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Unexpected money

March 3rd, 2011 at 04:23 pm

I found a bunch of "unexpected" money last week. First, I had forgotten all about the cash back on our credit cards. Over 20 months I accumulated $281 and my wife accumulated $221 in cash back, I cashed out $450. Our cash back is 2% on groceries and gas and 1% on everything else. That's a lot of stuff we put on our credit cards.

Then I got a check for last year's overpaid escrow of $370, and lastly my SEV value of my house was adjusted down 17% (ok, so I don't know if that's a good thing), meaning my property taxes will be 17% lower, or about $700 lower. Now if only I can get my tax refund.

How I (mostly) missed the chance of a lifetime

February 27th, 2011 at 02:54 am

It was March 2009, and I looked at the markets and the S&P500 was at 700. It was insanity, the economy had shrunk by 50% in less than 6 months, at least according to the markets and I convinced myself that it couldn't be right. I did a lot of research and I bought big (into 3 stocks, 60% of my liquid assets), for the first time in my life. Then two months later, the S&P was at 950. The market rose by 35% in two months! I thought I had hit the jackpot, I got nervous, I sold everything and cashed out. Today, the S&P is at 1300.

I bought SOL at 2.86 and sold at 4.04 (+42%), today it's at 11.54 (+303%)

I bought TXT at 3.87 and sold at 7.07 (+83%), today it's at 27.15 (+603%)

I bought PMI at 0.67 and sold at 1.39 (+107%), today it's at 3.03 (+352%)

On a smaller scale

I bought JASO at 3.07 and I still own it at 7.35

I bought AAPL at 164.25 and I still own it at 348.16

I bought C at 2.70 and sold at 4.10 (+52%), today it's at 4.70 (+72%)

Like a coward, I sat out the second half of the rally (May 2009 - August 2010), and only started buying "conservative" large caps last September. I estimate I left $50K out there by selling early. I don't know if there is a moral to the story, or whether I did the principled thing, but there sure is some regret.

Prosper.com - A final evaluation

February 26th, 2011 at 06:12 pm

3 years ago, just before to economy took a huge $#@!, I decided to give Prosper "a try". I had enough emergency funds to allocate $2000 to the experiment. I had high hopes because I rationalized that borrowers borrowing from other people as opposed to banks would be more motivated to pay back the money. My allocation was 15% AA, 70% A, 20% B and 5% C credit ratings. In my view a very "safe" investment. My own credit rating is "A" and I tended to put myself "in their shoes" as a judgement of their ability to pay, a very naive approach. What I learned was this:

Trust people that admit their mistakes and put forth a rational plan to remedy them.

Do not trust people that allege they make X amount of money and only have Y amount of expenses and therefore have an incredible Z amount of monthly surplus to pay the loan. In the end it doesn't make sense

It really sucks when the economy takes a big ol' $^@!.

Collecting agencies are useless. They got me back exactly $0 of the charged-off balance.

People lie. A lot.

Women pay back loans more than couples and men (sample size = 40)


So, here are the results of the "Prosper Experiment"
My nominal yield: 12.9%
My actual yield: -4.2%
Charged-off notes: 25%
Fasted Delinquency: 4 mo
Money Invested:$1971.82
Payments Received: $1888.44

No more car payments

February 25th, 2011 at 03:32 pm

I'm making my last car payment this week. I can't believe I've had it for 3 years now. I will have an extra $330 to save each month. In the 3 years I haven't had to make any repairs on the car, I put 26,000 miles on it, got 7 oil changes (4 of them DIY; I don't do oil changes myself in the winter), and it has been rated one of the top

Text is greenest cars and Link is http://www.greenercars.org/highlights_greenest.htm
greenest cars as well.

Mortgage Refinanced for the 2nd time

February 24th, 2011 at 07:12 pm

I've only owned the house for 4.5 years now, and I've already refi-ed twice. The house price has dropped by 17% so far.

My initial mortgage was 30 yr fixed rate @7.00%.

My last mortgage was 15 yr fixed rate @5.50%.

My current mortgage is 15 yr fixed rate @4.25%.

Total cost of financing this time around was about $1200. My payments will drop by $213/mo while extending the mortgage by 24 payments. Good deal or bad deal, what do you think?

