Angies List Promotion

Angies List promo codes are good for saving money when you sign up for the service but now Angies List is running a promotion for existing customers.  As I covered in my Angies List review earlier this year, I’ve used the service to find contractors for work on our house.

Apparently now there are more than one million members using the service and Angies List is running a promotion to thank existing customers.  If you like the service and tell your friends about it, they’ll give you a month’s free extension on your membership for each person you refer to Angies List.  Each referral also enters you into a contest to win a $1,000 cash prize.

The bad news is that the promotion has been going on for a while and is almost over.  The good news is that you still have a few more days left to participate.  Anyone you refer before the end of the month will get you an extra free month of service and put your name in the hat for the $1,000.

If you invite your friends, be sure to let them know about the Angies List coupon codes so that they can save some money if they sign up for the service.

Save Ten With Angie's List!
Posted on October 29th, 2009 in Angies List | 1 Comment

Written by Ben Edwards · Filed Under Angies List 

Variable Annuities Overview

Variable annuities are probably something you’ve never even considered investing in if you’re under 50 years young.  However, I’ve had people write me whose parents are getting pitched fixed annuitites and variable annuities as they are getting closer to retirement. To give an idea of how variable annuities work, Victor wrote up the following overview. [Editor’s Note].

What is a Variable Annuity?

Like a fixed annuity, a variable annuity is an insurance product. The difference between the two is the opportunity for more growth and risk. In a variable annuity, an investor’s funds can be invested in mutual fund-like products wrapped inside the annuity. The value of the annuity fluctuates daily based on the performance of the chosen portfolio.

Many annuities now offer certain guarantees. An investor can purchase principal protection where they are guaranteed every penny they put in. Some also offer guaranteed growth. They will have an offer that states the investor will receive 5% or the market performance of the portfolio, whichever is higher. Both of these options are nice to have, but an investor must realize that they pay for this. These are “riders” that are added to the annuity contract and have fees associated with them.

Liked fixed annuities, variable annuities have the same type of surrender schedules. A portion may be taken out without being charged a fee, but be aware that if you have not reached 59 ½, you may be subject to an IRS penalty of 10%. All growth is tax deferred in a variable annuity.

In a variable annuity, the funds are passed directly to the beneficiaries without going through probate. In the case of a spousal beneficiary, if the option is chosen, the spouse can continue the contract as if it were theirs. These annuities, again like their fixed counterparts, can be funded with a lump some or through periodic payments.

Typical Investor

In most cases, the typical investor of a variable annuity is retiree or a person with retirement on the horizon. Some annuities don’t even allow you to purchase them unless you are 45-50 years old. For some people, these newer annuities that include so many guarantees seem too good to be true.

Make sure you know how much it will cost to get all of these “guarantees” in an annuity. You will also want to know what kinds of investments are available inside the annuity and the health of the insurance company that is selling the annuity.

An annuity can be a very confusing thing. Annuity contracts are long and filled with “legalese.” Make sure you understand everything or speak to a financial professional and have them explain it to you before you put any money into it.

Here is a Smart Money article that takes a look at the downsides of variable annuities such as the average annual fees & commissions they charge, surrender fees, taxes on gains, and estate planning concerns.

Resources

Posted on October 28th, 2009 in Investing | 5 Comments

Written by Victor · Filed Under Investing 

Bond Fund Investing

Bond funds probably aren’t the investments that you spend hours investigating and researching when building your portfolio or 401k.  Typically individual stocks or equity mutual funds are the primary investing focus and bond funds are an afterthought if they’re included at all.

However, bond mutual funds and their fixed income can be just as important a piece of any portfolio as equities. Although you can get more bang for your buck with stocks, bonds can help you level off the volatility of the stock market. If invested wisely, an investor can use bond funds to not only increase the cash flow of their portfolio, but also see some growth.

Bond Mutual Funds

So how do bond mutual funds work? Similar to stock funds; portfolio managers buy an assortment of bonds based on the objective of the fund and what is available in the market.

Most bond mutual funds pay off a monthly dividend. That dividend can be paid out to your brokerage account in cash or re-invested by buying more shares of that particular fund. Please be aware the even if you re-invest the dividends, they are taxable in non-IRA accounts.

Bond Fund Categories

Like stock funds, there are many different types of bond funds, and investors have the same ability to diversify. There are bond index funds, government bond funds, state specific bond funds, corporate, international, etc.

