Money May Carry Disease and Other Things

dirty-moneyHave you ever wondered if the very wrinkled and dirty money you receive as change may carry a communicable disease?

Researchers from the Wright Patterson Medical Center in Dayton, Ohio, asked people standing in line at a grocery store checkout and at a high school concession stand to trade a $1 bill from their pocket for a new one. Then the doctors analyzed 68 of those old, worn bills.

Five of the bills contained bacteria that can cause an infection in perfectly healthy people, and 59 of them (that’s 87 percent) were contaminated with bacteria that could cause an infection in anyone with a compromised immune system, such as people with HIV or cancer.

Only four of the bills were relatively clean.

I used to stop at a bagel store on my way to do consultant work at Lockheed-Martin Missiles and Space. There was often a homeless lady in the store that the owners would shoo out after awhile. I was pretty sure that she kept her money and other treasures stuffed into the crotch of the old dirty long johns that she often wore. I suppose I took my chances every day that the money I received as change did not come directly from the homeless lady’s crotch. Yes, I know, ewwwwww. I never really thought about it at the time.

Drugs may also be found on paper money.

In a study reported in Forensic Science International, A.J. Jenkins, at the Office of the Cuyahoga County Coroner (Cleveland, OH), the author reports the analysis of ten randomly collected one-dollar bills from five cities, and tested for cocaine, heroin, 6-acetylmorphine (also called “6-AM”), morphine, codeine, methamphetamine, amphetamine and phencyclidine (PCP). Bills were then immersed in acetonitrile for two hours prior to extraction and subjected to Gas chromatography-mass spectrometry (GC-MS) analysis.

Results demonstrated that “92% of the bills were positive for cocaine with a mean amount of 28.75+/-139.07 micrograms per bill, a median of 1.37 μg per bill, and a range of 0.01-922.72 μg per bill. Heroin was detected in seven bills in amounts ranging from 0.03 to 168.5 μg per bill: 6-AM and morphine were detected in three bills; methamphetamine and amphetamine in three and one bills, respectively, and PCP was detected in two bills in amounts of 0.78 and 1.87 μg per bill.” The study confirmed that although paper currency was most often contaminated with cocaine, other drugs of abuse may also be detected in bills.

This is nowhere near enough drugs to adversely affect a person, but it is something to think about.

With the convenience offered by credit cards, I see little use for paper money any more. I charge everything these days, right down to a single dollar for two bagels at the Safeway store. Heck, I even get 2 cents cash back.

Do you still use paper money and coins?

Paying Bills for Adult Children

There has been much written in the media about sandwich generation, in which people are paying expenses for both their children and their parents. An interesting take on this is what to do about adult children who want to keep living with their parents. This was the subject of a short article at MarketWatch entitled, “Paying bills for adult children? Try tough love instead.”  It was also recently the focus of one of the forums at Early-Retirement.org.

The MarketWatch article noted that “Social norms have shifted so that accepting help from Mom and Dad well into your 20s is ‘OK.’” The article then went on to quote a paper by psychologists, Eileen and John Gallo.

Eileen Gallo and Jon Gallo note in their paper “How 18 Became 26: The Changing Concept of Adulthood,” for a certain socioeconomic set, growing up and moving out—permanently—means downgrading your lifestyle. The authors quote sociologists Allan Schnaiberg and Sheldon Goldenberg as stating:

“The supportive environment of a middle-class professional family makes movement toward independent adulthood relatively less attractive than maintenance of the [extended adolescence] status quo. Many of the social gains of adult roles can be achieved with higher benefits and generally lower costs by sharing parental resources rather than by moving out on one’s own!”

Parents Supporting Adult Kids-coins

I have to admit that I moved back in with my parents after I finished my 4-year stint in the Air Force. I always got along well with my parents, and they lived within easy bicycling distance of the University of California, Santa Barbara. The old GI Bill paid for my tuition, but little more. I am sure my parents would have kicked in for the extra cost of room and board at any other state university, but I was happy with the engineering program at UCSB, and living with my parents meant it was less expensive for everyone.

My parents recognized that I was fully an adult attending college full time. They gave me a lot of leeway in how I handled my schooling and friendships during the 4 years I was in college. I was on the dean’s academic list, but did not graduate with any outstanding honors. I still did manage to graduate in 4 years, which is pretty fast for a mechanical engineering major.

Since engineering jobs were in short supply in the Santa Barbara area in 1985, I immediately loaded up my possessions into my pickup truck, and moved to the San Francisco Bay Area. I lived with my older brother and his family while I looked for my career job. I found that job within a couple months and I moved to my own place shortly after. I have been working with the same employer ever since.

I somewhat agree with the MarketWatch article, as well as many others, that there comes a point where parents have to show tough love and launch their adult children into the world on their own. At the same time, such as in my case, if your adult child or children have a plan for gaining professional success, such as completing college on an aggressive schedule while living at home, there should be room for parents to provide support, as long as it does not unduly reduce retirement savings.

I am not sure how we will feel if our son wants/needs to move back in with us after college. We have saved enough that he should not be in debt after college. We might still let him move in with us for a short term while he actively looks to gain employment. There would definitely be a limit to how long he could live with us after college.

Some of the responses to helping adult children on the early-retirement.org forum were interesting.

NW-Bound said, “I have given money to my children after they started working, but will not pay their recurrent bills. The have good jobs that make use of their degrees so do not need my help, but even if they had a lower paying job, they must learn to live within their means.”

Mulligan replied, “A buddy of mine had a classic line a few weeks ago…His son saw his and his wife’s paychecks and says ‘Dad I didn’t know we were rich.’ He replied to his son… ‘No, your mother and I are rich, you are not’”

Cobra9777 wrote a good post that sort of tied back to my college days,

During college, we paid tuition, fees, room and board. We also paid for cell phone service and auto insurance, but that’s it. We intentionally did not provide daily spending money, as a way to start educating them on money management. Our son was an engineering major at a very tough school. So rather than work during school, he worked full-time during the summer and started the school year with around $3000 in the bank. We also gave cash gifts for birthdays and Christmas, so he had a comfortable budget of around $300-400 per month for gasoline and other misc spending. He eventually learned to NOT spend it all by November. Our daughter was always able to work during school with several lucrative nanny jobs. She tends to spend a lot more, and had a less demanding major, so this worked out well for her.

