Mortgage Rates Climb Applications Fall

If you were thinking about refinancing your mortgage and been dragging your feet (or maybe your bank has been), refinancing may be less attractive than it was a week or two ago. The 30 year fixed rate was about 4.81% last week. This week it has jumped right around 9% up to 5.25%. Granted this is still at a historically low level, but if you were meaning to lock in a low refi rate, you may want move quickly. There are still some banks out there with low rates, just make sure you crunch the numbers and take into account the closing costs and/or points the lender may be charging. As usual, Bankrate is a good place to start your search for the lowest national and local rates.

Amazon Selling Flip Camcorder for $50!

If you have a gadget-loving father, new grad or someone else in your family Amazon has a really good deal right now on the Flip Camcorder. For those of you not familiar with the Flip series of gadgets they are stripped down, but very functional camcorders that take digital video and in some cases HD video. The engineering on them is actually really good and best of all they are CHEAP.

Now don't expect a lot of bells and whistles, you will be dissapointed. But the little things do get the job done. Amazon is selling the Flip camcorder that takes 30 mins worth of video for $50. I think that's a steal as far as tech goes - especially considering how fast the stuff becomes outdated. They also have some more pricey models that give you image stabilization, HD video and some other features if those are important to you.

Using Web 2.0 to Find a Job

Quite a while back Mashable posted a list of their top 10 social websites to find a job. I have posted the list below. I admit while I'm familiar with the major sites on the list, many of them are new to me. If you are in the market, take a look. For a description of each head on over to Mashable. If you have any others that should be added, let me know.

1) Linkedin

2) Plaxo / Simplyhired

3) Twitter

4) Jobster

5) Facebook

6) Craigslist

7) Myworkster / Indeed

8) VisualCV

9) JobFox

10) Ecademy

Source: Mashable

Image Credit: Neubie @ Flickr

Consolidate, Simply, Improve Your Finances

I have been helping a family member wrap her arms around her financial situation recently and thought I'd share my observations. Unlike the typical situation these days she has judicially salted away money every month for a very long time and therefore won't be wondering if she can maintain her lifestyle in retirement. But, her husband ran into some health issues two years ago and she had to take the reins of their finances for the first time in 20+ years. In their family, her accountant husband had a mind for numbers and had invested money with 15+ mutual fund companies, opening one or two funds at each. This caused paperwork nightmare for someone who is financially savvy, let alone someone who has problems balancing the checkbook.

The health situation opened her eyes and woke her up to the fact that if something happened again she wasn't sure she would even know where all their money was. Of course, having 20 different mutual funds doesn't mean you are diversified. It's also a huge hassle. I've been enlisted to help them consolidate their accounts, re-balance and simply things. They are also looking into working with a financial planner. I'm admittedly not an expert on equities, bonds, and the like, but as the financial meltdown of 2008-2009 has shown, neither are most of the people on Wall Street. I'll list the steps I have taken below. They want to take a mostly DIY approach to their investments so I've tried to not make things overly complicated while bringing their risk down.

STEP ONE. CONSOLIDATE

As noted above, my relatives had holdings at over 15 institutions. While they had some real quality companies working for them, I question whether each of the offerings at T.Rowe Price, Vanguard, and Schwab have significant enough differences to spread your money around everywhere. This is especially true with the number of non-transaction fee funds and ETF's available at most full service discount brokers.

a) Where to consolidate?

This is essentially a personal preference since many of the brokers have similar offerings these days. My personal favorite is Fidelity, though Schwab is a close second. Both have a solid offering of branded no transaction fee funds, charge no annual fee, have relatively low minimums, and charge lower trading fees than many of their competitors. There are cheaper options for trading and lower minimums elsewhere, but these two have very good customer service in my experience which is worth the extra dollar or two on trades (since they are mostly invested in mutual funds).

There are also some very good mutual fund companies such as Vanguard and T.Rowe which basically have a brokerage account tacked on as an afterthought to their fund offerings. Both are great companies, but have thin offerings outside their branded funds.

After laying out the options they have decided to go with Fidelity.

b) Making the Move

One of the reasons that we settled on Fidelity was that quite a few of their funds were part of Fidelity's NTF network, so they could be rolled and moved into the brokerage account essentially unchanged. A number of the other offerings will be liquidated and moved into a similar offerings from the Fidelity branded funds, NTF funds Fidelity offers, or comparable ETF's. The whole process can be initiated online and finalized by mailing some paperwork to Fidelity. It is a fairly pain free process, but takes a little while.

