Keep More of Your Pay Check

Have Kids and Contribute to a 529? Read this before you make your next contribution!

2013-01-20T20:59:00.000-08:00

For those of you who have kids, you may have established a 529 College Savings Account for junior to go to college. You probably think you're doing the right thing by saving for junior. You're certainly not doing a bad thing. BUT, you may not be doing what's in your best interest. As this Forbes article from a few years ago mentions, colleges will take into account a parent's ability to contribute toward their student by including 529 account assets, but will exclude 401K/IRA (Both Roth and non-Roth). http://www.forbes.com/2010/01/25/college-savings-529-personal-finance-529_print.html

So what to do? Of course it depends on your situation, such as gross income, adjusted gross income, how many kids you have, if you're already maxing out your 401K/Roth IRA, your age, your children's age, etc.

What do I recommend, I'd recommend saving toward a Roth IRA and Roth 401K first, ESPECIALLY if your company offers a match to what you save up to a certain percentage. I've heard stories where companies offer a 5% match, and people don't even contribute 5% of their salary toward their 401K. That's like leaving 5% of your salary on the table or passing on a raise. Pay yourself first; there are always potentially scholarships, financial aid, work-study, part-time jobs,sports scholarships, and other mechanisms to go to college and graduate school. There are also programs such as loan forgiveness that may make it a better deal to have your kids take out loans and then later have them forgiven.

Be strategic about how you save, spend and borrow to put kids through college and you may save yourself thousands of dollars over the long run.

Save Money on Gas in Jersey

2012-03-15T20:12:00.000-07:00

I know, you know already that gas is less expensive in Jersey compared to NY - but obviously I have a better tip than just telling you that. Apparently, at least according to the gas station attendant at Sam's club who filled my car the other night, Sam's Club, Costco and BJ's and other similar clubs must make their gas stations in NJ only, available to all customers, irrespective of whether they're a member of the wholesale club associated with the gas station. I couldn't track down a statute etc. to verify such a fact, but I was more than happy to get gas for $3.46 a gallon! So the next time you're in Jersey and need to get gas, if you happen to know you're going to be passing one of these wholesale clubs with a gas station, might as well stop in and save a few cents over the already low Jersey gas prices! I'm a big fan of www.gasbuddy.com and have their mobile app on my blackberry.

Shaft the MTA Out of $2.25 Without Jumping the Turnstyle

2012-02-17T21:50:00.000-08:00

A few of my favorite tricks to beat the MTA out of an extra $2.25 includes taking advantage of the 2 hr free transfer provision:

If you take the subway one way, and want to go back to where ever you came from, take the bus instead and get a free transfer.

If you hop out of the subway in midtown and walk around for a bit, you can re-enter the subway using the 2 hr free transfer at either the 59th/Lex (4,5,6,N,Q,R) or 63rd/Lex (F) stations, because those two stations feature an out of station transfer.

Sure, you're not getting rich on either of these ideas, but every little bit helps!

Thinking About Replacing My Car

2011-12-22T17:20:00.000-08:00

So while on vacation this week, I rented a 2012 Nissan Versa sedan from Alamo Car Rental... for the trick on getting car rental pricing that I use, I checked Kayak.com and then also checked the prices from http://travel.bjs.com/car-rentals/ - I went with Alamo and paid about $182 for 10 days including all taxes and fees.... not bad for a peak time of year. Note that Alamo doesn't ask for verification of BJ's membership if you take care of your reservation using the kiosk for checkout instead of talking to their representative...

I liked the Versa enough that I even so much considered upgrading it and trading in my clunker that I held off on trading in during the Cash for Clunker program - a 1994 Buick Park Avenue Ultra. with 228,000 miles. I figured that the Versa was getting me 35.5 mpg overall on the road vs. 18ish for my Buick - if you do the math, estimating that I drive 1,200 miles per month, and assuming current gas prices stay the same, how long would it take before the car pays for itself through gas savings? The new car price would be about $15,000 even including tax, title, registration and a $500 trade in for the clunker. Let's assume $4.00 per gallon average for gas during the total length of ownership - not entirely unreasonable given recent gas price fluctuations and perhaps conservative overall. Let's also assume that my Versa mpg is only 30mpg, since that's the City rating, and I mostly drive in traffic, not highway. That's a 12mpg increase overall or 67% increase in fuel efficiency. I'd have to drive at least 170,000 miles until I break even - which at 15,000 miles per year, would take me about 11 years; factor in the time value of money from lost use of it when buying a car, and the cost of the car increases. Assuming a 3% per year IRR, then it'd take about 312,000 miles to break even.

Bottom line, with such a long rate of return, I think I'll keep my current car until it drops and defer buying a car as long as possible. For some people, a car matters, and sure, it matters to me, but I think I'll hold off for now. By 2016 car makers will have to achieve an average of 35.5 mpg on its cars, so if I can wait until then, the # of cars with amazing fuel economy is bound to increase, giving buys a nice selection of cars.... fuel for thought... http://autos.aol.com/article/new-federal-mpg-standard/

Flooring from Home Depot-Getting a Deal

2011-10-10T15:14:00.000-07:00

I decided to buy 30 boxes of Santos Mahogany flooring from Home Depot; as you might imagine, that means spending quite a few bucks. If you're like me, you want to pay as little as possible for what you want. But how to strike a deal on this? I've got the solution of course. The flooring is $3.37/sq ft, or $69.79/case. 30 cases= $2,093.70 + tax (NYC rate = 8.875% or $185.82 in tax = grand total cost of $2,279.52.

