Monday, December 15, 2008
I used Picasa 3 (free) to make the collage (size it to 4x6 so that it matched the 20x30 aspect ratio of the Costco print). This version of Picasa makes much better collages than previous versions. Then I printed off a 20"x30" print at Costco.com ($10+shipping). Then I framed it using this frame ($12+shipping). For $22 + shipping, it's a pretty cool gift.
If nothing else, I found out a pretty cool way of making a framed, poster-sized print for cheap. If I ever pick up my camera seriously again, it would be fun to line my house with huge photos.
One word of caution: for some reason I thought it would be a good idea to print a border around my picture when I sent it to Costco so that the frame wouldn't chop off my picture. It turned out to be a bad idea; the costco border chopped off way more of my picture than I wanted it to. If you end up doing this, don't print the white border when you send it to Costco.com. Also, be sure to upload the full resolution picture to Costco.com, or it will look horrible when you blow it up.
Here's the image that I used for my parents.
Tuesday, December 9, 2008
Thursday, December 4, 2008
If you exercise self restraint with credit (i.e. spend with them as you would with cash), I recommend buying everything imaginable with credit. You're also helping your credit score at the same time. Along those lines, I will open up a credit account for each of my children when they turn 16 or so. Length of credit history is a HUGE portion of your credit score, so setting up a credit card for a 16 year old will significantly help your son/daughter when it comes time for them to get a mortgage/student loan. Parents who teach children that credit is evil are setting their children up for failure when they go to apply for a mortgage or student loan. Responsible use of credit is a valuable skill.
If you want a 2% cash back credit card, they're hard to come by. Mine is no longer offered. Here's a new one that I found out about today: http://www.mymoneyblog.com/archives/2008/12/schwab-2-cashback-credit-card.html.
Have fun exploiting credit card companies (at the expense of stupid consumers who pay interest)! Can you imagine a world where nobody paid credit companies interest? Credit card companies would all fail.
Sunday, November 30, 2008
Based on the comments of the above links, there doesn't seem to be a great understanding of whether the $500 bonus per account can be cashed out or whether it is strictly to be used as a credit for future trading comissions.
I'm confident that the $500 cash out option will be clarified tomorrow in these threads, as users will post comments after talking to customer service reps. If the $500 turns out to be credits only, then I simply won't bother funding the accounts this week (but I still opened up the two accounts tonight, just in case it turns out favorably tomorrow) .
If it's true, this promotion is the best I've seen in a long time. A while back, I made $240 through a similar Sharebuilder promotion.
As far as I can tell, there is no hard credit pull for opening the account, so your credit won't get dinged (based on comments from the above links).
Good luck to anyone joining me in in this promotion.
UPDATE: As of Tuesday, 12/2, there have been hundreds of comments in the forums linked above confirming that the $500 may be cashed out in 6 months. Happy $1,000 to anyone who created their accounts in time!
UPDATE: As of 5/20, the $1000 was deposited into our accounts and the promotion worked as planned. Yippee. Best promotion I've ever seen.
Saturday, November 29, 2008
Saturday, November 22, 2008
Monday, November 17, 2008
With that said, I hear a lot of people around me saying that now is a good time to buy. I don't agree with this statement. I believe in efficient markets and believe that any time is a good time to buy, because the price of stocks should always reflect all publicly available information, and that the best strategy is to buy a little stock with every paycheck. This article explains that stock prices are not exceptionally cheap right now; they are about on par with historical averages.
Sorry about my stock market rant.
Now, to the point of my post...We're storing our cash under our mattress.
Just joking. We've been using a WAMU savings account which was paying 4.0% just a few weeks ago. Now it's down to 2.5%. With inflation at 4-5%, a 2.5% yield on savings isn't particularly impressive. We decided to open up a savings account at Dollar Savings Direct. As of today, this is the best rate available in the country. Deposits are insured up to 250k by the FDIC. I'm not sure how long the rate will last, but I was excited to find out about it and thought I'd share the info with you. The account opening process wasn't too painful and the website is easy enough to use. More discussion on Dollar Savings Direct is found here.
Saturday, November 8, 2008
The solution: If you use Firefox, install the Cookie Swap Add-on (https://addons.mozilla.org/en-US/firefox/addon/3255). With a simple click of the button, you can swap between several cookie profiles, meaning that it tricks the computer into thinking that you are still logged into all of your accounts. I LOVE COOKIE SWAP!!!!
Friday, November 7, 2008
Tuesday, June 24, 2008
So, like many financial products, Mint.com enables you to categorize expenses. Here are a few of our biggest expenses over the past 12 months:
|This is what the Baugh family spends their money on. I glean a few bits of information from this list.|
- I should own a house. Too bad $400k is the going rate for a starter home.