STEP TWO. SIMPLIFY

Asset allocation is the single most important factor in this process and I haven't been able to find any online tools that I feel confident with. This is especially true given the huge differences in allocations each recommended. My relatives are about 5 years from retirement, so they will need a more conservative allocation than someone like me. I have recommended that my relatives visit a financial planner who charges hourly and schedule an appointment to review their goals and get a plan figured out. A few hundred dollars is a small price to pay for solid advice.

STEP THREE. IMPROVE

While things haven't been finished yet. They are off to a good start. The final pieces will fall into place once they meet with the financial planner. I believe they will benefit a great deal from having the vast majority of their investments under one umbrella and just a few funds at another broker. Now, if something happens at least all their money will be in one place and accessible if necessary.

I'm interested to hear if you have had an experience good, bad or otherwise moving things under one roof. Do you have any other advice for them? If so, email me.

Image Credit: Ben30 @ Flickr

Just How Bad is the Job Market for the Class of '09

Yeah, everyone knows job losses have been downright ugly for some time now. But, what about all those new college grads being churned out this year. Sure some positions may have a fairly positive outlook, but far less have a red-hot demand as in years past. Tech is beat up, hospitals are laying off people, finance is all kinds of bad --- at least education and government are still hiring.

This is bad news for everyone, but if you are penny less and have some fresh student loans to pay off, things can be even more daunting. Gone are the good old days when parents could finance their kid's education or when students could make enough over the summer to pay most of their tuition. Enter the new reality, student loans and a world where a college degree is a bare minimum.

The WSJ is reporting that people who graduate in a recession end up making less over their entire careers, not just in that first job. Apparently employers are saying that they will hire 22% fewer college grads this year. That is especially bad news for all the history, english and philosophy majors entering the workforce this year. Read the whole story at WSJ.

Image Credit: quinn.anya @ Flickr

Asset Allocation Made Easy

As a DIY investor without a broker, I have been looking around (for a while now) trying to find a tool that will help me allocate my investments in different asset classes and help me rebalance them occasionally. As I will probably elaborate on in an upcoming post, I haven't really been happy with any of the tools that I've tried so far. The tools have either been too simplistic, way too complicated, or the numbers just don't seem to add up. I should note that I have been trying out free tools, when I probably just should have broke down and pay for some advice.

Today I came across the marketriders.com website. The site offers advice on asset allocations in a few flavors. In its most basic form you can pay a $9.99/mo fee for automated advice by answering questions about your time horizons, appetite for risk and age. If you prefer, for $399 you can talk to an advisor who will walk you through things. Or, if you need more help yet you can move your portfolio over the Market Riders and pay them a .50% commission. The company has based its philosophy on the idea that if you get your money in a low cost investment (preferably an ETF that tracks an index) and have the right allocation there's really no need for an expensive broker. They seem genuine when they say they really prefer if people do the investing themselves and don't hire them as their planners. They even impose a requirement that you fire them each year and decide if you want to rehire them.

I think its a good concept. I haven't tried their service out yet, but since they offer a free 30 day trial I will be soon and will post a full review at that time. Market Riders apparently has a database that has over 700 ETF's and provides users with a sample portfolio of ETF's to meet their respective allocation. Why ETF's? Because as counter-intuitive as it may sound, they generally beat the experts. The company also monitors the performance of the investments and will send you an email when it is cost effective to rebalance things. In this sort of market that could prove to be some valuable advice.

Does anyone have experience with Market Riders? I like the concept a lot, we'll see how the model plays out in the service itself. I will report back once I have a chance to kick the tires. I wish them the best, it's about time there was some solid unbiased advice at a fair price.

Link: MarketRiders.com

Image Credit: The New Fine Art's Lab @ Flickr

Hedge Fund Advisor Must House the Homeless to Build Mansion

The WSJ has a blog post that tells the story of a hedge fund advisor in England who was told he needed to house the homeless in exchange for the ability to rehab his home and add a pool. His total bill... $730,000. This sort of thing wouldn't fly in the U.S., but as the WSJ notes, apparently it's fairly common place across the pond before commercial projects break ground. Read the full story here.

Guy Steals $20k in Stamps... To Pay Mortgage

The title pretty much says it all. This is one of the stranger and dumber things I've heard in a long time. Apparently a guy in Michigan stole $20,000.00 in stamps and was selling them on eBay to pay his mortgage. The man was a 42 year old postal employee and as you can expect is in a whole lot of trouble right now. I guess it beats a second job.

