Todays Money Saving Tip is:
Buy generic instead of name brand. Generic products like groceries, prescription medication, etc. are often of the same quality as name brand products. More importantly, generic products are usually significantly cheaper than name brand.
Best,
James
Sometimes we don’t appreciate what we have until we explore our options. This would certainly be the case with my recent experiences with PNC Bank.
I initially came into the world of online banking with Washington Mutual. While regularly readers will know that we’ve faced a myriad of issues with WaMu’s Home Loans, I had a relatively excellent experience when looking strictly at online banking.
I was stubborn and kept my WaMu account for my first couple of years in DC, holding on to a piece of the Pacific Northwest. I finally converted after looking at all the options in DC very carefully: Chevy Chase, Bank of America, Riggs. I ended up going with Riggs since James was already on their accounts and the whole point was to simplify. I switched over and nearly fell over with how completely inept their online banking was. I couldn’t hack it for more than a couple of months and ended up switching everything back to WaMu again. The lesser of evils at the time.
When ING came out with their Orange Electric Checking I jumped at the opportunity and love nearly everything about their online banking. Oh let me count the ways…
Anyway, Riggs was converted a couple of years ago to PNC. Just as I was moving to Afghanistan I went in to close an account under my old name, one of the last hold outs, and got lured in. They had several account perks because of my employer, including no international transaction fees. I asked about the online banking, telling them that I hate hated the Riggs platform, and they had assured me of how excellent PNC’s was. Considering that this would be a gain of 1% international transaction fee on all of my overseas spending, and that James still keeps his accounts there, I thought it would be worth having an account there. I also figured that giving James an account with a local branch might make it easier for him to help with managing my accounts.
Since then it has been nothing but a headache. I’ve been charged international bank fees, as I was not supposed to, and I even got charged to have a wire from my employer deposited. The whole point was that they were giving me special perks because of my employer.
Anyway, I was finally fed up with it all a couple of months ago and decided to start shutting down my account. I canceled the automatic deposit I had going into the account from my employer, and that went well enough.
Then I tried to cancel my automatic payments that had been going to our second mortgage. I canceled the online payment and it worked for one payment and then came back another two weeks later. I canceled it again, and the same. Finally I canceled the whole bill pay system, and it still deducted again – this time causing an over draft. It failed to tell me that a check had already been cut the day before I canceled everything (even though it didn’t show that the payment was going out until another week), and thus the payment went through even though everything was canceled from every indication online.
I had to call six times today, with dropped calls and all, to sort out the issue. Now this means that I have to wait for a payment to come over from ING before I can close out the account. Additionally this has meant that $1,600 has gone towards our first mortgage when we would have rather had it goes towards our goal of paying off the second.
I will be so happy to say goodbye to PNC for good.
Lessons of the day: If you have a system that works. Stay with it. If you have a system that doesn’t work, demand more. Lastly, simplification is your friend.
Miel
Yesterday afternoon I was jogging through Malcolm X Park here in DC. The park is a wonderful example of neoclassical architecture with a fantastic layout reminiscent of a French palatial garden. Despite its wonderful layout, the place is a total dump.
On my jog through I counted four homeless people hanging out. In the past I’ve also seen sketchy guys looking for man on man sex, discarded drug paraphernalia, broken beer bottles and the occasional used condom. Not only that, the grass has been in the processes of being reseeded…for nine months. Much of the cement work is crumbling and the fountains are decrepit. In short, its in bad shape.
This illustrates a classic problem with public spaces: the tragedy of the commons. The tragedy of the commons is an economic phenomenon whereby everyone benefits from the use of the common space, but nobody has an incentive to take care of it, thus causing long term degradation. Often times, governments are supposed to manage common spaces. However in the case of DC’s parks the municipal government has historically not done a good job with the city’s greenspaces (1).
The more I think about it, the more it seems like the best solution is privatization. Since the park is a common resource it would seem sensible to turn it over to a particular individual or organization who will have an economic incentive to properly care for the park. While privatization is no panacea, in this case the model could work well. A private organization would be able to charge a modest admission, thus providing a basis for maintaining the park and keeping it free of crime and unsightly litter. Finally also the maintenance would likely generate modest job growth and admissions fees might provide some tax benefit. In short, with privatization, everybody wins.
If you want to think more about this, click here and here.
Best,
James
P.S. my wife Miel disagrees with me entirely on this point.
