Skip to main content

Monthly Archives: March 2008

Older posts
Newer posts

10 Ideas that are Changing the World

Posted on by

Happy Slow Sunday!

I just wanted to share an interesting article from Time magazine about the Ten Ideas that are Changing the World.

Many of of the ideas are interesting, but the ones that are most pertinent to DINKs are:

The New Austerity – The article claims that folks will start trimming the fat and living within their means. While James & I would like to advocate for this, we don’t know if we’ve seen the same trend through our blogging. Our experience is that our postings on credit cards create much more discussion than savings or stock market investments. This suggests more people are familiar with borrowing using credit cards than investing in the stock market or saving money.

Common Wealth – This article is all about how will will have to learn to live together in a global economy.

Check out the full list here:
Common Wealth
The End of Customer Service
The Post-Movie-Star Era
Reverse Radicalism
Kitchen Chemistry
Geoengineering
Synthetic Authenticity
The New Austerity
Mandatory Health
Re-Judaizing Jesus

Enjoy!

Miel

Fighting Wamu

Posted on by

Lesson of the day: Don’t mess with Miel.

People who know me would likely say that I can deal with just about anything without getting too upset about things. After all, I do live in Afghanistan and deal with frequent travel and other stressful situations.

Getting screwed by WaMu is where I draw the line.

As regular readers know, our current finance goal is paying off our second mortgage with WaMu. This has to do with putting money on our highest debt, but it is also because we are tired of dealing with WaMu’s crap.

The main issue that we are dealing with now is that WaMu has repeatedly applied the funds sent in for our second mortgage to our first mortgage instead. In each case the canceled check clearly shows that the payment was intended for the second mortgage. To learn about other reasons why WaMu sucks, check out past postings.

The first time this happened was back in July, and I only called about a dozen times and in the end they still didn’t reverse the payment and apply it to the correct account. I’ve been disputing two payments where the same happened back in December, and it happened again this week.

I did two things about this. First, I filed a complaint with the Better Business Bureau, as it is not appropriate for them to apply the payment to the wrong mortgage. Second, I gave them another friendly call and now have their word that they will apply all four payments retro to the date the payment was initially intended to be made.

They tried to pull the whole, “I’m sorry, but one leg can’t actually talk to the other leg” game. I was having nothing to do with that story. I nicely made it clear that I wasn’t dealing with their games and managed to get someone who actually made an effort.

Now I’m happy to say that it looks like we’ll have our second mortgage with WaMu taken care of sooner that we had thought.

With the four payments, totaling $2,750, and the $9,000 payment we are making from the interest free credit card that we just got, we will only have $3,177 to pay off before we don’t have to deal with the darn thing again. Sure we’ll still have to pay off the $9k on the credit card, but I’m so much happier doing that than giving WaMu another dime in interest.

Cheers,

Miel

Keeping it Together Long Distance

Posted on by

Hi All,

I’ve got to dash off to the university today, so there isn’t a whole lot of time to take care of blogging. But, I did want to share a couple of thoughts about how Miel and I are holding down our marriage despite being on two different continents.

First, it’s all about skype. If you don’t know about skype – you’ve got to check it out. It’s a form of internet telephony which allows you place long distance calls for free to other skype users. So, we effectively have a means of costless communication with each other. We can talk for as long as we want without paying a penny.

Second, we have twice weekly scheduled calls. We used to meet on Saturdays for finance and household chats, but now we have calls scheduled on both Wednesdays and Saturdays. We often end up taking for two or three hours and discuss all sorts of stuff, finance, taxes, our daily lives, our families, how we’re doing emotionally, etc. We’ve both got webcams so its almost like sitting in the same room.

Thanks,

James

Economic Turbulence – DINKs Do Nothing

Posted on by

Hi All,

There has been a lot of chatter in blogsphere and media about how to protect yourself against the current choppy economy. I’ve contributed to this as well, but in the interests of transparency, I wanted to tell our readers what we’re doing to adjust to this recession.

Nothing.

That’s right, we are doing nothing to adjust our personal finance because of the recession. We aren’t buying bonds, looking into beaten down stocks or buying shares on international markets.

What we are doing is sticking to our plan. Paying off our second mortgage and socking as much as possible into our retirement accounts. Why? For me, its really a matter of faith. I believe that the American economy will recover in due course and that our investments are sound. Also, more realistically we don’t have a lot of excess cash, and having fewer resources means its easier to stay focused.

Best,

James

Defensive Investing for the Recession

Posted on by

Hi All,

If you’ve been following the news recently, you probably know that some people think America is heading into a recession. While its hard to predict the economic future, the outlook certainly looks gloomy.

