My Personal Finance Journey

Ways to Maximize Benefits of Your Credit Card – Part 1

This is part 1 of a series of ways in which you can maximize the benefits of the credit cards you use. It is truly amazing how you can take advantage of things you never knew just by asking! So, let’s get started!
1)   Tip Number 1 – Request credit limit increases
The first way that you can maximize the benefits of the credit card you use by simply asking questions is to make sure that you currently have the maximum credit limit possible.
While I do not suggest that you use the added credit amount to make additional purchases, I believe that it is always beneficial to have extra funds available in your credit card credit limit in case of emergencies (examples include – being stuck at the airport in Argentina after a trip and having to buy an emergency ticket home, etc).
The method to request a credit limit increase is simple: 1) pick up your credit card, turn it over to the backside, and 2) call the 1-800 customer support number listed and select whatever option you need to to talk to a real, warm-blooded person. 3) Then, simply ask the customer service operator that you would like to request a credit limit increase. 4) They will then ask you the amount that you want to increase your credit limit. I have had good success with requesting a 33% increase over your current credit limit. 5) They will then ask you if it is all right to access your credit report. Tell them this is all right. The system will then process your request and tell you if you are approved or not.
A quick note here: 
Since requesting a credit limit increase requires the credit card companies to access your credit score, make sure you do not request limit increases too often or on multiple cards at once. This could possibly negatively affect your credit score.
It’s that simple! I have had great success with this method. Recently, I was even able to get my credit limit increased from $8,000 to $12,000 on one of my credit cards. Not a bad jump all at once!
To summarize, I follow the several rules regarding these requests:
1) Only place requests for credit limit increases every 3 months to avoid negative effects to your credit score from frequent accessing.
2) Request credit limit increases gradually, 33% at a time is a good number.
Part 2 of this series will be coming soon! Subscribe to the blog feed using the link below to be notified when it comes out!

Have fun and keep on learning!

Jacob

Go to Ways to Maximize Benefits of Your Credit Card – Part 2 – “Request interest rate decreases”

Frozen Vs. Fresh vs. Canned Vegetables

Well, turns out you really do learn something extraordinary every day! As I was cooking beef teryaki tonight at my apartment (using a package of frozen vegetables), I wondered to myself, “Are frozen veggies as nutritious as fresh?”
I then proceeded to go online, and to my shocking dismay, I found out that FROZEN VEGETABLES ARE ACTUALLY HEALTHIER (not to mention cheaper) THAN FRESH VEGGIES. Sounds to good to be true uh? Think again!
In the articles below, it states that since frozen veggies are picked at the peak of ripeness when vitamins are the greatest, they contain much more nutritive properties than the fresh version of the same vegetable. This is due to the fact that fresh veggies are picked before they are ripe and lose a lot of their vitamins to UV exposure and heat on the way to market.
What’s the morale of the story? Find ways to improve the taste of frozen veggies, save money, and be healthier!

http://www.associatedcontent.com/article/2398100/are_frozen_vegetables_healthy.html

http://www.eatingwell.com/nutrition_health/nutrition_news_information/fresh_vs_frozen_vegetables_are_we_giving_up_nutrition_fo

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Keep on learning!

Jacob

My Money Blog MySpace Page Created!

Good Sunday evening to everyone! Just wanted to let you all know that I finally broke down and created a MySpace page for the group. You can view the page by following the link below.
Inside, you will find a useful connection network as well as the following applications:
  • Loan calculator
  • Listings of free stuff online!
  • Personal finance calculators
  • Rich Man a Day Tips
  • When Will You Be a Millionaire Calculator
  • Tips for How to Make Money for Teenagers
  • And much more!
Keep on learning!
Jacob

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Cost of Pet Products

Recently, I have decided to provide foster care for a dog that is being rescued from execution (being put to sleep) at a high-kill shelter in Ohio. The dog is a young, fluffy, golden retriever/collie mix that was picked up as a stray at the beginning of February 2010.
The reason I opted to provide foster care for a dog as opposed to adopting/buying a dog was that I didn’t think I could commit at this time in my life to providing care for a dog for the long-term, especially since I do not have a private yard/house. Also, the foster program I am teamed up with is very supportive, and they actually pay all of the veterinarian bills for the dog (very nice!).
So, I decided that I needed to go to the pet store to get prepared for the new guy. When I went to the pet store (Pet’s Plus) in the town I live in here on the East Coast, I was appauled at the high cost of pet products these days, and was curious to find out a little more.
The thing that suprised me the most was the range in price of the pet products. For example. you could get dog food starting at $10.99 (Gravy Train) or get organic dog food (same weight) for $70.00. Furthermore, you could get a plain metal water/food bowl for $8.99 or a fancy ceramic one for $40.00.
To further investigate, I did a quick online search, and I found the two articles below that describe in detail the full cost of owning a pet/dog.

http://www.aspca.org/adoption/pet-care-costs.html

http://www.moneyunder30.com/the-true-cost-of-pet-ownership

The total that both websites come up with is that the total cost of owning a pet for the 1st year is $1200-$1500. Wow! The key takeaways from this investigation, for me, are shown below.

