Effective Customer Service Complaints

Today's, Fiscally Fit Column in the Wall Street Journal has an outstanding story on how to complain effectively to get satisfaction for a problem. I highly recommend it.

Key Links:
http://online.wsj.com/article/SB120413183493397095.html?mod=pj_main_hs_coll
http://www.gethuman.com/

Timing and Large 401k Contributions

Yesterday, my employer made its profit sharing 401k contribution for the year. At 3% of my salary, it was a nice chunk of change. Unfortunately, they made the entire contribution yesterday when the market was up instead of today when it was down. While a 1% difference in the initial investment value may not seem huge, over time it could add up to a nice chunck of change. Such is life!!!

Living with a HSA

Until I switch to my fiance's group policy after the wedding, I will be part of my company’s high deductible with an HSA. If I understand the paperwork I have been provided, I am supposed to use the debit card for covered items. Nevertheless, I wonder how they tell if I follow the rules.

Ka-Ching - Refund In Hand

Only one day after the promised, my tax refund hit my bank account this morning. Although I would love to use the money for savings or debt reduction, the money has been stashed in my wedding/honeymoon fund. She is worth it and I am looking forward to the vacation.

Save on Taxes – Tax Haven Style

In Lichtenstein!!! Apparently, people from all over Europe (and the US) hid money in the principality of Lichtenstein hoping to take advantage of bank secrecy laws. According to published reports, German (and possibly other) tax authorities bribed a former employee of the LGT Group to turn over stolen bank records.

My thoughts:
1. Saving money on legitimate tax strategies is moral and a fundamental right. When you cross the line into tax evasion, you are likely to face IRS prosecution. Even if you avoid jail, any tax savings are going to be dwarfed by your legal bills.
2. Do not hide money in foreign tax havens. The world is shrinking and you are not likely to get away with it. If you have already done it, I recommend hiring the best lawyers you can afford to get you out of this mess with as little pain as possible. He/she will tell you what to do/say if the feds coming knocking on your door.
3. While the German and UK tax authorities might get away with bribing an employee to “steal” records, US authorities are likely to have trouble getting any evidence gathered by bribing a witness to break the laws of another country. Without researching the issue closely, I suspect a Motion to Suppress would have a 75-80% chance of success.

Other links:
Liechtenstein defies German pressure over banks
Tax experts say German push on Lichtenstein omits own failings

Substitute Goods – Savings Strategy

By taking advantage of Substitute Goods, we can save money on goods we do purchase. For example, I love to play golf. Because of the weather in New England, I can stay home or deal with rain. I choose to play through rain and cold weather.

The best golf specific raingear in the US is made by Zero Restriction and I needed some rain pants. Not wanting to spend $250 on pants, I found a similar pair at a hunting and fishing supply store, Cabelas, for $85.

Bottom Line:
1. Same Color (blue)
2. Same Material (GoreTex)
3. Great warranty – Cabelas is fantastic in this respect.

Saved $150 and got what I wanted by using a substitute good – fishing pants.

Frugal? Buying Winter Clothes in February

Despite the 8 inches of snow we got on Friday, spring is in the air and the immediate utility of winter clothes is limited. Combined with the new spring lines, most retailers have winter items available at deep discounts.

Why we should buy? For staple items like coats, gloves, hats, sweaters, you can buy something that will not be out of style soon for a song.

Why we should wait? By purchasing an item now for use next year, you need to consider the impact of finance charges, storage, or lost interest for 8-10 months?

What I just bought? My Columbia snow boots had a great 7-year run. Warm and waterproof, they were easy to slip on/off and great for doing tasks like shoveling snow in a Northeast winter. Earlier this month, I noticed they were about to leak but thought I could make it through the season. Unfortunately, the late winter storm hit and they leaked. Today, I went to Dick’s Sporting Goods and got some replacements for $40 off some nice Merrill snow boots. Had I gone shopping 2 weeks ago, I could have had more choice and got a great buy on a cheaper model.

When Numbers Don’t Add Up: OMBIX

When Numbers Don’t Add Up: OMBIX

I stumbled upon OMBIX (JP Morgan Mortgage Backed Securities Fund) doing some research. Morbid curiosity caused me to look up its performance. Much to my surprise, Yahoo Finance reports returns of:
YTD: +1.83%
1YR: +8.46%
Is difficult to understand how a firm with holdings (per Yahoo) in Mortgage Backed Securities, even AAA ones, could be doing so well.

While I don’t have information suggesting the fund is being run by crooks, I am suspicious. If they did manage to keep their investors out of losing positions, the managers deserve an award.

