Tag Archives: Selling

Saturday Sneak-Peak: PFfirewall.com

Welcome to this weeks edition of Saturday Sneak-Peak! Every week I explore a personal finance blog and give a brief review of the site. My major intent of the adventure is to expose everyone to new and/or obscure blogs. Up this week is PF Firewall.

Firstly, I want to congratulate Jesse. He and his wife added a new bundle of joy this past week! If you don’t click on any of the links, at least leave a comment and congratulate him on this great blessing (they had a girl). ūüôā

Jesse has been blogging since February and has been know to have lengthy, well-thought out posts. He averages about 15 posts a month so those of you who do not like to be bombarded with posts, he is your guy!

Here are some of my favorite posts from him:

Selling Oil Changes Door-to-Door?

Shopping Out of Season

The Real Reason for Lehman Brothers’ Downfall

Now off to the questions!

YMR: Why did you want to start a personal finance blog and what blogs did you read before you started?

Jesse: I started my blog for several reasons. I am actually really new to the blog scene, I hadn’t even read any blogs previous to late 08 aside from The Consumerist, which I didn’t realize was a blog.

When reading The Consumerist, I read about a girl that paid off around $14k in debt by following some Consumerist tips. This led me to think about my debt which I was completely ignoring. One of the tips was to call credit card companies and ask for rates to be lowered, and if they didn’t lower the rate, transfer the balance to another credit card. While searching for credit cards with better rates, I happened on MyMoneyBlog.com, which led me to a few other personal finance blogs including GetRichSlowly.com, BudgetsAreSexy.com and BrokeAsASpoke.com and I was hooked on Personal Finance blogs. I started following blog networks and finding more and more blogs about personal finance to read.

So I decided to start a personal finance blog to track my finances. I also thought if my finances were out there in the open, I would be more accountable and wouldn’t be able to ignore my financial incompetencies.

A second reason, I have always felt like teaching is the best way to learn. By researching what I want to write about, I learn so much about finance from those out there that know more about it than I do, then I can share the information with my readers knowing it is accurate.

Yet another reason was that I am a pretty big geek, and having my own website is one of those things that I wanted to do, coded completely from scratch of course. I had started several websites from scratch but none of them really had a purpose so I would code them, put them up and never update them. I felt like this was holding me back from learning more about web development, so I thought if I started a blog that was really easy to update, using a blog engine like WordPress instead of coding from scratch, I could get the content rolling, get motivated, then be able to spend time coding and modding the blog. I am happy to say this is working. I recently released a new custom theme for my blog, I have been doing a ton of design work in photoshop such as logos, banners and icons, and I have even been hired to redesign someone elses blog.

I even started another site coded from scratch with a purpose/idea that I found while writing my blog. This new site hasn’t really gone public yet as I am still designing it but it fills my geeky void ūüėČ

YMR: Which post (on your site) has been your favorite and why?

Jesse: I think my favorite post was The Most Important Part Is Starting: Debt Recovery and the reason is I felt like the post, massive as it was, was really going to help people. The post was spurred by a friend that was having trouble getting started on the road to debt recovery. I realized there may be more people out there like her that have no clue on how to get started repaying debt so I was really happy to be able to help a friend out as well as anyone else that may read the post.

YMR: How would you describe your writing style?

Jesse: Another reason I started my blog that I left for this section is that I wanted to use my blog to start a writing portfolio. I have always loved to write and thought of doing some freelance writing but I have no public writing experience.

So my writing style reflects this desire. I write as if I am writing for a newspaper. Factual, informative and to the point. I try to hold myself to professional standards. I am known to be long winded but I want to make sure I cover all the facts and leave nothing out that may be important. On that same note I try and make the information more understandable as if I am talking to my readers versus writing to them.

YMR: Tell us something about yourself that some may not know.

