Bargaineering » Your Take

Your Take: Ever Play Credit Card Roulette?

Jim — Fri, 10 Feb 2012 12:15:08 +0000

So, I have a few friends who like to gamble (did my Super Bowl betting post about my friend who won $1500 on the Giants’ safety give that away) but, surprisingly, that hasn’t translated into many games of credit card roulette. There are a few varieties of the game but the basic gist is that you go out, get some food, and when the bill comes, everyone throws in a credit card. The server takes out cards, one by one with a lot of drama, and the last one in there pays the bill. The last time I played was a few weeks ago at a local bar, it was only four people, it was really really exciting, and it was really really awesome when my friend Drew lost.

Hey Drew – thanks for the oysters, beer, and dinner!

What do you think about credit card roulette? Stupid and silly? Or should I have to claim that win on my taxes?

(Photo: stoneflower)

Your Take: Ever Play Credit Card Roulette? from personal finance blog Bargaineering.com.

Your Take: Why I Keep Cash at Home

Jim — Fri, 03 Feb 2012 12:15:32 +0000

Tell a few personal finance bloggers that you keep cash in your house and you will invariably be asked why. Why keep cash in your account when you can put it into a high yield savings account and earn a percent of interest? What if there is a fire? What if you get robbed? Why not put it in the warm embrace of FDIC insurance at th ebank?

I don’t keep much, usually only one or two hundred dollars, and the reason I do so is so I can get cash easily if I need it, whatever the reason. I don’t keep a lot, I don’t see the point given credit cards, but I do want to keep a little for those times when cash is king and credit can’t be accessed. I’m talking about those rare cases, like a black out or a big snowstorm (like the major snowstorm a few years ago in the Baltimore Washington metropolitan area), where you need some cash but just can’t get to a bank.

To be perfectly honest, the number one reason I do this is because I’m lazy. I don’t really think that there will be a calamity where I won’t be able to get to an ATM or use a credit card, but sometimes I’m going out somewhere and I need cash but don’t want to make a trip to the ATM. It’s nice to have a few bills at home so that I can tap that reserve instead of make that trip. That’s why I keep some money stored away at home, instead of earning a few pennies at the bank.

One final bit of warning, cash is usually not completely insured by your homeowners or renter’s insurance. So if you are robbed and they take cash, or there is a fire and the money burns, you may be limited in how much cash is covered – that amount will be listed in your policy. I don’t recommend keeping thousands of dollars at home, but a few hundred will probably be covered by your policy.

Do you keep cash at home? If so, why?

(Photo: amagill)

Your Take: Why I Keep Cash at Home from personal finance blog Bargaineering.com.

Your Take: Hard Work or Connections?

Jim — Fri, 27 Jan 2012 12:10:47 +0000

The WSJ Wealth Report blog talked about a Pew Research Center study that attempted to find the origins of the conflict between rich and poor, which has been playing out in the headlines lately. While the main story talked about the impression of significant conflict between the rich and poor, the part that interested me was the same one that caught Robert Frank’s eye – did the rich get rich from hard work or their social network? That poll showed that 46% of respondents thought they were born with money or knew the right people, while 43% thought hard work, ambition or education was the root reason.

There obviously isn’t a definite answer, there will probably never be, but the question is an intriguing one. My belief is that both are necessary and the more you have of either, the higher your probability for finding success. Whether that success comes in the form of money or in the form of achievements, it’s hard to argue that you can be successful without hard work, ambition, education, or knowing the right people. Whether you’re rich depends on where you point yourself. You can be a successful philanthropist and not have a high net worth, you’d still be seen as very successful, you just chose a different path.

What do you think?

Your Take: Hard Work or Connections? from personal finance blog Bargaineering.com.

Your Take: How Much Income to Feel “Rich”?

Jim — Fri, 13 Jan 2012 12:16:58 +0000

A recent Gallup poll asked, among other things, respondents how much income they would need to earn a year in order to feel rich. 70% of the respondents that gave a number (10% didn’t give a number) said they would need to earn $100,000 or more with the median number being $150,000. 4% said over a million dollars and 11% said a million dollars. Compare this to 2004, the last time Gallup did a similar poll, and back then $120,000 was the median number, which happens to be $147,665.87 if you adjust for inflation (BLS CPI calculator). The median annual household income, according to the US Census, is around $50,000.