Here's what I did to save money off my purchase:

1) Bought through upromise.com web site, where a 2% savings is rendered on homedepot.com web site purchases.
2) Used my Upromise Bank of America Mastercard, where another 3% savings is awarded when buying through the homedepot.com link through the Upromise.com web site mentioned above.
3) When I went to pick up the flooring at home depot store (I did pick up at store delivery from home depot web site), I gave them a 10% off Lowes coupon for Home Depot to match. The sales clerk couldn't just adjust the price, and I didn't want to lose my discount from shopping online, so I had her instead return the purchase without a receipt to a store credit; then rebuy it using the coupon; saved $218 roughly in the form of a store credit.
4) Bought the flooring again online, this time with a ship to Newark, NJ store, where sales tax is 3.5%, and then returned the flooring, without dragging the merchandise, a savings of 5.375%.

Not a bad bag of tricks, right?

Saving money on produce @ the supermarket

2011-07-22T22:25:00.000-07:00

So I'm at the supermarket the other day and see someone tearing off the stems from their bananas and cherries. I asked them why they were doing that - they replied back, "why would I pay them for parts of the fruit that I don't need?" I looked a bit bewildered at them, thinking "that's how it comes, so you have to buy it that way". But then I quickly replied, "well, why not just take the entire banana out of its peel and put it into the plastic bag that way and not pay for the peel at all?" Of course I was joking, sort of. I mean, heck, if you're going to eat the banana on the way home, do you really need the peel anyway? I'm thinking I'll look for savings somewhere else in my life than to succumb to what that lady was doing - like filling up my gas tank in Jersey instead of New York or buying nearly anything else in Jersey where seemingly everything has lower sales tax than NY!

Best Places to Buy Electronics & Some 6th Avenue Electronics Deals

2011-05-04T20:53:00.000-07:00

Where does one go to buy electronics? With so many choices there who do you trust to get the best deals?

Here's a few "go to" places that I count on regularly when searching for the best deals.

6th Avenue Electronics - one of my personal favorite electronics stores out there - bought some flat screens there for my office some time ago.

Here's some coupons for them as well.

Kodak EasyShare M590 14MP Digital Camera - Silver. Now $83 with coupon: AFLKOD83
Harman Kardon AVR7550HD 7.2 Channel Audio/Video. Now Only $888 with coupon code: AFLHAR888
Pioneer GM-D7500M Class-D Mono Amplifier. Now Only $128 with coupon: AFLPIO128
KEF T105 5.1-Channel Ultra Thin Home Theater Speaker System. Now Only $1096 with coupon AFLKEF1096
KEF T205 5.1 T-Series 5.1-Channel Speaker System. Now Only $1396 with coupon: AFLKEF1396
Mirage Nanosat 5.1 Small High-Performance 5.1 Speaker System. Now $444 with coupon: AFLMRG444
Mirage Unitheater Premium LCR Flat-Panel Speaker (EA). Now Only $596 with coupon: AFLMRG596
Sennheiser HD280PRO Professional Headphones. Now Only $79 with coupon: AFLSNN79
Sennheiser PMX680 Sport Earbuds with Volume Control. Now Only $49 with coupon: AFLSNN49
Sennheiser RS170 Wireless Headphones. Now Only $232 with coupon AFLSNN232
Dyson DC24 Ball All-Floors Upright Vacuum Cleaner. Now Only $310 with coupon: AFLDYS310
Shure SRH440 Professional Studio Headphone. Now Only $66 with coupon code: AFLSHU66
LG Electronics 47LX6500 47" Class 3D 1080p 240Hz. Now Only $1188 with coupon: AFLLGE1188
Viewsonic G-Tablet with 10" Multi-Touch LCD Screen, Android OS 2.2. Now $299 with coupon: AFLVIE299
Pioneer DEH-3200UB Car CD Receiver. Now Only $88 with coupon: AFLPIO88

Another electronics store that I find that regularly has excellent deals is Electronics Expo The catch is that they only are located in Jersey - but if you're buying $500+ worth of stuff it may be worth the drive between lower sales tax and less expensive gasoline...they also match prices.

Sears, Amazon.com, Newegg.com, Tigerdirect.com, Frys.com, Meritline.com, Staples/Staples.com (especially with coupons), B and H camera on 34th street in NY or their web site, are some of the other sites that I have used for great deals as of late. As you may or may not know depending who's reading this, I do IT procurement for a living, so I'm constantly searching for the best deals out there for a variety of IT goods.

One of the most amazing deals I scored recently was from Staples... a laser printer that was originally $300, that I paid $25 for - they had a $200 mail in rebate, plus a $50 off when you trade in a used printer, and a $25 off $75 coupon.