I’ll add this… when the kids moved off campus (which is inevitable at some point in year 2 or 3), we continued to pay for housing cost, but not food and other bills, like utilities, cable, internet, etc. They both knew this going in, and had to adapt their working hours and spending habits to make it work. It was tough, but college kids are quite inventive when strapped for cash, like going to campus gatherings where there’s free BBQ.

For us, the answer was a balanced approach, both during college and after. No hard-line tough love, but no free ride either. We have friends who took one of the more extreme alternatives with their kids and it always ended badly. The balanced approach seems to have worked well for us, as both kids had the freedom to explore their dreams, finished college on time with no debt, and have a solid understanding of money management and the value of hard work.

How would you handle the needs of your adult children if they want to live at home while going to college, or move back home after college?

 

Beating Those Summertime Budget Blues

This is a post from Mrs. Save and Conquer:

Summer Time

As the long days of summer approach, so do endless hours of “Mom! I’m bored! There’s nothing to do!” Some people pay thousands of dollars in expensive activities (camps at $300-$500 per week for 12 weeks! Holy cow- that’s up to $6000!) just to make those words go away.

Now, I know how frustrating those long, seemingly empty hours can be, and I am actually more likely to get cabin fever before the kids do, but I just can’t see paying thousands of dollars to find a little fun when I know it can be had for so much less. Here are some budget activities that we (my self, my son and my two nieces) have done in summers past:

Continue reading

Investment Policy Statement

Our IPSI was at a friend’s house last week when he asked if I was planning to sell any stocks since the market is hitting new highs. I told him that my asset allocation has become a bit biased toward equities, due to the recent market gains, but I won’t do any asset rebalancing until the proper time of the year, as spelled out in my investment policy statement (IPS). I told him I wanted to wait at least a year between rebalancing is so that I will only incur long term capital gains if I need to sell stocks in my wife’s and my joint taxable account (which is what we will probably need to do).

I also told him that I quit trying to time the market a long time ago, and am much happier for it. We max our retirement accounts with appropriate monthly contributions, and then push additional money into our taxable investments. Each month, we invest this extra money in the under-weighted part of our asset allocation. And that it’s all spelled out in our IPS.

My friend then asked why I thought I needed an investment policy statement. He also admitted that he did not really know what an IPS was.

I told him that an IPS is a written statement that “defines general investment goals and objectives. It describes the strategies that will be used to meet these objectives and contains specific information on subjects such as asset allocation, risk tolerance, and liquidity requirements.” The part in quotes is directly from the Bogleheads.org wiki.

The benefits of using an IPS are that “it provides the foundation for all future investment decisions to be made by an investor. It serves as a guidepost, identifies goals and creates a systematic review process. The IPS is intended to keep investors focused on their objectives during short-term swings in the market and provides a baseline from which to monitor investment performance of the overall portfolio. Someone who doesn’t have a written policy often bases decisions on day-to-day events, which often leads to chasing short-term performance that may hinder them in reaching long-term goals. Having a policy encourages maintaining focus on the long-term nature of the investment process, especially during turbulent or exuberant times.”

I happened to have my laptop with me, so I pulled up my IPS to show my friend.

Investment Policy Statement

Philosophy

The Portfolio consists of all family joint investable assets as well as individual retirement assets.

Our investment philosophy is based on the Boglehead philosophy

  1. Develop a workable plan
  2. Invest early and often
  3. Never bear too much or too little risk
  4. Never try to time the market
  5. Use index funds when possible
  6. Keep costs low
  7. Diversify
  8. Minimize taxes
  9. Keep it simple
  10. Stay the course

Strategy

Desired asset allocation (AA) is roughly 50% percent in bonds plus cash, with remaining 50% in equities. The AA is based on Fama-French Trinity Study in which they use a 50/50 AA as the optimum ratio for a safe withdrawal rate of 4% with inflation adjustments over a 30 year span. This is also a good moderate AA in the latter stages of accumulation (prior to retirement).

Taxable bonds should be held in tax advantaged accounts with 50% total bond market, 50% inflation protected (That includes TIPs and I-bonds). Note that I-bonds and tax-free muni bonds must be held in taxable accounts.

Equities are approximately 85% US, and 15% international. US holdings are split among total stock market (TSM) and small-cap value (SV) stocks, with other small additions, such as REITs. (Tax-inefficient REITs, like taxable bonds, should be held in tax advantaged accounts.) SV are roughly 30% of total US equities.

Discipline

The asset allocation is checked once a year on Bryce’s birthday. Rebalancing of assets to 50/50 will be done if the asset balance is 10% or more off (i.e., if the AA has changed to 60+/40- due to appreciation of equities, equities will be sold and bonds will be bought to get back to 50/50).

No matter the current AA, $20,000 in taxable savings should be set aside to purchase i-bonds at the April-May timeframe of each year. Previous year-end dividends and savings should be used. A high-interest savings account will be used to hold money earmarked for next year’s i-bond purchase. The expectation of the $20k i-bond purchase may be used to offset out-of-band AA on Bryce’s birthday, assuming $20k in bonds will make a difference.

New assets will be applied to either equities or bonds depending on which asset is currently low in the 50/50 AA. This will help to maintain the AA without having to sell any assets.

The AA will be maintained when there is a need for money. The asset class that is “high” in the AA will be sold first. Assets will not be bought or sold based on market movements. Cash may be used, even if it is in the low asset class, assuming it will be quickly replaced by monthly savings.

That is our IPS. It is pretty simple, yet it helps us to stay the course and keep emotions in check as the market goes through its typical gyrations. There are more and better examples of IPSs in the bogleheads’ wiki.

