Personal Finance 

Read These Posts or You’ll Be Poor Forever

Heed my warning, read these posts. 🙂

For those of you with little ones on their way to college, FMF has a very good post about how you can save big money by getting good grades. If you are angling to save a few bucks but don’t have kids (smart move!), Nickel’s been looking at how to reduce his electrical usage and talks about a switch that lets the electricity company throttle your demand (and save you some bucks). If that’s too big brother-esq for your liking, MBH writes about his latest finds at some garage sales.

On the investment front, JLP has reviewed the Grangaard Strategy by Paul Grangaard (clever name for the strategy!). Also on the topic of investment, Flexo writes about four mental mistakes in investing, all of which I have made and will probably make a couple more times.

 Debt, Education, The Home 

Reader Question: Going to Graduate School with a Mortgage

Here’s a question I received today from a reader and as I understood it, he’s planning on going to graduate school, has saved up some money and owns a home in NYC, and wants to know how to best go about balancing a mortgage with the school payments. My suggestion was to aggressively pursue financial aid especially since any equity he’s built up in his primary residence won’t count against him as well as look for payment plans. If you have any additional suggestions, please leave a comment, thanks!

I am currently 23 years old and living in New York City. I purchased an apartment almost 2 years ago and have no other debt outstanding besides my mortgage and maintenance payments which is currently about 22% of gross annual income (that’s very good for NYC!). I’ve also been fortunate enough to save up quite a bit as well.

This fall, however, I will be applying to business schools in New York for admission in fall 2007. As I have no experience in trying to balance a graduate degree’s incredible costs while maintaining my mortgage, I was wondering if there is any advice you might be able to give on how to sustain both. Will the financial aid office hold my investment in real estate against me, or can I claim that as my living expense since I will continue to live there?

I want to come out of an MBA program with as little debt as possible, so I’m trying to plan in advance. Just wondering if you might have any insights or recommendations in terms of how to approach the financing of my education.

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 Devil's Advocate, General, Personal Finance 

Problogger’s List of Personal Finance Lists

Devils Advocate Logo
This is a Devil's Advocate post.

301 bloggers participated in Problogger’s List contest/writing project and Darren published all of the lists in categories, so, I’ve reprinted the links to all the personal finance related lists for your enjoyment. I know many of these bloggers (and if you’re a regular reader here, you’ll probably recognize many of the names too) and enjoy their blogs so you should too! (by the way, the numbers just coincide with Darren’s master list)

223. Your Credit Card Can Earn You Money by Mooiness
224. 10 Ways to Immediately Start Saving Money by junger
225. The 10 Best Money Moves You Can Make by FMF
226. Five things I would do if I had $20,000 by Patrik
227. Your Very, Very Best Money Saving Tips by NCN
228. Why I Tithe by Nneka
229. 5 Simple Steps to Get the Most Revenue out of Ad Space by Markus
230. 5 Ways MyMoneyBlog Can Make You $100 by Jonathon
231. Fifteen easy ways to save fifteen bucks by John
232. 5 Advertising Programs that Have Earned Me at Least $1000 by Paul
233. 5 Secrets to Fabulous Financials by Single Ma
234. Four Kinds of Money Making Websites You can Start By Yourself by Peter
236. Top 10+ ways to Save Money and Help the Environment by David
237. How to Organize Your Debts by Donna
238. Extended Car Warranty Do’s and Don’ts by Stuart
239. Five reasons why you should always buy in lots by Danielle
240. The 10 Things We did to Erase almost $9,000 in Credit Card Debt in Less than 6 Months by Tricia
241. List of Important Financial Documents by Jim
242. 3 Ways it costs more being a man by John
243. Three Reasons Why I Might Be Poor When I Retire by HART (1 800-HART)
244. Buying a Car the Right Way by Matt
245. Got a Dog? Here Are 5 Tips on Saving $$$ & Being a Responsible Owner by Financial Freedumb


Status Symbols and Keeping Up With the Joneses is Stupid

I don’t know the premise behind chartreuse (BETA) but I do know that dude (prince campbell) behind it is entertaining to read, has lots of pictures, and one of my favorite feeds in my Bloglines feeds. Anyway, today I read a post called An Open Letter To Those Born After 1982 (Or The One Thing Your Parents Got Right) and in it he says:

You are not your [f’ing] khakis.

