Do-It-Yourself Identity Theft Protection

Identity TheftLast Friday I discussed the CEO of LifeLock’s appearance on the Today Show and how many of the services they offer are things you can do yourself. So, rather than leave it all vague, here’s what you can do for a do it yourself solution.

Through, you can request a copy of your credit report from each bureau once a year. I generally like to stagger it every 4 months so you can keep up to date absolutely free. For example, get your Experian in January, then your TransUnion in May, then your Equifax in September, then Experian again the following January.

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Resources to Learn About Stock Market Investing

If you know nothing about the stock market, consider yourself lucky.

If you think the stock market is a scary place that you don’t understand, you’re actually in good shape.

I learned about the stock market in a time of prosperity, in pieces, and probably in the worst possible way and it’s burned me on numerous occasions. When everything is going up and there’s an irrational exuberance, you are afforded the opportunity to have good results come out of bad decisions and that can lead to the development of bad habits. So, if you know nothing about the stock market and are scared of it, that’s actually the best time to start learning about it.

So, if you’re scared and I have bad habits, why should you read anything I have to say about investing? I don’t actually talk much about investing outside of discussing ideas and theories (and recommending index funds from Vanguard) but today I’ll outline a few good resources I’ve found to help you learn more about investing in the stock market.

Morningstar Investing Classroom

Morningstar is great. The number one best place to start, if you know absolutely nothing, is with Morningstar’s Investing Classroom. They have four areas of beginner study – Stocks, Funds, Portfolio and Bonds. Each classroom has five levels of study with the exception of Bonds, it only has two, and each level has anywhere from five to eleven courses. I’ve taken several of the courses and they begin with the basics and move onto progressively more advanced topics.

As a bonus, you earn points for answering the quizzes following each course and can redeem those points for various rewards (you have to be a free registered member to earn these credits).

Motley Fool’s Investing Basics

If you’ve completed all of Morningstar’s Investing Classroom courses, Motley Fool’s Investing Basics is a great place to reinforce those ideas but with a witty and humorous twist. Depending on how quickly you went through the Morningstar site, you probably glossed over a few topics or forgotten others, so review can’t hurt. Plus they’re entertaining to read.

Decisions Decisions Decisions…

At this point, armed with the basics, you have to make a decision. Do you want to invest the your stock allocation in index/mutual funds or do you want to try to go your own way and invest in individual stocks? If the answer is index and mutual funds, you probably are armed with enough information go forth and conquer. Open an account with a Vanguard or a Fidelity and have it (those two always seem to dominate Top Fund lists). If you want to go after individual stocks… there is more learning ahead. (some would say there is more to learn but from here but between Morningstar and Fool, you have enough information to Google search from here)

Securities and Exchange Commission

The SEC has a great guide to financial statements, which you’re going to have to decipher and interpret if you hope to be able to pick some winners in the stock market. I would also get myself familiar with EDGAR, which is the SEC’s database of company filings (EDGAR Quick Guide, Comprehensive EDGAR Guide). EDGAR is far more versatile (and comprehensive) than navigating company websites for their filings. They also have a pretty extensive Publications section that has all sorts of valuable information.

Google Finance

If you want a very quick snapshot of a particular company, I think Google Finance has the most amount of information on a single page and provides the easiest interface to reach it. Simply type in the ticker or name of the company and you can get a wealth of information on one page. You can access their related companies, their latest financials, recent and future events, key stats & ratios, a brief summary as well as links on their company website, list of officers and directors, as well as links to other resource reports such as SEC filings, MSN Money’s listed major holders, etc. All that information is one page, that’s why I like it over other similar services like Yahoo Finance (Yahoo Finance’s advantage is that you can add a lot of technical indicators to their charting services).

Wall Street Journal Markets Data Center

So, armed with that information, you probably have enough to go out and do some serious damage to your portfolio (take that any way you’d like :)). Are you ready to be inundated with market data? If so, and my inundated I mean like drinking from a fire hose, then check out the Wall Street Journal Markets Data Center. Pages and pages and pages of financial information at your finger tips. (if it’s intimidating, but that’s okay… and that’s just the home page, you can drill down even more!) It’s absolutely stunning… now go forth and conquer!


Five Check Fraud Tips by Frank Abagnale

If you’ve ever seen Catch Me If You Can, starring Leonardo DiCaprio, then you’re very well aware of the exploits of Mr. Frank Abagnale Jr. The story is about one of the most prolific check fraudsters. He’s passed a bad check in all fifty states as well as an additional twenty-six countries, before behind apprehended. Recently, US News had a chance to talk with him and he passed on five tips to prevent check fraud.

