Aleksandra Todorova from Smart Money magazine put together a list of the top credit cards for students, rewards programs, cash or gas rebates, financial rewards, and low rates. He provides a thorough comparison of the cards considered and explains the benefits of each card recommended. Here are the highlights:
The Citi mtvU Platinum Select Visa Card for College Students offers bonus points for a good GPA, staying current on your bill, staying within your credit limit, and money spent on textbooks.
American Express Membership Rewards – “the oldest and remains one of the most comprehensive programs around.”
Citi ThankYou Network – “offers innovative ways of accumulating points and nearly all of Citibank’s rewards cards are fee-free.”
Cash or Gas Rebates
American Express Blue Cash for aggressive spenders – “5% cash back on purchases at gas stations, supermarkets and drug stores and 1.5% on everything else, once you spend $6,500 in a given year”. Am Ex Blue Cash is the card that we use for almost all our purchases.
The Platinum Discover Gas card is the runner-up, “a favorite among lighter spenders.”
Fidelity Investments 529 College Rewards card – “has the most generous rebate rate — 1.5% of all purchases will be deposited into a 529 Plan”.
There were two runners up, Fidelity Investment Rewards Card, which “converts MBNA’s rewards program points into investment dollars at a generous 1.5% rate” and One from American Express, “1% of your purchases are contributed to a high-yield savings account, which currently earns 5%. The drawback: The annual $35 fee.”
For those that carry a balance it makes sense to go with the lowest rate you can on a card. The winner was Simmons First Visa Platinum “with a 7.25% fixed APR” and the runner-up the Capital One Platinum Prestige card, “7.89% APR, reserved for people with excellent credit”.
There you have it, a card for every need. Of course, if you can’t be responsible with a credit card you probably shouldn’t own one but used correctly a credit card can be a great financial tool.
Here are some tips from my HR department on using your 401k for retirement savings.
Time is on your side. The sooner you start, the longer your money has to grow. It’s never too early to start saving for a secure retirement.
Only you can ensure that you’ll have enough money saved for your retirement.
Know What You’ll Need
Experts estimate that you’ll need at least 70% of your pre-retirement income to maintain the same standard of living once you stop working.
Contribute to the Max
The more money you put in your 401(k) plan, the more you’ll get out – especially for companies that match dollar for dollar up to a certain percentage.
Saving pre-tax gives you more money to invest. Because taxes take a large bite out of each dollar you earn, you have to save more after-tax dollars to get the same impact as pre-tax savings. PLUS, saving pre-tax lowers your taxable income, which means that you’ll pay less to the IRS on April 15.
Pay Yourself First
Out of sight, out of mind. You won’t miss the money you’re saving if it’s deposited straight into your 401(k) Plan account.
Keep Your Hands Off
Don’t touch your retirement savings. You’ll not only avoid tax penalties for using the money early, you’ll also give your investments more time to grow.
“Low-risk” investments usually mean low returns and may put your retirement finances in danger down the line. For successful saving, choose investments that will beat inflation over the long haul.
As the years go by, life changes. So should your retirement savings strategy. Review it annually to ensure it still meets your needs as retirement approaches.
How many books can your kid go through in five minutes? Never wanting to spend more than a few seconds on a page our little guy can speed through his pile of books in no time flat. So what do you do, buy more books to make a bigger stack? No way, use the Internet!
As I checked my email the other night my son pointed to the screen from his perch on my knee and yelled his favorite word, Car! Sure enough, he was eagerly pointing to an ad for the new Honda Accord. His ever first interaction with a computer gave me an idea so I opened up the popular photo sharing site Flickr.
I typed in Honda Accord and was rewarded with another enthusiastic burst of pointing and yelling from my son. I moved on to his favorite animal, he panted frantically and pointed excitedly as a list of puppy pictures popped up. We were on a roll! He and I spent the next 15 minutes on Flickr cruising through all his favorite images with him either saying the name of the object or making its sign.
Save Money on Kids Books
What a cool way to expose a little person to the world and its much cheaper than buying tons of baby books. We have a cat book that’s filled with images of about 30 cats in different poses. Why pay money for a boring book of the same 30 images you see over and over when you can surf the web to find new and interesting pictures every day for free!
Kids aren’t always patient so I looked for a few ways to get the pictures he liked faster. To get better results search for a specific terms instead of generic words. If you look for Honda Accord instead of car or Golden Retriever instead of dog you’re likely to get relevant images. Once you find a picture you’re looking for you can also click on the tags next to the picture, such as accord, that will take you to a grouping of pictures all on that topic.
Welcome to the digital age junior!
Would that headline catch your eye on a piece of mail? It’s a pleasant thought to be 18, footloose and fancy free again. No big projects at work, no mortgage to worry about, and no sense of responsibility keeping you awake at night. Plus to top it off you’re not even broke!
Back to Reality
As I opened the letter my thoughts of being young with money were rudely interrupted by a reminder that my next chance to shed these heavy burdens would likely come when I was old and grey. Ameriprise Financial was inviting “me and my guests for an exclusive dining experience”, which also featured “a private presentation of Retirement: Planning Beyond the Numbers”.