I Just Renewed My Tracfone for Another Year

TF_SAMS380C

Free Tracfone

I do not use a smartphone, nor do I have much use for a wireless phone other than in an emergency. To get the least expensive wireless phone and service plan, I turn to Tracphone.

Tracfone offers some phones for free, and plans for as low as $8.33/month if you sign up for a year. You do have to jump through a few hoops, however, to get the best deals. Most often this means entering a promo code at checkout to get additional minutes, and getting one of their phones with double or triple minutes for life helps to extend their time offerings.

I just ordered a one year card with 650 minutes. That got bumped up to 1950 minutes because my phone has triple minutes for life. The minutes go fast if you use data with a smart phone. But I am good for another year with my old minutes, plus an additional 1950 minutes, where I only use text and voice.

Our son has the same Tracfone that I have, but he is on a monthly payment plan of $9.99 for 50 minutes each month. 50 minutes may not sound like much, but his phone has triple minutes for life, and the minutes accumulate as long as no payments are missed. I think he currently has around 1800 minutes accumulated.

I would recommend something like Straighttalk for someone who uses a smart phone. My wife has the basic Straighttalk plan of unlimited voice, text, and data for $45/month. Her phone is a Samsung Galaxy S3 that she got from the Straighttalk website for around $350.

From their website, I see that Straighttalk is running their “bring your own phone” offer again, where you can use any GSM phone and purchase a Straighttalk SIM card for $6.99. Some CDMA phones (aka a Verizon phone) may also work with Straighttalk. Instead of purchasing a SIM card that you put into your phone, you purchase a Straighttalk network access code, after entering your phone’s MEID, MEID DEC, or MEID HEX code on their website to verify functionality with Straighttalk’s network (they specifically say that Blackberries will not work), you will be provided with an access code for a one-time fee of $6.99.

My wife seems satisfied with her Straighttalk phone and plan. She doesn’t have the latest version of Android, but she can talk, text, play games, and browse the internet to her heart’s content.

Do you use a no-contract phone plan, like Tracfone or Straighttalk?

Yakezie Carnival – June 29, 2014

nectarines-and-apricotsWelcome to the June 29, 2014 edition of the Yakezie Carnival. The Yakezie Carnival is brought to you to by the network of personal finance bloggers of the Yakezie. You can submit articles at Blogger Carnivals.

Late June, early July is when the “stone” fruits (apricots, peaches, nectarines, and plums) really start to become prevalent at the farmers’ market. Cherries and strawberries also start to arrive in abundance. Our neighbor has a peach tree with fruit overhanging our fence. Guess who is going to harvest that. A friend also has an apparently abundant harvest of nectarines and apricots, which is shown in the picture, above.

It’s time to enjoy the summer harvest both at your local farmers’ market and here at the Yakezie Carnival, where we have a bounty of personal finance information.

Dominique Brown @ YourFinancesSimplified writes What is an Appraisal? – When it comes to buying a house, there is so much to do even after you’ve made an agreement and created a purchase contract with the seller. One of the things you may have to do includes having the home appraised. In some cases you won’t, and it will depend on your circumstances.

Don @ Money Reasons writes Extra Side Income Is More Than You Think! – Do you realized that extra side income is more than you think! If you participate in such a practice, it can really make a difference to your bottom line!

Mike @ Personal Finance Journey writes My 7 easy ways you can clinch that sale – My 7 easy tips to follow to clinch your next sale and keep those sales rolling in.

CAPI @ Creating a Passive Income writes Identity Stolen? Steps for Recovering from Identity Theft – You see a lot of information on how to prevent identity theft. But what you do when your identity is already stolen? Read here for some great tips.

Debt Guru @ Debt Free Blog writes Financing Family: How to Prepare for a Newborn – So you’re expecting! The miracle of life is precious and adding to the family is amazing. However, you’ve gotta be sure to include a baby into your budget.

Don @ MoneySmartGuides writes Selling Your Old Cell Phone For Cash – Odds are you have an old cell phone lying around your house.

Hank @ Money Q&A writes 5 Wealth Concepts You Need to Teach Your Children – It’s important to teach your children financial lessons early. There are many money lessons that you can teach your children the values of money and handling it.

Kyle @ The Penny Hoarder writes Want to Flip a House? Here’s How to Actually Make a Profit – Thinking about buying a fixer-upper, putting in some work and reselling it? Follow this advice to flip your house and make the most of your investment.

IMB @ Investing Money writes Where is the Price of Gold Headed? – The US stock market made a new high in the Dow and S & P. Gold, on the other hand, fell to its lowest level in the past 15 weeks. Read to find out why.

Wayne @ Young Family Finance writes Your Financial Perseverance: How Bad Do You Want It? – How bad do you want to be out of debt? Or free of the creditors? Or financial stable? How hard are you willing to fight to reach these financial goals?

SBB @ Simple Budget Blog writes Your Spending Philosophy – Are you a spender or saver? Planner or pantser? Your spending philosophy may determine how well you budget.

Ted Jenkin @ Your Smart Money Moves writes Was Your Mutual Fund A One Hit Wonder? – We love lists. In fact, we have become addicted to them.

Kurt Fischer @ Money Counselor writes Debt Settlement: Solution or Just Another Scam? – If you watch television, you’ve seen ads from so-called debt settlement companies. Is the reality of debt settlement as wonderful as the sales pitch?

Emily @ Evolving Personal Finance writes Blog Statistics Update May June 2014 – We had a very high-spending month that would have overdrawn us if we were still using our old money management system.

Big Cajun Man @ THE Canadian Personal Finance Site writes Atrociously Dangerous Investment Advice – Is it ethical for an “investment guy” to tell a 72 year old widower that she should borrow money to invest?

Maria @ The Money Principle writes Five things to look for when choosing credit cards – When we first got in financial trouble – remember the obscene amount of debt we had and paid off – I did what many people who had to change their habits rapidly do: I went anti!

