Nickel is putting a lot into his retirement funds - a SEP IRA, 403b, and a 457b. Whew! And when you have four children, a potential 9% increase in milk prices can be quite disconcerting. MBH hits up the yard sales this week.

Despite the misleading title, FMF does highlight a very important Smart Money article on how some brokerage firm employees are dispensing financial advice - a strict no-no. To say that it’s bad advice wouldn’t be fair, it’s more accurate to say it’s not professional advice (in the strictest sense) and that it’s illegal advice. Well, I suppose it is bad advice.

Putting your tax refund into a Roth may be sound financial practice but it’s certainly not fun, Flexo outlines fun ways to spend your tax refund. Now, it’s one thing to spend your tax refund, it’s another to spend a tax refund you aren’t getting. Counting your chickens before they’ve hatched is always a bad idea.

JLP highlights a typical arbitraging tactic - buying popular items cheap and selling them once they run out in the stores on a site like eBay. One year in college I saw that Ashton Kutcher wore a green John Deere mesh hat on Punk’d so I snatched up a ridiculous amount (over a hundred) from various John Deere distributors for about $5 a piece and sold them on ebay for $25-$30 depending on the sucker buyer. It was pretty sweet.

Lastly, Gen X Finance has been doing a series called 24 Signs That You Could be in Financial Trouble and one that I found very poignant was #11: Consolidating Debt While Still Using Available Credit. You can’t get yourself out of a hole if you keep digging it deeper… that just doesn’t make sense.

Did you decide to buy something online recently because you knew that, in addition to perhaps getting it a little cheaper, you wouldn’t have to pay sales tax? While it would be very hard to convince me that anyone who reads blogs isn’t also savvy enough to order from Amazon.com instead of walking into a Best Buy (unless they need something in under a few days) to buy something, the price difference is staggering sometimes, but I might believe you if you answered “No.” Either way, an online vendor isn’t obligated to collect sales tax unless they have a physical location in the state they are shipping to and Amazon.com for example, will only collect tax if you live in Kansas, Kentucky, North Dakota, or Washington.

Now, would it surprise you to learn that what you are doing is actually somewhat illegal? First off, if you go to another state to buy something to avoid taxes, that’s technically illegal. (So is buying alcohol and transporting across state lines, but unless you’re talking large quantities, usually people let it slide) In fact, when you fill out your state tax returns, you’re supposed to write how much you’ve bought without paying for a “use tax” (which is the sales tax equivalent for out of state purchases that you bring in state). A use tax!

I honestly don’t know what I put down this year because I did everything through TurboTax (maybe they filled something in based on tables or just set it at $0, I have no idea but I don’t remember filling anything out) but the only time you ever hear of this use tax is around tax time and its because some writer for a mainstream publication needed to fill up some space (okay okay, I’m not mainstream but I didn’t put this here to fill up space, I understand the hypocrisy of my last statement) but check out the differences between a 2003 article in US News versus a CNET article three years later in 2006.

What did you do and did you know about this use tax?

If you work for someone else or for a company, you have invariably decided to trade away the risk of trying to scratch together a buck and the freedom to do whatever you want in return for a little less money than you’re worth (so someone else can profit) and stability. While you’ve probably never framed it in those terms before, that’s exactly what you’ve done.

When you take on a job, you agree that you’re going to work for someone, do what they tell you, and they compensate for you. If you strike it out on your own, you take on the full risk of performing poorly any particular day. If you don’t earn the rent check that month, there’s no one watching your back. When you work for someone, they accept that risk. Whether you generate revenue or not in a particular month, you still get paid for your salary. So while you do take on some risk, too many bad months and you’ll be out of a job, the risk is mitigated by the fact that you still get paid after a bad month, even if it’s your last. On the flip side, if you have an exceptional month, you still get the same salary. While that doesn’t “sound” risky, it truly is (and that’s why salespeople are on commission). If you secure a contract worth $10M, you will probably still see the same salary (maybe a nice bonus, but not a cut of the $10M )… that’s risky.

Another part of what you give up when you take a job is the freedom to do what you want. Some jobs give you more freedom than others through the use of comp time and such (where you just have to work your 40 hours a week) but in general, 40 of the possible 168 hours each week is earmarked for the man. That’s almost 25% of your week spent on working on someone else’s project.

Now, start framing this in your mind, you are a business. Consider your skills and see whether you’re better off working for the man and pulling in that stable steady paycheck or if you have some entrepreneurial blood in you, read to take on a little bit of risk for some freedom and potentially a whole piece of the pie. However, like everything else in this world, it’s not black and white, perhaps you have that thirst for some risk but you don’t have the skills… a relevant job may just teach you those skills and give you those contacts that will help you strike it out on your own.

