Calculate The Fuel Cost of Your Trip

If you are planning a trip to relocate for a job like me, you might be wondering how much your trip will cost based on gas prices. AAA has a nice tool that will help you calculate fuel costs based on the various states you will drive through and their current average fuel prices. The only potential problem is the calculator limits you to major cities, but it does have a wide selections of car makes and models to choose from.

Link
Fuel Cost Calculator @ AAA

Teaching Your Kids About Money By NOT Giving Them Allowance

I don't have kids, but recently read a conversation over at No Limit Ladies, between an entrepreneur and the blogger who runs the site, regarding whether it is good or bad to give your kids an allowance. It got me thinking about where I stand on the issue. For those of you who haven't had a chance to read the article it brings up some good points, but the gist of the article is that it is better to teach your how to sell items and earn money than give them handouts.

I generally agree with the entrepreneur's point of view on the site, but maybe not to the extreme he does. I really value entrepreneurship, people who work hard, and don't want my kids sitting around looking for handouts. But, I'm not sure I want them pawning their toys to buy the newest Nintendo Wii game.

I think my take on the issue is I think that kids shouldn't get an allowance by default. My view is that kids should learn to pull their own weight and have certain set duties as well as other things that they may be asked to help with. If they want to make some extra money to go out to the movies or buy some new clothes they can ask me to help out around the house with other chores which each have an assigned dollar value. I think that is the easiest way to show kids the direct correlation between work and purchasing things. I might not each them how they have to hustle to sell things and how difficult it is to start a business - but it will teach them the value of money and how hard savings can be.

I'm also a big fan of matching money that kids invest. I don't know how well it works since I don't know anyone who personally does it with their kids, but it seems like a way to encourage savings if nothing else.

Link
No Limit Ladies - Why I don't give my kids allowance

The Rising Price of Civilization

Scott Burns has a great article over at his site about the rising cost of civilization and particularly the exponential cost of government. He does a nice job of pointing out the runaway unfunded liabilities in our government and where the majority of them. Turns out the unfunded liabilities for Medicare are 8.5x the unfunded liabilities for Social Security and the government promised $63.675 trillion more in benefits than it took in. If this all leaves you a little uneasy, the post goes on to say that it's the way the world's governments work and we aren't alone.... for some reason that seems like cold comfort for me. Where are all the fiscally conservative people? I guess that doesn't get you elected.

Link
AssetBuilder - The Rising Cost of Civilization

Even More Reason I Hate Owning (and Paying) for Cars

My first car was a manual 1991 Honda Civic 4-door-deathtrap, but it worked remarkably well and clocked in around 40mpg. The body gave out before the motor and I squeezed about 160,000 miles out of it before I was at the point when rust covered a greater portion of the body than paint. Thus, my rocky relationship with all things automotive began.

I'm not a "car" guy, nor am I "handy" in any sense of the word. If there is one thing I hate more than paying money to fix a car it is paying a shop or dealership to fix my car where I can have the pleasure of getting talked down to and screwed out of large sums of money all at the same time. The Digerati Life has a nice article on the true costs of automobile ownership. It adds up a whole lot faster than you might think and that isn't including gas.

The main things I got out of the article I guess weren't the focus of the post - but were interesting to me never the less.

1. Mazda has the lowest total cost of ownership compared to other major car manufacturers at least for minivans.
   
   
2. The total cost of maintaining your vehicle will run you about twice the cost you paid for it. Does this sound like a 30 year mortgage to anyone else? At least you can have some equity when things are said and done if you choose the house & write some of the interest off.

Head over to The Digerati Life to get the full story
Do You Really Know How Much It Costs To Own Your Car?

Personal Finance Carnival #2: Weddings, Marriages, & Divorces

For this personal finance carnival I have gathered together articles about marriage and weddings since well... I'll be getting married soon.

SmartMoney has a column about five mistakes married women make. It has a practical look at what happens many times when wives let their husbands take over all the financial decisions with some worst case scenarios thrown in.

Weddings cost a small fortune. I have read figures that say the average wedding is running around $20,000 these days. If you are brave maybe you can pull off a sub-$3,000 wedding like this couple did over at Getting Green.

Attending a wedding? The Simple Dollar has a great article about gifts you can give the happy couple to get them started down the road to financial independence. Check out the frugal wedding registry.

So you're newlyweds and need some savings advice? Kiplinger's has an article about common mistakes newlyweds make. To sum it up, it says most newlyweds don't save enough and are too conservative. Nothing earth shattering, but a decent read.

Have kids? If you have gotten over your fear of all things germ related you might be interested in this article - Are cloth diapers worth it? The Simple Dollar has an analysis of whether cloth diapers are cost effective from a purely fiscal standpoint.