Read the whole article at CNN.

Free Up Some Time with a Virtual Assistant

One of the great things about the internet is that it removes a lot of the barriers that people face every day. No pesky brick and mortar store fronts to eat up overhead expenses, telecommuting reduces the need for office space substantially, and email and VoIP help keep people connected. With companies downsizing you might find yourself forced to do more with less and being squeezed to work longer hours. Or, maybe you own a business and are feeling maxed out. You might be able to get some cut rate freelance help whether you need it for a day or the next year. I haven't used any of the sites below, but I'm kicking around the idea of trying them out as projects present themselves or to give this site a face lift. In no particular order, here are some of the personal assistant/freelance websites that I've come across recently.

1. AskSunday.com

This site offers virtual personal assistants. Their website says that the most commonly requested services include: appointment scheduling, data entry, gathering information from the web and research, making telephone calls, booking travelnand ordering flowers or gifts. Pricing isn't available on the website, but new users can get a free week of service for signing up.

2. RedButler.com

This site offers similar services to asksunday.com with the addition of some membership rewards. The service starts at $36.95 for 15 requests / mo. and increases from there. Again, the site seems to specialize in the mundane repetitive tasks that often chew up a lot of time.

3. Elance.com

Elance more of a full-scale freelance site. Rather than outsourcing your projects to the company itself, Elance acts like more of a matchmaking service. Elance helps you match up people with projects and professionals who have the skills you are looking for. Professionals can then bid on the projects. At Elance you can hire IT professionals, lawyers, writers or finance specialists. Elance allows individuals to post opportunities for bid or search providers and contact them directly after reviewing their portfolios. I am considering using Elance to find someone to give this site a face lift, because my design skills leave something to be desired. If anyone has suggestions I'd be interested to year your experiences.

Has anyone used these sites? Are there better ones out there? Please let me know and I will post updates with any I receive. I will also update the site after I try them out myself.

Image Credit: vargklo @ Flickr

So Why Should We Bail Out Homeowners?

I am going to take a second to pose the question that I have been thinking over the past few weeks with regard to the proposed bail out of homeowners who now owe more than their home is worth. I understand that it's politically popular to help out people who might lose their homes, but to that I reply -- so what? It happens. At the risk of sounding heartless, I'll explain my position.

1) You should have bought your home to LIVE IN.

So if you did, then it shouldn't matter if you now can't sell it for more than you owe. It's called a paper loss. By the time you sell the house it might be worth more. That happens over the course of a 15 or 30 year mortgage. The bank isn't going to call its loan unless you stop paying, plain and simple.

2) You probably more than you could afford.

I acknowledge that bad luck befalls some people who have medical problems or other situations that arise unforeseen. If your gross income is $3,600 / mo and your mortgage is $3,500 a month, you weren't meant to be in that house in the first place.

3) The bank has the right to take your house if you don't pay.

When you sign a note and mortgage at a bank and close on the purchase of a home title passes to you from the previous owner. If you read the documents carefully, you should have realized that you granted the lender (and whoever the lender sells your mortgage to) a security interest in the property. This means you told them they could take the property if you don't pay. That security interest is also probably the ONLY reason a bank was willing to loan you money, because the bank knew it could get something if you decided to default on your loan.

4) Consumer protection laws are already stacked in the homeowner's favor.

When someone gets foreclosed on it is not a surprise. The process goes a little like this in most US jurisdictions. First, you get written notice that you haven't been paying your bills (which you should already be aware of). Second, the bank has to initiate a legal action which costs money and takes time (again the home owner is notified). Third, the legal action is completed and the house goes to sheriff's sale (again notices given to owner). Fourth, the sheriff's sale takes place after notices are posted and/or published in the paper. Fifth, the sale takes place. Sixth, the sale is "confirmed" by the judge (after notice to the owner). There is generally also a redemption period somewhere in that mix allowing the owner to catch up on any late payments. The whole process can take up to a year and this whole time the home "owner" is living there paying no rent, making no payments to the bank, and generally trashing the place.

5) Owning a home is not a right.

Take a look at the bill of rights, then read up on what they actually mean. People who claim that taking away a home (which they granted the bank an interest in and after they stop paying) is a violation of their rights, are like the people who you see on COPS screaming that the police are violating their Miranda rights (note: they don't apply until you are actually arrested). They don't quite get it.