Alexa @ Defeat Our Debt writes Should You Take a Vacation if You’re in Debt? – Your debt is stressing you out. Work is stressing you out. And you just need a little break from the normal day to day grind.

Alexa @ Single Moms Income writes The Best Online Business Blogs to Learn From – It seems like here lately I’ve had quite a few people email me and ask me about things that are online-business related.

Brad @ Enemy of Debt writes Optimise your spending: eliminate waste in your life and budget – Here is the ERR budgeting strategy I came up with to optimise our spending and make out money go further.

Larry @ KrantCents writes Why is there income inequality? – The top 1% increased income and the middle class income has been declining at a much faster rate.

Monica @ Monica On Money writes What To Do If You Totally Failed Your Budget – For the past few years, I have been a die-hard budgeting addict. I live for my budget and look forward to the end of each month.

Natalie @ Debt and The Girl writes (Natural) Beauty Tips on the Cheap – I have really been ignoring my beauty routine lately and my skin has been making me pay for it.

Cat @ Budget Blonde writes My $139 Tube of Toothpaste – Gremlins are all those little unexpected expenses that pop up, like speeding tickets or a broken retainer or a flat tire. – See more at: http://www.budgetblonde.com/2014/06/16/139-tube-toothpaste/#sthash.tv9plafc.dpuf

Justin @ iPlugin writes Why purchasing a knock-off iPhone charger might not be such a good idea – Many people that love their Apple products, including their iPhones, iPods and iPads, aren’t particularly fond of the high prices that Apple charges for accessories like chargers.

Danielle @ TeacHer Finance writes Can’t Afford These Luxury Items? Don’t Buy Them! – While borrowing money to purchase a home, get an education or buy a new automobile are (relatively) smart financial decisions, there are a number of items that a person should never borrow money in order to purchase.

Aaron @ Aaron Hung writes What days of the week are the best to save money? – If you’re like most typical Americans you do most of your shopping during one or two days of the week and, if you’re looking to save money, that’s a habit you need to change.

Justin @ Edward Antrobus writes Common Mistakes That Can Hurt Your Credit Score – Okay, we all know that there are plenty of myths that surround credit scores including one that says married couples share a single score and that everyone has only one credit score. (Both of these are false.)

Marissa @ Thirty Six Months writes 5 Tools That Every Blogger Should Use – I have a thing about pimping out products that I love. I think it’s fair to help people find things that make sense, and make their life easier.

Marissa @ Finance Triggers writes 3 Ways to Ensure You Have Money Left in the Last Week of the Month – We all know that when we look in our bank accounts during the week approaching pay day, it is more than likely that a few moths will fly out.

Sam @ The New Business Blog writes 10 Tips for Hiring Excellent People – As an entrepreneur it’s definitely okay for you to obsess over hiring employees because, for small businesses especially, one bad hire can squash an entire team’s productivity quite quickly.

Katie @ IRA Basics writes The Secret of Saving for Your First Deposit – Are you ready to become a homeowner and do not fancy a no-deposit home loan? Then the biggest obstacle standing in your way is the first deposit or down payment.

Lily @ Paying Debt Down writes What to do if you run out of cash before payday – Many people are finding it difficult to make their money last until they next get paid.

Bob @ Dwindling Debt writes Building Wealth on a Small Salary – Part Three – If you’re ready to get some more excellent advice on how to build wealth, even if you’re not making a huge amount of income, get comfortable and let’s get going!

Andrea @ So Over This writes 5 Things You Should be Renting Instead of Buying! – People spend money like fish swim in the water, it just comes natural to them, they don’t think twice about it.

Hadley @ Epic Finances writes 4 Investing Tips for Beginners – If you’re new to investing there are a lot of things that you need to learn in order to safely start investing your hard-earned money and using it to make more.

Lenny @ Best Money Saving Blog writes Do What You Love, Love What You Do – Do you have a favorite hobby or pastime? If not then you need to find one quick!

Amy @ Money Mishaps writes How to pay for car repairs with no money – If you’re one of the lucky ones that has already spent thousands of pounds on a new car, it is a little disheartening when the mechanic tells you that you need to pay for some serious emergency repairs before it’s safe to get on the road again.

Jack @ Money Saving Ethics writes Choosing the best bank account – Searching for a bank account can seem like a daunting task. There’s so much to consider before you open up an account and so much jargon to understand.

Matt @ Budget Snob writes Five Negotiation Mistakes to Avoid when Buying a Used Car – Purchasing a used car is a great way to avoid the hit of depreciation and drive away on a steep discount in comparison to new models.

Danielle @ Saving Without a Budget writes A Guide to Avios – Airmiles were once a popular way in which people could fly to faraway places without having to dig deep into their pockets.

Jay @ Daily Fuel Economy Tip writes Braking Properly Can Save on Gas! – Most drivers realize that an automobile uses the most gas when it accelerates.

Oscar @ Money is the Root writes How to get around the Roth IRA Income Limits – Most financial experts will tell you that a Roth IRA is one of the best retirement vehicles you can use.

Daniel @ Make Money Make Cents writes 4 Tips to Sell Your Home Fast – With the housing market looking troublesome and many people still tightening their budgets in the economic recession, finding the best buyers for your house can be tricky.

Andrew @ Finance with Reason writes How NOT to Value a Stock: 4 stock valuation mistakes to avoid – If you value stocks based on historical prices, observations, ratios, or advice from the media, you may be trusting your trading to luck instead of skill.

Harry @ The Rideshare Guy writes My First Weekend Driving for Lyft and Uber – As most of you know I recently signed up for Uber in order to take advantage of their ‘$500 Steal A Lyft Driver’ promotion (Ok I made up that name). Even though I started out with Lyft and I’m a bigger fan of their service in general it makes a lot of financial and business sense to drive for more than one TNC. We don’t know what’s in store for one company over another so it’s essential that you diversify your streams of income as a small business owner (remember we are all busines

Harry Campbell @ Your PF Pro writes How to Fly on American Airlines for Free (or Close to it) – I’ve worked in the aerospace industry for almost 5 years now since I graduated college. And whenever I tell people what line of work I’m in, they undoubtedly ask if I ever get to fly in the planes I work on for free. Sadly the answer is always no, actually there aren’t a whole lot of flight related benefits that being an engineer will get you. Generally, it’s only the flight attendants and pilots who get to fly for free.