Key Takeaways

1) Before buying or adopting a dog, be certain that you can financially committ to the animal for its lifetime. This could indicate that you will spend ~$10,000 total over the lifetime of the animal.

2) Determine if you are capable of getting the emotional return on investment from having a pet. Make sure that you truly will enjoy it and are not just doing it “because everyone else is,” etc.

3) When buying pet products, SHOP, SHOP, SHOP, and COMPARE, COMPARE, COMPARE. There will no doubt be a wide range of product/price alternatives to consider. Also, realize that many times, products sold at discount stores such as Wal-Mart or grocery stores can cost significantly less than the same products at fancier pet stores.

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Keep on learning!

Jacob

New YouTube Channel Created for My Money Blog followers

I just created a YouTube Channel/group where I will review financial movies on YouTube that I find interesting. You can access and subscribe to the Channel at the link below.

http://www.youtube.com/BlogMyMoney

Handy Tool to Assist in Performing Phil Town Rule #1 Calculations

If anyone has given Phil Town’s system of investing (from his book, Rule #1, a Simple Investing Strategy in 15 minutes per week) a signficant attempt, you have no doubt found out that running the numbers to calculate the Big 5 Numbers can be a time-consuming, cumbersome task that leaves you thinking, “There has got to be a better way!”

Well, I found out the other day that indeed THERE IS! It’s called the Stock2Own website, and it is free to use (see link below).

http://www.stock2own.com/

Once you enter the site, you can enter the ticker symbol of any stock that you identify for further investigation. From there, the website then automatically generates agressive, conservative, and middle-of-the-road calculations of the Big 5 Numbers. Additionally, the 3 technical indicator charts discussed in Phil’s book (MACD, Stochastic, and Moving Average) are automatically generated for you to view.

Quite a slick system!

Keep on learning!

Jacob

How do my living expenses compare after switching from living in Virginia to living in the Northeast?

Since recently moving from Virginia to the Northeast (philly suburbs), I frequently get asked how the cost of living compares between the two places. So, here ya go world! :) After all, you have to love how right now, gas in philly is $2.79 per gallon while in Virginia, it is $2.59 per gallon.


Virginia Living Expenses (per month)

A nice, spacious 1 bdrm apartment – $750
Water, trash fee, sewer – included (no extra charge)
Electricity (includes heat) –  $50
Internet – $35

VA Total = $835

Philly Suburbs Living Expenses (per month)

A nice, spacious 1 bdrm apartment – $1300
Internet – $38
PECO Electricity bill – $38
Renter’s Insurance – $15
Trash fee – $5
Water service fee – $9
Sewer service fee – $11.14
Gas-cooking fee – $5
Gas Bill (heating) – $31
Electricity processing fee – $17
Gas service fee – $7

Philly total = $1476

As one of my friends would say, FANTASTIC!!!

And the kicker is…get ready for it! There is no adjustment in pay for this cost of living difference…So, by working in a cheaper place, you are basically giving yourself an automatic raise! Food for thought next time you’re searching for jobs.

Ways for Parents to Give Their Kids a Financial Head-Start to Life

I want to preface this section by saying that I do not have any kids of my own and have not tried these techniques out. They are merely good advice that I have read in books over the years.

Ways to Give Your Kids a Financial Head Start in Life

In my opinion, the best way to give your kids a financial head start in life is merely to get them exposed to the general idea of finance at an early age, instead of having it be a taboo topic at home. Therefore, any effort is by nature good, but listed below are a few specific methods that I thought would be useful to share.

1. Buy your child 1 share of a stock they would be interested in. The key here is that the stock has to be something they will be interested in following. For example, if your child really enjoys Disney/Pixar movies, buy them a share of Disney stock (DIS ticker symbol). If he or she likes board games, Barbie dolls, Fischer, or Hot Wheels, buy them a share of Mattel (MAT ticker symbol). Use that share of stock to teach them all that you can about the stock market and investing!

2. Give your child (if they are old enough) a task to do to help with doing your taxes – Be sure that the only thing they know about tax time is that YOU DON’T LIKE TO DO THEM AND THAT THE IRS IS TRYING TO TAKE YOUR MONEY. This promotes negative associations for your child around money and something as certain as doing taxes.