- I should live closer to family to cut down on travel expenses. What's within a short driving distance of both San Jose and Chicago?
- I'm lazy at categorizing my expenses. Every Costco expense counts as "groceries" even though at least 25% of our expenses there are not food.
- I love prepaid cell phones combined with VOIP. We paid $109 last year for all of our phones. It would have been about $120 more, but our VOIP was prepaid this year.
- We paid $1200 on gas during the last 12 months. Since gas is up about 25% from last year, we can expect to pay about $300 more this year on gas if our driving habits stay the same and gas prices stay elevated. I'm skeptical that gas prices will stay this high, but our driving habits have changed. We've started to drive less. We try to consolidate errand running so we visit stores that are next to each other. When we want to go out for fun, we walk/bike/play tennis, which don't require cars.
- We only paid $330 in restaurants during the past twelve months. That makes me happy. I'm convinced that cutting back on restaurants, cell phones, phone services, TV, and movies is some of the most effective ways to increase your savings. Most of these are recurring things which you don't even think about.
Does anyone have any recommendations on how I can cut my expenses? What are you spending your money on?
If I cared about budgets, I'd probably do something responsible and divide these amounts by 12 and allocate a set amount to each category each month. I don't care about budgets, so we spend our money on stuff we need and try to avoid frivolous wants. It works out well for us that way.
If nothing else, this post may convince on or two of you to check out mint.com. It's a cool program that I wish I had discovered a decade ago. I love tracking our net worth over time. It's empowering. It might help some of you to realize what you are spending your money on. I encourage you to at least glance at every penny that leaves your accounts.
I just got my executive membership rebate in the mail last week. It was a check for $100. Doing some quick math, at 2% rewards, that means I spent $5000 at Costco over the course of the year. Though some may gasp at that number, let me tell you what we buy there:
- Pretty much all of our food ever (with the exception of a few items such as condiments, onions, and minor cleaning supplies). We don't eat out too much, so the $5000 includes breakfast, lunch, and dinner for a whole year.
- Pictures. We print lots of picture through costco.
- Staples such as laundary detergent, toothpaste, trash bags, diapers, wipes.
- Gas. It's cheaper there than it is anywhere else. I love the fact that I don't have to go to a different place to gas up. (The gas doesn't count towards my 2% cash back on the executive membership).
- Applicances. Last year we bought a rice cooker. We also bought a KitchenAid (it was actually a gift, but bought on our card so counted towards our rebate). I've also bought tools and other stuff there.
- Clothes. I'm a dork. I buy my clothes at Costco. We have several of Megan's outfits there. I have worn Kirkland Signatures $14.99 Court Classic Tennis Shoes for the past 4 years now. They've taken me up Mount Timp 3 times and gone on countless hikes here in Washington. I love striking up conversations with fellow Court Classic wearers. One of them happened to be a director of engineering at Boeing. I had a fun chat with him...we're good friends now. Maybe my shoes will land me a job as CEO of Boeing....one can only hope.
I'll try to dispel a few myths about Costco:
- "The membership cost isn't worth it." As described in the first paragraph, I got a rebate for $100. I paid $100 for my executive membership, so I got a free year of membership because I used it so much. One nice thing about the executive membership is that if you don't make at least $50 back (which is the added cost of the executive membership), you can get it reimbursed. I did that last year. They gave me cash. In diapers/wipes alone, I swear I've almost saved enough to justify the basic $50 membership.
- "My family is too small to buy in bulk." This isn't true either. When Tiffany and I were dating at BYU, we shopped at Costco. We split things like milk and bread, and we saved a lot of money on groceries. We freeze lots of things like bread and cheese to keep it from going bad. Buying fruits/veggies in bulk has been great for our health. It has encouraged us to eat lots more. Costco has some great prices on produce.
- "It's impossible to get out of there under $100." If you don't want to spend a lot of money, don't do it. Costco will kill you on impulse buys if you let it. Seeing a 50 pack of snickers for $20 may be a great deal, but you'd go broke if you bought everything in the store just because it is a good deal. Only buy stuff you need. Make a list and stick to it.
- "I can get better prices shopping sales." While this may be true for some sale items, I would argue that Costco is much more economical when you consider your time and gas for shopping. Tiffany and I can go grocery shopping about twice a month no problem when we shop at Costco. We don't bother to sale shop at 10 different stores during the week to beat Costco's prices.
In conclusion, everyone on earth should shop at Costco. It is a worthwhile investment. If you already shop there, try to buy more stuff there. Be wise in your purchases; don't buy stuff that you shouldn't just because it is a good deal.
