My Personal Finance Journey

Category Archives for Blogging

Help a Reader: To Refinance a Car or Not?

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Here’s an email I recently received from a reader:

I have a financial question for you. 

Currently, the interest rate of my car loan is 5.75% per year. And, I am wondering if I should refinance my car loan with a 3.99% interest per year loan that I found with my company’s credit union.

 I have paid off 50% of the original loan amount, and only have ~$7,000 left to pay.

At the current rate I am paying off the loan, I will pay off the loan completely in 3 years from now. I have a good job and a steady paycheck each month, and am 23 years old.

Would it be a good financial move for me to refinance with this lower interest rate loan? Any help would be appreciated.

What’s your advice for her?

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Related articles about helping readers at my favorite personal finance blogs:
Free Money Finance – Help a Reader – Paying off a House
Free Money Finance – Help a Reader – To Refinance My Home Or Not

First Time Visitor Start Page Now Ready!

My Personal Finance Journey Homepage

Recently, while reading an article by Bucksome Boomer about her experiences at the Savvy Blogging Summit Conference in Breckenridege, CO (I know what you’re thinking – what a sweet place to have a conference!), I came across a recommendation that she took away from the conference that was to make a “first timers,” or “start page” on your blog to make it more accessible for newcomers surfing the web.
I thought this was a great idea, and today, I put together a first pass try at the start page.
The page can be accessed at any time from the link at the top of the page. I have also copied the link below.
Click on the link and give it a try!

Is there anything else that should be included that I might have overlooked? Let me know by commenting below!

Your feedback helps!

Did you like this article? You can get the complete text of all the latest articles at My Personal Finance Journey in your email inbox each evening by clicking the link below and entering your email address. Your address will only be used for mailing you the articles, and each one will include a link so you can unsubscribe at any time.

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It’s a Hot Summer – Weekly Roundup – Week of July 19th, 2010

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Howdy, everyone! I would like to thank you for visiting My Personal Finance Journey, and being a part of it – whether you’re commenting or reading. Both are equally important! I appreciate your interest, and hope you keep coming back as we continue to grow.

This week was a big week for the blog! We joined the Yakezie Challenge to give us more incentive to improve the quality of the content and overall experience.

Going along with this, as mentioned several days ago, I created a short questionnaire (can be filled out at the link below) as a way for you all to give me feedback on how I can improve the site. It really helps me! So please take a moment and do that if you haven’t already!

My Personal Finance Journey 1 Minute Reader Feedback Questionnaire

Here are some articles that caught my eye this week/that I commented on, that I consider to be recommended reading:

  • Some Areas of the Country Producing More Millionaires Than Others at Freemoneyfinance.com
  • Do You Need All of These Insurance Policies? at Squirrelers.com
  • Stable Value Funds at MyMoneyBlog.com
My Personal Finance Journey was featured in the following carnivals and roundups:
Enjoy the weekend!

Did you like this article? You can get the complete text of all the latest articles at My Personal Finance Journey in your email inbox each evening by clicking the link below and entering your email address. Your address will only be used for mailing you the articles, and each one will include a link so you can unsubscribe at any time.

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Related weekly roundup posts at several of my favorite personal finance blogs:
FreeMoneyFinance – July 19th Weekly Roundup
Squirrelers.com – Weekly Review, Updates, and Favorites

A Credit Card Debt Saga – And How I Survived

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Today’s post comes to use from Kathryn, a dedicated My Personal Finance Journey reader and a valuable contributor to the commentary on a lot of posts during the past 6 months. Enjoy as she shares her story of how she got out of credit card debt.
A Credit Card Saga – And How I Survived
Background

