Personal Finance 
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A $400K Lesson About Greed

Last week, I linked to a video about how someone had multiple shots at a six digit payday on a game show and lost it all because they were staring at a potential seven digit payday. Greed is a sick sick animal.

Today, we have a story, courtesy of the Consumerist, about a woman who got taken for $400,000 by Nigerian email scammers. Yep, that actually happens. It’s a sad story about an unfortunate thing to have happened to an otherwise good person but we should all learn some very important lessons from this (you can just as easily lose that money to the stock market!).

If It’s Too Good To Be True…

There’s a reason why this saying exists… human civilization has been around for thousands of years and seen its fair share of scams. From the time of cavemen when a lion looked like it was dead (and wasn’t) to magical male enhancement and weight loss green tea products, scams are everywhere and we’ve become very good at detecting the scam. Even in that story, while she blew past her own BS detectors, her friends and family kept warning her and she ignored them as well.

The lesson is that if it’s too good to be true, ask three friends that you believe are savvier and smarter than you whether they think its a scam. Then ask three strangers. When they all say – “that’s a scam!” you either believe them, or you get taken.

Never Send Money Abroad

Unless it’s to a relative you knew before they emailed you out of the blue because they were sick or dying or needed some cash to collect a multi-million dollar payday… don’t send cash. Don’t buy stuff from an international seller unless its with a credit card. Money orders and transfers are not protected. Once that money order leaves your possession, it’s gone.

Don’t Let Yourself Get In Too Deep

The first few hundred you throw after a bad thing can be chalked up to stupidity, the next three hundred and ninety nine thousand is the fault of stubbornness and pride. After a certain point, you try to prove to yourself that you aren’t stupid and that you aren’t an easy mark by throwing away more money on the off chance it isn’t a scam. You have to recognize when you’re being smart and sticking to your guns and when you’re simply being stupid and stubborn.

It’s unfortunate she got taken for so much but life often isn’t fair.


 Shopping 
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Call Center CSRs Ruin Customer Experience

Yesterday I wrote about how I closed my Washington Mutual account by mail and the infuriating experience I had with a call center CSR. If you don’t feel like reading the entire saga, here’s the thirty second recap. I wanted to close my WaMu account and was given incorrect information that led to additional headaches and a $4 service fee. I called to try to close the account and discovered I was given incorrect information and charged the fee, so I was struggling with the CSR to get both the fee removed and the account closed. Eventually I learned the correct process and had the fee removed, end of story.

The infuriating part of the entire process was the fact that the first person you talk to isn’t going to help you unless it’s on their script. I understand the need for companies to outsource call centers to areas with a lower cost of living. The bottom line is the bottom line, cutting expenses is has a direct impact on that and outsourcing customer service is something all businesses are looking at. The problem is that you cheapen the user experience in interacting with your company and, if you frustrate them, you could potentially lose a customer because they don’t want to deal with your crap.

Unfortunately, it’s gotten to the point where people have associated accents with outsourcing and outsourcing with garbage customer service. I’ve been primed to believe that if I hear an accent then chances are I’m dealing with an outsourced CSR who is forced to follow a script and probably answers phones for multiple companies. They are effectively living, breathing robots.

Businesses need to think of customer service not as a cost they should be reducing but an opportunity to build a relationship at the first level, not at the escalation level. I was so frustrated at hearing the same canned response from the CSR that by the time I got to the supervisor, who coincidentally had no accent and all the authority (thus reinforcing an entirely unreasonable association), I was already formulating a blog post about how I’m glad WaMu got gobbled up. The supervisor was great though, she immediately removed the charge and told me how to properly get the account closed.

I was leaving and they were making it easy (they could’ve demanded the $4 fee), which made me kind of sad they were being gobbled up… but companies really need to rethink their call center strategy. There’s are quite a few similarities between all the hated banks, hated cable companies, hated internet companies, hated cell phone companies, and other hated companies – infuriating outsourced call centers. (and relentless fees!)


 Banking 
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How to Access International ATMs

20 Pound Sterling NoteMy wife and I still use Bank of America as our primary checking account and I called them the other day to let them know we’d be traveling and how we might be using our debit card abroad. I don’t plan on using it (we have a Capital One card for purchases) but I wanted to ask them about using ATMs abroad.