Derek Chamberlain @ MoneyAhoy writes Turn Off You Outside Lights at Night – Save more than $100 a year by turning off your outside lights at night!

Little House @ Little House in the Valley writes The Ultimate Camping Guide – Camping is a great way to explore the outdoors and take a frugal (or not so frugal) vacation. However, when I mention camping to some people, they become incredibly squeamish about the whole idea – the bugs, dirt, and animals freak them out. But it needn’t be that way.

Miss T. @ Prairie Eco Thrifter writes Deciding to Be Content Even When Life Doesn’t Go the Way You Plan – Have you ever had Life throw you a curve ball that you never saw coming? In moments like this, you have two choices–accept what has happened and make the best of it or be miserable. I was recently faced with this decision myself.

Hayley @ Disease Called Debt writes How Being Humble Helps Us to Live a Happier Life – This post is about the importance of being humble. When things aren’t going our way, looking at our lives through a lens might help to put things into perspective. Everyone goes through difficult times in their lives whether it’s to do with finances, relationships, jobs or even losing a loved one. Yet it’s possible to find something positive in almost every situation if we look hard enough.

Paul @ The Frugal Toad writes How to Lower Debt With Student Loan Forgiveness Programs – The student debt crisis in the United States is at an all time high. With over $1 trillion in outstanding debt, most students can be certain they will have some sort of debt when they graduate. While financing an education is still seen as good debt, any debt can be scary for new graduates. Luckily for many, there are some student loan forgiveness programs that can help them reduce debt. Not everyone will qualify for such programs, but here are more details on how they work.

Aldo Rancier @ Million Dollar Ninja writes DIY Phone Screen Replacement – DIY projects can save you money and make you feel accomplished. You can change your own cracked phone screen and save some money.

Mario @ Debt BLAG writes How renters can avoid losing your security deposit — to me (a landlord’s perspective) – Getting back your security deposit when moving out can be a big source of anxiety; here are some tips to improve your chances

Erastus @ Sprout Wealth writes Why Slow and Steady Wins Out When it Comes to Investing – Slow and steady is the best approach when it comes to investing. While it may not be exciting, lack of excitement is good when you’re in the stock market.

Erastus @ Wise Dollar writes What is the Difference Between Term Life and Whole Life Insurance? – The difference between term life and whole life insurance really comes down to the value you’re receiving. I cover the debate to see what’s best for you.

Michelle @ MakingSenseofCents writes Income Series: Stella & Dot Independent Stylist – As an independent Stylist with Stella & Dot I share and sell irresistible jewelry and accessories online and at in home trunk shows or pop up shops. Currently there are 12,000 active stylists for this Inc. 500 fastest growing company with a $25 billion global market opportunity.

Brad @ How to Save Money writes Create a Grocery List to Save Money – How to stop wasting hundreds on unnecessary food items

TW @ Tightwad Travelers writes Amazon Payments Review – Amazon Payments allows you to get more free travel rewards without any fees!

JL @ JL Online writes Online Entrepreneurship – You can work online and make money anywhere in the world.

Mr.CBB @ Canadian Budget Binder writes Will signing a room rental feel like I’m moving home? – Signing a room rental agreement could feel like you are moving in with your parents but it could be worse, you could be moving in with Sheldon Cooper.

Gretchen @ Retired by 40! writes They’re Financing Cell Phones Now…. – First it was auto loans, then TV financing, and now they’re financing cell phones. What in the world??

Michelle @ See Debt Run writes The Mistake I’ll Never Make…Again – Sometimes all you really need is a wake-up call, and sometimes wake up calls can be scary.

The Ascent of Money on PBS

I just spent much of my weekend watching The Ascent of Money on pbs.org. From the website

In THE ASCENT OF MONEY, author, economist and historian Niall Ferguson traces the evolution of money and demonstrates that financial history is the essential back-story behind all history.

The episodes are,

Episode 1: From Bullion to Bubbles
Episode 1 documents the roots of money in the conquest of the Americas, from the Incan empire to the Louisiana territory.

Episode 2: Bonds of War
Episode 2 explores John Law and his Louisiana territory Ponzi scheme; plus bond markets that supported warfare in Europe.

Episode 3: Risky Business
Episode 3 examines the roots of the insurance industry, natural disasters and risk management, and the history of hedge funds.

Episode 4: Planet Finance
Episode 4 chronicles the spread of good — and bad — financial practices across the globe, the meteoric rise of the American real estate market, and the consequences of the subprime mortgage fiasco.

I love history, and this documentary on money, lending, stocks, bonds, bubbles, booms, and busts is extraordinary. Of course PBS also has the Frontline series that often has good personal finance topics. Here is a fascinating episode titled, Secret History of the Credit Card, that tells how and why South Dakota, followed soon by Delaware, was the place where America’s credit card industry first began to really take off. The show also examines many of the current practices of the credit card industry.

Expense Ratio That’s Too High to Own

A while back I wrote a post that highlighted how seemingly insignificant fees can take away a lot of your total portfolio when these fees are compounded over many years.

cumulative-impact-of-fees

Recently, someone on bogleheads.org asked how high of an expense ratio (ER) is too high.

Do you set benchmarks? For instance, over 0.5% is too high? I’ve seen Target retirement funds offered by company’s 401k in the ~0.7%+ range and see individual index funds around ~0.2%. Is this enough of a difference where you prefer investing in the individual funds?

Any personal experience of why one is better than the other?

Where do you guys see yourself backing out of funds in terms of ER? Where do you set the tipping point where convenience is better than ER and vice versa?