Looking at the dark side of marriage just under 50% end in divorce. SmartMoney also has an article about how divorces are becoming increasingly complex with pensions, stock options and retirement accounts.

Advertising On TheGoldenParachute.com

After a few inquiries this week and a recent spike in traffic, I've decided to set a price for sponsored links on this site. I have decided to sell sponsored links for $10 a month for those of you who have emailed me recently. Buttons or banners are negotiable as well, depending on the service and the particular banner. If I get a decent response I'd love to replace the Adsense completely eventually, but we'll see how things go for now. Drop me an email if you are interested.

Signs It's Time to Sell Your Stock

The Motley Fool has an article that goes a little outside the box for advice on when to sell your stock. The research was done on factors outside company performance alone and boils down to two findings. 1) Once a visionary founder steps down that is a clear sign that the stock is headed for trouble (see Gates, Dell, & Bezos). 2) Once a CEO starts buying an estate and fancy cars complacency sets in and the company is headed for trouble.

I think the article is probably right on, but I'm not sure how you make this into an investing strategy. I mean you could dump a stock as soon as a founder or CEO steps down, but it's more difficult to figure out the complacency part of the equation. Take for example Apple, aside from their recent run on iPods, it is really Steve Jobs that people are investing in. He is the conductor that made the company innovate its way out of the funk it was in. You can also look at Google. Larry, Sergi & Eric are willing to take the risks that have made the company just dominant in its field. Both companies will struggle quite a bit when new management takes over eventually.

In the end, investors are buying a stake in the people of a company (unless you are investing in natural resources - mining, petroleum co's where is maybe not so important). If you can find a company with a Jack Welch (Fmr. CEO GE) or John Bucksbaum (Gen. Growth Properties), hold on to it and ride it out. It may not be as sexy as investing in the newest IT thing, but it is a lot more practical - which we at thegoldenparachute.com are big fans of.

Links
Motley Fool - When to Sell Your Stock
Forbes - Best Performing / Worst Performing / Highest Paid CEO's

Living on $46k in America

CNN's personal finance page is running a series on common folk in the U.S. living on $46k per year which happens to be the median income in our country. Please note this is for a household, not just an individual. This week they are focusing on Matt & Ginger Ogle who are a school teacher and assistant speech coach respectively. But, there are five couples in total with occupations ranging from claims adjusters to pianists. The articles break down their expenditures into categories and it is actually fairly interested because the site did a good job of picking people with varied backgrounds and varied geographies. Click the link above to read up more.

Payday Loans Costly Cash

A payday loan is a short-term loan that is designed to get you through until payday. The borrower must have a checking account, a job and be 18 years of age. Typical borrowing limits range anywhere from $100 to $600. Under terms of the agreement the loan is then due as of the borrower’s next paycheck.

Payday loans are a very simple concept, but it is one that has been abused by many providers and consumers. Many people have not used the loans wisely and have found themselves stuck in an expensive circle of loan extensions and costly fees. This has led many people to believe that payday loans are costly cash. However, they do not have to be. They do not have to be costly if they are used wisely. They also offer an option to consumers who do not otherwise qualify or have the time to apply for a typical bank loan.

A payday loan is termed just that because they are designed to get you through until your next payday. They are not designed to be long-term loans and should not be used as such. If these loans are used in a long-term manner, you end up paying short-term loan fees over a long period of time. That is a quick way to turn a payday loan into costly cash.

A payday loan can be used in a responsible manner. If you find yourself in a jam and you need emergency funds to avoid your credit card bill being late or your mortgage bill being late, then a payday loan is a viable option. You can take out the loan to help you pay those bills and then pay the loan back plus the fee when it comes due two weeks later on payday. This allows you to make it until your next paycheck without borrowing from a bank or risking late fees or NSF fees. By using the payday loan as a temporary solution, you are doing so responsibly and you are actually saving yourself money in the long run.

Get $$ For Your Unwanted, Broken or Old Cell Phone

I wish I would have stumbled across this a little sooner since I just got rid of my phone for free, but TerraPass has partnered with RipMobile to give people gift certificates for their unwanted, broken, or just plain old cell phone. You just click the make and model and print the shipping label. When RipMobile receives the phone they send you a gift card. Pretty easy. The phone doesn't have to be working as far as I know because the service breaks them down and recycles the parts. Might be something to check out if you have a couple in your drawer collecting dust anyways. My Sony Ericcson w600i will net me $45 - which is pretty good for a piece of tech garbage. I found a mention of the company in WiredMagazine as a best product of '06 so I'd guess it is on steady financial footing. RipMobile also recycles TV's, computers and other tech gear for cash too.