Jesse: I am much geekier than I let on in my blog. I am a Linux user..I worked on the Geek Squad when I was younger..and even my TV is running on Linux. I even switched keyboard layouts to be more efficient when typing. I use the Dvorak instead of QWERTY layout and now type a few dozen words per minute faster than I used to. It took about a year to fully switch.

I am much geekier than I let on in my blog. I am a Linux user..I worked on the Geek Squad when I was younger..and even my TV is running on Linux. I even switched keyboard layouts to be more efficient when typing. I use the Dvorak instead of QWERTY layout and now type a few dozen words per minute faster than I used to. It took about a year to fully switch.

YMR: Tell me a little bit more about this financial highway adoption you got going on.

Jesse: Well, I started my blog to be more financially responsible yet I spent about a hundred dollars on hosting. I knew it was necessary especially on the commitment and motivation side but I felt bad about it. Even before I started trying to get my finances in order, I had a real hard time spending money on myself for any reason. Even my play sites that I mentioned before were hosted on my home computer, making them unbearably slow. I couldn’t bring myself to ask for donations in the traditional way because I felt like a hypocrite, telling people to save money yet asking them to give me money. So I started thinking of ways I could reduce the cost of my blog without asking for a hand out.

My adoption system does just that. When someone adopts my blog, they pay a small piece of my costs, roughly the cost of hosting per year divided on a weekly basis, and in return get recognition from my readers for doing so. They get a banner in every post of their week and a banner on a dedicated page, forever.

I also want my readers to feel like they are a part of the little community my blog creates. Through the people that have adopted so far I have made some great contacts and friends, and gotten to know some of the bloggers that read my blog much better.

Thanks Jesse! Have a great weekend everyone! I am heading off to PA so limited posting this weekend.

9 Quick and Easy Tips to Prevent Identity Theft

Identity theft occurs when another individual uses your personal information, like your Social Security number and drivers license, to commit fraud or other crimes. In general, the FTC estimates that as many as 9 million Americans have their identities stolen each year. With a majority of things now done electronically, consumers should be extra cautious when doing even the most basic of tasks.

In order to help you fend off identity theft, I have compiled this list of 9 easy tips for you to follow. They are very easy to implement and can be completed with ease.

1. Clean Out Your Wallet

Many people do not realize how much information is in their wallet. Typical Americans carry several credit/debit cards, a driver’s license, insurance cards, etc. Some people even carry their Social Security card with them. If your wallet¬†is stolen, the thief will have all of the information that they need. They would have your name, address, Social Security number and major credit card number. They can do a lot of damage with just that info.

It’s recommended that you take as much personal information out of your wallet as possible. You should only be carrying one major credit and debit card, your drivers license, insurance cards and other discount cards. You should NEVER carry your Social Security card in your wallet. Only carrying one credit card will help you keep track of them better. If you are carrying 7 credit cards, you may not notice if one were to go missing. That’s just what the thief wants to happen.

2. Keep an Eye on Your Statements

Keeping a close watch on your bank and credit card statements will allow you to notice problems before them become to large to handle. If you notice an inconsistency, let your bank or credit card company know as soon as possible. The sooner you let them know, the better chance you have of getting the charges removed. Credit cards and debit cards have different limits for liablity in cases like these.

3. Buy Yourself a Paper Shredder

This is one of the most important steps¬†because many identity thieves are dumpster divers. In other words, they rummage through your garbage in search of documents with your personal information on them. Shredding all of these documents stops them dead in their tracks. I recommend getting a middle of the line shredder from Staples. The larger ones¬†can handle more pages and have larger baskets so you do not have to empty them as much. However, if you cannot afford a more expensive one, a basic one from¬†a discount store¬†will do the trick. It’s better to have a cheap one than none at all.

You can also guard against dumpster divers by decreasing your junk mail. Head over to the three credit bureaus (Experian, Equifax, Transunion) and have them take you off the pre-approved credit marketing lists. That will eliminate half of your shredding! You can also go to www.optoutprescreen.com to complete the task faster.