3. Keep finance/money an open topic around the house. So many times, the only things that children hear fro you about money is the negative things such as not being able to afford soething, etc. Keep the lines of communication open.

4. Open up college savings fund. Everyone hopes that their child will get a full scholarship to go to college, but the odds are not enough in your favor to take that chance. By opening a college savings fund through an institution like Vanguard, you can tax advantage of tax deferred growth within the account, while still having the luxury to direct the investments the way you want. Remember, you will want to match the maturity of the investment instrument with the time horizon associated with whenever you child will be going to college in order to maximize returns. The link below takes you to the section of the Vanguard site where you can obtain information about 529 education savings accounts. Open one!

https://personal.vanguard.com/us/whatweoffer/college/overview?Link=redlabel

Important Tip To Remember:

When calculating a student’s need for financial aid for higher education, it benefits the student to have as little money to his/her name as possible.

In this case, it means that it is best to place the college savings fund account in you, the parents, name instead of your child’s. This is due to the fact that parent’s are assumed to use 5-6% of their assets to pay for a child’s college education, while the student is expected to use 35% of their assets.

5. Open a Roth IRA for them whenever they first obtain earned income – See my previous posts on reasons to start investing at an early age to see the logic behind this technique. There is no minimum age limit (see article at link below) to when you can open a Tradition IRA, as long as your child has earned income. If you own your own business, even better! You can give your child earnings for jobs he or she performs for your business.

http://www.kiplinger.com/basics/archives/2002/03/story28.html

Useful tip from David Bach’s Smart Couples Finish Rich book:
Tell your child that if he or she opens up a Roth IRA and contributes to it, you will match them Dollar for Dollar. This will provide an even greater incentive for them to invest.

6. Show your child the power of compound interest, using the table below. Be sure to point out how little money it takes to accumulate $1MM if you start at an early age.

7. Give your child the gift of want – Encourage your child that if he or she wants to buy something, it is necessary for them to earn the money themselves. This can be done either buy starting your own business venture or getting a job.

This topic is discussed in more detail on a recent post at the following link – My Money Blog – Is it Good to Give Your Child An Allowance?

Keep the ideas coming and good luck!

Jacob

My Current Asset Allocation and Net Worth Growth – February 2010

Twice a month, I update a spreadsheet of all my accounts that calculates 1) my net worth and 2) my current asset allocation. I figured that it might be interesting to post it on my blog once per month

In my previous blog at the link shown below, I explained the details of the mutual funds I invest in and how I figure what my allocation targets are.

http://mypersonalfinancejourney.blogspot.com/2010/01/index-mutual-funds-and-current-assett.html

On February 3rd, 2010, my asset allocation picture was as shown below.

As you can see, I have some serious work to do to get to my allocation targets. Remember, the general rule of thumb is to rebalance your allocation if it exceeds +/- 5% of the target you select.

The areas that I need to drastically improve are highlighted in red below. The reason that I am so over-allocated in domestic large cap equity is that for the past year and a half, I have been contributing 100% of the money in my 401k to buying an S&P500 index fund. I have recently been trying to exchange money out of that and in to bond and international funds (as you can see, the international equity and non-inflation bond funds %’s are more or less on target).

However, my current goal is to get more funds shifted towards investing in Emerging Market funds. Keep on learning!

Detailed Allocation Calculations

 % Cash (money market target 5%)                      Currently 14% % non-inflat Bond Funds (target 15%)                 Currently 11% % TIPS Bonds (target 5%)                                  Currently 0% % International Equity (Target 11%)                    Currently 12% % International Emerging Markets (Target 11%)  Currently 5% % Domestic Large Cap (Target 8%)                    Currently 33% % Domestic Small Cap (Target 9%)                    Currently 6% % Domestic Small Cap Value (Target 13%)        Currently 6% % Domestic Large Cap Value (Target 13%)        Currently 7% % REIT (target 10%)                                          Currently 6%

Mint.com – Budgeting / Personal Finance Tool Website – FREE!!!

This website is a great find that the newsletter that comes from my apartment complex directed me to!

First off, what is the best thing about this website? It is a FREE tool to use. Completely Free. Yes, Free.

Essentially, what you do is go to the website, and it allows you to link your credit cards, savings accounts, checking accounts, car loans, bank loans, house payments, etc all to your Mint.com account. These are secure connections that are read only, so Mint.com does not steal your information.

Once your information is entered, you can then track your spending (see categories that you spend the most in, and what percentage this occurs in), see your investment performance compared to the market averages and what your asset allocation levels are. Overall, a very useful tool! Give it a try.

Mint.com

How about you all? What’s the best personal finance software out there that you’ve found?

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