The past few days I’ve been researching the best way to exchange money, trying to keep the fees low and the accessibility high. I’ve discussed things with my friends over there and the consensus was that ATM was probably the best way. Between ATM access and us simply paying with our 0% transaction fee Capital One card, we should be paying as little in fees as possible.

Global ATM Alliance

It turns out that Bank of America has partnered with a few international banks to form their “Global ATM Alliance.” When we use a Global ATM Alliance ATM, we avoid a $5 access fee. If we use any old ATM, we would be assessed a $5 access fee. Otherwise, ATM transactions incur a 1% transaction fee to cover the exchange of currency.

Here are the partners in the Global ATM Alliance:

  • Barclays (United Kingdom)
  • BNP Paribas (France)
  • China Construction Bank (China)
  • Deutsche Bank: (Germany)
  • Satander Serfin (Mexico)
  • Scotiabank (Canada)
  • Westpac (Australia and New Zealand)

Call Your Bank

If you’re traveling abroad, call your bank to see what your international options are. I should have done this from the start, rather than poke around and waste time researching the best option. One simple phone call would’ve yielded the simple advice of “Try to find a Barclays, you can use their ATMs.” The 1% transaction fee, which covers the currency exchange, is probably the leanest you’ll ever find. You will always have to pay a fee to exchange money and it’s either listed as a fee or integrated into an exchange rate that doesn’t match the prevailing rate (this is how credit cards used to “hide” the currency transaction fee and the reasoning behind the foreign transaction fee lawsuit).

Time to pack for London!

(Photo: funkypancake)


 Frugal Living 
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100 Money Saving Tips

Need a few ideas on how to save some extra cash? When I first wrote this list, it was November and we were ramping up to the holiday spending binge that we all love so much, but these tips can help you save money at any time in the year. Why wait until our consumer driven society gets all whipped up into a fervor? We can save whenever! (I see nothing wrong with getting whipped up into a fervor, to be honest!). This year, with the economy so weak and with so many people concerned about their financial future, it makes sense to cut back on the things that aren’t important so we can spend it on the things that are.

Here are a hundred tips on how to save some quick money:
(Click to continue reading…)


 Personal Finance 
36
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13 Quick Ways to Make Extra, Easy Cash Money

$1,025 in credit card offers!If cash is getting a little scarce around your household and you’ve cut back as many expenses as you possibly can, it’s time to look at the other side of the equation – the income side. There are many ways you can earn some extra cash and below I’ve listed thirteen that range from really quick and easy with no headaches to a bit more cumbersome. There’s no order to the list other than that’s how they came out of my brain.

1. Rent out a room. If you have a spare bedroom in your home, you might consider renting it out to someone. While this may not qualify as a “quick” way, it’s certainly something that can really put a lot of extra cash in your pocket. The only downside of this is if you select a bad roommate, always a distinct possibility, because it could be difficult getting rid of them.

2. Rent out parking. If you live in a parking-strapped city and have a parking pad, consider renting out any “extra” spots you may have (or even your spot). You incur the headache of finding a parking spot every night but you may be richly rewarded for doing so.

3. Baby-sit. Teenagers do it, why not adults? Baby sitting is a great way to earn easy money without dealing with a lot of headache. Just brush up on your first aid skills, know your emergency contact numbers (or better yet, program them into your phone), and start offering your services to friends, neighbors, Craigslist, etc.

4. Hold a yard sale. The weather up in the Northeast may not be accommodating to this particular idea but yard sales are a great way to turn your clutter into cash. If you don’t have a lot of stuff to sell, round up your neighbors and see if you can scare up enough stuff for a community yard sale.

5. Sell high dollar items on Craigslist or eBay. If you have any valuable items, consider listing them on Craigslist or Ebay rather than going the yard sale route. Yard sale aficionados are looking for deals more than they are looking for specific items, chances are a customer won’t value items as highly as you will. By going online, you stand a better chance of finding someone who really wants what you’re selling.

6. Return stuff you bought but haven’t used. This is more of a stretch but if you have anything you bought and haven’t used and can return it, just return it! That’s immediate cash money in your pocket that you didn’t have before and it took almost no effort.

7. Participate in focus groups. I participated in a 90 minute focus group in Baltimore about windows and was paid $100 cash. Do a search for local focus groups and you might be able to score some easy cash if you qualify.

