Reviews 
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WalletHub review: Free credit scoring and monitoring

Wallethub review

With credit such an important part of our lives, it’s frustrating not to know where you stand.

Is your credit good enough to get approved for the loan you want? Has someone stolen your identity after your personal information was compromised in a major data breach?

WalletHub’s completely free credit scoring and credit monitoring service can help answer these questions.

But is it worth your time? Use this WalletHub review to guide your decision.


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 Reviews 
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eBay app review and 6 tips to sell on eBay

eBay app review

If you’ve recently sorted and decluttered your home, you likely have a few (or more) piles of items to get rid of. Before setting up a neighborhood garage sale, it’s worth considering what you could bring in by selling those old collections online with the eBay app.

While eBay is not new to the online scene, it’s now easier than ever to use: with the eBay app, you can quickly list what you want to sell and then track the sales process.

The eBay app has had more than 282 million downloads worldwide, according to the eBay site.
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 Reviews 
3
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7 stores with an excellent return policy

Woman at a store with an excellent return policy.

After my mother passed, I was cleaning out her basement when I found a pair of new shoes in a Nordstrom box. These shoes had never touched the pavement and still sported the original price tag. I’d never returned anything to Nordstrom before, but I did to see if what all my friends said about their return policy was true. Indeed it was. They gave me a full refund with no questions asked.

Although most stores have a return policy in writing on their site, you can always ask if they’ll take back something that falls outside their policy. If the store prides itself on satisfied customers, it will usually try to accommodate you.

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 Reviews 
20
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BVC #3: NURU Personal Finance Cards Video Review [VIDEO]

The topic of the third Bargaineering VideoCast is a three-minute product review of the NURU Personal Finance Cards.

Since I read a lot of personal finance content, from blogs to magazine articles to Google Finance bboard pump-and-dump spammers, I’m not the target audience for these Nuru cards. My wife, who is also quite knowledgeable by osmosis, doesn’t spend all day reading this stuff so I asked her what she thought about the cards.

The cards are really good for someone who wants to learn basic personal finance, simple enough not to confuse and they’re good to educate you enough to get you on the path on learning. They’d be good for young people about to graduate college because you need to know all that information and you probably don’t know where to go to find it. It lets you know what you don’t know.

I posed my concerns about the $6.99 price point to Crystalee, one of the members of their marketing department, she made a good point:

One of the salient features of NURU knowledge deck cards is the fact that their hand-held size and key ring make them easily portable. They fit in virtually any pocket of a bag, jacket, jeans, etc. and are meant to be used as a quick-glance knowledge source, like a mini Personal Finance 101 class for anyone willing to pay a $6.99 tuition.

Although an introductory book could include the same information that is presented in our deck, it would not be in the same helpful portable shape/size, and nor would it have the upbeat tone that we make sure to use in NURU cards. We want our decks to reach people at different stages in life and commit to distilling the world’s best information for them.

Like I said in the video, leave a comment and I’ll give away the deck to one lucky commenter next Sunday (March 22nd)!

Please let me know what you think and thanks for watching!


 Frugal Living 
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547 Ways to be Fuel Smart by Roger Albright

547 Ways to be Fuel Smart by Roger Albright547 Ways to be Fuel Smart by Roger Albright was last published in 2000 (with editions in 1990 and 1978, hmmm curious dates they are!) and does in fact contain 547 ways you can get the same out of life but consume less fuel. The book is old, so you won’t find it in bookstores (I found it walking the stacks at my local library), but it contains information that is just as appropriate today as it was in 1978 and 1990.

While you won’t be able to use all of the ideas in this book, some of them will be a bit out of date, you are sure to find some that you can apply. There are five hundred forty seven ways in here pal, you should be able to find one. 🙂

Here’s one idea I won’t be using: Albright talks about four huge windows in his home that he loved but were huge energy sinks. They were afflicted with the same condition many older windows are: they were very drafty. He realized that he could live without opening them, because there were other options, so he nailed them shut, caulked the seams, and sealed off the draft. He could still admire and enjoy the views through the windows but he wouldn’t have to pay the energy costs for the draftiness. I won’t be nailing down any windows but it’s a good idea for those who live in older homes.