Bond funds can be based on the average length of maturity of the bonds in the portfolio (short-term, long-term, etc.), the average bond rating (AAA rated, junk bonds), or other specific objectives of the fund (strategic income, diversified portfolio, emerging market).

Bond Fund Analysis

When it comes to picking a bond mutual fund, an investor must go through the same type of due diligence they would for a stock fund.

  • Does this fund fit my objective?
  • Is it to aggressive or conservative for my liking?
  • Does it invest in the types of bonds I want to own?
  • What is the history of the fund, the manager and the company?

Rather than give you specific bond funds as a suggestion, I’m going to finish this article by discussing the two best bond managers in the business (in my opinion). Between the two of them, they have over 90 years experience in the bond market and have been successful year after year.

Bond Investor – Bill Gross

You may not know the name Bill Gross, but if you have a 401k or ever watch CNBC, you may be using his funds and have seen him on TV. Mr. Gross is the founder and managing director of PIMCO. He manages over $800 billion (yes, that’s a B) in fixed income assets.

His PIMCO Total Return Bond Fund is one of the most popular bond funds in 401k programs across the country. He has been named the Morningstar Fixed Income Manager of the Year three times and is a “go to” person for many different news publications and media outlets for his opinion on the bond markets.

Bond Investor – Dan Fuss

Dan Fuss is the Vice Chairman of Loomis Sayles & Company. He was named to the Fixed Income Analyst’s Hall of Fame in 2000 and is one of the most brilliant minds in the business today.

The equity side has Warren Buffett and the fixed income side has Dan Fuss. He has made a habit over the last 20 years of creating stock-like returns in his fixed income portfolios. In a previous life, when I was a financial advisor, every single portfolio I ever developed had his Loomis Sayles Strategic Income Fund in it.

Mr. Fuss is a much more aggressive investor than Bill Gross. I often used the two of them together almost as a yin and yang for bond portfolios. These men will bring a tremendous amount of knowledge and experience and proven to success to any portfolio. As always though, make sure the investments you choose fit your objectives, time tables and risk tolerance.     

Hopefully this look at bond investing will give some good food for thought as you plan out your portfolio.  For more on bonds, you can also read up on bond investing terms and some bond investing strategies.

Posted on October 27th, 2009 in Bonds, Investing | 2 Comments

Written by Victor · Filed Under Bonds, Investing 

Bible Money Matters

Last week, we highlighted Jeff Rose over at Good Financial Cents.  This week, we’re highlighting Bible Money Matters written by Pete.  He doesn’t believe that faith and finances should be separate, and so his blog chronicles his thoughts about how his Christian faith affects his finances.

I like Pete’s site not only because the posts are usually informative and educational, but I also like how he relates religion and money.  There are many issues that revolve around money and beliefs, like greed and giving, that I struggle with sometimes so his site is good food for thought on those topics.

About Pete

Pete and his wife Maria have been debt-free (except for their mortgage) for about two years. They vow never to be servant to the lender again by maintaining that debt-free existence.

Recent Links

Here are some other posts from around the personal finance web:

Software and Giveaways

10 Free Online Budgeting Applications @ Lazy Man & Money
2010 Quicken Deluxe Giveaway @ Suns Financial Diary

Budgeting

Saving Money

Taxes

Financial Education

Business Finance

Kids

Posted on October 26th, 2009 in Personal Finance | 4 Comments

Written by Debbie · Filed Under Personal Finance 

Outsourcing Your Investing Decisions

Would you pay someone to make your investment decisions for you?  Sure, most of us have some money invested for us by mutual fund managers but would you outsource your investing choices to someone that simply had a good track record of earning in the stock market?

A company called kaChing that runs a virtual stock trading website has added the capability to allow you to automatically invest your money in the exact stocks that the best investors on the site have in their virtual portfolio.

Site members that have maintained a virtual stock portfolio for at least a year with positive returns are eligble to become what the site calls an investing “genius”.  To qualify they have to get a certain score on an InvestmentIQ test and sign regulatory documents regarding securities laws.

Investing Your Money

KaChing’s philosophy is transparency you can see the holdings, trading history, and research of everyone on the site.  You can also see what stocks they’re watching and a peformance analysis of their investing.

If you find an investor whom kaChing has qualified as having an acceptable track record & sufficient investing knowledge and you want to mirror the stock trades they make then you can sign up to do that with kaChing.

kaChing opens an brokerage account for you at Interactive Brokers and will use your money to perform the same buying and selling of stocks as the investor that you chose to follow. The investor you’re following will charge an management fee that ranges from 0.25 percent to 3 percent of each trade. KaChing keeps a quarter of the fee, and the investors get the rest.