The company I work for is sending me to England on a 6 month assignment. Because of this, I called the bank to ask them to place a note on my account that says that I am living in England. 
As part of this conversation, the banker informed me that I was pre-approved for a Wells Fargo credit card. While it would be nice to have a credit card while overseas, I had to respectfully decline this particular card on principle. The rate, following the introductary APR of 0% for 12 months, skyrockets to a variable 17.5%! Also, if you miss a payment, the variable APR jumps to 27.3%! Wow. That’s a ton of interest.
People often talk about sub-prime mortgages as a major reason for the current economic woes. Little has been discussed about credit cards, which appear to be equally as predatory. To see how this type of credit card could truly bite you, let’s use a situation from my college days:
The Saga Begins – Get Ready
When I was a senior in college, in my last semester, I had a job lined up and my parents informed me that they would no longer be paying for my living expenses. Without any money secured, I applied for a credit card to use as a stop gap until I started making real income. I would not advise anybody to do this, for the reasons that I will discuss below. 
I charged approximately $3000 in living expenses over a 6 month period, and paid the card minimum ($20) each month. The card interest rate was 0% for the first 6 months, and then it jumped to 11 APR%. This particular credit card was compounded monthly.
It is important to note that the rate that the credit card company gives you is not exactly the actual interest rate. A more adequate way of characterizing the actual rate for a stable balance over a year period is call the EAR, or effective annual rate.
Let’s take a moment to explain what EAR is to get everyone on the same page. 
  • You can convert your APR to an EAR by using the following formula: EAR=((1+APR/n)^n)-1. n represents the number of compounding periods in a year. 
  • Thus, a credit card with an 11% APR compounded monthly is actually earning interest of around 11.6% per year. 
  • The Wells Fargo credit card I mentioned above has a 17.5% interest rate, compounded daily. That means the effective annual rate is 19.1%. 
So, as you can see, a monthly compounding would be closer to the actual rate than a daily compounding. For the penalty rate of 27.3%, the effective annual rate with daily compounding would be 31.4%. Yikes!
Let’s say that in the first 6 months, I charge $500 per month to my credit card and pay the minimum off. This would mean that at the end of the 6 months (in the introductury period), I have a balance of $2880. Under the credit card I used, if I continued to pay the minimum, and didn’t charge anything else, my balance would continue to increase as follows (note that I am using EAR/12 as an estimate for the monthly interest):
  • Month 1: $2880 (1+(0.116/12)) – $20 = 2887.84
  • Month 2: 2887.84 (1+(0.116/12)) – $20 = 2895.76
  • Month 3: 2903.75
  • Month 4: 2911.82
  • Month 5: 2919.97
  • Month 6: 2928.19
Okay…so now, in 12 months, I have charged $3000, but the total amount I’ve committed to giving the credit card company is $3168.19. And this is assuming I have that much money to pay the credit card company after 12 months, otherwise the balance will continue to increase. Honestly, this credit card isn’t too bad because of monthly compounding and the relatively low APR.
However, let’s do the same scenario under the Wells Fargo credit card with the 17.5% rate and daily compounding. Let’s say I have the same starting balance of when the interest rate kicks in. What does the amount of money I have committed to the credit card company come out to after 6 months? $3375.09. Wow! That’s a $375 profit for the credit card company.
The problem that people get into with credit cards is that they rack up a large balance and then don’t have the means to quickly pay it off. Once the balance gets higher, the interest starts going higher. And then you gain interest on that interest. The other problem is that variable rates can change at any time. Just because your credit card has a 17.5% rate today doesn’t mean it won’t have a 27% rate when your check gets lost in the mail.
As another scenario, say I’m a student who has put up $3000 in credit card debt over several years. What if I have the means to pay off $200 to this credit card per month? Under a normal, no interest situation, it would take me 15 months to pay my credit card off. However, say I pay my $200/month, but at month 6, the check gets lost in the mail. How long would it take to pay off this credit card? 18 months. And I’ve paid over $500 in interest.
What if I only have the means to pay $100 to this credit card per month? No interest, 30 months to pay it off. Under the scenario above, it would take 47 months and almost $1700 in interest. That’s over 50% of what I charged originally!
My Debt Repayment Method and Some Lessons Learned to Pass On
So, there are a few lessons to be learned. 
  • First, if you have gotten yourself into trouble with credit cards, you need to pay the largest possible amount of money you can pay to that credit card every time. In the scenario above, an extra $100 per month decreased the interest by over $1000 and allowed payoff much quicker. That will reduce the interest that your interest is earning. 
  • Second, try to find credit cards that compound monthly. Apparently, these are few and far between these days. 
  • Third, convert your APR to an EAR to get a better feel for how compounding will affect your interest rate. Be careful with how you use credit cards and never spend more than you earn.
How about you all? Do you have any credit card debt stories to share? Have you ever made purchases on a credit card knowing that would were not going to pay it back any time soon?

