Archive for the ‘Personal finance’ Category

Why so little financial education in SU schools?

Sunday, March 9th, 2008

This article makes a very interesting (to me anyway) digression from it’s look at mortgages and foreclosures around Pittsburgh:

“The everyday working guy is not educated on this type of situation,” said Pauline Skeriotis, who was among a group of about 10 local Acorn clients who recently shared stories about their troubles. “You think you are educated and you’re really not.”

Why aren’t we edcating our people? I remember sitting in math class bored out of my mind and arguing with the teacher when they said we would need to know the crap they were teaching later on in life.

I was right and the teachers proably knew it. It doesn’t have to be this way for future generations though. Call it math and financial awareness. Include stuff like mortgages, interest rates, extra fees, etc. Why not?

The importance of saving for retirement early

Wednesday, November 14th, 2007

This article has an important message to people in their 20s: save for retirement now. They recommend 8% a month. 8% might not be ideal for everyone but it’s better than nothing (much better actually).

Good advice, bad advice

Friday, July 6th, 2007

Here’s an interesting article with some good advice and some that’s a bit questionable. They say that young people shouldn’t have 6 months worth of cash on hand. I have no trouble with this advice (as long as it’s for young people) although as we age having cash makes sense. Once you hit 30, you probably earn enough to put some cash aside without messing up your retirement plans and the like.

I also don’t mind the don’t buy a big house and don’t buy more life insurance than your family needs advice. My big issue is with the 60% stocks and 40% bonds advice. Sure they say switch to 90% stocks after a couple of years but this seems strange to me.

Consumer spending = commercial real estate = residential real estate

Monday, July 2nd, 2007

Here’s an article on consumer spending, commercial real estate, and residential real estate. It basically says that commercial and residential real estate are entertwined so if Americans stop spending too much (they are in debt) the real estate market could change.

Speaking of real estate, here’s an article on several areas in and around Philadlephia. The Manayunk, East Falls, and Roxborough areas of Philadelphia are worth watching for me.

Retirement planning = real estate + stock

Saturday, June 2nd, 2007

I thought that this page on IRAs was very interesting. They have a lot of information on rollovers and things but what I really liked were the examples (find them at the bottom of the page I linked to). These downloadable PDF files show what would happen to a 55-year-old with a million dollars in a taxable retirement account (that person would run out of money at 84).

Considering that many people live longer these days (my grandfather is 95) it’s no wonder people can’t retire at 55. From watching my grandfather, I think I’ve realized that a good retirement comes from stocks going up, real estate (rental income and appreciation), and not spending money. The last one of course is the hardest for someone who likes to travel as I do.

Anyway, this link above comes from a retirement planning company. I’ve never tried their services, but I do like their informative website.

And I want to add that you can own real estate in your IRA – it’s recommended, especially if you can make the purchase without taking out a mortgage thanks to some complicated laws from the IRS (who would’ve guessed that the IRS would make our retirement planning more complicated?).

The article says that real estate works particularly well in a Roth IRA thanks to the way the Roth IRA avoids taxes. So you could have rental income (not taxed) and sell the real estate any time (no capital gains tax).

When not to pay off your mortgage quickly

Sunday, April 29th, 2007

This is an interesting article that argues a 6% mortgage is really like paying 4.5% interst due to tax breaks. Instead of paying off that loan some (but not all) people are better off investing the money. This is especially true for people who have to choose between maxing out a 401k and making extra mortgage payments.

Finanical brokers out for themselves? Bad PNC experience

Wednesday, February 21st, 2007

A friend of mine had always been a pro-banker type guy, but recently, he had some problems with his financial brokers:

Some things have really, really left a bad taste in my mouth with these brokers (Merill Lynch, Morgan Stanley, etc..) First, a supposed friend from high school puts my money in a stock. He then begins moving the money to different stocks without my consent, I assuming to make himself fees. He also told me the account had no penalty for withdrawing the money, but that wasn’t true.

Then these other two guys from PNC told us that these annuities would make 4.5% or something like that, and they ended up getting 2.5%. They switched to another company because they say Allstate told them it would be 4.5% and then felt lied to. Then they give us these proposals to move from PNC to their new company, none of which makes sense for us at all. Finally, they almost admit that they don’t have a better deal but want us to move the money to keep the relationship with them? You just told us 4.5% and got us 2.5% on a lot of money, and now we should move our money to you to keep our great relationship?

Then my Dad’s boss dies, the widow doesn’t know what is going on, and some financial guy churns her account for tons of money.

Some of these financial guys will buy you dinner, give you tickets to see your sports team play, and be the nicest guys in the world to you..until you have to move money out of their account. As soon as you question something they did or tell them you need money out, they spaz and put intense pressure on you to stay with them. Then their real personality comes out, and boy was it nasty today. Personally for my accounts, just give me ING Direct and give me 4.5% and leave me the heck alone.

A Smith barney employee responed:

Sorry to hear about your situation. There are accounts that brokers offer, in Smith Barney they are called PM accounts, where the broker gets your permission to buy and sell stocks up front. He can then make trades but they are done commisson free as you are paying a quarterly fee depending on size of the the account and the amount of discount the broker offers. Some give none but most these days realize you have to discount in order to compete. I am not sure why they are trying to sell you a fixed annuity in this market. It again depends on the size of your portfolio and what you are looking to do with the money.