8. Take paid online surveys. There are a lot of junk survey sites out there and I’ve stayed away from most of them but my experiences with Opinion Output and Pinecone Research have always been positive.

9. Donate plasma. I’ve always heard about donating plasma but really learned more about it when I was reading Adam Shephard’s Scratch Beginnings. Donating plasma doesn’t seem like fun but it pays and you can do it twice a week. (Men can donate sperm as well, but you’ll probably have to go somewhere else for that)

10. Put advertising on your car. If you do a lot of driving, especially on highways and in very crowded areas, considering getting your car wrapped. Advertisers will pay a few hundred bucks a month to get your car draped in their logo, colors, everything. The nice thing about this is that the wrap can be removed without any damage to the car. This option may not be as easy given economic conditions but it’s certainly worth considering.

11. Tutoring. Are you particularly strong in math or verbal skills? Did you crush the SATs or the SAT IIs? Are you a maven in the sciences? Consider tutoring either online through services like Tutor.com or locally in your area. Check your local area for opportunities to educate our nation’s youth (for a modest fee of course).

12. Seasonal labor. Check out the stores at your local mall, grocery store, and even the post office to see if they have any seasonal labor opportunities. Retail sales are expected to be weaker this year but you may still be able to find some work since there should be an increase in activity, especially at the post office. (You can always get a part time job or become a temp too)

13. Start a part time business as a dog walker, errand runner, or handyman. The easiest “business” you can start is one that uses your existing skills – everyone’s capable of running errands, walking dogs, and, for some, by a handyman (or woman).

If you have any good ideas I’ve missed, as I’m certain there will be plenty, please share them in the comments! Also, if you’ve tried any of these and could share your experiences, I’m sure everyone would be very appreciative.


 Banking 
32
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How To Close An Account At Washington Mutual

WaMu SucksBefore Washington Mutual was acquired by JP Morgan Chase, in better times for the bank, they offered a yield on their online savings account that was tops in the land. Since then, the rate as fallen to 2.25% APY, which doesn’t even register on the radar of high yield savings account rates, and so I opted to close my account when I opened a Dollar Savings Direct account.

This is the first online savings account I have ever closed and I had no idea it would be such a headache. I don’t know if this is unique to WaMu’s policies or if it’s universal to online savings accounts but it was a pain. First, let me tell you about my experience and then I’ll explain the easiest way to do it.

How To Improperly Try Close A WaMu Account

In Maryland, there are no convenient WaMu branches to visit so I would have to do it by mail. Yep, they can’t close an account over the phone, which makes sense but is quite infuriating. The first time I called, I was told that I needed to zero out the accounts (I had both checking and savings) and then I could close the accounts by phone. So, I transferred all the funds out of my checking into my savings and then initiated a transfer out of savings. The checking to savings transfer was instantaneous, so I immediately closed my checking. I was told I could just call back in a couple days once the savings was zeroed out and could close that by phone. That was wrong.

What happened was that once the checking was closed, the $300 minimum daily balance requirement kicked in for the online savings account. I was assessed a $4 fee, overdrawing the account! When I called today, I had to fight with the call center CSR, who had no power but the follow the script she was given, to understand the actual process, then escalated to a supervisor who reversed the $4 fee. Overall, the experience with the call center CSR, through no fault of her own, was frustrating and infuriating but the supervisor was accommodating and great.

How To Properly Close A WaMu Account

There are rules as to how you can close out interest-bearing and non-interest bearing accounts, just forget about them. You only need to know the two ways to close a WaMu account:

  1. Visit a branch and close it with a teller. I didn’t have this option, but this is by far the easiest.
  2. Send a letter to WaMu’s Bank By Mail, indicating that you want to close your account. You’ll need to provide your account number (which you can get by viewing one of your statements through online banking) and a return address so they can send you your balance by check.

The mailing address for that letter is:
Washington Mutual BBM
PO Box 659588
San Antonio TX, 78265-9588

Don’t close any accounts over the phone, you’ll just end up decoupling your checking and savings and be hit with fees.

(Photo: Sërch)


 Cars 
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5 Easy Ways to Screw OPEC

No Oil: OPEC Sucks!I don’t know about you but every time I heard oil prices falling, I grin from ear to ear. I like free markets if they are operating in a healthy economic environment (which means I’m cool with the bailout of banks, but I’m not cool with talks on bailing out GM, though I understand why) but those OPEC nations were taking it too far. I wrote about how OPEC hates us and how they were decreasing supply to “cope” with sagging demand. They got used to the high prices and now that demand is falling, they want to keep the high prices. That’s just mean.