What’s interesting about this poll and the answers is that the median result didn’t change much despite everything that has happened since 2003. In 2003, we were still working out aftermath of the dot com bubble and 9/11 but the stock market was improving after hitting its lows in late 2002. Hopefully we’re going through the same today having seen the lows already.

Here comes the obvious question… how much income do you think you’d need to earn to feel rich?

(Photo: nowhere77)

Your Take: How Much Income to Feel “Rich”? from personal finance blog Bargaineering.com.

Your Take: Frugal Christmas Gift Ideas

Jim — Fri, 16 Dec 2011 12:15:05 +0000

With the economy as rough a shape as it’s been, a lot of folks are turning towards frugal gift ideas this year. These are gifts that a frugal in the sense they don’t cost a lot of money but what they do replace with dollars and cents is oftentimes worth so much more. A gift doesn’t have to be expensive, it just has to have a lot of thought, care, and creativity in order to be a great gift. As we hunker down and try to end another tough economic year, things like homemade gifts will probably make many an appearance on Christmas day.

What is the best frugal Christmas gift that you’ve given or received? Or even just saw or heard about?

(Photo: Joriel “Joz” Jimenez)

Your Take: Frugal Christmas Gift Ideas from personal finance blog Bargaineering.com.

Your Take: Do You Buy Into IPOs?

Jim — Fri, 09 Dec 2011 12:15:46 +0000

There have been a lot of technology initial public offerings (IPO) this year and they’ve gotten a ton of press. It reminds me of the tech bubble over a decade ago when anything with a .com could IPO and skyrocket in the first day. This year we’ve seen plenty from LinkedIn to Pandora to Groupon and while the first day’s gains were pretty big, subsequent days saw the price fall. The latest hot technology stock IPO to get press is social gaming giant Zynga with their plan to raise as much as $1 billion in an IPO. The plan is to offer 100 million shares at $8.50 to $10, which values the company at around $7 billion. All of those deals would pale in comparison to the looming Facebook IPO.

I’ve never invested in an IPO on that first day (or first month…) and I doubt I ever will. I always see this as gambling because for every skyrocketing day-1 stock there is a ho-hum lackluster day-1 stock. Very rarely do you see a situation like Google where you have IPO at $85, it has a huge pop the first few days and is worth over $600 just a few years later. Just look at Pandora and Groupon today, just a short time after their IPO, and you can see how just holding onto it a little longer could take gains and turn them into losses. Would you take the day-1 gains and be happy? Or would you hold (and guess) hoping for a Google story? That’s why I don’t take part, I’m a bad gambler and an even worse guesser.

I’ll stick with my boring dividend stocks. Do you buy into IPOs?

Your Take: Do You Buy Into IPOs? from personal finance blog Bargaineering.com.

Your Take: Did You Use Up Your Vacation Days?

Jim — Fri, 02 Dec 2011 12:35:17 +0000

Here’s a statistic that is always surprising and this year was no different – the average American worker gets 14 vacation days a year and only uses 12 of them. That adds up to 226 million unused vacation days, or approximately $34.3 billion dollars of work. That’s amazing. It’s not that surprising though as we are in one of the worst periods of unemployment in quite some time and many people are probably cutting back on vacation days in order to be more productive. It’s not exactly fair but it’s human nature, if I’m concerned about getting fired then the last thing I’m going to do is take a vacation day. I’m going in to work harder and longer so I can show I’m a valuable asset to the team.

That said, have you used up all your vacation days?

Your Take: Did You Use Up Your Vacation Days? from personal finance blog Bargaineering.com.

Your Take: Any Good Black Friday Loot?

Jim — Fri, 25 Nov 2011 12:20:46 +0000

You know I skipped Black Friday (and I stuck to my guns for another year – nothing enticed me anyway) but that doesn’t mean you can’t brag about some loot you scored because you were the early bird.

Did you get anything particularly good this year that you want to brag about? Or just have a good story of something you saw?

Or, if you were like me, did you skip it entirely?

(Not sure what happened but this didn’t up as scheduled on Friday morning … )

Your Take: Any Good Black Friday Loot? from personal finance blog Bargaineering.com.

Your Take: Congressional Insider Trading

Jim — Fri, 18 Nov 2011 12:15:08 +0000

They say, sunlight is the best disinfectant. For years, I’d read about how members of Congress were exempt from your typical insider trading rules. If a company insider were to make trades on private insider information, and they were caught, there would be serious consequences. They’d have to pay restitution and, most likely, receive probation or jail time. If they were a member of Congress, well, nothing would happen to them. I’d always been perplexed by this but, in the past, no one had done anything particularly egregious with that “get out of jail free” card.