The Ameriprise brochure notes the presentation will explore issues such as:
- Defining your dreams for retirement.
- Envisioning the life you hope to live in retirement.
- Retiring TO something rather than retiring FROM something.
I think it is a good idea to define your financial goals early on in life and retirement is definitely one of them. The brochure says everyone who attends the event will get a copy of the Dream Book guide to help with their retirement planning. A free meal, free book, and a presentation about money do pique my interest but I haven’t called to sign up yet.
Our Ameriprise Financial Experience
When we decided to create our first official financial plan about 5 years ago we had an initial consultation with someone from Ameriprise Financial. He was a nice guy but we decided to go a different route. Our main complaint was that he had no financial experience! He was fresh out of college with just a general Business Administration degree and he wanted to be our financial advisor.
There was a more experienced person sitting in on the consultation but the rookie would be the one creating our plan. I know everyone has to learn somehow but I didn’t want him learning with our money. We ended up hiring a fee only financial planner who was both a CFP and a CPA, and for a cheaper price than Ameriprise!
Retirement Seminar Conundrum
Despite our initial experience with Ameriprise I’m still debating whether or not to sign up for the retirement seminar. As I mentioned, it’s hard for a cheap guy like me to pass up a free seafood dinner at a nice restaurant. I do enjoy hearing and learning about ways to invest money so it might be an interesting presentation despite the emphasis I imagine will be placed on Ameriprise products. What do you think, worthwhile educational dinner or a waste of time?
When Forbes recently published its annual mutual fund survey one of the funds on its Honor Roll (top 10 funds) caught my eye. Since I pretty much stick to index funds for our portfolio I’m not invested in any of the top 10 but I’m going to take another look at #3, Mairs & Power Growth (MPGFX).
One thing I liked about the Honor Roll is that it highlighted performance in both up and down markets. Although it has a C performance in up markets,
Mairs & Power Growth has an A rating in down markets. It managed to stay mostly ahead of the S&P during the good markets of the last 5 years and beat it nicely during the last 10 which included some nasty market drops.
Since we have the largest percentage of our portfolio invested in an S&P 500 index fund, an investment in Mairs & Power Growth might help offset losses during rough times in the overall market. A Smart Money article from a few years ago noted that “the Growth fund performs best during — and especially after — a fall in the market.”
The combination of no load, low expenses, and low turnover make it seem attractive as a good buy and hold fund especially if it has historically done well when the market is down. I’ll have to research the fund further but so far it seems like it could be a good fit.
The funds that made the Honor Roll in the Forbes 2007 mutual fund survey are listed below in order:
- Bruce Fund
- Keeley Small Cap Value
- Mairs & Power Growth
- Delafield Fund
- Third Avenue Value
- Stratton Small-Cap Value
- Perritt MicroCap Opportunities
- Value Line Emerging Opportunities
Lending money to high risk borrowers then packaging and re-selling the debt in ways that were supposed to reduce the risk didn’t turn out so well for the financial markets. A recent article in Business Week takes a look at these risky investments and Matthew Goldstein put together a list of the different areas affected by the subprime problem.
-Surging mortgage defaults
-Dropping home prices
-Criticized for not downgrading the risky investments backed by subprime mortgages
-Adjustable rate mortgages are coming due
-Ripple effect of subprime shockwave has hurt the whole stock market
-$1.2 trillion asset-backed market is drying up
-Brokerage stocks have taken a hit since investors are worried about their bond underwriting
-Risk-averse investors have created a credit crunch
-Banks have a $300 billion backlog of deals
-Funds backed by pools of subprime mortgages have lost tremendous value, for example the Bear Stearns High-Grade Structured Credit Strategies Enhanced Leverage Fund has gone into bankruptcy
I think this ripple effect caused by problems in the mortgage market reinforces the importance of diversifying your investments. If your money is spread over many different types of asset classes and industries it can help soften the blow of a far reaching investment crisis.
I’ll keep this Labor Day weekend review short. I’m out of town and trying to write on an Apple laptop and it’s driving me crazy! None of the keyboard shortcuts I usually use work and I don’t know how to navigate around the operating system. Now I know how a brand new computer user must feel, frustraed! Here are some interesting articles from this week:
-17 Cheap Ways To Keep Cool And Survive A Heat Wave @ The Digerati Life
-A Good Example Why You Shouldn’t Put Too Much Stock Into Investing Newsletters @ Generation X Finance
-What Are Your Money Leaks? @ Money, Matter, & More
-The Credit Card Arbitrage Game: Making Money from Balance Transfer @ Suns Financial Diary
- Save Money on Movies, Music, Television, & Books @ Lazy Man & Money
-10 Easy Ways for Single Parents to Save Money @ Free Money Finance
-Online Banking Roundup: WT Direct vs. HSBC, ING, and Emigrant @ Five Cent Nickel
-5 Ways Paperless Personal Finance Saves You Money @ Blueprint for Financial Prosperity
-Reduce your debt with person to person loans? @ Mighty Bargain Hunter
About a year ago, I registered a domain with the word ebay in the name. Just this week I received the email below from their legal department informing me I was violating their trademark. Luckily, I haven’t developed the site yet so no big loss to me.
