During a three or four month period last year, approximately 20% of my friends at my old employer, including myself, left the company in search of greener pastures. Some left entirely because of compensation, others left for job growth opportunities (that is to say, more compensation in the future), and others left simply because their job was boring and they had no opportunities for change. Either way, the question of compensation was always in the mix because, let’s face it, we all want to make more money than we do now, no matter how much we make now. If you made a million dollars a year, you’d want a million and a half. If you made ten million, you’d want fifteen million or even twenty. If you made twenty? Well, you’d want a hundred.

So, what’s a greater incentive to work hard, money or the potential for more money?

And, as a corollary, if you are paid more, does that make you work harder?

I saw this article about Suze Orman in which she admits she has about a million dollars in the stock market and has that much in there because she doesn’t care if she loses it all (she said that estimates that she was worth approximately $25M were “pretty close”).

She says she has about a million dollars in the stock exchange, because if she loses it all “I don’t personally care.”

Ignore the first three paragraph, they’re just gossip drivel where they mention that she has a female life partner and has never been with a man (as if that has any bearing on her credibility when it comes to personal finance advice, I have a female life partner, I’ve never been with a man, and you all still read my blog), but the last paragraph shows how ridiculous she is.

I don’t really like Suze Orman because of her abrasive attitude, some like the “tell it like it is” attitude but I think she’s taking a page out of Judge Judy’s playbook (I’d rip my eyes out before I’d watch an episode of her show, not that I’m a fan of courtroom shows like that anyway…) to make her name. Either way, would and should you go to someone for advice if they were recklessly investing in the stock market because they wouldn’t “personally care” if they lost it all?

I usually save Devil’s Advocate posts for more big time personal finance advice but with the recent spat of 0% balance arbitrage posts (of which I’ve wrote several), I felt that I should write a post arguing the potentials risks of 0% balance transfer arbitraging because you don’t see many of these out there. For those who aren’t familiar with the practice, basically you apply for a bunch of credit cards with 0% balance transfer offers, request a balance transfer check, and deposit it in a high yield savings account - pocketing the interest.

Here are some reasons why you shouldn’t do 0% balance transfers:

Universal Default = Death
Universal default is the keywords you should look for in your credit card agreement (don’t bother looking, I guarantee its in there) and what it means is that if you miss a payment, any payment on any account, you could see your 0% balance transfer offer interest rate spike up to rates as high as 30%. So if you miss a cell phone payment or a water bill payment or anything anywhere, you could see your 0% rate disappear.

Oh, and if your card does two cycle billing, you could get creamed the last two months as your 0% balance disappears but the “two cycle” math keeps it on the books. It’s a ridiculous thing but it does happen. No one has ever complained of this, I don’t have a card with two-cycle billing, so I’m not 100% sure this is true but it should be.

Your Credit Score Will Plummet
When you apply for credit cards, the bank will do a hard pull inquiry of your credit history to assess your credit worthiness. As you accumulate more and more of these inquiries, your credit score will fall lower and lower. As you request balance transfers from these new lines of credit, your credit utilization will increase tremendously and your credit score will fall lower and lower. Plus, when you pay off these debts, your credit score isn’t going to recover immediately - it takes a little while before you get back to normal. So, if you’re planning on any big purchases, this drop in your credit score will likely result in loans with a higher interest rate that will make your interest earnings look meaningless.

The Payoff Is Miniscule
Let’s say you get $10,000 in debt at 0%, you put it in a 5% high yield bank account, that means at the end of the year you’ll get about $500 for your trouble. Now, take out a fat chunk for taxes and you’re really talking about very very little (at 25%, you only keep $375, or $31.25 per month). Is that really worth all the trouble of setting up an automatic bill pay (or paying it manually) every month, double checking when the offer expires so you pay it off, and then sending a big payment?

Anyone else have any good reasons why you shouldn’t be doing 0% balance transfers just to make a few extra bucks?

The latest public security breach at a retail store comes from Stop and Shops in Rhode Island where “high-tech thieves” basically bugged the credit card swipes and stole a lot of data. Most places are now recommending you keep a diligent eye on your credit card statements for fraudulent charges if you shopped there, but I think that’s ridiculous. If you think someone has stolen your checkbook, you don’t wait until the first fradulent check hits your account before you do something about it - you cancel the checks. If someone stole your wallet, you don’t wait until they go on a shopping spree before you cancel your credit cards. So, why keep a diligent eye on your credit card statements if maybe your card was skimmed? It’s ridiculous, don’t be passive about it, be active - cancel your credit cards! Report them stolen, report them lost, just report them so the cards are deactivated and no one can use them. Don’t wait for fraud to come to you because these thieves will wait months or even years before they use the card, just to wait for the heat to cool off.