Then 60 Minutes put it center stage. Last Sunday, they aired a piece about members of Congress profiting from private information and how that was completely legal.

Here’s the funny part… we’ve known about this for years. I certainly heard about this many years ago but it’s one of those things where members of Congress know that it would be extremely embarrassing if they traded on insider information and they were caught. Considering how much money they can make by taking on new roles after office, like becoming lobbyists, it seems silly to make just a few bucks while you’re in office and put that in jeopardy. That was always my thinking anyway.

Anyway, Senator Scott Brown of Massachusetts filed a bill in Congress that would remove that exemption. I think it’s a good idea, what do you think?

Your Take: Congressional Insider Trading from personal finance blog Bargaineering.com.

Your Take: Ever Taken a Megabus or Bolt Bus?

Jim — Fri, 11 Nov 2011 12:28:42 +0000

I was reading a short little piece on $1 Megabus tickets when I thought back to my experience with one of these buses. I forget the name of the company (it was neither Megabus or Bolt Bus) but I purchased a $20 ticket from Baltimore to New York City to visit my parents when, before leaving Baltimore, the bus broke down. The oil cap had broken and the bus driver was trying to find a way to cap it, including stuffing a rag in it, so that he could make the trip. He only spoke Mandarin Chinese and I acted as translator for him and the passengers. It was a disaster and I opted to not take the bus since I’d rather skip the trip than face potential breakdown on the New Jersey Turnpike!

The most amazing part of that ordeal was one passenger who said “This has happened to me four times, this is unbelievable!” To which I thought to myself… I would’ve stopped using this company after the second time, assuming the first was a fluke. The Megabus and Bolt Buses look much nicer and with Megabus being owned by Coach USA, I’m inclined to believe they’re a more professional and well-run organization.

That said, have you taken one of these buses and what did you think of it?

(Photo: paul_lowry)

Your Take: Ever Taken a Megabus or Bolt Bus? from personal finance blog Bargaineering.com.

Your Take: Unbundling & A La Carte Pricing

Jim — Fri, 04 Nov 2011 11:23:18 +0000

I call it “a la carte” pricing, various industries all it “unbundling,” but more and more industries are breaking out how much you pay for what services when you do business with them. It was the subject of Art Pine’s article in Kiplinger’s and he goes into detail about the logic of bundling and unbundling your pricing.

Personally, I like unbundling as long as I have control over what I can buy. When a hotel breaks out the price of everything on the folio, especially on things I have no input on, I find it as unnecessarily complex. It’s as if they broke out the housecleaning charges, the linen charges, the water bill, the little soaps and shampoos, and the electricity bill – as if I had a choice in how much I consumed of each. I like that airlines are charging for baggage because in theory the baggage-less people aren’t paying for the baggage-laden travelers. In reality, I think the airlines just price compete with each other and tack on the baggage fees to make the traveler (more) profitable.

What do you think about unbundling?

Your Take: Unbundling & A La Carte Pricing from personal finance blog Bargaineering.com.

Your Take: Residence Visa to Foreigners Who Buy $500,000+ Homes

Jim — Fri, 28 Oct 2011 11:14:11 +0000

Here’s something interesting that I read last week – a new approach to our housing problem. It’s a bill co-authored by Senator Charles Schumer (D-NY) and Mike Lee (R-UT) and it would offer a residence visa to foreigners who spend at least $500,000 on a residential home – a single family house, condo or townhouse. It’s not a completely novel bill, there are similar ones offered to foreigners who invest in businesses that create jobs in the United States, and it takes great care not to disturb the current visa program (the bill would create a new set of visas).

I believe it’s great that we’re trying to “solve” our real estate problem with something other than taxpayer money. While I understand there will be unintended consequences, there always are, I think we should be happy that our politicians are trying new approaches.

What concerns do I have? The most obvious is the reality that money can now jump you to the front of the line if you want a residence visa. I know little about the process but I do know that visas are a pain to get and now half a million dollars gets you in. I suppose if I were part of an exclusive club (US citizenship), charging half a million bucks to get in works out well for me. Just not the same folks you expected based on Lazarus’ poem on the Statue of Liberty.

That said, I’m eager to see where this goes. What do you think?

Your Take: Residence Visa to Foreigners Who Buy $500,000+ Homes from personal finance blog Bargaineering.com.