4. Check Your Credit Report Often and For Free

Your credit report contains your Social Security number, present and prior employees, account numbers from creditors, etc. Monitoring this will help you spot inconsistencies quickly. If you find one, make sure you contact the credit bureaus to dispute the charge, late fee, new account, etc. If something doesn’t look right, it probably isn’t.

I recommend checking your credit report every three months at www.annualcreditreport.com.This is a free service offered by the three credit bureaus. Avoid companies such as freecreditreport.com because you must first sign up for the credit monitoring program (which costs $) before getting the report.

5. Secure Your Security Passwords

Do not place all of your security passwords on a piece of paper and carry it around with you. That’s like giving the keys of your car to a car thief and saying “take it”. Try as hard as you can to memorize all of your passwords but be sure to omit personal information from them. Do not make your bank account password your date of birth, anniversary, pets name, etc. They are what thieves will try first. If you must write down passwords, place them in a fireproof safe in your home and have it bolted to the concrete floor. Yes, your passwords are that important!

6. Don’t Give Out Personal Information to People You Don’t Know

Sounds ridiculous right? Well, many individuals do just that on a daily basis. Whether it’s people giving their Social Security number to a Saudi Prince that contacted them from Gmail or a “creditor” that called them at 9PM, it happens often. Whatever you do, do not give out your personal information to anyone unless you initiated the call and know who you are talking to. If someone calls your home and asks you to verify your account by giving your Social Security number, do not do it. Ask if you can call the company directly and solve the matter. If they agree, do not call the number that they give you. Make sure you look up the number for the company yourself. If they do not agree and insist that you give them your personal information, hang up. The same goes with online emails. If the email says that it is urgent that you sign on and verify information, chances are it is a Phishing email. They (identity thieves)¬†are trying to get you to go to¬†a fake website where you enter in your info so they can copy it.

7. Wipe Your Computer Data Clean

Selling or donating a computer? Make sure you delete all information off of it beforehand. Deleting a file, partitioning a disk, or formatting your hard drive will not erase hard drive data. I repeat, just reformatting your hard drive will not erase personal information from your hard drive. Because of this, many identity thieves have been targeting used and donated computers. Shield yourself from this by doing a complete hard drive erase using a program such as WipeDrive.

8. Skip the Mailbox

If you have something to mail, take it straight to the post office (or one of the blue USPS boxes). Placing mail in your mailbox invites thieves to take your mail (and your personal information). Don’t have time to make it to the post office? Is the post office too far? If so, invest in a mail box that locks. That way, your mail will always be safe and sound inside the box where no one can get it. They can run a little pricey but it does not compare to the amount of money you may lose if your identity is stolen.

Going on vacation? Have the post office hold your mail until you return. This way you do not have a stockpile of mail in your box.

9. Know Who to Call If You Suspect Fraud

If something looks strange on your credit report, chances are you are a victim of credit fraud. Having copies of all of your account numbers and customer service numbers (in a locked safe of course), will make the process of reporting fraud much easier. It also pays to call them ASAP because it will help limit your liability in the matter.

There are also services out their such as LifeLock that will handle much of these problems for you. They have a program called WalletLock that will assist you in contacting your creditors in the event your wallet is stolen. They also have a generous $1,000,000 guarantee . They state that if your identity is stolen while a member of LifeLock, they are willing to spend up to $1,000,000 to help you get your good name back. Click here to get a 10% discount on LifeLock.

As mentioned before, identity theft is no laughing matter. Just ask the estimated 9 million individuals that have had their identity stolen over the past year. Follow these steps and stop identity theft in its tracks. It’s always better to be safe than sorry!

12 Questions With Deena Katz – Top Financial Planner

While attending Graduate school at Texas Tech, I had to opportunity to learn from one of the top financial planners in the country, Deena Katz. Deena has been in the business for many years and is recognized as one of the best CERTIFIED FINANCIAL PLANNER√Ę‚Äě¬Ę Professionals. She was recently named one of Financial Planning Magazine’s “5 Most Influential People in the Planning Business”. She is also the author or co-author of nine books on financial planning.