Please share by commenting below!
Did you like this article? You can get the complete text of all the latest articles at My Personal Finance Journey in your email inbox each evening by clicking the link below and entering your email address. Your address will only be used for mailing you the articles, and each one will include a link so you can unsubscribe at any time. 
Related articles about credit card debt stories at several of my favorite personal finance blogs:

Help a Blogger: Reader Feedback Requested on My Personal Finance Journey

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In order to go along with the spirit of the Yakezie Challenge (which I recently joined), I am dedicated to improving the quality of this site so that it best serves you all, the readers.
In order to make sure I am doing this as best I can, I created a reader feedback questionnaire, which can be accessed at the link below. 
The questionnaire is less than 10 questions, and will only take 1 minute to fill out. If you have a free moment during the day, please stop by and submit your feedback. It will very much help me. Remember, the best feedback is not totally positive in nature, but honest opinions about how I need to improve.

The questionnaire will be placed, and can always be found going forward, on the Contact Me page link in the top menu. I’ve attached this link below as well.
Contact Me – My Personal Finance Journey

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My Personal Finance Journey Just Joined the Yakezie Challenge

The Yakezie challenge was started by personal finance blog, Financial Samurai, as a personal finance blog challenge revolving around the group goal of increasing the Alexa rank of every site in the group and promoting other members of the challenge.
Over time, the Yakezie Challenge has morphed into a personal finance blog group called “The Yakezie” that is dedicated to promoting high quality personal finance content on the Internet. To view the complete list of members, click on the link below.
List of Yakezie Personal Finance Blogs
I am joining the challenge because I have been blogging for some time now (a little over six months), feel I have some good articles to share, and want to meet other personal finance geeks out there that enjoy writing this stuff as much as I do.
How about you all? Does any one out there that runs a personal finance blog partcipate in this Challenge? What have your experiences been?

Did you like this article? You can get the complete text of all the latest articles at My Personal Finance Journey in your email inbox each evening by clicking the link below and entering your email address. Your address will only be used for mailing you the articles, and each one will include a link so you can unsubscribe at any time.

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My Personal Finance Journey’s First Blog Carnival

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Good Monday morning everyone! 
Great news to report today. A recent article on My Personal Finance Journey (shown at the link below) was just selected to be featured in this week’s edition of The Carnival of Personal Finance. The topic of the article is about the different types of taxes (and when you have to pay them) that result from selling items on eBay, either as a hobby or as a business.
To view the Carnival, click on the link below to go to NerdWallet.com, the blog who hosted the Carnival this week.

Carnival of Personal Finance #266 – NerdWallet.com

Also featured in this same blog Carnival are some very insightful posts from several of my favorite personal finance bloggers. A quick overview of some of the articles is listed below:

Do you run a personal finance blog and are interested in participating in the next Carnival of Personal Finance? Simply click the link below to submit your article!

Submit Your Article To Carnival of Personal Finance

Did you like this article? You can get the complete text of all the latest articles at My Personal Finance Journey in your email inbox each evening by clicking the link below and entering your email address. Your address will only be used for mailing you the articles, and each one will include a link so you can unsubscribe at any time.

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Importing Products From China For Resale

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Today’s guest post is provided by Corry Cummings, the owner of LearnToImportFromChina.com. His website offers information on how to get true wholesale products from China. To visit his website, simply click on the following link – learntoimportfromchina.com.

