve has enacted regulations that cover how electronic transfers are managed.

Some of these regulations are helpful. For example, consumers have been saved a great deal of grief from the passage of Regulation E. This the law limits the liability for unauthorized transactions and regulates electronic file transfers (EFTs) including ATMs, direct deposits, telephone transfers, point-of-sale terminals, pre-authorized withdrawals and other transfers. Banks are required to clearly explain their policies and federal regulations relating to EFTs and give a 21-day notice of changes, thanks to Regulation E.

But others such as Regulation D isn’t as popular and has quite a few critics. It was enacted to prevent consumers from using savings accounts and other share accounts as checking accounts. It limits automated withdrawals from non-transactional accounts. The details include:

No more than six (6) pre-authorized, phone, automatic or check withdrawals or transfers in any combination are permitted from a savings account per month. Transfers and withdrawals include overdraft protection transfers, EFT transfers/withdrawals, debit card transactions, home banking, telephone and fax transfers.
Transfers out of savings accounts to loans, transfers into savings accounts, and transfers into or out of checking accounts are unlimited.
Once you’ve reached the limit, you’ll be locked from further EFTs.
An unlimited number of withdrawals or transfers are permitted when:

Made in person at the bank
Request made by a mailed letter
Made at an ATM
The member is paying a loan they have with the bank
Made from a checking account

Impact of Regulation D on Consumers

The limit of six transactions a month was set in the 1980s when internet banking was still a new concept. It’s estimated that between 500 million and 1 billion people will use mobile technology to access financial services by 2015. So the potential for Regulation D to cause problems would seem obvious, especially when convenience is at a premium and more people are doing their banking on the fly. Here are the risks:

Returned Unpaid – If you’re not keeping track of the number of transactions you’ve made during the month and make an online payment from your savings account, you may be shocked to find that the bill wasn’t paid because your six transactions were used up. There would have been no problem, however, if the payment had been made from your checking account.
Automatic Payments – Make too many payments from your savings account and automatic payments set up to come from your savings may not be honored; you may find you’ve missed this payment, as well.

Tips to avoid Regulation D Limits:

Set up your pre-authorized payments or automatic withdrawals to be taken out of your checking account, which is not subject to Regulation D.
Set up your overdraft protection to access an overdraft line of credit or a credit card as a safety net, instead of your savings account.
Limit transfers from your savings by making planned transfers in larger amounts instead of several small transfers.
Use an ATM to transfer funds within your account.
Monitor your accounts frequently to plan your transfers and control the movement of your money.

About The Author: Noreen Ruth writes for ASAP credit card blog and several popular finance websites. She is interested in educating consumers about using credit responsibly and about legislative action that will affect their ability to borrow the money they need. She has contributed hundreds of articles to various online sites that provide content to educate consumers on credit cards, debt relief services, loans and other finance related topics.

MoneyPros Index Fund Challenge Leader

Slug — Thu, 19 Jan 2012 18:37:07 +0000

So, back in December I was invited to take part in the MoneyPros Index Fund Challenge hosted by the fun folks over at MoneyPros. The game was simple. Just choose 3 stocks that you think are going to do the best in 2012. I am by no means a stock expert, but I do trade stocks and options occasionally so I jumped right in. I chose:

INCY – Incyte Corporation (Incyte) is a drug discovery and development company, focused on developing small molecule drugs to treat serious unmet medical needs. The Company’s pipeline is focused in the areas of oncology and inflammation and includes compounds in various stages of development, ranging from preclinical to late-stage development. Its two advanced programs include janus kinase (JAK) inhibitors.

YMI - YM BioSciences Inc. (YM) is a drug development company advancing a diverse portfolio of hematology and cancer-related products. The Company is advancing three clinical-stage products: CYT387, an oral small molecule oral dual inhibitor of the JAK1/JAK2 kinase; nimotuzumab, an EGFR-targeting monoclonal antibody, and CYT997, a potent oral vascular disrupting agent (VDA).

YGE - Yingli Green Energy Holding Company Limited is a vertically integrated photovoltaic (PV), product manufacturer. The Company designs, manufactures and sells PV modules, and designs, assembles, sells and installs PV systems. Its products and services include the manufacture of polysilicon ingots and wafers, PV cells, PV modules and integrated PV systems.

I actually own the first 2 in my own portfolio. I don't own the third, and of course it's been the best performer so far. The contest only just started, but guess who was sitting atop the leader board at the first update? That's right, it was me. This prompted me to send the following note to the other participants:

Everyone,

I'm calling it now. My lead is insurmountable. There is absolutely no way I can lose at this point. Sure, it's less than 3 weeks into the new year, and I picked ridiculously speculative stocks that could tank at a moment's notice, but really there's no way I can lose….

Just wanted to say I'm happy to be here. I thought I would get all my trashtalking in now before one of my three blows up!

I certainly am glad I got my trashtalking in early because as of this post I've already been overtaken by SweatingTheBigStuff. My only solace comes from knowing he had to sell out and choose Bank of America (BAC) to get to this position! I would hope for a big mortgage scandal for them, but I can't since I own BAC in my real portfolio too. Argh.