Which chapter did I like the most? Chapter 7: Rake in Savings From Your Garden! While many of the suggestions in the book are for people with in-ground gardens (versus a patio/planter garden like we do), there are still great ideas in here that we can take away. One section explains the best way to store your harvest to make it last. For example, there are two ways to store and dry herbs. The first is to dry it in hanging bunches in a fine mesh onion bag in your refrigerator for a week. The second is to use a microwave to dry them (wrap in paper towels and zap for short intervals). Both are better than leaving them out in the air because that’s how they lose most of their flavor. I haven’t tried any of these ideas but they seem plausible.

If you’re interested in finding a few new ideas, check to see if your local library has it.


 Retirement, Reviews 
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Suze Orman’s Will & Trust Kit Review

Suze Orman Will & Trust KitIt’s not easy thinking about Wills because doing so forces you to confront your mortality and that one day you will die. However, if you do not take care of this very important piece of business, the State will take care of it for you. In every state there are rules that dictate what will happen to your assets in the event of your death. Unfortunately, they may not match what you’d choose to do with it (chances are they don’t). Creating a Will is one of the most important and significant actions you can do for your finances and shouldn’t be put off. The preparation of Wills is big business too and can cost quite a large sum in lawyer fees, but there’s a way to significantly cut your costs – Suze Orman’s Will & Trust Kit.

My tentative plan is to create a Will with Suze Orman’s system and then get it reviewed by a lawyer. By having at least a draft, you save a ton of money on the hours that would’ve been spent preparing it. What makes this even better is that the kit is free for a limited time (meaning I have no idea how long it’ll last).

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 Banking, Reviews 
38
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HSBC Direct Review

HSBC AdvanceHSBC Direct has usually had one of the most competitive interest rates, so I opened an account there. I didn’t open it because I was planning on moving funds from a 2.70% ING Direct account, I did it because the cost of opening an online savings account was near zero and because I could then start funneling income deposited into a 0% Bank of America checking account into the new HSBC Direct account. It doesn’t make much sense to move funds from ING or Emigrant to HSBC, but it does make sense to change the destination of funds from Bank of America.

There were a few other non-financial reasons for opening the account. First, there’s no marginal cost to opening another savings account. HSBC has a well known international name and has consistently been among the leaders in interest rates. I would be hesitant to open an account at a lesser known bank. HSBC’s international presence is also a benefit. When we were in China and Taiwan, HSBC was everywhere (along with Citigroup) and that’s a side benefit. Lastly, my mom has an HSBC account, in part because of the China and Taiwan presence, and having that link is convenient as well.

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 Investing, Reviews 
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Review: The Intelligent Portfolio by Christopher L. Jones

The Intelligent Portfolio by Christopher L. JonesThere are thousands of books on investing, a point highlighted in a back cover quote by Peter L. Bernstein: “Books on personal investing are a dime a dozen. But if we add them up, all those dimes come to plenty of money.” It was Bernstein’s contention that Christopher L. Jones’ The Intelligent Portfolio was a cut above the rest with its “strong foundation in theory, the depth of its insights, the power of its message, the clarity of its exposition, and the value of its examples.” That’s quite a laundry list, but does The Intelligent Portfolio deliver? That depends.

About The Author

First, a little about the author. Christopher L. Jones is the Chief Investment Officer and Executive VP of Investment Management for Financial Engines, a personalized investment advice and management service. One of the bonuses of the book is that you get a free yearly access pass to Financial Engines through a code written on a card in the book.

At this point you might think – hmmm, this sounds a little fishy. He’s the CIO and EVP at a generic sounding financial company, what’s the big deal? Hold on, Financial Engines, Inc. provides advisory services to 109 of the Fortune 500 companies and its services touch the assets of 6.8 million employees. As of the end of 2007, they were managing over $16 billion in defined contribution assets on a fee basis. They’re a pretty big deal.