One answer that I really like and agree with came early in the thread,

I target .1% in total fees. .7% is huge, compounded over decades. I’d certainly use individual funds in that case, or even alter my asset allocation to get a cheaper fund.

The weighted ER for all funds that my wife and I own is 0.11% It would be lower except that our 401(k) stable value fund has an ER of 0.5%. Another boglehead answer puts some qualitative assessments on some ER ranges,

<=0.10%: My favorite!
0.11-0.20%: Acceptable
0.21-0.40%: Getting Expensive
0.41-0.50%: Better be special
>0.50%: No thanks

Or, if you were to put it in dollars taken from your account in fees over one year (say you had $500k)

<=$500: My favorite!
$550 – $1,000: Acceptable
$1,050 – $2,000%: Getting Expensive
$2,050 – $2,500 : Better be special
>$2,500: No thanks

Someone who is willing to pay a little more said,

Depends on type… If it’s an S&P500 idx or alike better be < .1 but if it’s – say – an international small cap value or something I would accept far higher expenses….. A lot here might disagree ; on holding such a fund at any price :D or the “max” they would be willing to pay.

And then, finally, my favorite answer,

This pretty much sums it up. I would love to have all my ERs at .05. But I am going to pay .12% to get my bond fund. I am going to pay .15% for Emerging Markets and so on. ER is not the driver of my investing strategy. I figure out what I want and then figure out how to get it as cheaply as possible.

Do you know what your total weighted ER is for your entire portfolio? Morningstar’s portfolio x-ray will automatically give your weighted ER after you have entered each fund or ETF and the number of shares you own. You can get it for free at T. Rowe Price.

Carnival of Retirement, June 16, 2014

relaxing-beachWelcome to this week’s Carnival of Retirement.

My wife and I are planning to retire in nine years. It seems like a long way off, but in reality, it will be here soon. We have guestimated our expenses in retirement, factored in 3% inflation, and determined that our nest egg will last indefinitely so long as we only withdraw 2.5% of assets, adjusted for inflation, each year. Of course it won’t necessarily be smooth sailing every year, but we plan to be flexible with our spending and withdrawal rates. I think those are the keys to a financially sound retirement: withdraw less than 3% of the portfolio annually, and remain flexible.

Debt Guru @ Debt Free Blog writes Military Finance: What to Do Before Serving Your Country – One of the biggest problems with being in the military is keeping your finances in order. Read here for tips.

CAPI @ Creating a Passive Income writes Stress Storms: Cheap-to-Free Methods of Reducing Stress – There are times when we don’t know what to do with our stress. Luckily, there are methods to combat it. Read here for helpful tips on stress reduction!

SBB @ Simple Budget Blog writes Eating Differently: How to Budget for Food Allergies – The best ways to budget and shop for those with food allergies.

Tony @ We Only Do This Once writes The Inverted Pyramid Model – Managing finances is a skill that takes time and experience to master; the inverted pyramid model allows you to prioritize your finances.

Mr. Frenzy @ Frenzied Finances writes Five Essential Skills for Living Cheaply On Your Own (And Then Some) – Living alone for the first time? Good! It’s challenging though, especially with finances. Here are five essential skills for living cheaply on your own.

Ted Jenkin @ Your Smart Money Moves writes How To Teach Your 5 year Old About Money. – We do a poor job of teaching our kids about money in this country. In order to get my kid started in the right direction I set up the following system.

Kyle @ The Penny Hoarder writes Why You Should See Dollar Signs When Your Neighbor Puts Junk On the Curb – Want a business that’s pure profit? Try selling other people’s junk. This author got a table, chairs and more for free — and sold it for cash.

JP @ My Family Finances writes 5 Reasons That Your Employer Should Have Group Insurance Benefits – Everything from attaining a group insurance quote, to establishing insurance and deciding on good insurance policies is relatively easy and the benefits of group insurance far outweighs any of the perceived negatives.

Dominique Brown @ YourFinancesSimplified writes Your Financial Relationships: Should We Have Separate Bank Accounts? – This post is part of our Your Financial Relationships series. This series is designed to help you discover the financial topics you should discuss with your significant other in order to have a financially healthy relationship.

IMB @ Investing Money writes Is France Totally Bankrupt? – Is France a bankrupt country? Examining the pros and cons of the economy of France.

Hank @ Money Q&A writes 3 Surefire Ways To Get Ahead At Work – Looking to get ahead at work and in your career? At work, think of yourself like a CIA agent. Gather intelligence wherever and whenever you can, and get inside the mind of your boss.

Crystal @ Married (with Debt) writes 5-Year Progress Check – I have made decent progress over the past several years in managing my finances better. How much better you might ask? Let’s take a look.

Don @ Money Reasons writes When Debt is a Good Thing – Borrowing rates are low, and in this article I’m going to demonstrate that sometimes debt is a good thing! I’m only half way through, and already I win!

Wayne @ Young Family Finance writes Insuring Yourself: The Types of Insurance Available for Life – Better to be safe instead of sorry! Time to insure yourself. Here are the types of insurances to protect individuals and their families.

Mike @ Personal Finance Journey writes Learning and Loans: 5 Ways to Stay on Top of Your Finances in College – Learning how to manage your finances and loans while you’re still in college will help build stronger and positive financial habits.

Don @ MoneySmartGuides writes 4 Ways To Save On Internet Costs – The internet is considered a need for many people. But, the internet can cost a pretty penny.

Michelle @ The Shop My Closet Project writes You might not have a job problem but a life problem – This post was originally going to be called -A funny thing happened on the way to quitting my job.- For those of you who have read my blog for awhile (and thanks for being patient while I took a long needed break) you know that I have expressed for awhile a deep rooted dissatisfaction with my job. I had written about my disturbing longevity in my job, my loathing of my commute (it’s a long one), and my lack of a social life.

Natalie @ Debt and The Girl writes A Secret Career Confession – Last week a friend of mine was looking for people that wanted to do a little acting for a video that was being produced for the company he works for.