I believe you need to sit with the manager in the current office you are in and explain your level of frustration. Not all of us are bad guys – just seems you have ran into a few who have not helped the reputation for the rest of us in the industry. Good Luck in the future. I always tell my clients never buy anything from me unless you understand it completely. Good Luck in the future. Don’t let a few guys get you sorry you were ever in the market. Still the best place to be for you over the long haul.

Escaping credit card debt and finding the best cards

Sunday, January 21st, 2007

I graduated college in 1999, went to work, and started investing in the stock market. As the market went down I kept thinking wow I bought Sun Microsystems for $70/share and now their down to (insert sickeningly low number here) I need to buy more stock. I invested so much money in stocks that I ran up some credit card debt. What saved me was 0% introductory interest rates. Apply for a new card, get the low balance transfer rate, repeat. It’s the same advice I found in this article on paying back credit cards. It’s not ideal, but it’s better than paying 19% a year.

Luckily I’ve recovered from my investing stupidity and am now a responsible adult. However, I still purchase as much as I can on credit. I just make sure I can pay it back immediately. The same Credit cards & loans site that published the article I linked to above has lists of reward cards. To me it just doesn’t make sense to pay cash when you pay the same price for credit and get rewards.

I have a friend who used an auto rewards card for years and when he cashed in got $5,000 more off a new car. Had he used cash, he would basically have spent an extra 5 grand. On the page I’m linking to they have Subaru and various gas reward cards.

They also have my personal favorite, travel rewards cards. In Korea I use a card that gets me miles with Korean Air and I’ve taken several domestic flights with these miles, saving me a few hundred bucks. In America, I use a card that gets me points towards cruises (free or upgraded cabins).

This site also has a section on loans, tools like mortgage calculators, and more good articles. I think it’s worth checking out.

Fired for taking care of my baby – any recourse?

Wednesday, September 13th, 2006

Here’s a question someone I know asked recently about getting fired and advice from a couple of friends about lawyering up:

After 15 months of a very expensive custody battle and coming out on top, I thought everything was golden. Until 10 of 5:00 PM EST.

My boss, who is a complete idiot- She uses words like boughten it, instead of bought or purchased, ain’t none left etc, she has little computer knowledge, including asking me to find the columns on a spreadsheet that she “lost” somehow… Anyway, she has been pissed off at me for using my vacation time for my court hearings and appoints for my kids, so she began blasting me to the VP of Sales, saying I was always out and without notice.

When you say “Can I have Friday the 10th of August off?”, you are asking for permission and giving notice. But anyway, we were scheduled to have this sales conference this coming week, starting with a dinner Sunday night. The problem for me is that my wife is being sent to California for work, all week and I have all 3 kids (one of which just turned 1 August 17th). So I said I wouldn’t be able to make the after hours stuff (dinner Sunday and Boat Cruise Monday night) but would be at all the daily functions during the work week. Wow, one day later, BOOM—- Fired!

Advice from person #1: He can get an initial opinion for free. If his case has merit, he can get a very very good lawyer to take it on contingency. In any case, he will know up front how the fee structure will work. That’s by law. Under any circumstances he should go to a lawyer…even if he doesn’t have much of a case letting his employer know he is getting representation can influence the size of the severance agreement substantially. He should not sign a severance agreement, no matter how tempting until he has seen a lawyer…and understands just how much he potentially could get in comparison to what is offered. Thats what anyone in the same situation should do to protect themselves and their family.

Any reputable employment atty would gladly interview you. The lawyer would want you to bring any paper work you have (1) describing the conditions of your employment (2)anything in writing from the employer describing this special weekend sales meeting (3) payroll records.
Now, was anyone at a comparable work level excused from the weekend meeting? If so, why? If you are a white male, you are not a member of a protected group. More importantly, in the absence of a contract of employment, you can be terminated for good cause, bad cause, or no cause at all.

Someone may mention the FMLA. I haven’t looked at in lately, but typically it requires that you or a family member have a serious health condition or for the birth or care of a newborn. I doubt sitting for your 1 yr old meets the test for ” care of a newborn” but it might. That would take 10 minutes to research.

But, there are severance pay, vacation time,COBRA and other issues where you might need some guidance. Most of that wouldn’t be handled on a contingency fee basis.You can probably handle those matters on your own.

I don’t know what state you live in, so maybe there is some labor laws that create a wrongful termination action that I’m unaware of. That term–wrongful termination–is truly over-used.It typically exists on a very limited basis. Firing someone for pursuing or reporting a work comp injury…whistleblower cases. But, absent a contract of employment, the law is very heavily in favor of an employer having the right to run his shop as he wants, provided the practices don’t violate federal discrimination laws.

Obviously we all wish this single-father the best of luck finding a new job and hope that his investment strategy left him with emergency funds.

Manipulative fiancee trying to get future wife’s 401k

Monday, July 31st, 2006

Michelle Singletary of The Washington Post has an interesting article which covers financial decisions made by couples. The first part is about a manipulative fiancee who won’t marry his betrothed unless she agrees to empty out her 401k and spend it on his daughter’s education (and buy her a new car). Of course, that’s crap – big decisions like emptying out a 401k need to be unanimous.