As you might have guessed by the name of his website, the topic of his post is learning importing wholesale products from China and selling them through various venues on the internet such as eBay®, Yahoo®, Amazon®, or Craigslist®.

I have to admit that I am/was very eager to have Corry do this guest post because this is one type of business that I know little-to-nothing about. Therefore, I am very interested to hear about anyone’s experiences with importing.

Let’s get started!

What Product Types to Import From China
Importing products from China to sell can be a cost-effective alternative to purchasing goods that were manufactured domestically. It is becoming increasingly popular for retailers in the US and Europe to buy wholesale items from China and then markup the prices and make a large profit. Virtually every item that you can think of is manufactured in China and available to foreign retailers to purchase. Retailers will want to do their research and consider their options before deciding which products to import from China.
Importing Clothing From China
It is very common for clothing retailers to import their items from China. Clothing manufactured in China is often less than half the price of clothing produced domestically. All types of clothing are manufactured in China. Chinese factories manufacture clothing in a wide variety of styles, sizes, and materials. Many factories produce quality clothing. However, you may want to consider hiring a third party company to research local manufacturers for you. Hiring a third party company who knows the local market is often a good idea to ensure you pick a quality manufacturer. Before placing an order, you will want to request product samples so you know exactly what you are purchasing. You will also want to request a detailed invoice with each order that gives information including types of clothing ordered, quantities and prices.
Importing Electronics From China
Electronics are some of the most popular items to import from China. Retailers can often purchase electronics in large quantities for low costs. The electronics are then sold for a marked up price, producing a large profit for retailers. All kinds of electronics are manufactured in China. The following electronics are routinely imported from China:
  • DVDs
  • DVD Players
  • MP3 Players
  • Televisions
  • CDs
  • Cell Phones
  • Computers
You will want to make sure that you choose a supplier that manufacturers quality products. Before placing an order, you will want to make sure you understand the return policy of the manufacturer in case you are sent deficient electronics. You will also want to inquire about the shipping policy of the manufacturer. Electronics are easily damaged during shipment, so you will want to make sure the products are packaged and shipped properly.
Importing Toys from China
Another popular item to import from China are toys. Toys are manufactured very cheaply in China and can be purchased by foreign retailers for minimal cost. Purchasing toys in bulk can reduce the cost for retailers even further. Choosing a quality toy manufacturer is essential. There have been issues in the past regarding the quality of toys imported from China. You may want to consider hiring an in-country inspection company to evaluate the quality of toys before placing an order.
Importing products from China can be an excellent way for retailers to save money. Every product imaginable from clothing to electronics is manufactured on a daily basis in China. You will want to do your research and explore your options before deciding what products to import from China.

How To Get Started

The first thing you have to do when importing products from China is find wholesale companies in China that are reliable and trustworthy. You can do this by using the list of companies provided on the Federation of International Trade Association’s website. All of these companies meet the standards and regulations of the FITA and are a great place to start.

Once you find a few companies you feel comfortable with, the next step is to contact these companies and request sample products to assure you are getting what you think you’re getting. This may cost some money, for things such as shipping and handling, but it is something you’re really going to want to do before you begin buying large quantities of any product.

Thanks for reading,

Corry

So, what do you all think? Do you think that importing products to resell from China would be something that you are interested in? Does any one have any experience doing this that they can share?


Excited to hear everyone’s take on this, 

My Personal Finance Journey
Learning for Life

To become a guest-poster on My Money Blog, please send me an email at the address in the Contact Me page.

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Celebrating 6 Months of Blogging – Top 10 Reader Rated Posts

Back in January of this year, I started this blog, with the aim of sharing what I have learned and had yet to learn about personal finance.
Now, 6 months have already flown by! In this time, we have had great success, largely due to all of the readers who have inspired me to keep going, knowing that the content on this blog makes a difference in their life.
For me, the most significant milestones we have seen are listed below.
  • ~40 email subscribers to my RSS Feedburner feed, making you all able to read posts directly from your email.
  • A total of >8200 total visitors to the site, from all around the world.
  • 4 regular guest posters/writers.
  • 181 financial-related post categories

  • 158 total posts
Of those 158 posts in the last 6 months, listed below are quick summaries of the top 10 most popular/highest rated posts by you, the readers! Be sure to take a look at any of the posts you might have missed!