Sunday, May 11, 2008
- How to Increase Your Savings
- Understanding the Value of a Dollar
- How to Invest Wisely
- Why I Save
- Understand needs vs wants
- Whenever I make a purchase, I ask myself if it is a need or a want. If it’s a need, I buy it without remorse. If it’s a want, then I have to do some more thinking. If you want to increase your net worth, this is the single most important principal that I could impart to you. There have been countless times that I have wanted to buy a new toy, but I’ve refrained because I didn’t need the thing. I use this skill daily.
- A budget can help you distribute your spending to satisfy your needs and wants. I’ve heard that they are very useful for a lot of people, but I don’t use them.
- Spend less than you make
- When you get a raise/bonus/tax rebate, pretend like you didn’t. You’ll magically increase your savings. Tiffany and I pretend like we are college students even though we’re making a hundred times what we were in school. It pains me when I hear of people blowing off their tax rebates on plasma TV’s which they really can’t afford. I am not going to alter my spending habits at all when my $1200 gift from the IRS arrives. It will go straight to savings.
- Watch out for recurring fees. They’ll kill you because you don’t even thin when you pay them. I’m talking about cell phones, tv, internet, car insurance, etc.
- Tiff and I pay $13/month for Comcast local TV. It was tough saying goodbye to ESPN (more so for Tiff than for me), but we hardly miss it at all.
- Tiff and I pay $100/year for BOTH of our cellphones. We have T-mobile prepaid phones which we use sparingly. We use less than 1000 minutes a year total. Tiff and I are able to get a hold of each other 99% of the time when we’re apart through normal phones at home/work. I don’t miss having my normal 1000 minute/month plan one bit.
- Tiff and I pay $13/month for voice over IP (VOIP) phone service, with unlimited long distance. Since we can’t live without broadband, I figured that we ought to get the most use out of it. VOIP quality is fine. It’s better than cell phones but worse than land lines. We use viatalk (viatalk.com) and like them fine. I believe they have a promotion right now for 2 years of service for $200. That’s better than the promotion that I locked in to.
- We take advantage of internet promotions, which give away internet for free for the first 6 months. Once the rates go up, you can switch services to qualify for the new internet promo. We switch between Comcast cable internet and Earthlink broadband every 6 months or so. The great thing about this strategy is that Earthlink uses Comcast cable, so you don’t need some installation guy coming to your house every time you want to switch. It’s as easy as a phone call. We save TONS of money each year by doing this. If you are too lazy to do what I just mentioned, simply call up your current provider and ask them to match a competitor’s promotion. 99% of the time they will give you a cheaper rate so that they don’t lose your business. Info here: http://www.mymoneyblog.com/archives/2005/08/how_to_save_138.html.
- Car insurance. Tiffany and I have gotten some pretty sweet discounts at Geico by following the counsel provided here: http://www.mymoneyblog.com/archives/2006/12/pentagon-federal-offering-3-year-cds-at-625-apy.html. We save about 15% a year on car insurance by simply by opening up a checking account at PENFED. I believe we put $5 in there to open the account an haven’t used it since. This discount is the same as Berkshire-Hathaway shareholders enjoy. Fortunately, $5 is a lot cheaper than the $4179 that a Class B Berkshire stock is going for now. If you don’t have family in the military, you can pay the $20 fee as explained in the link.
- Develop cheap hobbies. Some of our favorite cheap hobbies are playing board games, hiking, biking, going on walks, and reading.
- I could go on forever and ever and ever about board games. I’m not talking monopoly or sorry. I’m talking about German strategy board games like Settlers of Catan,
, Ticket to Ride, etc. Alhambra
- Eat out less frequently. It pains me to the core every time I go out because I realize how much cheaper I could eat at home. It’s so bad that when it’s my birthday, I request to eat at home instead of going out. If you do go out to eat, don’t order drinks, sides, or desserts. I realize that I’m pretty unique one this one… I simply don’t care about food that much.
- Never, ever, ever pay bad interest. I would categorize education loans and mortgages as good interest. Anything else would fall under the bad interest category, including cars.
- Own a home if you can. Unfortunately, after being out of school for 1.5 years and living in an overheated
real estate market, we have been unable to cough up the 20% required for a house. Fortunately, through living the principals mentioned in the first section, we’re getting close. There are countless benefits to owning a home. I’m looking forward to building equity in a house, never having shared walls again, and having a juicy tax write-off some day. Seattle
- If your employer matches any retirement contributions, you must take advantage of that. When you fail to take advantage of your employer’s matching, you are throwing money away. This is a tough principal for a lot of us young folks to grasp. When I was an intern at my company, I didn’t take advantage of the company matching because I was a dumb kid. I didn’t understand what a 401(k) was or why I should take advantage of employer matching. I’ve wised up over the past several years, and I’m kicking myself for my wasted opportunity.