A Different Investing System

The thought behind the kaChing system is that mutual funds charge fees that are too high and they are not transparent enough with how they’re investing your money.  The founder, Dan Carroll, felt he could offer a better system and started kaChing to address some these concerns.

kaChing is attempting to let past performance help you find investors that you would feel comfortable “managing your money” for you.  Of course they don’t directly manage it, they simply buy and sell their virtual holdings and you mimic them in the real world.

kaChing Investing

One thing that’s good to see is that at the top of each investor profile they indicate whether the investor has some of their own money invested in the funds so at least you can see if they have skin in the game.  They also display how much money in customer assets is actually mirroring the trading moves of the investor.

Of course neither of these things will tell you if the person’s stock choosing ability will be successful and consistent. The way I see it, the big question is whether the qualifications kaChing requires are enough to make you feel comfotable investing your money with these investors.

I hate it that they call the qualified investors “geniuses”.  It seems dangerous to me, both for the investor and the people matching their trading moves.  You certainly don’t want the investor thinking they are a genius and feeling as though they can’t go wrong. You also don’t want people to put their faith in an investor simply because they’ve been labeled as an investing “genius”.

Something else to consider is that even if you did invest money through kaChing you’d have to watch the investing strategy of each investor and how it fit into your overall investment portfolio. For example, the investor with the top returns at the moment invests only in the healthcare industy. The intro to his nvestment strategy on the site is:

“My portfolio aims to produce returns from small to mid-cap companies in the biotechnology and pharmaceutical sector. I focus on discovering significantly undervalued companies with encouraging drugs and opportunities for significant gains.”

Would You Use kaChing to Invest Your Money?

I don’t think I’d setup my investments to be automatically made to mirror kaChing investors. It certainly wouldn’t hurt to open a virtual account and start following the moves of the top investors; picking their brains to see what moves they make and why. I’m sure you could learn a lot about the market and try out what you learn with your virtual account.

It is interesting how technology is being used to enable individuals to perform some of the functions that we’re used to depending on big financial businesses for.  Companies like Prosper and Lending Club have created a whole new marketplace for peer to peer lending where individuals can lend money to others, cutting out the banks and the fees they charge.

Now kaChing is offering an alternative to having mutual fund companies manage investments for you. Instead you can choose to follow the investments of skilled individual investors. Who knows, maybe it’s the investment model of the future but right now it’s not for me.

Posted on October 24th, 2009 in Investing | 2 Comments

Written by Ben Edwards · Filed Under Investing 

Our Furnance Repair Bill

Heating & cooling your home isn’t cheap, especially when you add in furnance repair bills like the one we had last weekend.  We came home last Sunday afternoon and found that although our thermostat was turned to 65 and we could hear the furnace blower kick on, there was no hot air coming out of the vents.

Heating System

Our central heat system uses a heat pump to warm the house when the temperature is above a certain level and then a gas furnace kicks in as auxilary heat when the temperature outside gets too cold for the heat pump to keep up.

I opened up the furnace and could see that the gas burners weren’t lighting but didn’t see a pilot light anywhere.  Reading through the owners manual I discovered that some of the newer gas furnaces like ours have an igniter instead of a pilot light and they recommended having a professional diagnose it.

Furnance Repair

I knew it would be more expensive for a weekend call but it was pretty cold so I called up the evening and weekend number and scheduled an emergency repair visit.  It turned out our furnance igniter had gone bad but luckily for us he had a van full of furnace parts and had the one we needed.

The total furnace repair bill was $180. The service call was $120 since it was on a weekend, and the part was $60.

Furnance Maintenance

I questioned the furnace technician as he worked to see what I could do to prevent future $120 weekend service calls.  He said that other than regularly changing our furnance filter there wasn’t much else simple that I could do myself.  He did show me how he cleaned the burner and sensor with some steel wool and just cleaned the dust and dirt out of the furnace cabinet.

He said that although our Carrier furnance was pretty easy to disassemble compared to other brands like Trane, where you need special tools just to take apart the furnace, if I wasn’t familiar with the inner workings of our furnace that my best bet was to get it serviced once a year.