Look for more posts on the MoneyPros Index Fund Challenge in the coming months (as long as I'm near the top of the leaderboard!).

5 Good Reasons to Autopay

Slug — Thu, 19 Jan 2012 13:28:36 +0000

I read a lot about personal finance. Much of this is at the message boards over at Bogleheads or SavingAdvice. One debate I'm tired of seeing is the one about AutoPay so I'm here to take a stand. You should AutoPay in full anything that allows it.

There, I said it. I feel better. But, this is the internet so of course I now must defend my position. Why should you AutoPay?

You're never late with a payment. If the payment is set to automatically come out of your checking account, guess what? It does. This means you guarantee yourself no finance charges or late fees. I can almost guarantee you that I'll get a comment from someone with some very specific situation where they were autopaying but for some reason it didn't work and they got hit for a fee or interest because of it. What you're not going to see is a comment from the hundreds of thousands of other people who have been paying this way for years with no problem. Although I would welcome that!

You open up space in your brain. You don't have to remember that your mortgage is due by the 3rd of the month so you need to initiate the online transfer or that the gas card is due on the 17th, but the 17th is a Sunday so you need to get it there by the 15th and you live in NY but the processing center is in Omaha so you need to mail it on the 11th just to be sure it gets there. And, do I have stamps? Yeah, that's a waste of my brain.

You save money on stamps and checks (assuming you're one of those truly old school people that mails your payment). Do those people still exist? Should I admit this reminds of Ke$ha? Probably not.

It serves a governor on spending. Hear me out here. If you're one of those people that doesn't have a lot of float in your checking account, you're going to pay more attention to your spending habits if you know that your bill is set to autopay every month. Sure, you could turn it off, but that's another hassle. So, you'll be more mindful, and that's good.

No special calendar or spreadsheets. How many times do I hear from people who don't autopay say "I have a special calendar that has all my bills listed on it" of "I designed an Excel spreadsheet for that"? The following is an actual quote from what I believe is a real person:

"I have a system that I created. I got a pocket folder and on Word created a chart of all my bills going down and the months of the year going across. I put that on the front and then laminated the whole thing. So as I pay them, I can check them off down the list and I can easily see that the whole column for April has been paid. I used to write the amount in, instead of a check mark. Also, i took a file folder and cut it in half. I stick them inside the pocket folder (so it is like 2 file folders inside, with the tabs sticking out the top). On the tabs I have "Pay on the 1st" and "Pay on the 15th." When I receive a bill in the mail, I tear off the payment stub and stick it in the appropriate file so when I sit down to pay bills, I just grab that file and write the check."

If this is really how you want to spend your free time, then go ahead. I'll be playing LEGOs with my kid.

Next let's debunk some of the reasons people give for not Autopaying:

I like to review my bills. Yeah, and…. This has nothing to do with autopaying. You can review your account online anytime you want. Even if you get a paper bill, you have plenty of time to review all of the charges prior to payment going through. That's not an excuse not to autopay, that's just laziness.

I don't trust them to pull the money out. Um, yeah. Look I don't trust the banks or cable companies or phone companies or fitness clubs to do much of anything right, but believe me when you're willing to autopay, they extract that money every time just like they say they will. And, when they don't, they fix it. Twice I've had a Bank of America payment fall on a Sunday, and they pulled the money on the following Monday which of course results in a finance charge. I can see it all online. And, sure enough a couple of days later they reverse themselves. Again I would rather have these rare occurrences happen where I have to pay particular attention for a couple of days rather than worry about payments every month.

I only autopay fixed amount payments like a mortgage. Inevitably the follow up statement to this is something along the lines of I like to pay more attention to things like credit card bills. *SIGH* There is NOTHING of course that prevents you from already doing this online. Set it to autopay and simply review your charges.

What do I do? I autopay everything I can possibly autopay. That includes 10+ credit cards, my mortgage, my cable, my cell, my landline, and my gym. And, with all my extra time I write posts like this!

Alright everybody, what do you think? Did I convince you?

Fidelity Retirement Rewards AMEX 5% Categories Q1 2012

Slug — Thu, 05 Jan 2012 14:26:40 +0000

I've already reported on the 2012 cash back categories for Discover and Chase Freedom, and I thought I was done. I'm delighted to report I was not. Yesterday I got an email from FIA Card Services who manages the Fidelity Retirement Rewards AMEX. As a reminder, this card already pays you back 2% on every purchase, and now they're offering 5% cash back on the following categories:

Gas
Groceries
Drug Stores
Restaurants

Those are some great categories, but you always have to read the fine print:

The key piece here is the UP TO $25 part. That means you're limited to $500 in spending which is consistent with when they made a similar offer back in Q2 of 2011. Additionally, the offer is not retroactive for Q1. So, if you've already made what would have been eligible purchases, those don't count. It only counts AFTER you enroll.

Even if you didn't get the offer in your email, it looks like you can work around that by clicking here and choosing "Don't have one" option at the registration area. Then, all you need is your last name, last 4 digits of your card, and your billing zip code.

Sunk Costs Are Irrelevant

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