- Invest in low-cost mutual funds. The most significant costs associated with mutual funds are sales loads and expense ratios. Just like the principles described in the first section, cutting costs is one of the best ways of guaranteeing superior performance on stocks. I invest exclusively in index funds, which are like mutual funds in that they hold a variety of stocks, but they are passively managed. What this means is that a person isn’t actively trying to guess what the best stocks are going to be. Rather, the index simply tries to follow a pre-determined mix of companies. The S&P 500 and DOW are the most common
indices out there. There are countless PhDs out there who swear by passive investing. I’m not as smart as them, but I’m smart enough to read their books and believe them. If you care to learn more about investing, I have some recommended reading at the end of the post. US
- If you have money left over, put it in a Roth IRA. Capitalism is great. Business are out there doing hard work to make money. They create amazing innovative technology and perform great services. Through the miracle of stocks and bonds, you and I can share in the profits of these companies!!! All of this while sitting in our underwear at home!!! Stocks and bonds are profitable investments when companies make profits. Since most companies usually make profits over the long run, stocks and bonds remain to be pretty profitable investments.
- Each year, you are allowed to put $5000 per person in this tax-sheltered account. The Roth differs from the traditional IRA or 401(k) in that you pay the taxes now, but you never pay taxes again. That means that when I withdraw from my Roth IRA in 40 years, I won’t pay a penny of taxes to the government. One of the greatest advantages of the Roth IRA is that you can touch the principal (money that you have contributed) without penalty at any time. When you do this, you don’t have to pay taxes, since the money has already been taxed. Traditional IRAs or 401(k)s impose a 10% penalty upon withdrawal of funds in the event that you withdraw before retirement.
- Open up a Roth IRA at Vanguard. It is hands down the best brokerage out there. Vanguard has the lowest fees out there, and they have a wide variety of index funds to choose from. Investing in a target retirement fund is the easiest way to go because it automatically adjusts your portfolio's risk profile as you age. If you are planning to retire in 2040, invest 100% of your money in the Vanguard Retirement 2040 fund. You will be incredibly diversified with this one fund.
- One word on realistic expectations on returns: The 12% return in the markets that we’ve seen over the past 25 years is unsustainable. Businesses simply aren’t that profitable. What has driven up stock market prices so much is speculation. Warren Buffet, the richest man in the world, has indicated that future returns should be no more than 7%. Call me crazy, but I listen to the guy when he talks. He knows a thing or two about investing.
- Invest in yourself. The leaders of the church have told us on many occasions to “get all of the education that you can.” It’s a powerful statement that has inspired me to go back to school for a graduate degree. Investing in your education is simply the best investment that you can make. As the world becomes flatter and flatter, it is getting more and more competitive. Having an education will be paramount in remaining marketable through these times. Thirty years ago, all it took was a high school diploma to be marketable.
- Open up a money market savings account. These vary from traditional savings accounts in that their interest rates don't suck. Current money market rates are around 3%, though they were as high as 5.5% before the federal reserve started slashing interest rates over the past 6 months. WAMU has one of the best rates in the country right now, at 3.25%. Sign up here: http://wamufreechecking.com/FreeChecking/index.html?appType=FC&AffiliateID=cj&CreativeID=whoohoo
- At any point in time, Tiffany and I only have $50 which is rotting away in a checking account. Everything else is invested in the stock market or making interest.
- Since money market accounts have a limit of 6 withdrawals a month, we simply buy everything ever on a rewards credit card and pay it off in full every month. This way, we have far less than the 6 transactions a month. If we owe a friend $5 bucks or something, it comes from our checking account.
- Safety net. I have a HUGE piece of mind when I realize that I could be laid off tomorrow, and still be able to provide for my family for over 2 years without income. This freedom will enable me to take my time to find my next job instead of committing to the first job offer that comes my way.
- A house. I realize that I could spend frivolously and eventually get into a house in 20 years, but I'm not that patient; I want to get into a house sooner. Living frugally will enable me to do so.
- Retirement. I don't want to work at the age of 65-70 like some of my coworkers. I want to retire at a reasonable age. I would rather be serving a mission or traveling the country to visit my grandchildren when I’m retired than working at Walmart at 65 because I didn't save enough.
- Vacations. I love vacations. Some of my best memories as a kid were of being on vacations with my family.
- Paying for kids. Kids are going to get a lot more expensive once they get older and start going to college, wrecking cars, and going on missions. Savings will definitely help here.