I appreciate the time that Deena took out of her extremely busy schedule to answer our questions. Here is the list of questions that I asked her. These questions include some of my own as well as some from readers. Deena has some great insight in her answers and I hope you appreciate her input!


YMR: What drew you to financial planning and how does it enhance your life?

Deena: My mother was a minister and a social worker, but when my father died at 39, it became clear that she was unprepared for the financial burden.¬† She taught me early on to be able to take care of myself, because there is a high likelihood that I would be taking care of myself at some point in my life.¬† That led me to the planning profession.¬† My first company was working with women in transition.¬† It is extremely fulfilling to see people learning to take financial responsibility and accomplishing their goals.¬† I’m passionate about it.

YMR: Why do you think many individuals are scared about the thought of using a financial planner? What can the industry do to fix this problem?

Deena: There have been some very bad incidents in past years (Madoff and Standford most recently) which have shaken the trust and confidence that people had in advisors. ¬†¬†This is a two-sided problem.¬† Many people do not have the education to recognize if something is not right, some are looking for investment opportunities that are just too good to be true.¬† A little greed and a little vice make a big mess.¬† I always tell people “Never let anyone care more about your money than you do.”¬Ě¬† On the other side of that, I believe people should work with CFPs, who are bound to standards of ethics that are quite rigorous.¬† I also believe that advisors should act as fiduciaries (in the best interest of the client.)¬† When looking for a planner, ask how they work, how they are paid and if they are a fiduciary.¬†¬† Then you can begin to develop trust.

YMR: How have you been calming down your clients over the past year? Did you have them well prepared for an event like this?

Deena: No one is really prepared for an event like this.¬† It’s a 6th standard deviation event.¬† But, if we are able to manage client expectations from the first minute they work with us, we have a better chance to keep them from jumping ship when things are rocky.¬† As advisors, we can never promise market returns, we should be exploring the downside of investments with them.¬† We should be able to “stress test”¬Ě their plan, to demonstrate how bad things really have to get, before their plan is unworkable.¬† We need to keep them informed of what is happening in the markets, in congress, and in the economy so we can give them “our take”¬Ě on it and how it affects them personally.

YMR: Do you think this economic climate will finally get people to realize that debt is bad and retirement saving should be a priority?

Deena: No.¬† I don’t think many folks really understand.¬† I am hoping that congress will start to help us focus on financial literacy so that young children get this education to prepare them for life, rather than stumbling through it, making grave mistakes, then trying to “right”¬Ě everything before they retire. I think people are paying more attention, but I am not sure they have been taught successfully yet.

YMR Reader: Do you think budgets are a sexy thing right now?

Deena: I have always felt that budgets are a four-letter word…but “sexy”¬Ě is not the word I think of.¬† The nature of many human beings is not to feel the constraints of budget, because you fight against them, the same way you fight against your parents when you are 15. ¬†I believe in¬† “trade-off”¬Ě spending.¬†¬† The first thing you need to know is how much does it cost you to live-basics, like rent, utilities, etc.¬† Then you look at the variables-eating out vs. eating in, for example.¬† ¬†Then you can say, “I’d like to buy a new car, so if I eat in and shave off some other expenses, I can us that money to buy the car.”¬Ě¬†¬† With budgets you are managing money, but with trade off spending you are managing goals.

YMR Reader: The buy and hold strategy has been around for decades. Do you feel that same strategy applies to the Gen X and Y generation?

Deena: I do not believe that modern portfolio theory is dead.¬† I further believe that you can’t¬† make market returns unless you are in the market.¬† Look what has happened in the last two weeks— If you missed one day, you missed a 6 ¬Ĺ % run up.¬† Right now, I have no reason to change my investment philosophy.

YMR: Speaking of generations, do you think the baby boomer generation is prepared for retirement? Why or why not?