Link
RipMobile

Student Loan Database Off Limit to Lenders -- For Now

I was just reading an article over at CNN about the Bush administration closing off the student information database (the National Student Loan Data System) to lenders. I've gotta say I'm pleased. Now that I'm going back to grad school, I can say first hand the sheer the volume of offers lenders send out is too much. I personally receive no less that 4 or 5 in any given week (although I'm not sure how typical this is). I do know that InformationWeek has reported that when rated on the most recent internet security report card the Education Department moved from a C grade to an F which is at least a little unnerving. The Education Department also reports that it has revoked over 52,000 ID's used to access the system for suspicious activity or because they were no longer being used. Looks like it is a step in the right direction let's hope it continues.

Links
CNN - Lenders Can't Use Database
InfoWeek - Education Dept. Blocks Loan

Never Pay a 411 Charge Again!

Sometimes the a Yellow Pages or the internet aren't handy to find the phone number or address of a business or person you desperately need to get a hold of. Enter 411 the call service that provided an operator to look up that information (often incorrectly) and charge you a dollar or two for conducting the search. Google quietly released a new product in GoogleLabs a few weeks ago that provides 411 services... in typical Google fashion... for free. I don't know how the company plans to make money on it or if it does at all, but it's surely worth a try if you are a 411 service user.

Details: Google Voice Local Search
Price: FREE!
How it works: Just call 800-GOOG-411 or 800-466-4411. The service lets you search for the proper name of a business or just a category (like Chinese food). You can also get the information delivered via SMS message to your phone which is nifty when you are driving or can't write it down.

23 Things You Can Get For Free

Real Simple Magazine has a list of 23 "surprising" things you can get for free. While most aren't really that exciting (a free week or month trial at a health club), some of the others are actually helpful. The list has free online courses (MIT/Yale), telephone (Skype), paperback books (paperbackswap.com), Ben & Jerry's and some other cool stuff.

Link
Real Simple Magazine - 23 surprising Things you Can Get For Free

Online Personal Finance Calculators

I've said this before, I love the wide variety of online personal finance calculators there are out there to save us everyday folk time. They save people like you and me from breaking out something like this...
Here are three more to add to the list of handy time savers. This group covers the value of your college education, taxation of bonuses and whether you should exercise stock options.

How much is your graduate education worth? This calculator takes what you expect to make before, after, years till retirement and the cost of your education into account. I personally like it because it shows you the break even point to where your education has paid for itself.

What will my bonus net after taxes? This calculator is pretty straightforward, it takes your bonus amount, income, deductions and allowances to determine how much you will get and how much Uncle Sam keeps for himself.

Should I exercise "in the money" options? With obvious shortcomings - since there is no way for the calculator to know if your company is in a downward spiral - this calculator will attempt to give you a good idea about whether or not you should exercise those options floating around in your portfolio (if you are fortunate enough to have some).

Subprime, Foreclosures and Second Chances

Home foreclosures are up dramatically across the country as part of the subprime fallout, but has spiked especially high in certain areas (see my post on subprime data and heat maps). If you are one of these people who is getting close to foreclosure and wondering what to do, Clark Howard (Clark Howard - Wikipedia) is suggesting that you call your lender and try to work out a deal. He reporting that to avoid foreclosures some lenders have recently began agreeing to extend loans to 40 years. While not a huge amount of relief (usually about 5%) it may be enough to help you ride things out for a little bit. Clark is saying that foreclosures rates have risen astronomically and are up 1,100% in Ventura Co. California, 900% in Orange Co., and 700% in most other Southern California counties and speculative areas in the southwest. Knowing that your lender likely has a lot of other people in the same situation might give you a little big of leverage when negotiating.

Links
Clark Howard - Apr 17, 2007 Foreclosures Up

What's Your (Personal) Cash Flow?

Any business owner or executive would tell you that cash flow is key. It allows them to pay off debt and gives them a tremendous amount of flexibility. When I worked for a small M&A firm before grad school they used the phrase "cash is king" and did a lot of short hand valuations based on cash flow. The phrase described the ability of an acquiring company to immediately pay down debt and other short term obligations by using the excess cash over immediate liabilities.

Why is this at all important you might ask? Because the same principles apply to you. If you have any sort of budget you likely have a good idea of what your cash flow looks like, but keeping track of this indicator lets you know if you are in the red or black each month and if you should be allocating more money to investments or if you need to tighten up in other areas.

First step, figure out how much you bring in each month by tallying income, investments, pensions, social security and any other income streams you may have. Next, figure out for a month what you spend on everything from groceries and gas to health club dues and child care. Once you have a list of these items you can grab a legal pad & pencil, fire up Excel, or head over to YahooFinance where they have a handy calculator that will let you fill in the blanks.