At the end of the email they ask that I contact them in writing but don’t give any address. I replied to the email saying that I would comply and asked how to send my in-writing request but haven’t gotten a response yet. I hope I hear back soon, according to their email, if they don’t get a response they “will have no choice but to pursue all available remedies” against me. Here is the email from eBay:
We are writing concerning your registration of ebayxx.com which contains the famous eBay trademark.
eBay has made a substantial investment in developing and providing its services. As a result of eBay’s pioneering efforts and its devoting substantial effort and resources to providing only high quality services, the eBay name and trademarks are widely known among the consuming public worldwide, and the name and trademarks embody substantial and valuable goodwill.
Accordingly, we were concerned when we learned of your registration of the domain ebayxx.com. As we hope you can understand, protection of its trademarks is very important to eBay. We have filed several successful federal court actions in the United States against companies and individuals employing the famous eBaytrademark in their domain names, as well as more than six proceedings before the United Nation’s World Intellectual Property Organization’s arbitration panel. eBay prevailed in each case and the domain names at issue were all ordered to be transferred to eBay.
We understand that you may have registered ebayxx.com without full knowledge of the law in this area. The Anticybersquatting Consumer Protection Act (http://www.patents.com/acpa.htm) provides for serious penalties (up to $100,000 per domain name) against persons who, without authorization, use, sell, or offer for sale a domain name that infringes another’s trademark.
While eBay respects your right of expression and your desire to conduct business on the Internet, eBay must enforce its own rights in order to protect its valuable and famous trademark. For these reasons, and to avoid consumer confusion, eBay must insist that you not use the domain name for any purpose, do not sell, offer to sell or transfer the domain name to a third party, and instead simply let the domain registration expire.
Please confirm in writing that you will agree to resolve this matter as requested. If we do not receive confirmation from you that you will comply with our request, we will have no choice but to pursue all available remedies against you.
eBay Legal Department
Are people wasting their money when they pay a company to repair their credit? This question came up today when I discovered a coworker had previously worked at a credit repair company.
Credit Repair Services Provided
Based on what my co-worker learned in his time with the credit restoration company they did not provide a service that an individual with credit troubles could not do themselves. Here is the process they went through on behalf of a customer.
The first step was for a person with bad credit to request a copy of their credit report from the three major credit bureaus, TransUnion, Experian, and Equifax. The company then opened a dispute with the credit bureaus on several negative items from the report. The credit bureaus then had 30 days to contact the creditors and investigate the disputed items. Typically one or two of the negative items would be dropped from the credit report after this process. The credit restoration company would wait a period of time and then try again.
Waste of Money?
The fees for this service varied from $300 – $600 depending on the branch that did the work. From what I understand, the customers are basically just paying the credit restoration companies to do the legwork, there doesn’t seem to be a lot of added value other than having someone else go through the motions. It seems likely that if someone has credit problems, they’re probably not flush with money and they’d be better off doing the work themselves and using the fee they paid the credit restoration company to pay down their debts.
Am I off base? Do credit repair companies add more value than I just described for the money they charge?
If a wealthy retired corporate executive gave you retirement advice would be thankful or feel like they were rubbing your nose it in?
Our most recent company newsletter featured several former corporate executives that have retired from the business to pursue their life’s ambitions. I had mixed feelings as I read the article in my worker-drone cubicle. They all gave good advice on preparing for retirement but they also had much larger salaries than most people in the company. I understand that the corporate benefits office was trying to promote 401k investing and good money management with the article but it didn’t sit quite right reading about these executives living their dreams while we slave away in our cubes.
These executives worked long and hard to get to the top but they didn’t achieve early retirement simply by earning a lot of money. They were smart and managed their money well. The article started off by explaining they had all set their retirement goals when they were young and managed their lifestyles and finances around the goals. It also mentioned that the booming market of the 1990’s had a part in helping them retire early.
Here are some of the actions and philosophies the executives follwed that allowed them to retire early:
– maximized participation in the company 401k, invested in non-company plans like a Roth IRA, and worked there long enough to become fully vested in the profit sharing plan
– lived a conservative life style, tried to manage their money to stay out of debt and that left more money to invest for retirement
– "When I got extra money it went into investments; I didn’t drive big fancy cars and I didn’t buy big fancy houses. You have to put aside to take care of yourself, and if a company hands you money, you have to manage what they hand you"
– Started planning for retirement as soon as they joined the workforce, first thing they did was start a savings account
– Remained debt-free
– "It’s all about choices: if you choose to spend, you choose to work until you pass away; and if you choose to save, you leave when you want"
I’m glad that our company is trying to promote planning and saving for retirement, I just wish they had used some role models that more of us workers could relate to. I’m afraid that since only executives were interviewed people may miss some of the message on money management and focus on the fact they need to become corporate big shots to make enough money to retire. What do you think? Did the executives inspire our workforce to save? Will people be able to see beyond the big salaries to the wise retirement preparaton advice?