Deena: Baby Boomers are not prepared, but they don’t really want to retire either. Further, if all of us did retire, we would not have a big enough work force to carry on.¬† Boomers may not stay with their current jobs, but may work at something they love, for less money.¬† They will postpone retirement because they have to, even though they will not admit that’s the reason.

YMR Reader: Asset allocation has been preached extensively after the dot.com bubble, yet even diversified balanced portfolios took a significant hit with the recent economic meltdown. How do you address that to those concerned?

Deena: See #6 above.

YMR Reader: Speaking of asset allocation, what do you recommend people do with their retirement accounts? I would like an answer for new hires, mid-range employees and close to retirement employees.

Deena: First, the younger you are, the more time you have to let your portfolio grow.  I suggest a low-cost S&P 500 index.  Leave it alone.  As you continue to add money, eventually you should buy small cap and international-all index.  Mid range employees, you may want to add some fixed income, probably around 20% max.  As you get closer to retirement, you may have 60% equities, depending upon when you will need to start withdrawing from them. You want low-cost selections, because the fund expenses come right off the return.

YMR Reader: The economy has my wife feeling a bit insecure even though we’ve got a sizable emergency fund built up, and we have no debt. The question is, once we’ve completed our emergency fund, what path should we take? Should we start investing in the stock market like it’s on clearance, save in a high yield savings account, or should we be paying extra on our mortgage? Or a combination of those things?

Deena: Some leverage is good, so I would not start paying down the mortgage unless your interest rate is so high that you cannot beat it by investing your money elsewhere.¬† If your mortgage interest is low, invest in the market, because it is on sale.¬† I would suggest that you in invest index mutual funds because they are cheaper (less expenses).¬† Try Vanguard’s S&P Index fund for starters.

YMR Reader: My wife and I are in the market to buy a new home. We’ve saved up a sizable amount and we are selling our current co-op to use mostly as a down payment on a new place. Our credit is also impeccable. Still…how can we tell if we can truly afford it? Is there a metric/guide we can go by?

Deena: Bankrate.com has a calculator that can help you get your arms around that.¬† I don’t like “rules of thumb”¬Ě because they are made for average situations and I believe you deserve solutions that are unique to you.

YMR: Now a fun question! How are you liking semi-retirement in Texas?

I am not semi-retired!¬† I am working 24/7, but loving it. ¬†I love Lubbock, it’s just the right size community for me.¬† I love the school, my fellow faculty and most of the students.¬† I can’t imagine doing anything else. In fact, we’ve opened up a branch office of Evensky & Katz here in Lubbock and we are in for the long haul.

Many thanks to Deena for allowing me to interview her!

Weekly Roundup – March 29th

Welcome to this weeks roundup! There were plenty of great articles this week around the PF Blogosphere. Last week I posted infrequently and I apologize for that. I hope to get a full week of articles done today and you can expect to see my Q&A with Deena Katz (the top financial planner) on Wednesday. She has responded to my questions and I am excited for you all to read it. Anyway, enjoy these great reads!

Great Reads

Ben at Trees Full of Money witnessed a credit card fiasco at a Target checkout counter. Needless to say, this article really made me angry for some reason. You can see my response in the comments of his post.

Trent at The Simple Dollar thinks that most time management is rubbish. Head over there to see the ten things that work best for him.

Pinyo at Moolanomy has some extra income ideas for college students and recent graduates. I especially like the one on selling class notes. I wish I would have thought of that when I was in school!

Pete at Bible Money Matters wants to know if you are emotionally invested in your credit card.

Frugal Dad talks about the new Discover card for teens that creates bad habits.

I hope you enjoyed these great posts! I look forward to your comments this week!

Laid Off Recently? Turn It Into Something Amazing

Lost your job recently? Feeling in the dumps? Well, here is some good news. Many great business founders started their businesses after being laid off. Time to turn that frown upside down and get out there to make things happen. Although I wrote the post 10 Things to Do When You Graduate Without a Job for recent college grads, most of the imformation applies to anyone searching for a job. Head over there and apply those steps and get searching.