Links

Yahoo! Cash Flow Calculator

Yahoo Finance

Selling Your Home? Here's a Way to Cut Broker Fees

Typical real estate broker fees fall in the range of 5-7%. Of course you can list the house for sale by owner and potentially cut out the sell side commission, but how do you attract buyers. One of the cards that real estate brokers hold over potential sellers is the ability to list property on MLS services. That left people interested in selling their homes by owner with the option to go it alone and hope a sign in their yard did the trick, or pay someone to list their house on the MLS.

The internet might change that. If you are looking to buy or sell your home you have the good fortune that two recent internet services are trying to level the playing field. If you are a seller you can head over to Zillow to see how much houses are going for in their neighborhood. You can take that information and determine what your home should be priced at (or how much you should offer if you are a seller). Zillow has received some flack for not having the most accurate data, although I'm not sure anyone has been able to back up these claims. I still think it is better than nothing.

Zillow Screenshot

Next, you can head over to Iggy's House and list your home for FREE on the MLS. Yep, FREE. I don't have a house to sell, so I can't vouch for the service but that seems like a heck of a deal. The site lets you post pictures, a description and most everything else a typical broker would. I have heard there is a couple day lag before your home makes the listing from when you submit, but if you can avoid a 3% commission that seems worth it to me. If anyone has tried out this service please send me an email or post in the comments.

Iggy's House

FYI: You will more than likely not avoid commissions completely selling your home by owner. You could conceivably, but it isn't very likely. If a broker brings you a buyer you will have to pay the buyer's agent commission which runs around 2-3% if my memory serves me.

Links
Zillow - Home Price Data

Iggy's House - Free MLS

Student Loan Provider Settles

Sallie Mae has been one of a few student loan providers to draw fire lately for questionable practices. However, it also happens to be the largest provider in the $85 billion dollar United States student lending industry, so that makes things a bit more newsworthy. It turns out the company was providing student perks to schools and campus financial aid workers to get preferred status or the ability to charge inflated rates. Other companies to feel the heat recently include CitiBank and Student Loans Xpress. Here's my question... does anyone think that a $2 million dollar settlement means much to CIT, CitiBank or Sallie Mae? I'm going to guess that is looked at as one of the costs of doing business. Check out the full story at CNN and shop around if you are in the market for a student loan.

Link
CNN - Nation's Largest Student Loan Provider Settles

Think Dual Incomes is a Great Thing? Not Always

The prospects of having two incomes to support household expenses sounds great. What's not to love? Double the money to pay bills, send your kid to college or enjoy life. Well that pesky "marriage tax" makes the calculation a little more difficult. True, individually two incomes are great, but in married couples are subject to different tax scales. There is a point of diminishing returns as your combined income gets higher and higher.

Take this hypothetical:
John makes $75,000 per year. Jane (his new wife) makes $50,000. Combined they bring in $125,000 yearly. If both work full-time childcare expenses will be $500 per month before and after school. Jane will also spend $1,000 a year to commute to and from work. Let's also say the local tax rate is 6% and they don't have a flexible spending account to sock pretax money for the additional childcare expenses.

Individually John would be in the 25% tax bracket approaching the 28%. Jane would be in the 25% tax bracket. While they individually hit the 28% tax bracket at $77,100, as a married couple they don't hit this bracket until $128,500. So, for income tax there is no real difference assuming that they don't get salary increases to move them into the 28% bracket.

However, the real problem is they will lose out in a lot of other ways. They will be taxed more for social security and medicare (jumping to 7.65% up to $97,000 then 1.45% thereafter. The child tax breaks begin phasing out at $110,000, they will also be unable to claim the Hope Education credit. The effective tax rate is a whole lot more than what the charts show.

So back to the fact scenario above. Assuming the very broad facts laid out above in my hypothetical the actual take home from Jane's $50,000 salary will be around
$27,425 or to put it a different way she nets 54.85% after costs and taxes. This is obviously a very rough estimate and there are lots of variables, but it's helpful to think about some of the other factors aside from just the salary figure. Try the calculator SmartMoney has created to simplify these factors and read about other potential problems that might come up.

Note: I'm not implying that the $20,000+ take home is a small sum, just that there are diminishing returns for high income couples and there are more variables to take into account. The $27k would most definitely be worth it for me. I also acknowledge that there are a lot of soft factors not in the equation. Lots of families decide that soft factors like spending more time with their spouse or raising children should trump extra income. That is a great decision for many people and I don't want to discount that - however, it would take an economist to figure out the opportunity cost (which I don't pretend to be) so it has been left out of my analysis. I would guess that if it was added in it would make a spouse staying home more attractive to some and less to others.