Some of the sites that I use to search for excellent deals, particularly when looking for a specific type of item are as follow, in addition to vendor specific sites:

http://slickdeals.net/
http://www.pricegrabber.com/
Google's Shopping Tool

Bottom line: some leg work and looking at the right stores and using online shopping tools can yield some really good deals.

Coupons.com

2011-05-03T20:34:00.000-07:00

Just one of many coupon sites - but a great site to check before going shopping for food, grocery, cosmetics, and a whole host of other items. Every so often I use it for myself before going shopping. Coupons.com

Plum District "Deals for Savvy Moms and Families - Discounts Daily

2011-05-03T20:19:00.000-07:00

Yeah, it's another site that's a knockoff of Groupon, but hey, what's one more - perhaps worth subscribing to and seeing if there's any deals that piquePlum District your interest...

New York State Government Surplus on Ebay!!!

2011-05-02T22:15:00.000-07:00

New York State's Office of General Services (NYS OGS) sells its surplus stuff on ebay! Here's the link: EBay-NYS OGS Surplus - The catch: most of the stuff you need to pick up in person, Monday through Friday, where ever the stuff happens to be located for salvage, often times in Albany, but sometimes NYC, Long Island, or anywhere else there happens to be a NYS government office, which, really is anywhere in NY. There's been anything including: airplanes, bookcases, cars, doors, elephants - just kidding, a lot of stuff listed for sale on the site, and the prices are always good in general, unless it's a super high demand item, so worthy of adding them to sellers that you follow on ebay.

Real Estate Starting at a $1

2011-05-02T14:40:00.000-07:00

There was an article in AM Today advertising real estate starting at a $1 - that's fine and dandy, until you read the article and realize that with certainty, you're not going to be the winning bidder for merely a buck. So what else is out there that's remotely legit? Here's a few sites and descriptions of what you may find that may not be a dollar or even close, but still a potentially great bargain if you're looking for perhaps an investment, vacation home or other undervalued relative bargains. Although I haven't taken advantage of any of these deals, for better or worse - I can only hope you benefit:

http://www.Governmentauctions.com - this site features various items for sale by governments through a third party privately held company. Essentially from what I can tell governments contract with them to dispose of property and capital assets - an asset disposition via auction company if you will.

USDA Properties for Sale - The US Department of Agriculture offers real estate for sale includes government owned real estate and potential foreclosure sales for single/multi family homes, arm/ranch properties, houses, lots, and buildings.

Commercial / Industrial Office Space - thus far, this is my personal go-to site, when in the past I've had to search for commercial/industrial office space in the past. If you're someone who has a need to search for that kind of space, I highly recommend the site.

NJ Affordable Housing - a good site for affordable housing in NJ; "Mt. Laurel Housing" - for those unfamiliar with what Mt. Laurel Housing is, check out

Eventually I'll discuss other housing programs such as Mitchell Llama and HDFC in detail; feel free as always to post any questions.

SALE!!!!

2011-05-01T10:18:00.000-07:00

If there's one word that's overused in America, it's the word "Sale"

Often times my friends say they purchased something on sale for 50% off. 50% off of what? All too often, people see a sale, and see it’s 50% off, and they get excited.

Ladies and gentlemen, make no mistake, people buy into marketing and get excited when they see a term such as “sale,” “going out of business – everything must go – make us an offer” etc. Ever see a store that says it is going out of business-lost their lease, and they’re closing December 31^st? Sure you have, just admit it, that or go out shopping more often. How many times has that same store been in business come January 2^nd? Somehow they miraculously extended their lease.

THE BOTTOM LINE:

Know what things are worth before getting excited by a sale.
Patience is a virtue: if you don't need the item today, and you've seen it on sale for a lower price than the currently advertised price, more than likely it'll be offered for sale again at the best price you've seen previously, absent inflation, scarcity and other uncontrollable factors.
If it's not at least 2/3rds off, it's likely not that great of a sale, particularly when it comes to shopping at stores such as Macy's. - Isn't everything half off every day there so it seems?
Compare prices for big purchases via the Internet, particularly when it comes to electronics and similar items that are brand name items that are easy to compare.
Ask yourself if you really need it/want it - even if something is 80% off, if you really don't need it, is it worth buying? You still need to pay the other 20%, which is more expensive than not buying it at all.

Triple Coupons Today and Tomorrow @ Pathmark, Waldbaums

2011-04-30T12:55:00.000-07:00

Go clip some coupons and go shopping... Now through Sunday, Pathmark and Waldbaums is tripling all manufacturer's coupons up to and including $1 value, even those that say not to double. With deals like that, you can be your own "Extreme Couponing" superstar. I'm referring to the TV show, for those out of the loop.

Catch? max 10 coupons can be tripled per checkout, so you may have to go back on line more than once or request that items be rung up separately. I'll likely go have my own Extreme Couponing adventure and blog about it afterward and report how I did.

Have $20,000? What to do With it

2011-04-30T10:55:00.000-07:00

A friend asked me today, "I have $20,000, what should I do with it? How do I invest it? Should I buy a CD with it? Should I save it in a liquid savings account toward a future down payment that may or may not come and don't know what time frame I'm looking at? Should I put it into a Roth IRA? What should I do with the $20K burning a hole in my pocket?