Your mom made money so she could move you to a better neighborhood and buy a SUV. But take a look around.

Status symbols are bullshit.

You are not your zipcode.

You are not the car your stepdad drives.

Everybody can afford everything anyway. Poor kids in the projects are sporting Lexus’ and Vendi. If your judging yourself by the stuff you got you are sure to get [f’d].

If that’s not one great reason why status symbols and the whole concept of keeping up with the Joneses is stupid, I don’t know what is. The whole premise behind status symbols is that they prove to the world that you’re something you’re not. You buy a flashy expensive car and get a trophy boyfriend/girlfriend/wife/husband to show you have money… but all you need is a handful of credit cards to get some of those things. Want Coach and LV purses? Just swipe it.

You can be up to your eyeballs in debt and still look filthy filthy rich… so what value is it in paying out all that money for the symbols if they no longer indicate you have the status? Enjoy your weekend!

 The Home 

Home Sellers Offering Incentives to Buyers

My friend put an offer on a house a couple towns over (I believe it was a couple thousand under the listing plus closing costs) and the sellers countered with the selling price and no closing cost assistance, but they’d throw in some mattresses and box springs for the rooms. But that’s nothing compared to what some builders are offering – upgrading appliances, upgrading cabinets, counter-tops, pools, etc. Of course, some are offering cash discounts too and with home sales dropping (4.3% new homes and 4.1% existing homes in July 06), it’s no wonder. So far my friend has run into resistance from home sellers (thought our area isn’t as crazy as some others like California), I think if he waits a couple months things will look better.

What’s the craziest incentive you’ve seen for someone to buy a house?


Broker Commission Fee Schedule Comparison

Thinking about investing in some securities? Well you’re going to need a brokerage account. While it’s hard to compare the qualitative differences between each brokerage, it’s easy to compare one of the big quantitative differences – fee schedules. So, below I’ll compare the fee schedules of each of the major brokerages in easy to understand language and hopefully it’ll make your decision just that much easier. In the discussion below, I only talk about online trades – no phone or in person (broker-assisted) transactions.

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 Credit, Education, Personal Finance 

Citi mtvU Grade Points Redemption Form

One of the great things about the Citi mtvU card is that you get Thank You points for good grades. One of the bad things is that in order to get the form, you need to scour the web to find someone who has scanned it or you call them up and they fax it to you. This post is as much for me as it is for anyone else, I’m tired of looking for the form so after I found it on Fatwallet, I’m posting it here.

mtvU Card’s Grade Points Redemption Form (PDF)

Here’s what you get for what grade:
Earn up to 2,000 ThankYou Points twice a year for having a good GPA
GPA = ThankYou Points
2.50 – 2.99 = 250
3.00 – 3.49 = 500
3.50 – 3.99 = 750
4.0 = 2,000

 The Home 

Don’t Refinance ARMs in the Short Term

However, in the long run, we’re all dead – as economists like to say. But this is one of the first times I’ve read in an article where the expert is advising that someone in an adjustable rate mortgage (ARM) not refinance the loan (the circumstances make this the correct advice). The situation is this: 1/5 ARM at 4.5%, adjusting in 2009 with a maximum annual increase of 2.0% and a maximum interest rate of 9.9%. The advice by Dr. Don (who has an impressive alphabet soup of degrees after his name) is that if that person is there for the “short term” (3-5 years) then leave it be, otherwise refinance at the roughly 7% interest rates for a 30-year fixed loan.

It’s a rough approximation, but if your loan balance is currently $100,000, refinancing a 4.5 percent loan three years before it becomes an 8.5 percent loan costs you $8,000 per year over the next three years. That’s $24,000 plus closing costs. Refinancing today at 7 percent will cost you an additional $7,500 over the next three years, versus the existing mortgage, plus closing costs. The interest expense is scalable, so a $200,000 loan balance would be twice as much plus closing costs.

So it’s a closing vosts vs. increase interest rate decision that puts you in the no-refinance camp if the adjustment doesn’t come for another three years, what (and the Bankrate article doesn’t address this) if the ARM readjusts this year?

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