Link

Smart Money Should You Go Back to Work Calculator

Get Rich and Have Better Sex (at least if you are a woman)

Generally I am not a big fan of articles on MSN. As a rule of thumb I think they are of little substance and a lot come off as if they were written by a paid representative of some corporation hawking a product. This article follows along with my rule of thumb thinking MSN articles are of little substance, but at least it's entertaining.

Apparently there was some study done (by some a group academics who are more than likely way to qualified to be researching this no doubt) that said rich individuals have better sex and lead more adventurous sex lives than their less affluent counterparts. If that isn't a good reason to start saving more money and moving up the corporate ladder what is? My favorite part of the study is that when asked what the best that money allowed them to have in their sex lives women said higher-quality sex. The men? Oh, so stereotypically said multiple partners simultaneously.

Some caveats: 1) while both sexes who were studied reported better sex lives, the wealthy women did so at a much higher percentage than the men, 2) the average net worth in the study was $89 million - so if you are reading this you probably weren't a member of the study group. The group studied had an annual income of greater than $9 million too.

Link
The Rich Have Better Sex

Personal Finance Carnival #1

Here's a round-up of what I've been reading on the web this week.

My 1st Million at 33 is taking about why stocks are (sort of) a bargain.

Smart Money has an article on the new ugly trends in credit cards.

FreeMoneyFinance suggests that losing weight may increase your net worth.

The DINKS (dual income no kids) have some tips for paying off debt fast.

Blue Print for Financial Prosperity ponders whether married couples should combine their finances.

YahooFinance has an article asking if you need a cost of living reality check and has some helpful budgeting techniques.

Incentive Recycling from RecycleBank

Many communities make scads of money from their curbside recycling programs. With the price of metals rising and the processes to recycle many other materials improving it's easy to see why. Would you like to get a little bit of a kickback for taking your recycleables down to the curb? I thought so. RecycleBank has introduced a incentive based program where you fill up one of their provided containers in 35, 64, and 94 gallon varieties and they pick it up and give you rewards. The company will credit you up to $35 a month that can basically be converted into gift certificates. The program is only currently available only on the East Coast in Delaware, Philadelphia, and New Jersey. The company has a strong environmentalist sell so the website shows the trees saved and oil saved by the program.

Link
RecycleBank

Subprime Shakeout and Where it is Happening

The fallout from subprime lending defaults and other risky lending ventures made big news a few weeks ago, but now we are starting to get a clearer picture of the extent of the damage. Some resourceful bloggers have put the data into graphical form. The data floating around out there shows where the most subprime loans were made and also the locations where most are now in foreclosure.

For the most part the data isn't earth-shattering, because it seems that the most subprime loans were made around the major metro areas. I would guess this is because there are typically very wealth and poor people in these areas (or maybe just people in general). My theory is then that there were plenty of people buying more house than they could afford or investment property and also those who probably shouldn't have been offered a loan in the first place. However, that doesn't seem to always be the case if the maps are any indication. I'm not really sure what to make of these, but here they are...

Links
Dinocrat has some nice maps of subprime lending and subprime foreclosures

The Big Picture has a state by state subprime heat map that shows which states have the most subprime loans out there.

Immigration Myths and the Economy

I am quick to admit that the U.S. immigration system needs an overhaul, but when you listen to the pundits and talking heads go on and on you don't get an idea of how the system really works. I recently read an article from The Creativity Exchange about how the U.S. needs to attract top talent from other countries to stay competitive. I wholeheartedly agree with the theory, but don't think that opening up the floodgates is the way to do it. While I'm no immigration expert I know a little bit about the structure of the system so we'll start there.

To begin you have to know the three interests that drive the U.S. system 1) family 2) employment 3) diversity. Within these interests there are varying quotas and preferences that add other complexities to the system. As you get farther down the preference chain in each interest group, the less likely you are to get into the U.S. on a Visa for many years.

• The preferences for family immigrants range 1st - unmarried sons & daughters of U.S. citizens, 2nd - spouses and unmarried kids of lawful permanent residents, 3rd - married sons & daughters of U.S. citizens, 4th - brothers, sisters of U.S. citizens.
  
  
• The preferences for diversity depend on the number of immigrants that enter the U.S. in the other interest and tries to get other countries represented in the U.S. population. (ie. Mexican immigrants can count out diversity immigration because they represent a huge portion of the U.S. population.
  
  
• There are 8 preferences for employment so I will briefly list them but not go into much detail. 1st - EB-1's are extraordinary talents or "superstars" in athletics, education, business, research, professors, 2nd - Exceptional ability in science, business or the arts and advanced degree holders enter here, 3rd - Skilled and professional workers who have occupations requiring two or more years of training (bachelors degrees), 4th - Special immigrants includes religious workers or U.S. govt employees abroad.
  