If you only have one credit card and you’d be lost without it, this should be a wakeup call that you should have at least two - so you have a card if one is every lost or stolen in the first place.

FMF is running his annual March Madness battle of the personal finance posts and has started requesting posts, I’ve decided to scour the archives to find four posts I’ve written over the last two years as my entrants. I’ll list the four below as well as a blurb about why they’re the best, let me know if you think one should be chucked and another added in its stead! Thanks!

I Hate U-Haul Truck Rental (And So Does Everyone Else)
This is one of my most commented posts and it’s about how badly UHaul tried to screw us on a move from NJ to MD a few years ago. With over 80 comments, this is basically a big bashfest on UHaul, how dangerous their trucks are and how poorly they do business. If you want to read the most vitriolic of comments (luckily not against me), this is the place to go.

How To Invest With Only $100
I was turning up the creativity bone on this particular post where I recommend ways someone with $100 could increase that to over a $1000 by taking advantage of referral bonuses from banks like ING and Bank of America and signup bonuses from Sharebuilder and the like. It was picked up by Lifehacker and quite popular with readers.

Understanding Your Financial Fortress
A fun post chock full of pictures in which I draw the analogy of your personal finances into that of a financial fortress, complete with a moat, high tower, and castle walls. It’s a unique way of looking at your finances and hopefully one in that resonates with anyone regardless of their financial situation.

25 Steps To A Wildly Successful Personal Finance Blog
A popular one with the ladies was this one post in which I outlined some steps a personal finance blogger should take if they want a “wildly successful” blog. Not everyone who follows ever step will reach wild success but many have said they’ve found this list very helpful and I’m very glad that I wrote it well enough to be of some assistance. The list itself is actually 29 items, the extra four coming as ideas after I hit publish!

So, anyone want to recommend a replacement?

So right after I wrote up that walkthrough for the Citi 0% balance transfer process, I thought I’d do the same for Discover card. The only problem is that if you want to take advantage of their 0% balance transfer offers, you have no choice but to send a check to actual creditors - you can’t get a check sent to you (something Citi does do).

So, if you’ve been thinking about giving 0% balance transfer arbitrage games a try, I recommend that you first go with Citi cards and then, after those offers have expired or are expiring, go with a Discover card offer and pay off your outstanding transfer amount on the Citi cards.

Now, you might be thinking that you can just “pay off” a credit card with a $0 balance and then request the overage back to you but that card will likely flag your account, investigate, and generally take a few weeks before they’ll send you the overage. Then they’ll yell at you for doing it because, let’s face it, that’s pretty shady. It’s much easier to just go with Citi and get the check made out to you in the first place.

Lazy Man and I Have Plasmas, We Are Not Crazy…

Lazy Man penned a post in which he talked how he owned a plasma television and how personal finance bloggers called him crazy (technically, he only supposed that pfbloggers would call him crazy) and I’m here to back him up, I’m a pfblogger who wouldn’t call someone, with a plasma television, crazy. I would call that person foolish if they put the whole thing on a credit card and planned on paying it off over the next 234908230943 years at 203984230% interest (that’s quite a bit!), but I wouldn’t call them crazy.

See, I recently got into a discussion with my fiancee over the idea of spending now versus saving now. She wanted to save more now, I felt like we were saving enough, but she was just worried of the unknown that is the future and whether we were being foolish for buying too much stuff now. It’s a perfectly reasonable concern because not many people have nice televisions or nice cars and so if you spend money on those things, you’re wondering if you should be saving it like everyone else (reverse Keeping Up with the Joneses!). However, you need to strike a balance between save now and spend now because an unreasonable emphasis on saving now is just as bad as spending now, but because it’s less common it is not discussed as often.

Once we worked out the saving versus spending concerns, the next real concern is whether you’re able to make the purchase in the first place. If you are putting it entirely on a credit card that you can’t pay off by the next billing cycle, you probably don’t want to be buying a plasma television. If you know that you’re taking advantage of a 12-month Best Buy 0% financing offer and won’t be able to pay for the whole thing in 12 months, you probably shouldn’t buy it. If you could, but don’t so that you can take advantage of special offers, pay for the whole set right now with cash from your bank account without compromising your financial situation, then by all means enjoy your television.

One final thing to remember, with technology the prices are always falling. If you want a $2000 television and you only have $1500, just wait a few months and by then you’ll have padded that television fund up to $1700 and the television will have falled in price to $1700. A win win!