So, if you want to take a defensive stance with your personal finance, you might consider investing in bonds. Here are two options.

1) Federal Savings Bonds: Savings bonds are stodgy – the kind of thing your grandpa would give you as a kid. However in the current environment savings bonds and specifically series I bonds, have some attractive aspects. Among these are safety and inflation protection. In terms of safety, the principle and interest payments of I bonds are guaranteed by the full faith and credit of the government, making them some of the safest securities on earth. Second, the I bond is linked to the consumer price index, so buying them partially covers you against inflation.
You can get I bonds at any bank or from treasurydirect.gov.

2) Municipal Bonds: Municipal bonds are securities issued by local governments (clicky). In today’s environment, there are at least three reasons to consider this asset class. First, the Fed is cutting interest rates which usually increases bond prices. Second, some municipal bonds are free from federal taxes. Since the presidential election isn’t settled, nobody really knows what future tax rates will be. Third, municipal bonds are one of the safer asset classes. In an climate when stocks are perceived as risky – like today – bonds prices may go up. For more info on Muni’s click here.

We own about $500 worth of the Series I bonds, but don’t have municipal bonds.

Best,

James

Thank Goodness

Posted on by

Hi All,

I just wanted to take a moment to share a couple of personal thoughts with our readers.

First, I was able to transfer over $702 dollars this month from our schwab brokerage accounts. The source of this money is dividends paid from our investments in common stocks. It feels wonderful to have this cash coming in. Especially because my checking account is down to $20 bucks and we owe property taxes on our place this month.

Second, I’m tremendously gratified that my wife Miel and I can work together on this blog. As you know, she’s helping our nation’s efforts in Afghanistan and lives in Kabul. The fact that we can both work together on this webpage gives us an opportunity to be business partners and coauthors in a way that helps bridge the distance between Kabul and Washington DC. There is no way I’d be as happy or as rich if I didn’t marry Miel.

Just my two cents.

Best,

James

More Thoughts On LendingClub

Posted on by

Hi All,

Just wanted to update our readers about our thoughts on LendingClub. For those of you who don’t know about LendingClub, its a person to person on-line money lending service like prosper.com or zopa.com. We got a promotional offer a while back, and since we like discussing these sorts of things, today’s posting is on LendingClub’s screening procedures for loan applicants.

According to the email exchange I struck up with Rob Garcia, LendingClub’s web promoter, their service actually undergoes a rigorous screening process before listing a borrowers loan request.

Their screening process has the following elements:

1) Staff verify the basic facts of all applications, including addresses, phone numbers, employment, etc.
2) Loans with high credit scores (e.g. FICO of 700 or higher) but a short credit history get extra scrutiny. LendingClub defines a short credit history as six months or less.
3) Borrowers with FICO scores less than 640 are not permitted to list requests
4) Individuals with current delinquencies are screened out.

This processes results in a rejection rate of about 1 out of every 9 or 10 loans.

LendingClub also has a fairly aggressive follow up and collection processes. About 80% of loans on their service get funded. Provided that a funded loan is late, LendingClub follows up with an telephone call. Its been their experience that most of the time late payments are due to borrower forgetfulness or other temporary issues rather than malfeasance. For borrowers who are non-responsive LendingClub has an attorney on staff and works with a collection agency.

Why does all this matter for you? Well, if you’re thinking about investing your money using a peer to peer service, its important to know what will happen if your borrowers go belly up. Believe us, this can happen. We had 7 of our loans default when we used prosper.com. So, if you want to get into on-line lending the integrity of your service’s business model is therefore an important consideration.

Best,

James

DINK’s Taxes

Posted on by


It’s about that time to be dealing with the old tax man. James & I set aside time on Saturday to discuss the ins and outs of our tax situation this year.

Last year was our first year filing jointly, and we were amazed to see our first round of taxes to tally out at a whopping seventy pages! Most couples may not start with such complicated finances, but in our case we both had different financial issues that added to the general complexities.

The thing about taxes are that they change as your life does. For us we are still wondering how long it will take for two relatively consistent years in a row. I’m thinking it will likely be some time in the future, if ever.

While last year it was challenging, this year we are trying to sort out how my international work will affect our taxes. We still have many questions unanswered, but it seems that we may have to file for an extension until the end of September so that I can file based on being overseas for a year. This means that we’ll have to wait for our return, but it will be well worth it.

This will also affect our taxes in 2009, as my contract will have me work two 12 month periods that don’t align with the calendar year. Luckily the tax system is smart enough to recognize that most international contracts are signed on an annual basis.