Compares how grocery prices differ between Aldi, Wal-Mart, and other national chains. It just may influence you to stop by Aldi next time you are out looking for groceries!

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

Compares how my housing, grocery, and utilities expenses compare between the different places I have lived in the past year.

8. Does Phil Town’s Rule Number 1 – 15 min a Week Stock Trading System Work?

Find the truth about if Phil Town’s foolproof stock trading system works. A quick review of my experience having tried it for 6 months.

7. Creating and Implementing Your Investment Strategy – Part 3 – Determine Your Specific Mix of Fixed Income Investments

Describes step 3 of constructing your personalized investment strategy by walking you through the steps in choosing which specific bond (fixed income) securities you should buy.

6. My Current Asset Allocation and Net Worth Growth – June 2010

The June roll-up of my net worth growth and goals for the month.

5. Index ETFs vs. Index Mutual Funds – Which Are Better?

Compares the +’s and -‘s of ETF’s and index mutual funds. Shows a comparison of fees and performance.

4. How to Get a Job After College – Part 1 – Creating a Resume and Cover Letter

Describes the crucial first step towards landing a job after college – creating a resume. Involves a description of real-world advice based on my experiences in the past 3 years.

3. Favorite Cash-Back Credit Cards

Describes my two favorite cash-back credit cards: one that I use for all of my gas purchases and another one for all other purchases.

2. Save Yourself 50% On Your Monthly Bills With a 5 Minute Phone Call

Learn how you can cut your monthly bills by simply asking for a discount or a lower rate.

1. What Percentage of My Donation Goes to Funding Operating Expenses of the Charitable Organization?

Take a journey with me as I investigate how much of your contribution money goes to non-charitable (salaries, admin, etc) expenses in non-profit organizations.

How about you all? Which posts during the last 6 months have been your favorite? What types of topics/posts would you like to see in the future?

Do you have any ideas on how I can make this blog better?

My Personal Finance Journey
Learning for Life

To receive updates on topics such as this one as soon as they are published, click on the link below to subscribe to My Personal Finance Journey:

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Top 10 Highest Paid Supermodels in 2010

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Tonight’s posting comes to us as My Money Blog’s 3rd guest post by Alban. To read his previous guest posts, click on either of the two links shown below.

