Personal Finance 
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comments

Roundup: Mega Millions Worth $540 Million

The Mega Millions drawing scheduled for tonight at 11 PM has a record breaking prize – $540 million (update: $640 million!), $389 million if you choose the lump sum over the annuity. The tickets are just a buck and you pick six numbers. Of the first five, you pick from a number between 1 and 56; for the sixth you choose from between 1 and 46. Match all six, win the entire prize. Match fewer than all six and you can still win.

Here’s the prize table:

Match 1st 5 # Match 6th # Prize Odds
5 1 Jackpot 1 in 175,711,536
5 0 $250,000 1 in 3,904,701
4 1 $10,000 1 in 689,065
4 0 $150 1 in 15,313
3 1 $150 1 in 13,781
3 0 $7 1 in 306
2 1 $10 1 in 844
2 0 $10 1 in 844
1 1 $3 1 in 75
0 1 $2 1 in 75

The odds of winning anything is 1 in 40 and you can buy a ticket up until 10:45 PM! You playing?

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 Personal Finance 
5
comments

MasterCard & Visa Warn Banks of Processor Breach

It seems like a while since we’ve had a massive credit card breach but the MasterCard and Visa are warning banks that there was a “massive” breach at a US based credit card processor, first reported by Brian Krebs. The breach occurred between Jan 21 and Feb 25 of this year and full Track 1 and Track 2 were taken. The tracks refer to the magnetic stripe on the back of the card and financial cards have two tracks, this means that the cards could be duplicated.

There isn’t anything you can do about this, nor would I do anything, except to know that it has happened (and these types of breaches will continue to happen well into the future). Most credit card issues offer zero liability for unauthorized charges and those that don’t have protection under consumer fraud laws that limit liability to $50 if reported within 60 days.

Update: The WSJ is reporting that Global Payments was the processor that was breached and around 50,000 cardholders are at risk.

If you’ve heard anything from your bank about this, please let us know!


 Your Take 
79
comments

Your Take: On the Healthcare Law

Earlier this week, the Supreme Court heard oral arguments over the healthcare law over the course of three days. It’s been the subject of debate all over the news and it’s something that even my lovely wife has asked me about. This Your Take is going to be exceptionally long, I hope you read most of it and I really hope you share your thoughts. Unlike the vast majority of the comments on the Internet, I know that when it comes to thoughtful insight, you guys have enlightening me more than the other way around.

Before I get into what I think, I want to introduce the idea of the tragedy of the commons, because it plays an integral role in how I think of health care. If you have several herders sharing a common piece of land, where each herder is allowed to let their cows graze there, and each herder has an incentive to keep the pasture in good condition. If everyone starts with five cows and they agree to share the land, the grass can grow back and the pasture is kept in good condition. Then someone gets a new cow, lets it graze in the fields, then someone else gets a new cow, and it too grazes. They know they originally agreed to share the land but now two of the owners are getting a little bit more than the rest and the pasture suffers from overgrazing.

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 Personal Finance 
5
comments

How to Help Your Child Buy a Home

If you believe the financial news media, getting a mortgage is a lot easier than it was just one year ago and not only that, it’s cheap. With rates aroundso low, it’s the best buyers’ market this country has seen in decades. Like most reports we read or view in advertisements, it’s not quite that simple.

It’s still more difficult to get a mortgage than it was before the housing collapse and most people would agree that it should have never been that easy to begin with but still, somebody with good credit and a steady job should be able to buy a home at close to the low interest rates. Sometimes that’s the case but often, it’s not.

Where the government couldn’t help, consumers are finding a way to make getting a home a little easier. Parents are becoming lenders to their children and that is making the purchase of a home a reality for many who couldn’t find success on their own.

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 Business 
3
comments

Business or Hobby? How the IRS Views Your Money-Making Venture

Hobby IncomeThese days, there is a lot being said about side hustles. If you are looking for a little extra cash, you could try to make money from your hobby, or even start a side business. When tax time rolls around, though, it’s important to understand how the IRS views you. You want to make sure that you know the difference, in tax terms, between a business and a hobby.

With a hobby, you can deduct your expenses to offset your income (you are supposed to be reporting your income), but only the income from your hobby. You can’t claim losses related to your hobby. A business, though, is another matter. Your business loses are deductible against other types of income. So it’s important to be able to differentiate between a business and a hobby for tax purposes.

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 Cars 
21
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How to Save Money on a Rental Car

Budget Rental CounterSometimes we’re just plain clueless when it comes to certain expenses. We don’t purchase air conditioners, automobiles, or furniture enough to consider ourselves expert consumers in those areas and often, that causes us to feel at the mercy of the salespeople. For many, travel expenses fall under that category. Most Americans don’t travel regularly so expenses like rental cars could make you feel like you wouldn’t know the difference between a good and bad deal.

As the husband of a former Enterprise employee, I’m in a unique position to know the real story behind rental car sales so let’s take a look at some of the facts that the rental car sales staff won’t be quick to tell you.

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 Family 
22
comments

Should You Charge Your Child Interest on Loans?

Loaning moneyNot too long ago, my son wanted to buy a book. He only had about half the money he needed, since he had recently made a larger purchase. For the first time ever, he asked me if he could borrow the money, and then pay me back. I was hesitant, because I don’t like the idea of teaching him that he can just get money for things he wants now by borrowing.

However, after some thought, I decided that this could be a good learning experience. I explained that, like Monopoly, if he’s going to borrow money, he’s going to have to pay extra in interest. So, even though he was borrowing $7, he would need to repay me $8. I told him it would come out of his allowance (after he paid his charity donation and savings), and he had to repay the debt before he could buy anything else.

He agreed, and has been kind of bummed ever since. Instead of watching money grow in his spending jar each week, he has to give all his money over to other obligations. Even worse, in his eyes, is the fact that it’s taking longer to repay me because he owes an extra dollar in interest. An extra dollar! That dollar is going right to my pocket for me to buy candy, instead of him being able to get that big candy bar he wanted the other day.

Right now, he is making grand declarations of never borrowing again. The whole exercise has made a big impression. Hopefully, we won’t have repeats of this borrowing situation later on because of this experience. However, if he does ask to borrow money later, there is a good chance that interest will be charged.

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 Personal Finance 
11
comments

Beware the Monthly Math Trap

Marketers are very very clever. Ever notice that banks advertise their loans in APR (annual percentage rate) while they advertise their CDs in APY (annual percentage yield)? They are slightly different calculations but an APY is always greater than an APR, so they know to advertise using the right one (lower for loans, higher for interest) to tap into your psychology.

The same is true about something I call “monthly math.” Monthly math refers to the marketing tactic of taking a large purchase and breaking it up into more bite-sized monthly payments. It’s why shopping channels like QVC always break down a large payment into “three installments of …” $200 is a lot, but four payments of $50 seems like less. It makes the purchase seem more manageable.

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