Here is my problem with the pundit version of the argument. We need knowledge based workers no question. But we have to attract them. If they want to come here and they are qualified they will get in (so long as they aren't from a country that harbors terrorists). Take a look at the most current Visa bulletin put out by the State Department. The government NEVER fills the highest priority employment Visas. The laws allow for thousands more than there are applicants each and every year with basically no wait time to get approved. The first priority workers (ie superstars) are current in every country. The 2nd priority advanced degree holders are current in every country except for China and India where the wait is about 2 years and 4.5 years respectively. If we want these workers in then expand the 2nd preference employment Visas. There are plenty of people who have B.A. & B.S. degrees in the U.S. Then again if more advanced workers or B.A. degree holders are accepted then people will complain they are losing their jobs again because they have to work a little harder to find one. I definitely don't think the answer is to let everyone in nor is it to make people pay more. Most people entering illegally don't want to wait & can't afford it.

To me if the debate is focused on attracting people at the 1st, 2nd or 3rd employment preference it becomes a question of how many jobs are created v. the displacement of Americans. If there is truly a lack of qualified applicants in some sectors then by all means bring people in until enough people can be educated to fill the vacancies. People aren't told that employers must offer a U.S. market wage and post the job for hire in the U.S. for a certain period of time. They can't just bring a guy over here and undercut U.S. competition. I believe it does happen, but not as widespread as the media leads everyone to believe.

Just my 2c... Feel free to comment with what you think.

* Note: A lot of this is oversimplified. It would take a book, economist, and an immigration lawyer to give it the justice it deserves.

Links
The Creativity Exchange: Creative Class Lockout
Apr 2007 Visa Bulletin

Department of Defense Tries to Cap Payday Loans

The department of defense has introduced a draft proposal capping payday loan interest at 36%. The potential law has recently been published in the Federal Register and the 60 day comment period has begun. I'm generally not much for Congress legislating things into submission, but something needs to be done about these shops. Capping rates at 36% would be a drastic cut from what most of these operations now charge.

The people who have helped push this legislation to the point where it will be considered claim that service men and women are particularly susceptible to these programs. While that may be true, I don't see why this legislation isn't extended outside the services. For every armed service member who falls behind and uses one of these services there are probably at least two or three average Americans. Service men and women nobly provide for our country, but they make a salary that is above the poverty line and have access to free or reduced education expenses. If they are running into this problem what about the inner city poor that these businesses thrive off? That's the end of my rant. If you want more information about why payday loan services are at least borderline unethical visit the FTC, Wikipedia, or Responsible Lending.

Links
DOD Legislation Story

FTC Payday Loans

Wikipedia Payday Loans

Responsible Lending

Soap Box Derby Big Wheel Style

This has nothing to do with personal finance, but it's fun and a break from the usual. The annual BYOB (Bring your Own Big Wheel). Race down Lombard St. which happens to be steep and have lots of turns...

Link
Big Wheel Race

The New Hot eBay Items

One type of company that I rank right up there with Pay Day Loans as far as over promising services to people who don't know much better are the Sell it on eBay variety. There are also countless books, e-books, CD's, etc claiming they can teach you the secrets about how to make a killing on eBay.

Although I am a frequent eBay user, I typically buy things there because they are cheap. To get to the cheap good stuff I have to wade through about 10 pages of knock offs, overpriced buy it now items and overall crap. I rarely sell things there unless I have low expectations about what I will receive. Aside from the aforementioned shortcomings, it is a great resource to find stuff that is hard to find or unique. Many people do make a sizable income there (generally by selling in volume).

Apparently the new hot (and large markup) items on eBay lately have been iPods, plasma TV's, Wii's semi-designer clothing. I was floored recently when I read in the Wall Street Journal that a lot of limited edition short run Target and H&M clothing has been selling at double, triple and 5x retail. I'm no fashionista and this is obviously not something everyone should try, but if you have an eye for fashion and are into eBay could be something to play around with.

Link
Gold in Your Closet WSJ

E*Trade Free $25 Savings Sign-up Bonus

E*Trade has a promotion running for their new high yield online savings account. If you open account and fund it with $1 (the account minimum) they will give you a $25 bonus. Not too bad of a deal considering you only have to chip in $1.

The account pays 5.05% which puts in a good position to compete with what the other top online savings accounts are paying out right now. The biggest benefits (aside from the free cash) is that the transfers are really fast in and out. I have complained ad-nauseum about the lag time for HSBC and have been happy so far with the responsiveness of E*Trade's online account. As with all reliable online savings accounts this one is FDIC insured up to 100,000 too.