Use Your Layoff to Do What Your Employer Did Bad

One of the tips dealt with finding alternative ways to generate income. So, why not start your own business? If you enjoyed your last career, why not start a business in the same field that does something your original employer did wrong? I will be doing this next year. While working at my current job, I have been very observant. I now know what not to do when I start my own business. I know what to charge that is competetive and I know what people are looking for.

Didn’t really like your last career? Why not start something that you have always been passionate about? There are plenty of businesses out there that you can start for almost nothing. Want some inspiration? Here are some individuals who started their businesses after being laid off:

Tom Stemberg

Tom was let go from a supermarket chain names Finast-Edwards in 1985 when his division was sold. He then founded Staples, the office supply giant which has over 40,000 employees. His estimated net worth is over $200 million. Not to bad for starting a business that sells pens and paper!

Michael Bloomberg

Michael was laid off from Salomon Brothers only to start the financial news service that bears his name. He is also the mayor of New York City.

Get Going Now

Recessions can be the best time to start a business. When everyone else thinks it’s the worst time to start a business, it’s sometime the best time. Sort of like in the stock market. Now may be the best time to start a business that helps individuals find jobs or helps them find other sources of income so they do not foreclose on their home. Just sit down and brainstorm. You will be surprised with what you come up with!

Basics of Prepaid College Tuition 529 Savings Plans

Have you noticed an upward trend in college costs over the past few years? I am guessing that you have. College costs have been increasing every year at an average of 6% per year. That means that a public university that costs $10,000 today will cost approximately $29,368 in 18 years. That’s for only ONE YEAR! Are you afraid you will not be able to save that much? What if I told you that you can lock in current college prices. Would you be able to sleep more easily at night? That is the idea behind a prepaid college tuition plan.

What is a 529 Prepaid Tuition Plan?

Prepaid tuition plans are college savings plans that allow you to lock in current college costs. In other words, if you purchase a full years worth of tuition at a state school today, that plan will pay a full years worth of tuition 10, 20, or 30 years down the road. It is guaranteed to increase at the rate of college inflation.

Prepaid Unit Plans

Prepaid unit plans allow you to purchase units that represent a certain percentage of college tuition. For example, you may be able to purchase 1 unit in the plan that represents 1% of college tuition for a year. Everyone pays the same amount for a unit and the price increases each year. You can then use these units to cover part or all of the costs of attending college.

Contract Plans

Contract plans sell, you guessed it, contracts. These allow parents to purchase a set amount of years of tuition at a certain price. Basically, the younger the child, the less expensive the contract price.

Advantages of Prepaid Tuition Plans

  • Allow parents to lock in current tuition rates
  • Very simple to understand and no personal investing required
  • Plans involve no risk of principal and are typically back by state or local government
  • Anyone can contribute to the plan for the benefit of the beneficiary
  • If the beneficiary dies or does not attend college, the funds can be transferred to another

Disadvantages of Prepaid Tuition Plans

  • Have a negative impact on need-based financial aid just like regular 529 plans
  • Cannot earn higher returns if the market has a great year
  • Typically, can only be used for tuition and not for room and board, books, supplies, etc.
  • They do not guaranteed acceptance into college
  • You are limited to the schools that are listed in the plan

Is a prepaid tuition plan right for you? It all depends on the things that were mentioned above. Look carefully at the advantages and disadvantages and make your choice based on those criteria.

You may also want to consider using the plan in conjunction with a standard 529 plan. The standard plan will allow you to invest the savings more aggressively while the prepaid plan may help you hedge against higher increases in tuition rates. One day we are going to have to start paying back all of the government debt we have and education funding may have to be cut. What will happen then? Large increases in tuition, you can be sure of that! I also recommend using the site www.savingforcollege.com. The site offers evaluations of each states plans and has some great college funding calculators.

Has anyone had any experience with prepaid tuition plans? I know they are fairly rare but someone may have an experience they may want to share.