Todays money saving tip is:
Buy a home video game console or games for your PC. Why? Over the long run, your investment will pay off in fun nights at home rather than expensive evenings out on the town.
Best,
James
We all know that consumer purchases aren’t the way to build wealth. At the same time, they are part of life. My opinion is that you get the most out of your money by shopping wisely. One way to do this is to be conscious of the return policies at the places you shop, and don’t be afraid to use this when you need to.
This week has been one of running errands, as I’m about to depart on an overseas business trip. Here are a few examples of places I’ve saved money by using the the return policies:
The point is, don’t just keep something because you bought it. One of the great things about the American way is that you can return things. You might as well use this to make sure you are getting the most for your money. The same goes for gifts you don’t love or need!
Happy returns!
Miel
Hello All,
This posting is a bit of departure from our usual fare of interviews and pithy quotes. As frequent readers of our blog know, we DINKs have an investment apartment. Since 2003 its value has appreciated substantially and we now have $75,000 in equity. However, since the market has slowed, we are now challenged with the problem of making this money grow.
So far, our options look like the following:
1) Borrow and Invest in Income Stocks. For this one, the numbers do not look too appealing. According to bankrate.com, we could probably borrow $30,000 at 6% while maintaining the 80% loan to value ratio required by many lenders. On those numbers, the most we would get on a monthly basis after paying Uncle Sam and the bank would be about $90. That’s not so hot, but we could keep the apartment.
2) Sell and Reinvest the Equity. After paying taxes and transaction costs, the investable equity would likely be $48,720. Assuming we could find a stock yielding 12%, the monthly payout for this option would be $389.76 – a lot more than the first choice. We would get more money on a monthly basis, but would have to sacrifice owning the property.
3) Do nothing. Sometimes this is the best option. However the return on equity on the apartment is something like 1%, not very good at all.
So, if you have any experience with tapping equity and investing it profitably for current income please feel free to email us. We would love to hear from you.
Thanks,
James
“The secret point of money and power in America is neither the things that money can buy nor power for power’s sake but absolute personal freedom, mobility, privacy.”
-Joan Didion
Hi Folks,
I wanted to follow up on the dialog about paying off our second mortgage that we recently put on a zero percent credit card.
Since the card has 0% interest for a year, our initial approach was to to put our money regularly into our ING money market account, and just pay off the minimum balance monthly with auto pay. We’d then pay it all off before the year was up and make a bit more on interest. Folks had mixed comments, but generally tending towards the side of not being worth the risk.
At it turns out, when I tried to put the card on auto pay it was not possible to do through the internet. Citibank’s process takes 4-6 weeks to set up through snail mail. Note that even their question and answer section of their website says that this is possible to do online. My thought is that they don’t have that option available for those on a 0% credit card, hoping that they will mess up.
Upon learning about the snail mail option (even more difficult from Afghanistan!) Citibank got an earful about being in the dark ages and having no consideration for the time of their customers or the resources used in the mail process for such an archaic system.
The end result is that I’m annoyed with the whole process and just want to screw them as they try to screw us. While part of me wants to keep their money as long as possible to take this money away from them, we’ll choose to screw them by paying off as soon as possible and canceling the card on the way out.
Best,
Miel
“I can’t put it any more simply or emphatically: How we behave toward our money, how we treat our money, speaks volumes about how we perceive and value ourselves. If we aren’t 
powerful with money, we aren’t powerful period”.
Of all the cast of characters on Wall Street, day traders are perhaps the least well understood. Most people understand the role of CEOs, financial planners and mutual fund managers, but fewer people understand day traders. Most media stories suggest that day trading is a fast track to bankruptcy, so the public is often left with a dim view of the strategy.
Properly speaking, day traders are individuals who buy and sell financial instruments within the same trading day. Of course, few trade exclusively on such a short term timeline, but the term is also often used more generally to refer to people who trade frequently with a short term time horizon. Many have lost gobs of money in short term trading, but others – notably William O’Neil of Investors Business Daily – have made large fortunes using this strategy.
Since we don’t trade often we asked Jefferson Krull, a web publicist and active trader, to share his personal experiences with you. Jefferson was kind enough to complete a Q&A with the DINKs, which has just gone live. The interview reflects Jefferson’s irreverent style but does give you one traders views on personal finance and offers some insight into how active traders conduct their business.
Click the gif below for the interview.
or go here.
Enjoy!
James
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