Link
E*Trade $25 Savings Bonus Promotion

Cross Country on Grease

Everyone knows that ethanol is the new big thing making farmers in Iowa and other farming heavy states see dollar signs... but what if you could power your car on something other people gladly get rid of?

The Adler family took a cross country trip in their diesel RV and didn't fill up at a single gas station. Not the most unheard of feat, but when you learn the family filled up their RV at waste frying oil things get a little more unbelievable. Net cost for the journey - nothing, nada, zilch. The site says he was only refused oil one time when he asked on his cross country trip. They filled up at McDonalds, Chinese buffets and other greasy American staples.

Let me just say that it makes me feel a little uneasy about my day to day nurishment if a byproduct from it can power a RV.

Link

Cross Country on Grease

Free Money... (Well Stock)... No Honestly

I'm always looking for a way to save or make a little money (so long as it is legit and not the slightest bit shady). How does $50 sound... Like there is a catch right? Not exactly, but let me explain. Sharebuilder (a website that lets you buy as little as $1 worth of a share of stock), has a promotion running where they will give you $50 when you open an account. I did this a while back and opened up an account, purchased a couple risky penny stocks (its free money after all) and am sitting back waiting to retire on the beach 30 years from now.

How it works:

• Head over to Sharebuilder.
  
• Enter one of the codes below (all were working at the time of this post) and open up an account.
• Make a trade and 4-6 weeks after your trade is made your $50 bonus gets deposited in your Sharebuilder account.

Code: CAMPUS50
Bonus: $50
Exp: None Found
Link: Link to Open Account

Code: UFALUMNI45
Bonus: $45
Exp: None Found
Link: Link to Open Account

Code: IPLANGIFT
Bonus: $50
Exp: None Found
Link: Link to Open Account

Code: ENTERTAIN40A
Bonus: $45
Exp: None Found
Link: Link to Open Account

Code: SMFALL50
Bonus: $50
Exp: None Found
Link: Link to Open Account

Code: UWALUMNI45
Bonus: $45
Exp: None Found
Link: Link to Open Account

One other thing to consider is if you are a CostCo Member Sharebuilder has a deal where they will give you a $55 bonus if you enter your membership number when signing up. If you are an "Executive Member" you get the $55 bonus plus 25% of your Sharebuilder fees credited back to you. If you are a "Gold Star or Business Member" you can get the $55 bonus plus 10% of your transaction fees credited back to you. If you are interested and a Costco member you can find out more about the offer here.

FYI:

1. I have heard that once your $50 bonus posts you can electronically withdraw that bonus cash without fees once it hits your account, but I haven't done it myself.
   
   
2. You can open additional Sharebuilder accounts and still receive the bonus cash, but space them out by a week or two and use a different code, if you open over 3 accounts you are going to run the risk that they prevent you from opening additional accounts.
   
   
3. Sharebuilder has a pdf form that you can print off and fax to them that will allow you to combine accounts at a later time.
   
   
4. If you are thinking about cutting and running quickly after you receive your bonus be warned that to close your account and transfer all or part of the funds out of your account ShareBuilder charges fees (see the fee schedule below).
   

Links
ShareBuilder

Sharebuilder fee schedule
Fees

The Perils of Debit Cards

Americans use debit cards a lot. Use of debit cards has grown exponentially and the recent gains coincide nicely with the increased marketing they have received from credit and banking companies. Debit cards are a boon for these companies, they get processing fees still, overcharge fees (at my bank it is almost $40), and they don't have to float you money free for 30 days.

The products are great for people who tend to overspend with credit cards (provided they do not overdraw their checking when using a debit card) and are convenient. But, there are some things you should be aware of.

1. Know your liability policy, the "Zero Liability" that you see marketing generally applies only to cards branded with the Mastercard or Visa logo.
   
   
2. The Zero Liability doesn't apply if someone else uses your PIN.
   
   
3. Potential fraud or stolen cards need to be reported FAST. Debit cards are governed by different laws than credit cards.
   
   
4. It is generally harder to dispute purchases on debit cards than credit.

I don't want to sound the alarm too loud, but these are some things to consider when you visit your local retailer and put down the plastic.

Link
Read more about debit cards.

CNBC Million Dollar Challenge Update

I've been doing an excellent job wasting time this morning and just logged into CNBC's Million Dollar Challenge. Although I think it is mostly luck, I'm hanging around the top 10% right now. I just wish you could trade more quickly, I don't like waiting till the next day for an order to register... Anyone else find this thing strangely addictive?

PS: The answers to the bonus bucks questions for today are (31% was the profit jump for the Industrial Bank of China, reserve bank of Australia kept rates at 6.25%)

Link
Million Dollar Challenge

Tax Crunch Time

Only a little over a week till tax time is here. With that in mind, here's are some quick links to what other blogs are saying about it.