Brad @ Enemy of Debt writes A Sure-Fire Way To Save On Taxes – Those who pay less in taxes do so by spending less and saving more.

Maria @ The Money Principle writes Three gifts for men to get your gift ideas factory going – Men are awkward customers. I can say this because I am a man and I empathise with anyone who has ever endured the frustrating quandary of what gifts for men to get for friends or loved ones.

Justin @ iPlugin writes What’s the reason for the decline in iPad sales? – People are beginning to question what’s going on with Apple’s ubiquitous iPad tablet as sales during the first quarter of 2014 dropped 16%.

Danielle @ TeacHer Finance writes Why Bargains Aren’t Always Such a Bargain – Here is some sage and simple advice; never purchase anything just because it is a bargain.

Cat @ Budget Blonde writes Saving Money Isn’t for the Sleep Deprived – Despite being up all night with my little boy bean, I thought it would be an excellent idea to go to the grocery store on Memorial Day and leave hubs with the twins.

Alexa @ Defeat Our Debt writes How to Get Rid of Debt on Your Own – There is no easy way to get rid of debt. You have several options, each come with their own set of pros and cons. Here is how to get rid of debt on your own.

Alexa @ Single Moms Income writes I Did It……I Opened a Retirement Account – At the beginning of the year I declared that 2014 would be the year I stopped talking about investing and just went for it.

Larry @ KrantCents writes If You Were Boss – What would you do if you were boss? What if you were boss of the company you work for?

Monica @ Monica On Money writes What Turning 30 Taught Me About Money – I finally turned 30 in March. For years, I’ve been anxiously waiting to turn 30! I’m not exactly sure what I expected, maybe that I’d suddenly become more successful

Aaron @ Aaron Hung writes Facts you really need to know about your 401(k) – If you have a 401(k) plan through your employer there are a number of things that you really need to know about it in order to take advantage of it as much as possible.

Justin @ Edward Antrobus writes Tips to Help You Pay Down Your Student Debt – If you’ve just recently graduated from college, congratulations! Best of luck finding a job and starting your career.

Marissa @ Thirty Six Months writes Unemployed Financial Management – Losing your job can be a very difficult and stressful time. It is, however, vital that you take the right steps to secure your finances as soon as you become unemployed.

Marissa @ Finance Triggers writes 3 Ways to Ensure You Have Money Left in the Last Week of the Month – We all know that when we look in our bank accounts during the week approaching pay day, it is more than likely that a few moths will fly out.

Sam @ The New Business Blog writes 5 Top Apps for Entrepreneurs – If you are a busy entrepreneur you already have your hands full with a million different things that need to be done.

Katie @ IRA Basics writes The Secret of Saving for Your First Deposit – Are you ready to become a homeowner and do not fancy a no-deposit home loan? Then the biggest obstacle standing in your way is the first deposit or down payment.

Lily @ Paying Debt Down writes Is Data Mining a fair way to set Insurance Rates? – With computer technology advancing by leaps and bounds, it is no surprise that insurance companies have started using sophisticated software to help them determine what rates to charge their customers.

Bob @ Dwindling Debt writes Health Insurance Coverage | Will My Health Insurance Cover Dentistry? – It is no secret that your dental health is one very important element of your overall health.

Andrea @ So Over This writes Could You Live on Minimum Wage? – Unless you’ve been living under a rock the past the year it’s hard to miss the ongoing debate over minimum wage!

Hadley @ Epic Finances writes 9 Proven Strategies to Eliminate Debt – One of the most stressful things that can happen to a person is falling prey to what I call the Debt Trap.

Lenny @ Best Money Saving Blog writes Financial Aid Tips for the Uninitiated – If you are the parent of a child in high school that is rapidly approaching college age, chances are that you have just been introduced to the numbers game that is financial aid.

Amy @ Money Mishaps writes The biggest threat to Retirees’ nest-eggs? Their Mortgage – What is the biggest threat hanging over the head of many older Americans heading towards retirement?

Jack @ Money Saving Ethics writes Taking the Leap: When is it Time to Ditch the Lease? – This past decade has paved the way for some very big changes in the housing market, making it both harder to find a home and easier to get financed for one.

Matt @ Budget Snob writes Five Negotiation Mistakes to Avoid when Buying a Used Car – Purchasing a used car is a great way to avoid the hit of depreciation and drive away on a steep discount in comparison to new models.

Danielle @ Saving Without a Budget writes Lock Up Credit Card Safety with the coming Card Control App – One of the most vulnerable points that credit cards have is that, since they are always on, they can always be used by criminals who somehow get access to their data.

Jay @ Daily Fuel Economy Tip writes Gas Saving Myths Exposed – Summer is coming up fast and with it gas prices will be increasing, as they seem to do every year.

Oscar @ Money is the Root writes Borrowing Money? Avoid using these 2 Methods – While it is certainly true that everyone needs money, sometimes it is rather hard to find if you need extra money quickly.

Daniel @ Make Money Make Cents writes 4 Tips to Sell Your Home Fast – With the housing market looking troublesome and many people still tightening their budgets in the economic recession, finding the best buyers for your house can be tricky.

Jerry @ Buckeye Finance writes 3 Ways to Pay Off Your Car Early – If you’re retired, a car loan can be a significant monthly payment to worry about each month. Find out how to pay off your car ahead of time.

Evan @ The Smaller Dollar writes Top 3 Tips for a Frugal Road Trip – A road trip is generally more frugal than a plane flight since plane tickets, parking, baggage fees, and rental cars generally dwarf just filling up with gas every several hundred miles but there are some key steps you can take to really make your next road trip a frugal one.