I hate citicards

August 19th, 2010 at 03:02 pm

Today I realized that Citi canceled my VISA and opened a MasterCard instead. I was a little annoyed by that to say the least, but after some searching online I realized that it's partly my fault for not reading all my Citi mail thoroughly. Apparently they sent me an opt-out notice a month ago.

I hate opt-out things. What's the point of opt-out anyway except for to scam you into doing something you don't want to do. Why can't banks just use opt-in instead.

Tax Refund much lower; sign of a good year.

February 24th, 2010 at 11:25 pm

2009 tax return was $2000 less than last year, and $4000 less than two years ago.

This is the first year I've taken the standard deduction because my interest and tax payments on my house were not high enough to warrant itemizing, all positive results of refinancing my mortgage at the right time.

My messing around in the stock market, made me enough money that I owed over $2,000 in unpaid taxes on profits.

The result is that I got almost no refund this year, but I'm not complaining.

A Head Start

February 23rd, 2010 at 11:11 pm

Some may call it being blessed, I just call it lucky, or maybe a good upbringing.

It really helps when you start out without any debt. No CC debt, no student loans, no car loans. I started out with none of those. So here my advice to those who are starting out. Work, work, work. Don't spend more than you earn. Especially those who go through college, it is truly a great feeling being debt free coming out of college. And I recommend taking each summer off and working for 3 out of the 4 months. I'm sure others will disagree with me, and say academics come first when in college, but I found it a great change of pace to do something different for 3 months.

Ok, these days that's easier said than done with the current economic situation, and I don't envy those going through college right now.

Oh, also it helps to go to in-state public colleges, because it's impossible to pay for out of state or private colleges by working part time.

Back, and winging it.

February 23rd, 2010 at 04:30 pm

I sometimes like to convince myself that I have many years left to save for my retirement. I probably do -- 35 years or so at least. So, that's the excuse I give myself to just wing it when it comes to money; No penny pinching, no fiscal discipline, no keeping track of every single dollar I spent.

Yet, I have only 2 debts:
1) Mortgage (15 yr fixed rate at 4.5%)
2) Auto Loan (3 yr fixed rate at 5.0%)

I really don't consider my mortgage a real debt since I have about $40K equity in my home. But realistically I pay $400/mo in interest and $400/mo in taxes and insurance, which is really comparable to paying rent. So really I only have my car loan, which I hope to pay off in 12 months.

I do have a little bit of savings. I am still a bit skittish when it comes to stocks, so I never hold stocks very long, and so far, knock on wood, I haven't sold any stock at a loss, and only my mutual funds have lost money since I bought it but they're in my roth, so I won't sell those for a long time.
Cash: 51.7%
Stocks: 36.3%
Mutual Funds: 7.9%
CDs: 4.1%

I LOVE CCs

June 3rd, 2008 at 06:50 pm

Probably one of the best things I've ever done is to not get into CC debt. While a freshman in college, I regrettably signed up for some credit cards, but luckily I never used them. I was told that I needed to use them to build credit history, and maybe I should have. But I decided it was better to live on cash and an ATM card. Once it became fashionable to use "Electronic Automatic Payments" I started using my CC for just that, while also linking my checking to my CC account: pay my bills using CC, and my CC using my checking.

And then I discovered all the cool CCs with rewards and incentives and what not. That's when I began charging EVERYTHING on my CC. This could have been a disaster, and for a while I was hovering on the equality between revolving debt and checking account balance. (It didn't help either that we supported the both of us on just $1450/mo for a year). I do not regret the fact that I started using CCs for every purchase, and it taught me how to use CCs responsible by paying off the balance in full EVERY TIME. Besides, the "rewards" are a nice bonus, and I love how there's no fuss whenever I need to get a loan or to refinance one.

My to do list:
Spend less than you make - CHECK
Have no Credit Card debt - CHECK
Have a good Credit Score - CHECK
Save for retirement - 0 saved
Pay of car - 27 months to go
Pay of home - 178 months to go
Have a savings plan - Working on it...

You can pinch pennies ... or ...

May 13th, 2008 at 02:01 pm

Drive a more fuel efficient car. And it's better for the environment too! Let me give a personal example. I went from driving a 1996 Dodge Avenger to a 2008 Toyota Yaris.