Getting Green has an article about 10 Ways to Avoid an Audit.

Additionally, the IRS has a list of the top five most overlooked items by taxpayers in their 2006 tax returns.

Those of you paying someone to prepare your taxes may be interested in the article on TaxProf Blog about the government charging 125 Jackson Hewitt franchises with tax preparation fraud.

People using popular tax preparation software packages like TurboTax or TaxCut can find coupon codes for H&R Block's TaxCut software over at FIRE Financial.

Living Almost Large has a nice article about her philosophy as to when it makes sense to pay off a mortgage early.

If you are still hungry for more tax goodness, Don't Mess with Taxes has a variety of other Tax related links.

...don't forget to thank your local IRS auditor for all the wonder this time of year brings.

Identity Theft With That Tenderloin?

Visa came out last week saying that restaurants are the most common place for credit card theft to occur. The company, with a wealth of detailed data at it's disposal from millions of card holders, says nearly 40% of thefts happen at restaurants. The report also says that some companies are saving data from the cards that makes compromises by thiefs even easier. Unsurprisingly, the restaurant industry contests these figures... but I tend to believe the guys issuing the cards.

Link
Restaurants & Credit Card Theft

Cash & Prizes to Search Google? Huh?

I was looking at my page statistics today and saw a unusual site referring visitors to my site. Recently I have been getting visitors from a site called "Blingo."

From what I gather, the site uses Google's search results and gives out prizes and cash to people randomly selected. I would guess the site makes money from two income streams. 1) sponsored links and 2) compiling search data (note: I have no proof that the company sells data, but the site says it pays for prizes with the ad revenue it receives). Each search, up to 25 per day enter you to win at the site. The site claims to have given away more than 4,000 prizes and the following every day.

• A Ford Escape or $20,000 cash.
• $5,000 cash.
• A home theater or $2,500 cash.
• $1,000 cash every Thursday.
• $25 Amazon.com gift certificates.
• Fandango movie tickets.
  

The site doesn't offer any incentives for people who click sponsored links and doesn't have the adsense text ads that appear on Google. After searching a couple times today I must admit the site is pretty clean. I don't know how they are cash flowing enough to support the prizes they give away -- since my searches only showed 1-2 clearly marked one line "sponsored links." However, the ads were unobtrusive and I'll probably give the site a try for awhile since it pulls results from Google which is my search engine of choice.

An important caveat, the site is run by Publisher's Clearinghouse - the same company that is famous for the "Prize Patrol" and showing up at people's homes with checks the size of a Honda Civic.

I signed up and shamelessly will put a link to my Blingo account for anyone who is interested. My compensation? If anyone signs up under the link and wins a prize, they give me the same as a bonus. You don't win a prize? I get nothing at all.

Link
Blingo.com

Can Cell Phone Banking Possibly Be a Good Idea?

I generally try to find things that may be potentially helpful to readers and discuss them here in on The Golden Parachute. Tonight I'm going to discuss a service that I can't see as having much redeeming value - banking by cell phone.

The service will be initially rolled out in California - which makes sense based on the high level of tech acceptance there in many places. Users will be able to transfer funds, check balances, and view statements from their handsets. The service promises encryption and that the service will only work from the handset that is "registered" with the service. Users who lose their phone can call to have the phone deactivated much like a typical credit card.

Now on to why I can't see this taking off given the technology and abysmal wireless market in the United States.

1. Although the service makes users download an application that encrypts transmissions, most users don't know how to properly secure their phones. Every time a celebrity has their cell phone pictures make it to the web this point is reinforced. Common accessories like BlueTooth (when turned on) can leave hardware vulnerable to malicious individuals. Hackers are always one step ahead which is why DRM and virus scanning companies have healthy balance sheets. It is only a matter of time till people figure out a way to spoof phones, control other handsets, or unleash viruses targeting this sort of application.
   
   
2. People tend not to secure their phones because it cuts down on the convenience they provide. Many people also save passwords on their computers for often visited sites. This could potentially cause a problem for people who lose their handset.
   
   
3. There is a very small market for this product. Tech savvy people who are most likely to use cell phone banking more than likely carry a BlackBerry, Palm, or other smart phone that can easily access the internet. Why not access the bank's website over your device's internet connection and do your banking over an encrypted SSL connection? I'm not a well versed in the processing of financial transactions or software that facilitates this, but I think that would be the easier solution. A wild guess tells me that this is a strategy to get people to stay loyal to Citi (through using the application), rather than telling people they can access Citi's website and do the same thing.

Would you use the service? Do you think it will take off? I'm interested in your comments.


Link
Citi Introduces Cell Phone Banking