Harry @ The Rideshare Guy writes Why Lyft is the Perfect Second Source of Income – I’m always looking for easy ways to make money, it’s kind of like a hobby for me. Some people like to watch tv or play sports, but I’m always on the hunt for hobbies that align with viable business opportunities. The first time I realized that I could make money off a hobby was during college when I started coaching volleyball. Obviously it wasn’t the same as getting paid to play, but I did get paid to hang out with my friends(who were also coaches), hit balls at a bunch of kids (as h

Harry Campbell @ Your PF Pro writes Get Your Free FICO Score from Barclaycard – The media likes to bombard us with credit related advertisements. It doesn’t matter whether you’re watching TV, listening to the radio or playing a podcast, it seems like there are always ads for free credit scores, debt repair and things of that nature. I’ve always felt strongly though that I shouldn’t have to pay for access to my score and report. After all, the information contained in those documents is about me and my spending habits. It’s not like I’m asking to see someone else

Little House @ Little House in the Valley writes Back and Forth on Rent Vs. Buy – Should I buy? Should I continue renting? If I lived in a city where there was a clear choice, this wouldn’t be such a dilemma. However, living in a suburb of Los Angeles makes it a distressing, hair-pulling decision.

Miss T. @ Prairie Eco Thrifter writes Housing Solutions for Seniors – There are plenty of housing alternatives for the elderly who prefer to stay near family and yet still maintain their own autonomy.

Erastus @ Sprout Wealth writes What Investments Should I Invest in My 401k? – Are you in the position of not knowing where to start with your 401k? Your 401k can be a great way to save money for retirement. I hope this post will help get you started investing in your 401k.

Erastus @ Wise Dollar writes How to Make Retirement Planning Easier – What are you currently doing to make your retirement planning easier to manage? Coming up with an investment plan you should be able to make some decent headway towards reaching your specific goals.

Jeremy @ Modest Money writes What You Should Know About Binary Options – Binary options are investment vehicles. Binary Options Broker aren’t Shady because often times, the broker sets the price of the asset. So, if they wanted to win every time, they would set the price in their favor.

TW @ Tightwad Travelers writes Liquidating Visa Gift Cards – Find out how to be a travel hacker with Visa Gift Cards

Glen @ How to Save Money writes Pet Care Costs – How A Pet Can Blow Your Budget – How the costs of pets keep stacking up after the initail purchase

Mr. 4HWD @ The Four Hour Work Day writes The Fastest Way to Increase Wealth: Want Less – Personal finance often serve as great resources for those seeking to build wealth and improve their financial standing. The best bloggers offer practical advice and actionable tips while creating a welcoming community for anyone interested in money matters.

Mark Ross @ Money Saving Dude writes 50+ Money Saving Tips From Some of The Best Personal Finance Bloggers Today – Are you looking for ways how to save money? If you are, then let these money saving tips from some of the best personal finance bloggers today help you.

Mario @ Debt BLAG writes Two measures could make this a HUGE week for student loan reform! – This week, two proposed measures could expand the Pay As You Earn repayment option and allow borrowers to refinance their student loans

Jessica Moorhouse @ Mo’ Money Mo’ Houses writes Plan to Retire? Then Stop Giving Your Kids Money! – Lately I’ve been seeing a lot of articles written about how parents may need to rethink their retirement plans because of their Gen Y money-sucking kids. Guess what, the solution to your retirement dilemma is simple. Stop giving your kids money and use it to retire on instead!

Mr.CBB @ Canadian Budget Binder writes Do your parents stick their nose into your bank account balance? – Do you have parents who are overprotective and want to know your every financial move? Find out what one fans parents do and what my suggestion to her was.

Gretchen @ Retired by 40! writes Why You Should Create a Bill Schedule – The Bill Schedule – an amazing tool that transformed our financial lives!

Mario @ Adventures in Frugal writes Nine frugal things I love about summer in the city; my 2014 checklist – Even city-dwellers have plenty to look forward to when the weather gets warm; here are the things I’m looking forward to

The Carnival of Retirement website can be found at www.carnivalofretirement.com. You should submit your articles for the Carnival at Blogger Carnivals.

Near Collision

A while back my wife, or Mrs. Save and Conquer as she sometimes likes to be called, was very nearly in a high-speed accident on the freeway. She said a car in front of her in the right lane lost control, went across all lanes of the freeway, bounced off the center wall, and back into the lane in front of her. As all this unfolded, she hit the brakes and managed to come to a stop a few feet from the out-of-control car. She then pulled over to the right shoulder and called emergency police.

The dispatcher asked if anyone was injured. My wife said the people in the crashed car did not appear injured, but that gasoline was leaking from the vehicle. The dispatcher said police and fire crews were on their way, and that my wife could leave.

 

My wife did not leave, but called me because she was a bit shaky and wanted to calm down. I asked pretty much the same as the dispatcher, and was relieved that she had not actually been in the accident. I then recommended that she not leave the scene until a police officer told her to. My thinking was along the lines of liability.

You never know what other people might say or recollect about an accident. She said she heard someone say that the other car had been cut off and that was why they crashed. I did not want it to come back at her that she had anything to do with the accident.

If you drive long enough in a metropolitan area, you will probably have your share of close calls. It is a good idea to sometimes go over what to do if you are witness to an accident or are involved in an accident.

  1. Take care of yourself. Make sure you are off the roadway and out of danger. Drive your car to the side of the road, if possible. If your car cannot be driven, stay in the car with seat belt fastened until help arrives. (Obviously, don’t stay in the car if there is fire or leaking gas.)
  2. Turn on emergency flashers, determine if there are any injuries, and then call 911.
  3. Wait for the first responders (i.e., police) and then do whatever they tell you.

In addition, if you were involved in the accident

  1. Get names and addresses of people involved, their drivers license numbers, vehicle make and model, vehicle identification number from their vehicle’s registration, plus insurance company name and telephone numbers.
  2. Take pictures of the vehicles involved and of the accident scene. I carry a cheap camera in the glove box. Most cell phones have a built-in camera, so use that as well.
  3. Do not admit guilt.
  4. File an accident report with the police.
  5. Call your auto insurance.
  6. File an accident report with the Department of Motor Vehicles.