Your Take: Anger At Banker Pay

Jim — Fri, 21 Oct 2011 11:37:31 +0000

When Goldman Sachs announced it would set aside $10 billion for staff pay this year, CNN Money went to the Occupy Wall Street demonstrators and asked them what they thought. It was equal to $292,000 per employee, which is a drop of $78,000 from last year. The responses were what you’d expect – everyone was upset. They didn’t know why people needed to be paid that much.

Here’s the crazy part – bankers aren’t paid huge sums everywhere. In Germany, bankers aren’t paid millions to do their jobs (I was very surprised to read how little they made). In the United States, where capitalism meets unchecked human greed, bankers are paid like professional athletes (you could argue athletes are paid too much, but that’s at least sustained by sports revenues). The bar keeps getting set higher and higher in order to get the “best talent,” whatever that may be in the eyes of the person writing the checks.

We pay bankers too much because we knocked down that wall separating basic banking and speculation. Speculators who guess right can pay vast sums to people who are good at picking the winning bets. Basic banking is boring, there’s no leverage, and you can’t make absurd sums of money. It’s like a grocery store that sells lottery tickets. The lottery tickets can make big bucks but lettuce and oranges are boring low margin items. When parts of Glass-Steagall were repealed, it set the stage for what happened. For political folks keeping score at home, the repeal was a bi-partisan effort. It was sponsored by Republicans, passed in a Republican Congress, and a Democrat President (Clinton).

So being paid vast sums is offensive, especially with unemployment is at fault, but politicians deserve the ire.

I’m curious to hear what you think about bankers being paid that much?

Your Take: Anger At Banker Pay from personal finance blog Bargaineering.com.

Your Take: How Have You Felt The Recession?

Jim — Fri, 14 Oct 2011 11:15:20 +0000

While the national unemployment rate is up around 9%, the unemployment rate for college graduates is much lower. At the end of last year, with national unemployment at 9.8%, it was only 5.1% for those with a bachelor’s degree. While I’ve often stated that a college degree is a defensible moat, that statistic really drives that home. I don’t know what the figures are like today but I suspect they aren’t much different.

So the question I have this week is how have you felt the recession? I’ve been fortunate in that the majority of my friends in the area have bachelor’s degrees and, to my knowledge, they’re all still gainfully employed (many are in defense and there’s still many billions available in the industry).

How have you felt it?

Your Take: How Have You Felt The Recession? from personal finance blog Bargaineering.com.

Your Take: Faith in the Stock Market

Jim — Fri, 07 Oct 2011 11:23:03 +0000

Here’s what every stock market expert will tell you – slow and steady wins the race. Keep your regular contributions going, lean on the benefits of time and compounding, and you will be financially set when you retire. Ignore the daily swings of the stock market, those are based on the whims of traders and market makers, just keep at it and you will be just fine. Statistics will be quoted, including the infamous “the stock market has returned XYZ since 19-whenever,” and those are supposed to buttress the argument that the stock market is just fine… as long as you ignore the daily gyrations.

Here’s the problem I have with that line of thinking – the market may have offered a reasonable rate of return since the Great Depression but a lot has changed since then. With the sheer number of electronic trading, including emotionless computer algorithms that follow their independently programmed instructions, and events such as the flash crash, it’s obvious we aren’t in the same era as before. High frequency trading accounts for almost 75% of all buying and selling of equities, according to Bloomberg.

The first arrow that pierced the sanctity of the stock market was when I read Trading with the Enemy by Nicholas Maier, which chronicled Maier working at Cramer’s hedge fund. In that book, Cramer finds out about a newspaper article before it gets published and trades based on that information. Is it insider information? Perhaps. Does this happen all the time? Very likely. Does this make you believe that us buy and holder suckers are really just buying into a Ponzi scheme?

Do I believe the stock market is the easiest way for you to save for retirement? Yes. You really can’t beat getting into and out of a fairly liquid position for only a few dollars. When I buy shares of Apple, and I have, I’m not worried I can’t find a buyer in the next ten seconds. I might have to adjust my expectations, which should be in line with demand at the moment based on Bid/Asks, but I can find someone fairly quickly… much quicker than any other asset.

Is my faith somewhat affected by the hundred+ point swings in the market that seem to happen on a daily basis these days? Also yes.

How about you?

(Photo: psycho-pics)

Your Take: Faith in the Stock Market from personal finance blog Bargaineering.com.