There wasn’t much of a point to this article other than to put down some thoughts I’ve had lately onto “paper” and to see what you all thought of it. (No I’m not going to quit my job, I actually enjoy it) As always, I think that if you try to look at things from a different perspective it will give you insight into your daily life…

If you live in Maryland and buy power a company that has it generated by Baltimore Gas and Electric, on June 1st, 2007, the rate stabilization plan that was put into place a year ago, which capped the potential 72% increase to market rates at 15%, will end and consumers will have to choose one of two plans. The two choices are: 1) phase in the market rates through a 7 month program; 2) take it. As June approaches, BG&E has indicated they will send out more information.

If you don’t remember opting into the one year rate rate stabilization plan, that’s because everyone was required to participate and the difference (between market rates and the cap) was sold to a third party, a debt we’ll be paying off for the next ten years.

I believe you can get the latest from BG&E’s website but I’m unsure how often it is updated.

When my friend refinanced her mortgage, I was surprised that she had to pay for title insurance all over again (and title insurance is not cheap, in fact, it’s pretty ridiculously expensive for what you get). See, the way I saw it, she paid for title insurance the first time around and it insured that her title was clean for her. So… if it was clean then (and insured against mistakes, fraud, etc.), why would she have to get it again considering there was only one change between the first time she bought it and the second time, the lender providing the loan. When you get title insurance, they’re supposed to double check that all the t’s are cross and all the i’s are dotted, and then insure you against their own mistakes. If you’re still the owner, why do you need to buy it again?

Well, it turns out that the title insurance follows the loan and the insurance policy expires when the loan is paid off. When you refinance, the new lender pays off the old lender, which means the old loan is paid off, and the title insurance expires… and you get the opportunity to pay for title insurance all over again. Talk about a scam that is totally legal…

You’ve probably seen numerous promotions about the latest card from Chase, the Chase Freedom Rewards card, and the recently expired $250 promotional bonus for signing up for the card; but if you are like me, you never really took a look at the merits of the card to see if it was worth applying for. From a superficial glance, I would say it looks like a solid grocery and gas station card as it offers 3% cash back from those purchases and 1% from everything else. In addition to those mainstay options, you can also get 3% back from quick-service restaurants (I think that’s lingo for fast food).

3% on grocery store purchases is only a single percent better than my current Citi Platinum Dividend card (currently shelved as I’m taking advantage of a 12 month 0% balance transfer option) and still 2% less than my Citi mtvU card (Citi mtvU review) for all restaurants (not just quick service), so this card doesn’t look like a winner for me.

Now, the main gimmick of his card is that you can convert dollars to points to whatever else but that’s not something that appeals me. I only want cash back, you can keep the rewards and the airline tickets, I want greenbacks. In fact, the only reason why I’m using the Citi mtvU card and the Thank You Network is because I can use it to pay off student loans.

The one good thing I do see is that if you save up $200 in cashback, you can get $250 back, making it slightly better if you’re willing to hold off on cutting the checks. One almost cool thing is that they’re offering a 6 month 0% balance transfer but it comes with a 3% fee which makes it bad for arbitrage and not great for actually transferring balances (if you need one, go with a longer period or at least a fee cap card otherwise that 3% can be brutal). As with any card I’d ever consider (except a business card), this one has no annual fee.

Disclaimer: Insider trading is illegal. Don’t do it.

A seasoned friend (he wouldn’t call himself an investor) once told me that unless you have some sort of insider information, the average investor is likely to be killed by the professionals because those professionals have friends in high places, right places, to give them some good informational nuggets to trade with. He worked on the efficient market hypothesis, that is the market value reflects all the information available, and I’m generally inclined to believe the same as well. Now, we take that information, put it together with what we may have learned reading Trading With The Enemy and it’s not difficult to believe that the professionals are all in bed together, playing by a different set of rules, and that some sort of shenanigans are going on. Oh yeah, add in the latest bit on Cramer and “fomenting” for a little bit of spice in that recipe.

Lately I’ve had my eye on one particular stock in a pretty sizzling industry, watching it fly high, fall, fly high some more but I’ve never bought any. In fact, I’m probably never going to buy any but that doesn’t stop me from peeking at it from time to time to see what’s going on. So, about a month ago it was at a high, let’s say in the high 20’s, but some mediocre news and the absence of news caused the stock to drift downward until it was in the low teens. Then, miraculously, it spiked up 15% two days in a row (Wednesday and Thursday) for absolutely no reason. At least no reason publicly. Then the following Monday, the company reported some excellent news and the stock took off (in part from short sellers looking to cover).

So, what did the buyers on Wednesday and Thursday know? Certainly they didn’t bid up the stock 15% two days in a row (32% gain in two days!) on the anticipation of good news, did they? Depending on the market cap of a stock, you might see maybe +5% the day or two before a potentially good earnings announcement (thought that’s not indicative of whether the announcement would be good or bad) but +15% two days in a row? People knew something (and other people didn’t).

Trading without insider information is like going bear hunting with a BB gun.

At the risk of not ending this article on a ridiculous image (who goes bear hunting anyway?), I am really curious to hear everyone else’s thoughts on this; whether you’ve seen something similar and agree or you think I’m full of crap and all conspiracy theory.