The answer is, that all depends on your personal goals, needs and future plans - the reality is, it's important to try to have some kind of insight into one's personal time frame for different life events. Of course all that can change after a few too many cocktails at the bar, and you or your company for the evening decide to head to the airport for a shotgun wedding in Vegas. Fantasy aside, most people can really predict and steer events and have a decent amount of control over what life events happen when - at least for items such as buying a new home or car or going to grad school, etc.

In my friend's situation who posed the above question, likely the best bet, since they don't have really anything aside that $20,000 in savings, is it should be placed into a CD of a one year duration. I'd be certain that it's in a CD that can be withdrawn at any time if need be, with a relatively low penalty for withdrawing the funds early - i.e. lose one month's interest if withdrawn early. That way if an opportunity arises and the funds are needed, it's not that big a deal to withdraw the funds.

Investing in a Roth IRA is also a good bet; here's a good article that explains the penalties for withdrawing before age 59 1/2: http://www.smartmoney.com/personal-finance/retirement/tapping-your-ira-penalty-free-7958/ It's also a good way to store your money until you're ready to buy a home, though potentially more risky if you invest in stocks and the stocks go down when you're needing to tap into the funds. This is the route that I'd most likely personally take, in part because I'm a high risk taker and am comfortable taking higher risks than most.

The safest plain vanilla approach is to simply keep it in the bank and do nothing with the money. I really don't see the benefits of doing nothing, for no one gets anywhere in life sticking with the status quo in general.

Using Credit Cards The Smart Way-Credit Card Arbitrage and Other Issues

2011-04-28T22:38:00.000-07:00

I have met so many people who are afraid of credit cards - even millionaires. Let's begin with the obvious - if you can't afford it, don't buy it! I feel like I may have stolen a Suzie Orman common sense piece of advice there, and although the goal of my blogging here is certainly not to stoop to her level of simplicity of issues covered here, I felt compelled to cover that fundamental.

I personally think that it is in every individual's best interest to understand and take advantage of credit cards. They're a great tool to "keep more of your paycheck" if used in a responsible and advantageous manner.

Here are things to keep in mind:

Don't just rely upon the standard car rental insurance included with the card... I always use AmEx's premium insurance these days... https://www295.americanexpress.com/premium/car-rental-insurance-coverage/home.do?intlink=premiumprotecthub_hero_multiple_pcrp I recommend that the same be done for trip interruption insurance. https://www295.americanexpress.com/premium/credit-card-travel-insurance/home.do?inav=menu_travel_protection
Remember that most cards double the warranty on a product to two years from one year; stop buying extended warranties at Best Buy, Staples etc. The employees that sell those warranties make commission, and trust me, the stores aren't just breaking even selling those policies in general; they're making a killing on something you're already covered for by your credit card.
Foreign transaction fees: When you purchase something overseas, your credit card will often charge you a foreign transaction fee to handle the foreign exchange process for you. In fact, part of that fee is imposed by Visa and MasterCard itself, so any Visa and MasterCard that charges you less than 1% is actually eating the fee. Capital One and Discover are the only two companies that do not charge a foreign transaction fee; Capital One actually pays the fee for you and Discover, since it’s not on the Visa or MasterCard network, just doesn’t charge for it. As I wrote in the other article, if you want to pick between the two then I’d go with Capital One because Discover isn’t as widely accepted overseas (Capital One cards are Visa or MC).
Here's a great outline of credit card arbitrage that I recommend reading and doing only if you fully understand the pro's and con's: http://www.fivecentnickel.com/2007/02/27/how-to-profit-from-0-balance-transfer-credit-card-offers/ I personally don't do this, but have thought about doing it, and know many that do do this regularly. Something to ponder.
Use your credit card for every single purchase, including small-dollar items such as food and gas. Then pay off the entire balance each month when due. If you spend $1,500 a month on your card, with a 1 percent cash back reward, you will earn $15 per month (more if you convert those points to airline miles). Plus, the money you would normally use to pay your expenses will earn a small amount of interest each month just by sitting in your checking account (if you do not have an interest rate on your checking account, consider opening one that does). See my google search blog post for how to find such an account.
If you have department store card such as a Macy's or Dillard's card and it offers a better rewards system than your regular credit card, use it when making department store purchases. Doing so may result in gift cards and exclusive coupons. I'll often use my Macy's card at the register, then pay it off.
Set up auto-pay for credit cards - it'll help you ensure you maximize the interest earned on the money while it's in the bank, and make sure your bills are paid on time to avoid late penalties and interest charges.
Stop using debit cards instead of credit cards - for the reason stated in #7, use credit, not debit cards. For those who are afraid they'll overspend using a credit card, and thus use a debit card - see my first disclaimer that you shouldn't spend more than you have - keep a book with you at all times and record your transactions if necessary to ensure you're staying within budget - the best rule is, if you don't need it, don't buy it. That'll keep you within budget if you stick to this plan
Take advantage of credit card offers - Discover sent me an offer of $150 extra savings if I spend $1,000 a month for the next five months using their card. If I were to spend that much anyway each month, then why not take advantage of the offer? $150 isn't a whole lot, but better to have it than not.
Find the best card for YOUR situation. https://www.google.com/comparisonads/uscredit?s=1&kw=credit%20cards&cat=6&sort=31&cardtype=personal&rewards=miles&rewards=cashback&rewards=points&c=us_rw&q=credit%20cards There's a gazillion cards out there on the market; each person's spending categories, needs, carry a balance/no balance, points vs. cash back, and personal preference. The AmEx Business Platinum Card, Discover More Cashback Card, and UPromise Mastercard are my personal credit card staples.