SmartyPig Rate Continues to Impress

With the Fed. keeping rates around zero and now firing up the printing press (or more accurately magically pressing a few keys on its computers) to ease rates, online savings and CD rates continue to fall off a cliff. Most of the major players who a year or so ago were offering 5%+ APY's are now in the 1-2% range. SmartyPig is a newer player and seems to be holding the line with its rate. The bank, which is FDIC insured, offers online savings accounts with no minimums and a 3.25% APY (as of 3/22/2009).

There's no guaranty that this rate will stick around for the long-term, but it might be worth a look for some of you out there looking to park some short-term cash. From what I can tell, over its short life, SmartyPig has been consistently offering high(er) returns and now offers rates that are more than double those of other major players like INGDirect (1.5%). So, it might be worth a try. Especially now that one year CD rates are around 2% and online savings accounts have the benefit of much more liquidity.

Full disclosure, I haven't been able to try the site myself. I'd love to hear from anyone who has an some experience with the site, its interface and speed of its ACH transfers.

Will You Get You Next Job By Bidding?

They say that recessions spur a tremendous amount of innovation and out-of-the-box thinking because smart, well-qualified people lose their jobs for reasons other than performance. The job market gives people the push they need to take the otherwise scary leap to be their own boss. A relatively new website called "Jobaphiles" takes a different approach and lets you either a) post a job and let people bid on how little they would take the job for (and supply their qualifications of course) or b) bid on a job that someone else has posted.

I think its an interesting concept, though it seems to me that most of the jobs are entry level or college student type temporary jobs. For example, there are plenty of babysitting, bartender, assistant and web content jobs. All relatively low skill and high turnover positions. This isn't surprising, since most employers are concerned with quality over the lowest option for more high end positions. I think its safe to say most people would rather have the best doctor or lawyer they can afford than the absolute cheapest one out there.

Jobaphiles is worth checking out, it might take off, but I think there are plenty of freelance websites out there where pro's will get your job done cheaper and probably with better quality. I think if the site attracts more users and tweaks its model, then it stands a chance to build something really useful off of the basic idea job auction idea.

Anyone out there have experience using the site? I would guess based on the relatively sparce job offerings that the site is relatively new.

Link: Jobaphiles

Image: Egan Snow @ Flickr

Tough Job Market For New Grads

The economy isn't great, something we are all aware of, but something that is often overlooked are the challenges facing new grads entering the workforce.

The number of experienced employees seeking work has swelled over the past few months, companies are cutting back their forecasts and their hiring outlooks. If you think you are in a tough spot, you should empathize with all the new college grads that will be churned out this year. I think people who are older often underestimate the challenges facing recent college grads these days. Yes, most grads don't have kids they have to support right out of the gate and aren't necessarily tied down to a specific geographic area. But, they have also faced college costs that have skyrocketed over the past decade. The average private university will set students back well over $20,000 per year for tuition alone. Even public universities will run well over $20,000, over the course of a four year degree. New grads have a few months grace after graduation, then need to start making loan payments, car payments, rent and pay for all the expenses associated with starting out on your own.

Now these grads have a new battle... one against all the experienced hires prowling for work. The options may be fewer and ideal jobs harder to come by, but the good news is the recent grads will find work somewhere. As the WSJ notes today, there are some ways new grads can improve their odds. These include: 1) interning, 2) looking for fields where lots of boomers are retiring or will retire, 3) volunteer and keep your options open.

Personally, I think interning is the most valuable option, but it should be done WHILE you are in school. College students should get this out of the way over their four years at school so they can hit the ground running with a leg up come May. I'm all for college kids working cheap in the name of experience, but think its unfortunate so many take "unpaid" internships. There are paying gigs out there, you just have to look for them and knock on some doors that may not be advertising they are open . There are plenty of smart young (and established) companies ready and willing to take on a college kid who is willing to work hard and contribute. I contacted the local chamber of commerce in college and basically mail-bombed all the companies that looked like they might be interesting. I landed with a young financial company that was growing quickly and treated me great. The money was terrible, but I got paid and was rewarded with some nice bonuses on my way out. Oh yeah, and they were more than happy to pull strings and set me up with a real job elsewhere, even though it wasn't in their line of work.

Just remember new grads, you have some advantages over your experienced job-seeking counterparts. First, you are dirt cheap. Second, you aren't limited by "they way things work". I find that new grads are able to think outside the box better sometimes because they are less resistant to change than their older peers.

Are you a new (or soon to be grad), I'm interested to hear how your search is going and if you interned at all to set yourself up at graduation. Please leave a comment.