The tips are fairly straightforward – release as little information as possible, don’t use checks because they’re insecure, and check your register every single month. Diligence and common sense have always been and always will be the best defense against fraud.


Review: Investing in Brazil Stocks by Fred Fuld III

Investing in Brazil Stocks by Fred Fuld IIII don’t know Fred Fuld too well, though we’ve swapped a handful of emails, but I suspect he’s a no nonsense, get to the point, don’t waste your time kind of guy. I suspect this because his book, Investing in Brazil Stocks, is a no nonsense, get to the point, don’t waste your time kind of book. If you want to learn about the major companies of the major industries in Brazil and you had only one hour to do it, this is your book.

The book is organized in a very straightforward manner. The book begins with a discussion of the importance of international markets, of BRIC (Brazil, Russia, India, China), and the rapid growth of industries in those countries. The book then makes a bit of an entertaining digression to discuss a fund Fred created called the Gisele Bündchen index (he has created several of these and the Gisele Bündchen index was featured in Money). The Gisele Bündchen index increased 29% last year (Dow increased 6.5%) and is down only 1.9% this year (Dow fell 5.6%). From there, Fred jumps into the major industries of Brazil in this order:

  • Chemical, Energy & Mining
  • Bank & Real Estate
  • Telecom
  • Food
  • Utility & Forestry
  • Airline

In each industry, Fred outlines a handful of companies in pretty solid detail. For each there is a brief profile, history, recent news, sometimes some trivia and discussion of their financials. Some of the trivia is entertaining to read as well such as Petrobras Energia Participaciones, a leading Brazilian oil company commonly called Petrobras, having some product placement in the yet-to-be-successful Speed Racer movie (that’s polite for ‘it bombed’).

If you are looking to get a comprehensive overview of the major Brazilian industries and their major players, you’ll be hard pressed to find a better starting point than this book. I recognize that’s a very specific need, one that I really didn’t have (but the prospect of a book on Brazilian stocks did interest the trivia side of my brain), but investing internationally is where the investment money will be made in the next hundred years so you might as well start learning now or be relegated to the dinosaurs.

The second edition will be coming out in the Fall.


SmartMoney 2008 Broker Survey

Smart Money reviews brokers every single year and they recently just gave a preview to their results. Rather than give the straight ranking, they discussed some headline categories (Commissions & Fees, Research, Trading Tools) and then listed the best and worst from each category.

For best commissions and fees, they listed Interactive Brokers, a brokerage firm I hadn’t heard of but does charge pretty rock bottom fees (half a cent per share on equity trades). They also showed the spread was anywhere from $4.95 for TradeKing to $112.50 for Fidelity on broker-executed trades.

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 Banking, Personal Finance 

Remember Certificates of Deposit During Fed Rate Cuts

If you think interest rates are falling, put some of your savings into a CD. Since last August (2007), the Federal Reserve, haunted by the spectre of a slowing economy, had been hacking and slashing the Federal Funds and Discount rates. During that run, and until just recently, the prevailing attitude on Wall Street was that the Fed was going to continue cutting the rate until the threat of future inflation balanced out the threat of a recession. With this last twenty five basis point cut at the end of April, the prevailing attitude changed. Analysts now believe the Fed will stand pat and potentially even raise rates in the future.

During those rate cuts, all of the high interest online banks dropped their savings account interest rates dramatically. Since January of this year, the interest rate on E*Trade’s online savings account fell from 4.95% to 3.01% (only to increase, just recently, to 3.15%). ING Direct account holders saw their rates fall from 4.10% to their current rate of 3.00%. If you were able to purchase a CD at the prevailing higher yield online savings account rates for even a year, you’d be sitting pretty on those funds right now and that’s why CDs become popular during a falling interest rate environment.

This is where you say: “Jim, I’m not an idiot, I know that if the rates are going lower then I want to lock in good rates.” Yes, you are not an idiot but the point is I didn’t lock in any funds in CDs, except for my laddered emergency fund, because I didn’t recognize that I should have (or at least should have considered it). It wasn’t an error of judgment but one of ignorance.

Everyone knew rates were going to be cut but not everyone realized they should’ve considered putting a little bit away in certificates of deposit. (I can confidently say that because I know I didn’t) So, the next time you think rates are going to stagnate or fall, lock a little away in CDs.

 Personal Finance 

LifeLock CEO on the Today Show

LifeLockThis morning the CEO of LifeLock, Todd Davis, was on the Today Show with Matt Lauer to defend his company’s service. He was there to answer a few pending lawsuits about how the LifeLock service doesn’t work and that its claims to protect and prevent identity theft are fraudulent claims. Lauer really hammered Davis (as hard hitting as the Today Show can possibly be) but there were some pretty interesting statistics Davis brought up:

  • Only a 105 out of a million customers have been victims of identity theft.
  • Todd Davis, advertising his SSN for the last two years, has had 87 attempts with only one successful hit in Texas where someone was able to get $500.