He gave me a sheet with a breakdown of all the things they do in their furnace annual service.  Apparently they take apart the furnace and lubricate all the moving parts and go over the following components:

  • Burner
  • Heat Anticipator
  • Heat Exchanger
  • Safety Controls
  • Air Filter

As part of the maintenance, they also check:

  • Flue for proper drawing
  • Temperature rise through furnace
  • Fan and limit control
  • Proper combustion
  • Gas line & manifold pressure
  • Pressure regulator
  • Blower components

Since I don’t have much spare time, I’ll probably take advantage of their annual tune-up either this winter or next.  Hopefully that will ward off any future emergecy weekend repairs.

Posted on October 22nd, 2009 in Home Owner, Personal Finance | 2 Comments

Written by Ben Edwards · Filed Under Home Owner, Personal Finance 

What Was the Best $100 You’ve Ever Spent?

How often do you spend a big chunk of money and look back on your purchase weeks, months, or years down the road and congratulate yourself on money well spent?

It seems for me that I usually do the opposite.  Things seem to break before they should or don’t do as good a job as I expected them to.  It’s not often that I reflect on a $100 buying decision and pat myself on the back.  Maybe my expectations are too high, maybe “things just aren’t made the way they used to be”, or maybe some of both.

Best $100 Spent

I’m pleased to say that I do have purchase that was money well spent, one where we definitely got our money’s worth.  About a year ago our neighbors moved and sold us their trampoline for $100.  They even somehow got it over the fence and moved it into our backyard while I was at work one day.  The trampoline was probably only about a year old, so for $100 we got a pretty new trampoline, no assembly or delivery required!

All spring and summer, when I’d get home from work my son and I would head out to the trampoline for some dad and son time.  We shared many stories and laughs while we jumped away the troubles of the day and got some exercise as well.  So over the course of a year we racked up hours of entertainment and exercise all for only $100, best money I’ve spent in a long time.

I’m sad to see the cold weather encroaching on our trampoline time.  This will probably be the last week it’s warm enough for us to get out and jump until next spring.  That’s okay though, it’ll be there in March or April waiting for us to have more fun and keep getting our money’s worth.

What’s the best $100 you’ve ever spent?

Posted on October 20th, 2009 in Personal Finance | 9 Comments

Written by Ben Edwards · Filed Under Personal Finance 

Good Financial Cents

Each week I’m going to share with you a personal finance site that I enjoy. I started this a while back with Moolanomy, Gather Little by Little, and Being Frugal but got a little sidetracked when our daughter was born.

Good Financial Cents

This week I recommend checking out Good Financial Cents written by Jeff Rose. He’s one of the financial advisor websites with blogs I highlighted a while back. Jeff’s a certified financial planner at Alliance Investment Planning who shares some of his insights about money on his blog.

I like Jeff’s site not only because he’s a practicing financial professional who knows his stuff but also because I agree with the philosophy that a big part of being successful with your money is simply using common sense. For example, his recent post about why you should keep contributing to your 401(k) even when you feel like you’re throwing away money.

About Jeff

Jeff served 9 years with the U.S. National Guard, during which time he supported Operation Iraqi Freedom. It was during his downtime in Iraq that he earned the Chartered Retirement Planning Counselor designation. Jeff is a certified financial planner and also holds a B.S in Finance and a minor in Accounting from SIU-Carbondale.

Recent Articles

Here are a number of other posts from around the personal finance web:

Career

Investing

Retirement

Taxes

Household & Family

Mortgage

Other

Thanks to the following sites for highlighting Money Smart Life articles:

Posted on October 17th, 2009 in Personal Finance | 3 Comments

Written by Ben Edwards · Filed Under Personal Finance 

Fixed Annuities Overview

Fixed annuities have caught the attention of some investors who have taken a pounding from the world of stocks over the last few years and started looking for something a little less volatile. This type of investment, though it brings a much lower return on investment, does provide more stability. Are the lower returns and usually high exit fees worth the added security?

What is a Fixed Annuity?

A fixed annuity is an investment product where an insurance company guarantees a certain rate of return for an investor’s money. This guarantee is backed by the full faith and credit of the offering company (fixed annuities are not FDIC insured). The return on a fixed annuity is comparable to the rate of a Certificate of Deposit at the time the annuity is purchased.

Most companies offer an incentive where a bonus rate is added for a certain period of time. For example, XYZ insurance company offers a fixed annuity with a current rate of 4.00%, but if the investor deposits an initial investment of $100,000.00, they will receive a premium bonus of an additional 4.00% for the first year. The investor will receive 8.00% the first year and 4.00% the following years.