Image: telethon @ Flickr

Jon Stewart v. Jim Cramer: Blow by Blow

In the event you have been living under a rock for the last week or so, Jon Stewart of "The Daily Show", has been skewering CNBC recently. For those of you that don't know, Jon Stewart is a comedian who has made a living with, as he calls it, "a fake news show". The reasons he says he called out CNBC is that a) they have been cheerleaders as Wall Street ran amok and b) failed to ask hard questions for fear they would lose access to insiders.

Stewart often lets his political leanings be well known on his show, but in my opinion that's not not a big deal because he doesn't pretend to have a real news show. He's a comedian, a very popular one, but a comedian none-the-less. Anyways, below is: 1) the video that started this all in motion, 2) Stewart piling on, 3) Cramer's retort, and 4) Cramer's appearance on the Daily Show.

I'd be interested to hear what other people think. Was Stewart unfair in taking CNBC to task? Was CNBC out of line? Did the Cramer interview live up to the hype?

The Daily Show With Jon StewartM - Th 11p / 10c

CNBC Gives Financial Advice

Daily Show Full Episodes
Important Things w/ Demetri Martin

Political Humor
Jim Cramer

The Daily Show With Jon StewartM - Th 11p / 10c

In Cramer We Trust

Daily Show Full Episodes
Important Things w/ Demetri Martin

Political Humor
Jim Cramer

The Daily Show With Jon StewartM - Th 11p / 10c

Basic Cable Personality Clash Skirmish '09

Daily Show Full Episodes
Important Things w/ Demetri Martin

Political Humor
Jim Cramer

The Daily Show With Jon StewartM - Th 11p / 10c

Jim Cramer Battle

Daily Show Full Episodes
Important Things w/ Demetri Martin

Political Humor
Jim Cramer

The Daily Show With Jon StewartM - Th 11p / 10c

Jim Cramer Unedited Interview Pt. 3

Daily Show Full Episodes
Important Things w/ Demetri Martin

Political Humor
Jim Cramer

Link to Full Interview

See More videos at Comedy Central

How to run an investment fraud the Madoff way

The NY Times posted an article this week entitled "How to Run a Financial Fraud" that outlined six steps to run an investment fraud (ala Bernie Madoff) and walk away relatively scott free -- considering you may have stolen billions of dollars. Of course the article doesn't condone the activities or even say that people should expect to get away with things, but it offers some interesting observations on how Madoff consciously did certain things to limit the collateral damage of the fraud for himself and his family. A thumbnail outline of the points made follow below.

1 - Avoid the six year lookback period for fraud
2 - Make substantial transfers to your friends and family
3 - Title your assets in the name of your spouse (preferably in Florida)
4 - Confess when before you get caught so you can control things
5 - Get arrested by the Feds, not the state.

You can read the whole store here at NY Times.

Image: Tracy O @ Flickr

At Least One Place Is Hiring

While I am not a huge fan of big government, it's nice to know at least one place has jobs for people who are looking. The pool of employers looking for recruits and work for those who hang on to their jobs is dwindling, but Uncle Sam has been on a hiring binge. Reports peg the number of open positions in the FBI alone at 3,000. That's a huge number by any count, but there are currently approximately 30,000 employees in the agency right now, so this represents approximately a 10% increase over its current level. The positions on FBIJobs.gov range from linguists, special agents and mechanics.

Are There Any Safe Investments Left In This Economy?

Maybe this is a sign of the new normal, but I have been searching in vain to find some safe investments to park money that earn a respectable amount of interest. Now I realize that with return comes risk and that nothing in this world is guaranteed, but aside from parking money in a CD that is yielding in the 2-3% range or a money market fund with an equally dismal rate of return, there are not a lot of options. I think the best places to park short term cash right now are FDIC insured online banking institutions. They offer much better rates of return than traditional brick and mortar outfits and more liquidity than treasuries or CD's. A quick Google search can return the usual suspects. As of the posting of this article the banks below were offering rates higher than the national average for 1 year CD's of 2.28%.

E*Trade Bank: 3.01% (no minimum deposit)
ING Direct: 2.5% (no minimum deposit)
FNBO: 2.6% (no minimum deposit)
Capital One: 2.64% (no minimum deposit)
HSBC Direct: 2.45% (no minimum deposit)

If you see any FDIC insured banks beating these rates or offering sign up specials please drop me an email at goldenparachuteblog@gmail.com or leave a comment on this post.