My opinion of LifeLock has always been that the $10 you pay each month is essentially insurance on your time. Becoming a victim of identity theft, even if you are diligent in every single possible way, is like winning the lottery (a small firehouse charity one).

Just to give you a basis for comparison, the Privacy Clearinghouse 2007 Identity Fraud Survey reported that there were 8.4M cases of identity fraud in 2007. If there are 304M potential targets (that’s the census estimate and it does include children and babies, but they can be victims too) and a 2.73% chance of becoming a victim. With LifeLock’s measures (many of which you can implement yourself such as opting out of junk mail and freezing your credit reports), you have a 0.01% chance of becoming a victim.

So, going back to the Privacy Clearinghouse’s data, the mean fraud amount was $5720 in 2007 and the mean resolution time was 25 hours per victim; so your $10 a month is buying you insurance against that < 2.73% chance (that's if you did the average to protect yourself) of losing 25 hours. To calculate what that's worth, you look at how valuable you think your time is and whether the $10 a month is worth it. LifeLock shouldn't be considered bullet proof protection against identity theft, it should be considered time insurance against dealing with it.

 Cars, Personal Finance 

Can You Really Give Up Your Car?

Higher gas prices suck, but you’re willing to pay them. You’re willing to pay them, much like I’m willing to pay them, because you pretty have no choice but to fund the extravagant palaces of those oil rich families in the Middle East (if you think Exxon is making insane profits, it’s nothing compared to many of the ruling families over there) right? Well, if you’re like me, you’ve probably considered what it would take to surrender the keys to your car and came away with the conclusion that life would be too difficult without your car… but would it?

Mass Transportation

If you live in a major city, mass transit is your best “next alternative” to a car. For people in New York City, with an intricate subway system, this is a no brainer. In fact, very few people who live in NYC have cars because it’s simply not worth it. Why pay for a car, insurance, gas, and parking when you can easily get around the city for a subway token or cab fare? If you need to leave the city, rent a car or go with a ZipCar. If you need to move a lot of stuff, rent a truck or van.

In fact, if you live in a major metropolitan area (the full list of participating cities, surprisingly NYC isn’t on the list), Google Maps can give you a “Take Public Transit” option that includes walking. The next time you do a search between places in a city, look for a “Take Public Transit” link in the Directions section (next to the Drive There option) and it’ll explain exactly how to get there. Pretty useful!

Unfortunately, if you live in the city then you’ve already realized this. If you don’t live in the city, you can’t benefit as much from this. If you live in the city but work outside of it, again you probably can’t benefit significantly from this either. That puts you in the same boat as those people who live in the sprawling suburbs. Is it really possible to give up your car? The answer is yes, if you’re willing to do the work. Transportation comes down to figuring your options and taking advantage of the resources you have available, which oftentimes is time.


If you have a bicycle, you have the second best mode of transportation available to you (the first being your legs). The key here is to take advantage of it by researching how to get to different places using only your bicycle. I knew a guy (Paul G, this is you if you’re out there) who would bike a twenty minute car commute once a week (or more, I can’t remember) for the exercise. This is the same guy that one day came in with a broken thumb because he fell into a big crash at a weekend bike race! He knew all the little detours underneath highways so that he never had to cross a major highway. If you want to bike to work or to the mall or wherever, you need to find yourself a Paul G. either in person or on the internet.

Incidentally, you should never try to cross a highway. If you can’t find a way around, scrap the idea of biking into work entirely. The danger is simply not worth it.

Also, there’s a petition to Google to provide a Bike There feature like the “Take Public Transit” option mentioned earlier. If this is ever made available it would be awesome.


This option requires a little planning at the buy/rent phase, meaning you need to plan the idea of walking someplace into your decision to buy a home or rent a home/apartment/condo. We lucked out and bought a house that gives us the opportunity to walk to a library, bank, supermarket, liquor store (this is crucial!), neighborhood bar, and some random food places (that we’ve never eaten at).

When you are thinking about buying a place, keep this in mind when you’re surveying the neighborhood. How easy is it to navigate the area on foot? Are there a lot of paths? Are they well lit? While you can’t walk to work, at least you can try to find a place that is within walking distance to a lot of other places you’d frequent.

Other Modes of Transportation

I’m at a loss to think of any other modes of transportation other than by train, bike, or foot… anyone have any clever ideas? Segways are out of the question. 🙂

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