There is a “surrender schedule” attached to annuities, in which withdrawals during this time will incur a “surrender fee.” This fee is calculated based on how long the annuity has been owned (surrender fees are waived in the event of the death of the annuity owner).

In most cases, 10% of the principal or the interest earned can be redeemed over a twelve month period without incurring these penalties (please check your annuity contract before making any withdrawals). It is important to remember that annuities grow tax-deferred, so any distribution of earnings will be taxed as income.

Types of Fixed Annuities

Generally, annuities fall into two categories: immediate and deferred. These terms are based on the income stream options of the investment. In an immediate annuity, the investor deposits their money and immediately starts taking an income stream from the investment. On a deferred annuity, the funds are left in the product to grow at the fixed rate stated on the contract of the annuity.

The “pay out” from an annuity can vary based on the length of time the payments will occur, the value of the annuity and the age of the annuitant.

Typical Investor

Fixed annuities have always been popular with retirees looking for guaranteed income and other types of investors seeking security have started using them as well. The “pay out” phase of the annuity can be set for a specific range of time (10 years, 20 years, etc.) or for the lifetime of one or two annuitants. If a person wanted to make sure that certain bills would be covered at all times regardless any other outside factors they might choose to invest in a fixed annuity.

A CNN Money article titled the trouble with annuities talks about the major disadvantage of fixed annuities as being opportunity cost.

“With such high exit fees, it’s prohibitively expensive to back out of a contract. So you could miss the rise in interest rates and improvement in market conditions that many experts are predicting.” Worst case: Your money ends up lagging behind price increases. “In an inflationary period, having 4% fixed in long-term money could be devastating,” says Salt Lake City financial planner Ray LeVitre, author of “The Retiring Boomer’s Financial Handbook.”

The Money article suggests that short- to intermediate-term high-quality corporate and municipal bonds could be an alternative to fixed annuities if safe growth is the objective. The argument is that they have fewer restrictions and can offer higher yields than CDs.

Of course, everyone’s situation and risk levels are different so if you’re not sure whether fixed annuities are for you then talk with a financial professional about how they fit into your investment strategy. Look for a financial advisor who doesn’t make a commission off of selling you annuities since that can present a conflict of interest.

What do you think about fixed annuities? Do you have any money invested in annuities?

Posted on October 16th, 2009 in Investing | 3 Comments

Written by Victor · Filed Under Investing 

Blog Action Day – Recycle, Recycle, Recycle



Recycling may not be the first thing you might think about when the topic of climate change comes up but recycling can certainly make a difference. Here are some recycling stats from the recycling section on the University of Michigan website:

  • The U.S. recycles approximately 32 percent of its waste which saves an equivalent amount of greenhouse gases to removing 39,618 cars from the road.
  • Increasing the recycling rate to 35 percent would reduce greenhouse gas emissions by an additional 5.2 Million Metric Tons of Carbon Dioxide Equivalent.
  • Net carbon emissions are four to five times lower when materials are produced from recycled steel, copper, glass, and paper. They are 40 times lower for aluminum.
  • Just one person recycling their newspaper, magazines, plastic, glass, and metal for one year is enough to save 471 pounds of carbon dioxide from going into the atmosphere.

I’ve always made recycling a habit, maybe it’s because when I was a teenager we lived in Germany and everyone recycled there.  I’m sure my parents had something to do with building the habit since they were firm believers in “reduce, reuse, recycle” growing up.

Here is some more information on recycling and climate change from the University of Michigan:

“Recycling and waste reduction are actually very much related to climate change. The energy used in the industrial processing of virgin materials and in their transportation, involves burning fossil fuels such as gasoline, diesel, and coal, all major sources of carbon dioxide and other greenhouse gases.

 

While manufacturing goods from recycled materials still requires energy, it is much less than extracting, processing, and transporting raw materials. Recycling and waste reduction also avoid emissions caused by incinerators and landfills which produce large amounts of carbon dioxide and methane (21 times more potent than carbon dioxide). Waste reduction and recycling also slow the harvesting of forests, which act as carbon sinks, meaning they absorb carbon dioxide from the atmosphere.”

I don’t cover “green” topics very often but I do try and use our natural resources responsibly. For many years I would ride the bus to work, now that we have two kids in childcare that’s not as practical but I still do recycle all the junk that we go through.

This post was part of this year’s Blog Action Day to help combat climate change.

Posted on October 15th, 2009 in Other | 3 Comments

Written by Ben Edwards · Filed Under Other 


Page 86 of 190« First...102030...8485868788...100110120...Last »