1996 Avenger: 21 mpg (rated @ 24 mpg, but it's old)
2008 Toyota Yaris: 32 mpg

With gas at $3.50/gallon and driving 12K miles a year it would cost me:

1996 Avenger: $1750
2008 Yaris: $1312 (save $438/yr)

Let me give some comparisons:

2008 Toyota Prius: $903
2008 Ford Escape Hybrid SUV: $1312
2008 Dodge Grand Caravan: $2100
2008 Ford Taurus: $2100

If gas were at $4.00 then you would save relative to a Grand Caravan/Ford Taurus:

Prius: $1368/yr
Civic: $1230/yr
Escape Hybrid: $900/yr

**Here I am just giving fuel savings for a fixed price and driving behavior. This is not a "cost to drive" value. Cost to drive also depends on capital cost (vehicle purchase price), maintenance costs, depreciation and car financing. Here are the cost to drive numbers for my:

Avenger: $0.25 / mile (assuming $2.50 gas)
Avenger: $0.30 / mile (assuming $3.50 gas) Yaris (so far): $0.78 / mile (assuming $3.50 gas)
Yaris (12 yr): $0.26 / mile (assuming $3.50 gas)
Yaris (15 yr): $0.23 / mile (assuming $3.50 gas)

2 Month Went By Fast

May 12th, 2008 at 06:44 pm

So this is what has happened since the last entry:

1. Refinance My Mortgage from 6.75% 30yr fixed to 5.5% 15yr fixed. Cost me $700 in fees. But will save me close to $80,000 in the long run. My payment went up $150, but I can afford that.

2. Bought a new car with almost $4000 down. As of today I have $10,400 on the loan with a monthly payment of a little over $300.

3. Got my new car rear-ended. $1800 in damage. Got my car fixed, looks brand new again. Cost me a whole lot of time and $50.

4. Bought a bike for $325. Will save me about $1 everytime I ride my bike to work. It will take me a few trips to earn it back.

February numbers

March 4th, 2008 at 02:52 pm

February was a weird month. Here are some unusual numbers:

Car Down Payment: -$4,700
US tax refund: $3,700
Green card renewal: -$370
Net worth*: $39,979 (+$2,961)

Most our losses came from car sales tax and immediate depreciation (almost $1600). Numbers have been updated on the left.

$15,500 Lighter

February 28th, 2008 at 02:57 pm

I got a brand new Toyota Yaris Sedan sitting in the drive way. The money scale says I'm $15,500 lighter. I put $4500 down and got an $11,000 loan for 3 years at 5.55%. I'm looking to pay it off in 12 months with payments of about $1000 a month. On top of our refinance mortgage at $1700 a month, we'll need to tighten our belt a little bit. The other big hit is the extra $80/mo for insurance. Our take home pay is about $4600, so we still have $1800 for regular expenses, but it will be interesting to see how we'll manage.

BTW the Yaris is a nice little car. 35 mpg, so we'll save some on gas.

What is a Toyota Yaris Sedan

February 26th, 2008 at 02:42 pm

A: The car I am going to buy.

A combination of JD-Power ratings, test drives and price have led me to decide on the Yaris Sedan. I finally decided on it because it's built here in the U.S. apparently. I have been soliciting offers from about 10 dealers in the area. We're hoping on getting a deal in the low $15K, and we're planning to put about $5K down. We are going for a "cheaper" model, but with all the "basic options" like power locks, windows, cruise control etc. BTW, I despise car dealers...

Recession, say what?

February 22nd, 2008 at 03:45 pm

So, I have heard people say that there's already a recession. But mind you, a recession actually has a technical definition: 2 consecutive quarters with negative GDP growth. Now, I concede, macroeconomics is a fairly difficult to understand subject, and I'm no expert at it. But I do think it's obvious, that, for some people, the economy has a worse impact than for others, and for that reason they're quick to use the 'R' word.

I just got my Tax refund, so I must say that I feel I have not been negatively affected by the economy. In fact, it allowed me to refi my mortgage at a great rate, and I feel like I'm better off that way. Now, don't get me started on the lower yield rates, but I don't think that has that much of an impact on me, you know maybe $5 or $10 a month, but nothing big.

But who needs money, when you have a wonderful wife?