I also highly recommend the credit cards from the Pentagon Federal Credit Union - read this on how to join: https://www.penfed.org/howtojoin/overview.asp and this for an overview of their credit card offerings: https://www.penfed.org/productsAndRates/creditcards/overview.asp Their AmEx is used by me only to buy airline tickets for 5% back; their Platinum Rewards card is great for gasoline purchases.

Don't carry a balance from month to month - pay your bill in full each month.
If you do currently carry a balance, make every effort to pay it off ASAP, assuming you're not being slick and taking advantage of a 0% intro APR.

Consider shopping around for a line of credit or a balance transfer offer with another credit card to pay off higher interest rate credit cards, or other lower interest financing methods.
Always pay off debt with the highest interest rates first, as a general rule - unless you're purposely carrying something like student loans from my prior blog post, where you're purposely in debt.
Don't just stockpile cash in the bank earning 1% or less if you are paying 20% in interest on a credit card, just because you like to keep cash reserves in the bank for a rainy day - in most situations, that's penny wise, pound foolish!
In the meantime, call your credit card company and ask for a lower rate if you're carrying a balance.

Feel free to post questions on the blog for me to answer in more detail.

Exchange Traded Funds (ETF's) vs. Mutual Funds

2011-04-28T21:50:00.000-07:00

If you're aware of your surroundings and walk around Manhattan, you likely have noticed advertisements for Exchange Traded Funds (ETF's). SPDR and iShares being the two brands of ETFs that market themselves the most. Keep an eye out tomorrow and you'll likely see an advertisement for one of them.

ETFs are baskets of stocks in a variety of broad market, sector or capitalization categories, similar to mutual funds.
Some of the reasons why most consider ETFs superior to Mutual Funds:

More cost-effective because of lower operating and transaction costs.
More liquid and flexible than funds; they can be traded anytime during the market day like stocks.
More tax-efficient because they typically have very low distribution rates.
Often have better performance than index funds because they are more efficient.
Offer investors a more liquid and efficient way to access hot overseas markets like Brazil, Russia, India and China, in part because they can be traded throughout the day, helping to ensure that the investment can be disposed of mid-day, instead of at the day's end pricing.

As suggested above, the goal of them is to offer investing opportunities similar to mutual funds but at a lower cost, passing savings to the investor. Mutual funds tend to have higher costs and quite frankly, I really don't see any inherent value in them anymore relative to ETF's. I personally have stopped investing in mutual funds as a general rule and instead stick with ETFs these days.

The below article from Forbes gives a great overview of points to consider:

Investment Strategies
The Smart Trader's Guide to ETFs
William Baldwin, 05.09.11, 6:00 PM ET

Exchange-traded funds are one glorious success story, having gone from nothing to $1 trillion in assets in 18 years. The best of them beat the classic Vanguard mutual funds in the cost game.

But you have to know what you're doing. If you are sloppy with selection or execution you will fritter away the ETF cost advantage. Here are three rules for cost-conscious ETF investors.

Compare expenses. Consider the two big emerging-market funds, from Vanguard and iShares. "Emerging," by the way, is shorthand for "where property laws are sketchy." These funds invest in China, Russia and Brazil. Between them they sit on $90 billion. In Vanguard's case the ETF is attached to an old-fashioned mutual fund with the same portfolio.

Vanguard and iShares have slightly different collections of stocks, so one might do a point or two better than the other in any year. But that, to me, is an inconsequential fact for two reasons. There's no way to predict the outcome, and, in any event, these performance differences tend to even out over time.

The more important difference is in the expense ratios. Vanguard peels off 22 basis points for its portfolio work. That's $22 a year on a $10,000 investment. BlackRock's iShares wants 69 basis points. Over 30 years that difference of half a percentage point compounds to 13%.

If your $10,000 earns 9% a year before expenses, the tiny cost difference will balloon into a difference of $16,000 in your pocket in 2041. Alongside this, the free pass your broker did or didn't give you on the $9 trading commission doesn't really matter.

Never buy an expensive fund unless there is compelling evidence that it is likely to outperform the cheap alternative. In this match, Vanguard MSCI Emerging Markets (VWO, 49) is the winner.

Be careful with market orders. A market order gets executed at whatever price is needed to complete the deal. In hyperactive stocks like the ETFs that State Street has for the S&P 500 and gold, market orders do no harm. You can get several thousand shares without disturbing the price.

But if you have a hankering for the FaithShares Baptist Values fund, which moves 200 shares on a busy day, a market order for 2,000 shares is a bad idea. It's an invitation for the marketmaker on the other side of the trade to reach into your pocketbook and help himself.