About The Book

It’s not every day you read a book written by an EVP of Investment Management of a financial advisory and management company that tells you question the advice of experts and to approach everything, especially investing, with a very healthy dose of skepticism. From the preface: “… many of the most important ideas from financial economics, promoted by popular media and advertised by financial services firms, are distorted or misused in order to sell more products and services.”

So, given that knowledge, what do we need to focus on, according to Mr. Jones? He lists the following ten basic concepts:

  1. Recognize the linkage between risk and reward
  2. Avoid being deceived by history
  3. Leverage the wisdom of the market
  4. Select an appropriate risk level
  5. Avoid the perils of stock picking
  6. Don’t spend too much on investment fees
  7. Diversify intelligently
  8. Select funds using relevant forward-looking criteria
  9. Understand how to realistically fund financial goals
  10. Invest tax-efficiently

At the 30,000 foot level, all those concepts seem pretty straight forward. “Avoid being deceived by history” likely refers to how you shouldn’t base investment decisions on historical returns. “Don’t spend too much on investment fees” probably talks about how you need to check expense and sales ratios on funds and manage advisor fees and such.

The chapter I’ll highlight below was the one about avoiding stock picking since I, like many others, can’t seem to avoid the perils of stock picking (I own shares of Yahoo FTW!).

Avoid picking individual stocks

The crux of the chapter is that for the last few decades, investing the stock market usually meant investing in individual stocks. Mutual funds, index funds (which are mutual funds), and ETFs are all fairly recent investment vehicles. The problem with investing in individual stocks is that it’s risky and investors underestimate the risk and return involved, thus making a disastrous combination. Jones contends that most investors think that the risk of an individual stock is comparable to a mutual fund, despite it being significantly riskier. Financial Engines calculated that, as of Jan 07, the risk level, or volatility level, of the Vanguard 5000 Index fund was 1.5 (a market portfolio has a risk level of 1.0), can you guess the risk level for Dell? How about Pfizer? Or Tivo? (Dell was 3.7, Pfizer was 2.6, Tivo was 5.5) This is expected, I think it’s how much they differ that surprises people.

The three risk types that affect individual stocks are market risk, company risk, and industry risk. With a mutual fund of many companies in numerous industries, company specific risk and industry risk are mitigated and often hedged by other holdings. Every domestic holding faces market risk, but the fact is that the company risk and industry risk effects on one stock are far more significant than on a basket of stocks in diversified markets.

Okay no big deal, we all know one stock is riskier than a fund of the five hundred stocks of the S&P 500. I think my stock pick is a winner and I’m comfortable putting that bet on the table. Jones then did a study where they randomly picked a single stock from each of the S&P 500, S&P 400, and S&P 600 (they represent large cap, mid cap and small cap US stocks), hold it for month and then buy something else, and then see if the stock would outperform its parent index over a 10 year period between 1995 and 2005.

They ran 100,000 hypothetical investors and the results were that the single stock monthly flipper lost. In fact, in the case of the S&P 600 small cap, the median cumulative return was 3.4% vs. the index’s 13.70% return, over 10% different. With the S&P500, 62.80% of the hypothetical investors lost out to the index itself. With the S&P400, 74.10% were losers and with the S&P600, $74.60% were losers. Do you think you’ll be in the top 30% each and every year?

Conclusion

I learned quite a bit about constructing a good portfolio and what the important factors are when selecting various investments. It was fun learning what alpha meant (manager alpha refers to how much a fund manager beats its underlying investment style) and get a few more factors to look at when comparing mutual funds. On the other, it did make a strong, indirect case for sticking to index funds because it mentioned the importance of managing fees very often and how it’s important not to let them eat into your returns.

I may give the Financial Engines a look over the next few months, as it was referenced very frequently in the book (you get a free annual membership with the purchase of the book, so it’s not like it’s a sales pitch or anything), and hopefully they have some more of the same type of interesting simulations and statistic analysis the book carried.

If you’re interested in what a more seasoned investor thinks of the book, here’s Seeking Alpha’s Geoff Considine’s review of The Intelligent Investor.


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