So, what can we do? Hit them where they want to hit us, in the money sack. We must use less gas.

The lesson here, which we should’ve learned in the 70′s, is that OPEC should control our destiny. Say what you want about offshore drilling or alternative fuels, that’s for the pundits and the policy makers to figure out for 2015… I’m going to continue to do what I can today – use less gas.

Five Ways to Screw OPEC

1. Regularly maintain your car. Getting regular checkups, regular tune ups, and regular oil changes will improve your fuel mileage and increase the lifespan of your car. The myth about the 3,000 oil change is a myth, you can follow whatever your car manual says for your type of usage, but you still need to get that changed. As for the 30,000 and 60,000 checkups? Do them. Tune ups? Wonderful for gas mileage as you replace things that have been worn down. Don’t be penny wise and pound foolish with your car because the day you take it for granted is the day it reminds you that you shouldn’t.

2. Check your tires regularly and rotate them. Rotating the tires maximizes their lifespan. Keeping them properly inflated maximizes your fuel efficiency and maximizes their lifespan. Those two simple things will reduce how much gasoline your car consumes and how much oil is used to produce the rubber for your tires. Use less, OPEC complains.

3. Carpool to reduce driving. I feel like a broken record (can I even use that analogy anymore?) but carpooling and efficient trip planning has to be the easiest way to save gas. My wife and I try to plan our trips such that we minimize how much driving we do and it makes for a fun mental exercise.

Did you know that if two separate people are meeting at a point between them, it’s always better for one person to pick up the other person first as long as they return to the same place? If my wife is leaving work and I’m at home, it’s better for her to pick me up if we plan to go out for dinner than for us to meet each other at the restaurant. I didn’t think it was intuitive but if you draw it out it makes very obvious sense. (if the meeting point is equidistant to both then it’s equal)

4. Learn how to hypermile. Hypermiling is changing your driving behavior so that you maximize your car’s fuel efficiency. The basics are quite simple, you want to brake as little as possible, accelerate as slowly as possible, and travel as slowly as reasonably possible. Realistic hypermiling are a few suggestions I feel are both effective and realistic in our current driving environment.

5. Buy a bike. My wife and I bought bikes earlier this year and we use it to get around our area fairly easily. This may or may not be feasible for you given your neighborhood but it’s something you should consider. If not a bike, then investigate how you can best utilize mass transportation in our area. The key here is to ditch the car and try something fun and different.

Now say it with me, “Down with OPEC! Down with OPEC!” :)

(Photo: jfabra)


 Credit 
12
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Peer to Peer Lending Becoming More Popular

I was listening to NPR’s Morning Edition the other day when they started talking about peer-to-peer lending companies like Lending Club and Prosper (currently closed pending SEC approval).

I’ve written about peer to peer lending a few times before, first when Prosper’s Peer to Peer Lending Marketing debuted and then once again when LendingClub offered their peer to peer lending service.

I personally don’t invest using either service because I didn’t have confidence in an untested system in a totally new paradigm. However, if I were a borrower, I’d jump at the chance to borrow money from individuals rather than the monolithic lending industry. You’d be kidding yourself if you didn’t think the lending industry, be it loans or credit cards, doesn’t jump at the chance to lock you in to something complicated and counterintuitive (option ARMs anyone?).

The borrowers probably benefit the most in this arrangement. The experiences profiled in the Morning Edition clip echo many that I’ve read online – borrowers get the opportunity to get loans with better terms and with less headache. While you are still ranked by your score, you get to add a little color commentary not captured in credit histories.

For investors, I have read that default rates were higher than they first listed and individuals are finally learning why the lending industry acts the way it does. A lot of people default. The benefit of peer to peer lending is that investors can invest small amounts into many loans, thus diversifying their risk. I like the idea of having another avenue to invest in outside the typical stock/bond/whatever paradigm but I’m still apprehensive.

While I’m still not sold on the idea of investing in peer to peer marketplaces, if I needed a loan I wouldn’t hesitate to put them on my list of places to get a quote from. What are your thoughts on the peer to peer lending industry?


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