If you are interested in an ETF whose volume is less than a million shares a day, put in a limit order. You offer to pay, let us say, $30 a share and not a penny more.

Gary Gastineau, author of a textbook on ETFs, recommends a "marketable limit order." If a stock is quoted at $29.95 bid, $30 ask, and you really want it, your limit order for 2,000 would be at the ask price.

You might or might not tease out all the shares you are looking for. You might get 800 and have to return the next day for more. But that is better than putting in a market order that gives you 200 shares at $30 and the other 1,800 at $31.

Don't let orders sit around. When you put in a buy at 10 a.m. and then walk away from your desk, you become a patsy for professional traders. In effect, you are giving these guys a free put option, says Gastineau. He knows all about this. His first textbook was on option theory.

Say that an ETF is quoted at $29.95 bid, $30.05 ask. You bid for 2,000 at $30, beating the previous bid by a nickel. Your position at the head of the buying line may not last for long. A sharpie with a split-second computer can elbow you aside with a bid at $30.001. He grabs the first 2,000 shares that come along.

If this is a stock that jumps around a lot, it could end the day at $29 or at $31. If it goes up, the high-frequency trader pockets a $1,998 gain. If it crashes, he unloads his position on you. He's out $2, and you're out $2,000.

Solution: If you are interested in a thinly traded stock, put in your bid, then yank it an hour later if a buttinsky quote pops up on your screen. Wait at least a day before returning.

If you don't want to spend your afternoons trying to outsmart marketmakers, stick to heavily traded ETFs with low expense ratios.

For big-company stocks SPDR S&P 500 (SPY, 132) is the obvious choice. Its annual fee is nine basis points. For a broader mix, with 3,400 stocks, buy Vanguard Total Stock Market (VTI, 68), at seven basis points. Another option is the Schwab U.S. Broad Market ETF (SCHB, 31), which owns 1,500 stocks and will cost you six basis points.

Go To Medical or Dental School for Free (Nearly)

2011-04-27T20:14:00.000-07:00

http://studentaid.ed.gov/students/attachments/siteresources/LoanForgivenessv4.pdfSo I received a request to talk about this topic for tonight from a friend who's currently in med school. It's a bit of an elaboration on a prior post. So what's the trick to pay nearly nothing for medical or dental school? Borrow money from the federal government's student loan programs (no private loans!). Then upon graduation do the following three things:

1) Consolidate all student loans into the Federal Direct Loan Program
2) Select the Income Based Repayment payment method
3) Go get a job working for a VA Hospital or some other government or non-profit entity and make 120 payments while under their employ until you are eligible for the rest of your loans to be forgiven by the government.

Now people will say, but doesn't the government pay a lot less than you'd make otherwise? And the answer is quite possibly yes. But factor in items such as not having to pay for health insurance, double social security and medicare taxes, paying for an office, the student loans that you won't have to pay as much back on, better hours, and even the potential ability to start to establish a home office perhaps, and suddenly the difference in salary starts to disappear. Don't forget also, after 10 yrs of doing what I described above, there's nothing stopping you from leaving government or non-profit employment to work wherever; or concurrently work a second job for someone else while also working for government (assuming you don't have a conflict of interest or are barred from external employment for some positions).

Income Based Repayment: http://studentaid.ed.gov/PORTALSWebApp/students/english/IBRPlan.jsp

Loan Forgiveness for Working in Gov't: http://studentaid.ed.gov/students/attachments/siteresources/PSLF_QAs_final_02%2012%2010.pdf and http://studentaid.ed.gov/students/attachments/siteresources/LoanForgivenessv4.pdf

Health Profession Loans: https://ifap.ed.gov/dlfsheets/doc0008_bodyoftext.htm and http://bhpr.hrsa.gov/dsa/sfag_past/sfag_01_00/health_professions/2hpslcom-03.htm

The image below shows that under the assumption that you make $200,000 a year and have $300,000 in debt, you'd still be eligible for income based repayment! Your estimated monthly payment would be only $2,295 per month! You'd pay a total of $275,400 back over 10 years, and remaining payments after that would be forgiven. This assumes a single person with no one else in their household. If you take into account the deduction of student interest from your income taxes, and inflation over 10 years, it's as if you're paying perhaps 40% of the $275,400, or roughly $110,000.

Compare that with any of the other repayment plans, and you will realize that Income Based Repayment for nearly anyone with federal student loans is the best route to follow, unless you have a very low dollar amount of student loans, or they're not consolidatable under the Federal Direct Program guidelines. See screen shot below for comparison of other student loan payment options. Also note that you must use Income Based Repayment to be eligible for loan forgiveness after 10 yrs.

Hit Control + to zoom in to see the screen shots below more clearly or View, and then Zoom menu in your browser.

Compare Mortgages, Credit Cards, CD's, Checking and Savings

2011-04-24T08:07:00.000-07:00

Think you're getting a good deal on Compare Mortgages, Credit Cards, CD's, Checking and Savings? Although not the be all and end all guru guide of every single last best deal out there, stopping off onto Google's little search tool, is a good place to start to baseline the potentially best deals out there for such types of financial products. Check it out!: https://www.google.com/comparisonads/home?c=ny_fam&kw=mortgages&q=mortgages&s=1 It's similar to bankrate.com and interest.com and some others. Compare at least all three is my recommendation before getting any of the covered financial products that they cover.