The outcome is that the first $85k is not taxable while I’m working abroad. This obviously isn’t an insignificant amount of money, so it is worth our while to make sure that we are filling appropriately. The next step will be looking into changing my deductions so the money isn’t taken out in the first place.

Being that we aren’t in the same place, James had to do the physical aspect of putting together all of the documents that we needed to send to the accountant. We did brainstorm together to see if we were keeping everything in mind. In addition to this we googled to make sure we weren’t missing any possible deductions.

After putting this altogether we wrote a note to our tax accountant and sent it off in the mail to her. In past year’s we’ve practiced with a mock 1040 so we could double check the results, but this year the complexities were beyond that.

Tips for couples approaching joint taxes (most are the same for individuals as well):

  • Set aside some time to discuss; such tasks are easier if you can prepare yourself for them.
  • Taxes are a whole lot easier if you have everything you need in front of you, so do yourself a favor and put any tax related items in one easy to find place.
  • Put everything together in one package.
  • Double check to make sure you aren’t missing any deductions; a google search is helpful.
  • It can be a good idea to do a mock 1040 so you can cross check with your accountant.
  • Direct deposit is recommended to put money in your pocket faster and to save your tax paying money.
  • If you taxes are simple, keep in mind that turbo tax is free if you go to the site through the IRS website. This will save you thirty bucks or so. I’ve found this to work well in the case of less complexities.
  • If you file electronically pay attention to credits for buying a house or things like that, in our case DC couldn’t do this through the electronic system and it took me months to get my $2,500 tax credit back when I was a first time home buyer.

Readers: If you have other examples of things you find helpful to keep in mind we’d love to hear from you!

Good luck with your taxes!

Miel

Bear Stears Down the Tubes

Posted on by

Hello All,

Just saw this one the news wire from Yahoo. Evidently JP Morgan is buying the once mighty Bear Sterns for 2 dollars a share. That’s right, folks – 2 bucks a share. For those of you who don’t follow stocks, that means that Bear Sterns is worthless. The total purchase price that JP Morgan is offering is approximately $236 million, which is essentially paying for the staff, the office equipment and buildings. There was no provision in the offering price for cash flow, because Bear Sterns doesn’t have any. That’s right, BC is effectively bankrupt, kaput, out of business.

It’s being called the first major casualty of the recession.

All I can says is “wow”.

Check out the story here.

Best,

James

Complex Budgeting

Posted on by

Living as an expat has certainly added to the complexity of my budgeting exercises. There are many financial perks to living in a dangerous post such as Afghanistan, but there are also a number of fluctuations that I continually have to manage.

This includes:

  • No danger pay whenever I’m out of Afghanistan, including while working in Southeast Asia;
  • Per diem that is post tax while on business;
  • Advances and reimbursements for business expenses;
  • Fluctuating R&R expenses;
  • No danger pay or post differential when I’m in the states;
  • Fluctuation of taxes as allowances ebb and flow.

This means that I have to be careful with automated finances, as the incoming pay will fluctuate often as my travel bumps up in the near future.

To make sure that I was keeping this delicate balance I recently spent some time updating my budget. James’ budget is relatively fixed, so I’m just concentrating on mine for the moment.

Here are the figures that show the variations that should be expected. Note that the taxes had to be done as a percentage of what is currently being deducted, and may have further fluctuations.


Here is what the pie chart of my finances looks like:

Looking at the allocation of my expenses you can see that I’m spending less money than ever before, with only six percent of my finances going to discretionary expenses. Having no place to spend my money helps this considerable.

If you add it up I’ve also got 21% going towards reduction of debt and another 47% going towards retirement funds and investments. Note that this includes investment of paying off our second mortgage.

Other findings include discovering that although I won’t be paid danger pay while I’m leading tours in Southeast Asia, the added post tax per diem will actually put more in my pocket in the end. This is a bit of a relief, as I wasn’t certain how this added travel would impact my budget. I will of course find more things to spend my money on in Vietnam than Kabul, but I’m willing to endure such hardships. ;-)

All in all it looks like we’ve got things on track when it comes to budgeting. As you can tell from the detail on the budget image, there is a pretty large fluctuation in the final excess cash. To adjust for this I will not be paying James or the R&R fund while I’m in the states, and then invest the additional excess funds for when I’m in Kabul or leading trips.

I hope this helps people get a picture of what our budgeting looks like. I know the exercise has been helpful for us.

Cheers,

Miel

Older posts
Newer posts

Boost Your Brand – Advertise with Us!

Advertise With Us

You cannot copy content of this page