Top 10 Highest Paid Supermodels in 2010

Most if not all have graced the cover of a fashion magazine, most do tremendous work for charity and most can be seen strutting down a catwalk wearing nothing more than some strategically placed glitter; but now men who can’t have them and women who can’t be them have even more reason to be jealous because we’ve compiled the Top 10 Highest Paid Supermodels of 2010
1. Gisele Bundchen –
Born in the town of Tres de Maio (which translates to 3 of 5) this Brazilian bombshell is the highest paid supermodel of 2010. Earning a loco $25 million (20m Euro) this year and estimated to have a $70 million fortune it’s the fact that she could sell out a stadium quicker than the Brazilian soccer team that has her in the number 1 spot again. Her latest endeavour sees her teaming up with Apple to promote their new Macintosh line…which gets me excited to say “I can have Gisele Bundchen on my Dashboard anytime I want!”
2. Heidi Klum –
Gutentaaaaaag Heidi! Dis German Frauline hash bin making ush say “Wunderbar” since 1992. Furst appearing in da Sports Illustrated Swimsuit she den became vun of Victoria’s secret angels and now lives with a Seal and 4 seal cubs. Last year Heidi ish making a whopping $16 million (13M Euro – shizer! That’s a lot of Deutschmarks), which equals a lot of frankfurters yuh. Heidi vee vud never say Auf Wiedersehen to you.
3. Kate Moss –
Major respect must be given to Kate for staying alive this year to make it onto this list. Known for her wild lifestyle and boyfriends to match, Kate could have probably been in the top spot if only drugs weren’t so addictive. Despite losing several major contracts with sponsors when a photo of her snorting “a mysterious white powder” emerged, Kate still managed to make an enviable $8.5 million (6.5m Euro) in 2010.
4. Adriana Lima –
They sure know how to make very beautiful women in Brazil. We’re sure even the man upstairs doesn’t mind when she comes out for Victoria’s Secret wearing high heels and some oversized wings made of feathers and sequins. All that praying earned her a tidy $8 million (6m Euro) in 2010 and I might take this opportunity to thank the great bearded one in the sky not just for the ladies on this list but for all budding supermodels everywhere. Amen.
5. Doutzen Kroes (pronounced Dow-tzen Crew-s) –
I’d never heard of her either but this gorgeous Dutch clog made $6 million (5m Euro) in 2010 to come in 5th in this year’s list. Showing she has brains as well as beauty she sent the paparazzi photos of herself to get noticed and boy did they take notice. Her wax model in Amsterdam’s Madame Tussaud’s requires daily cleaning from all the cookie crumbs and drool that is left behind from visitors and it is reported Van Gogh cut off his ear off after she called their relationship quits (which is understandable).
6. Alessandra Ambrosio –
Whattaya know another Brazilian makes the list. As my personal favourite Alessandra stays in such good shape with a daily routine of what she calls the “Brazilian Butt Lift”. Ladies pay attention. It is a mixture of aerobics, samba and the Brazilian martial art Capoeira. It is this formula that had her back on the catwalk 3 months after giving birth. Though it was not all peaches and cream for Ambrosio; at 11 she had surgery to have her ears pinned back, which has left more than physical scars. She now cries into the $6 million (4.9m Euro) she made in 2010.
7. Natalia Vodianova –
This Russian born Lolita came from a less than lavish lifestyle and currently uses her global status to help construct playgrounds for children in Russia. While being hot enough, Vodianova wasn’t good enough to make the professional Tennis Tour (see Top 5 Female Russian Tennis Players) and turned to modeling. Her father walked out on the family when Natalia was a toddler and surprisingly came back into her life once she became famous. Natalia now attributes her model figure to a diet of vodka and caviar, which her annual earnings of $5.5 million (4.4M Euro) allows for.
8. Daria Werbowy –
Polish born but residing in Canada, Daria has had a stellar career but is already contemplating life after modelling. Werbowy is choosing rather to sail around the world, despite the lure of a star on Canada’s Walk of Fame along the likes of “The Great One” Wayne Gretsky and Celine Dion (how could you say no) and fulfil her lifelong dream. While Linda Evangelista would only make $3.65 million for waking up every day ($10,000 x 365) Daria earned $12,329 a day raking in $4.5 million (3.6M Euro). Enough to make you think twice about chucking a sicky.
9. Miranda Kerr –
Australia’s own dimpled girl next door is so nice she gives part of her hard earned $3 million (2.2m Euro) to Australian bush fire appeals (probably in case she gets so hot that she starts one!) She’s posed naked to attract attention for Koala’s and claims to be a practicing Buddhist. Already replacing Gisele for a major lingerie label contract, I won’t say a bad word about her and we won’t be surprised if Miranda is in the top half of this list very soon.
10. Carolyn Murphy –
Making a healthy $3 million (2.3m Euro) and being the only American on the list, at 36, Carolyn’s been in the modelling game for a long time. Carolyn is predominantly known for her work with cosmetic company Estee Lauder due to her ageless beauty and less for her marriage to Eddie, which ended after he made Holy Man (smart move on her behalf we think).
And that rounds off this year’s list. So what can we make of this bevy of beauties? For one Brazil is looking like a great place to travel and two, Victoria’s “secret” is where the hell she is finding these women! And remember, you read it on the Internet…so it must be true.
Alban writes about personal finance, he also helps people to compare home loans. Please click on his website for more information.

Thanks for reading and keep on learning!

Jacob

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