Where to Allocate Savings: 401K vs. Roth 401K vs. 529 College Savings Accounts

2011-04-23T13:46:00.000-07:00

For those who are reading this and unfamiliar with what a 401K is vs. a Roth 401K vs. a 529 College Savings Account, descriptions are at the bottom of this blog post.

A friend of mine saw that I have the UPromise credit card and complimented me on using the credit card. It lead to a more extensive conversation about saving for college for his daughter. I asked him the question of whether he was maxing out his 401K first prior to his monthly contribution to the 529 College Savings Account. The answer was no.

I asked him why not? He replied that he needs the money to pay for his daughter's college first since that'll come before he retires. Smart logic? In theory yes, but you should be able to guess that the answer is no, otherwise why bother to write this blog commentary.

The smarter strategy for most people is to max out their 401K (preferably a Roth IRA over a traditional IRA in most people's cases) before saving for their kids college. Why? A few different reasons

Colleges will count the 529 savings toward their financial aid packages.
Roth IRA's are taxed at current tax rates rather than future tax rates, and most people say that future tax rates and the tax brackets that you'll be in at retirement are likely higher than the rates currently being paid.
Maybe your kid will get a scholarship for college and you won't need the 529 - not likely, but one can hope. With programs such as Income Based Repayment for student loans, it's ideal to let your child rack up debt with the government's assistance and then only pay a portion of it back.
If your child works for the government or non profits post college, then they have a lot of repayment assistance programs out there, so it may not make sense to pay for college out of pocket if Uncle Sam will pick up the tab ultimately for you.

Those are just some of the reasons to take care of saving toward your retirement first and worry about your kid's tuition second. I'll go into more detail on the above topics and details about some of those programs mentioned above in other posts, and feel free to ask any questions that you'd like answers to or for explanations.

Finding The Best Gas Prices

2011-04-21T18:45:00.000-07:00

In case you haven't noticed, gas prices keep going up; seriously, if you haven't noticed, perhaps you should stop driving and go get your eyes checked. Or you are a New Yorker, and don't drive and don't care what the gas prices are. Anyway, for those who care, check out http://www.newyorkgasprices.com Of course nothing beats just finding those consistent "go to" stations with great prices, but perhaps this tool will prove useful.

Perhaps it's also worth hedging against gas prices by buying a relevant stock or ETF holding. I've personally purchased the Vanguard Energy ETF. http://www.google.com/finance?hl=en&sugexp=ldymls&xhr=t&q=vanguard+energy+etf&cp=17&qe=dmFuZ3VhcmQgZW5lcmd5IGU&qesig=sCltFq9adfD7ODBv77Jgrg&pkc=AFgZ2tk6Utts8GENjru8XMzpnMVSnbHS2KpfFmDD9MGXvK9FaWcKzuXdllDl6NFGdU-_OmvYsyo99bxx2HCQgqfTDJQozEs9eA&bav=on.2,or.r_gc.r_pw.&um=1&ie=UTF-8&sa=N&tab=we It pays a dividend, so you're guaranteed some income out of it for the duration of ownership.

Others are classics like Exxon also pay dividends and are likely to go up in sync with gas prices, though no guarantees and invest as you see fit - definitely don't go by me! http://www.google.com/finance?q=NYSE%3AXOM

New Google Feature to Find Best Checking, Savings and CD Rates

2011-04-21T18:27:00.000-07:00

Check it out if you haven't already... https://www.google.com/comparisonads/ussavings?kw=best+CD+rates&q=best+cd+rates&s=1#!search&Deposit+Range_D=5000&Zipcode_S=11577&si=0&start=0 Of course be wise and still keep an eye out for deals not listed on here that may be available locally, etc.

Cell Phone Services

2011-04-15T22:53:00.000-07:00

If you're like most people, you have a cell phone. If you don't have one, and never intend to have one, you can stop reading right now.

Ok, glad you decided to keep reading. If you're like most New Yorkers, you likely have Verizon as your cellular carrier; or you have an iPhone via AT&T and are pissed that you are locked into a contract with them because you wish you had a Verizon iPhone now. If you're in the minority, you have Sprint, TMobile or Nextel.

An increasing number of people are switching to "prepaid carriers" such as Boost Mobile, Virgin Mobile, MetroPCS, Cricket and a few other companies that are emerging into the market place. Some people have heard of them and are skeptical about changing to one of those carriers due to the confusion about what they are, whether the network is as good and whether it's worth switching.

I'm not going to actually be able to give a clear definitive answer as to whether it's worth switching to one of those carriers, for each person's individual situation is different, but one thing is for sure: with their competitve rates and service being transmitted over the big name carriers, it's worth giving some of these newer brands a serious look and consideration. Sure, you have to usually purchase the phones outright from the carriers, but in effect, the cost is more than mitigated through lower rates over time. I did the math, and found that it was definitely worth getting a phone through one of those newer carriers over the "legacy" carriers.

I have always found it interesting how people are willing to pay for phone insurance. I'm not a math genius, but if you're paying $7 /month for insurance, and have a $50+ deductable, over a two year contract, you'd pay $7*24 months = $168+$50 = $218 to replace your phone via insurance. Meanwhile the same phone likely can be had used/refurbished via ebay for less. Aside for piece of mind, something to think about before paying for insurance on a phone - it very well may not be worth having insurance on your cell phone.

Are you in school? Do you use your phone for work purposes sometimes - even to call to say you're running late in getting to work? Perhaps you've overlooked deducting the cost of using your phone from your taxes? Maybe your accountant didn't advise you to consider reviewing your usage and determine whether some of the associated cell phone costs should be tax deductable. With the ever increasing cost of cell phone services and devices, perhaps it's time to check with your accountant whether any or all of the costs you incur are tax deductable? Just another way to help keep more of your pay check.

Car Buying 101

2011-04-14T21:40:00.000-07:00

This really isn't car buying 101, but considering how so few people seem to know how to buy a new car for the right price, I'll go ahead and call it such. Now I should disclose that I have never bought or leased a new car for myself, and quite frankly, I may never - cars are one of the fastest depreciating "assets" around - a sinkhole for money if you will. However, I have done this for other people, and figure I should at least clue the rest of the world in on how to haggle a great deal.

Let's assume that you're just the average Jane or John looking to buy a car and know what car you want and what options you want. I highly recommend first checking out the Zag Car buying service for strong bottom line pricing, as a baseline maximum price to pay. That's right, maximum price to pay - for if you're paying more than that, you're clearly overpaying. AmEx, Costco, USAA and others offer pricing from Zag to its customers as a service. Here's a link to the AmEx site with car pricing. http://amexnetwork.zag.com/main.html

If doing a trade in, find out what your car is worth http://www.kbb.com/ Don't kid yourself, you're not getting anything above the "good" condition for the trade in value, so keep that in mind if you think your car is awesome.

To figure out what to actually pay, take what the price is from Zag, subtract it from the kbb trade in value. Pretty simple, right? But wait, let's now up the ante; start calling some dealerships and ask to speak to their Internet Sales Dept, tell them what you want in terms of the car and trim and trade in, and tell them the price you want to pay - what you just calculated and subtract another $500 off that price and see if they're able to do the deal.

They'll likely tell you to come in and they'll see what they can do. Don't bother - tell them they have to make you a deal over the phone, and if it's not what you agreed to over the phone, then you'll walk. You'll see them later - and be prepared to do a deal later, if they have the best price of all offers you receive over the phone that day.

Now some may say they can't match that price - then ask them what the best they can do is - psych them into thinking that price is something some other dealer quoted you to push them to admit their best bottom line; do this for a solid dozen dealers if possible and that should give you a good idea of whether even just $500 off the caculation from before is enough, or you should try to get an even lower price.

Happy car shopping!

Unit Pricing @ the Supermarket: the secret to the best deal

2011-04-13T19:27:00.000-07:00

How many people have gone into a supermarket and have seen a unit price next to the price of the item they intend to buy on the shelf and have wondered what the unit price is? Raise your hand - no one's looking, unless you're using your computer in public - and they'll probably think you're stretching.

If you've ever seen two similar labels like the ones above, and are trying to figure out which is the better deal per tissue, how can you tell? It's really simple if going by a standardized measure - that'd be the unit count - the one in orange above. It allowes you to compare the price per 100 tissues. Which one is less expensive? The one for $1.32 per 100 count, right? It's less than $1.68, right? Well, not quite - read carefully - the unit price saying $1.32 is "per each," NOT, "per 100" as the one above it says.

If you adjust the unit price for the second item to "per 100", then the true unit cost per 100 would be $1.55 - still less costly per tissue than the label above it, but not by much.

Takeaway:

1) Unit pricing can be helpful for comparing the unit cost of items vis a vis one another BUT
2) Stores are sometimes tricky when they use a different unit for similar items making it difficult if not impossible to compare unit prices accurately.
3) Be careful when using unit prices to ensure all units are the same, and adjust accordingly - use the calculator on your cell phone if you want. To adjust the price to "per 100" like I did above, simply take ($1.32/85)*100 to get $1.55 per 100 count.
4) Bulk sizes may not always have a lower unit cost, so be careful not to get ripped off buying bulk sizes thinking it's less costly - Costco and BJ's may not always be less per unit cost than regular supermarkets, particularly when shopping in suburbia.

Like Doing Drugs? Save Money Doing Them

2011-04-12T23:32:00.000-07:00

Here's a few ways to do drugs on the cheap (free or low cost prescriptions are available without prescription coverage required):

ShopRite: http://www.shoprite.com/cnt/FreeAntibiotics_FAQ.html

Target: http://sites.target.com/site/en/health/page.jsp?contentId=WCMP04-040590

Walmart: http://i.walmartimages.com/i/if/hmp/fusion/customer_list.pdf

http://www.pparx.org/

Know of others? Post them so others can learn about them!