Wall Street always a Winner

According to stories, there has been a major failure of the auction rate securities market. As a result, entities like the The Long Island Power Authority are moving to refinance debt with longer-term issues. What isn't mentioned, every time they refinance, a Wall Street investment bank collects more fees. Every time a client loses, they make more money from fees. Every time a client wins, they make more money from fees. Great business model.

Unfair Shoplifting Penalties

    

Back in the day, I had a client stopped for shoplifting in a local store. Although we quickly worked out a reasonable deal with the prosecutors, I was surprised when the store went after him for penalties. In today's WSJ, they have an outstanding storing on the process. The money quote:

• "In an escalating battle against theft, retailers are going after anyone suspected of shoplifting, turning over their names to lawyers and collection firms, who pursue the suspects for stiff penalties and split the take with the retailer. There is little oversight of a system retailers call "civil recovery," created by special laws passed in all 50 states. With no proof of theft, the retailers demand money -- often $200 but sometimes far more -- and promise to avoid suing if it is paid quickly. Laws vary by state, but in general, retailers can demand these sums even if the item at issue was worth far less and was quickly recovered and put back on the shelf.
  

When to Buy Life Insurance!!

Simple - Before you need it. Tomorrow, we are buying life insurance while we are young and insurable.

Saved 10% on IRA - Market Timing

Months ago, I posted my intention to move my money out of the market into cash and cash equivalents. Fearing a train wreck, it seemed like a good plan. Happily, it worked out. Since moving my money from my 401k to my IRA, my account is down 1.5%. Using my original asset allocation (low-cost index funds - diversified), I would be down 12%.

New plan, I have begun a plan to dollar cost average back into the market to take advantage of the depressed prices.

Keeping Illegal Trading Profits

Sometimes, the Law is dumb as a post. As the story below details, laws are written by people (often stupid people) who don't think of everything.

Make Big Profits Illegally (and Maybe Keep Them, Too)
http://www.nytimes.com/2008/02/15/business/15norris.html?_r=3&oref=slogin&oref=slogin&oref=slogin

Borrower Risk – Mortgage v. Student Loans

Lets say you have to decide on defaulting on your student loans or defaulting on your mortgage. In many ways, the mortgage may be the good choice:
1. Student loans are generally not dischargeable in bankruptcy;
2. After foreclosure, the lender (in some states – check with you attorney) may not be able to go after you for any remaining balance.

While I do not condone or otherwise recommend going to foreclosure, I do not the “risk” student loan borrowers have. For people like doctors, they may have hundreds of thousands of student loan debt. Faced with a choice between paying down the mortgage or paying down the student loan balance, the student loans are a no brainer.

Borrower Risk – Mortgage v. Student Loans

Lets say you have to decide on defaulting on your student loans or defaulting on your mortgage. In many ways, the mortgage may be the good choice:
1. Student loans are generally not dischargeable in bankruptcy;
2. After foreclosure, the lender (in some states – check with you attorney) may not be able to go after you for any remaining balance.

While I do not condone or otherwise recommend going to foreclosure, I do not the “risk” student loan borrowers have. For people like doctors, they may have hundreds of thousands of student loan debt. Faced with a choice between paying down the mortgage or paying down the student loan balance, the student loans are a no brainer.

Feb 25th - Refund Day!!!

If you were one of the many people impacted by the IRS' decision to reject tax returns until Feb 11th, Feb 25 may be your lucky day. My confirmation indicated I can expect a Direct Deposit on that day.

Mojo Network - Wall Street Warriors

If you want to get a good view of Wall Street scumbags, check out Wall Street Warriors. Day Traders, Boiler Room Brokers, traders and hedge fund managers. In the episode I watched, some traders had a rousing conversation on how to deal with guys who have lost money - liquidation - even if it is their friends.

$18 eFile for $4 Refund???

Getting ready to file my taxes tomorrow, I noticed TurboTax charges something like $18 each to e-file state and federal taxes. Although I am getting a good refund from the Feds, my $4 state refund request is going by mail. Paying $18 to get $4 is never a good deal.

BTW - I think it is a little sneaky for Intuit to charge $18 for each E-File.

Note: This year, I used the download version of TurboTax for my return and the online version (free from State Farm) for my fiance's return. By using the online version, you avoid the e-file fee. Next year, we will both use the online version.

eBay Feedback Change - No Buyer Negatives

If you haven't heard, eBay is taking away "negative" feedback for buyers. In adopting the new rule, eBay stated they want to protect buyers from retaliatory feedback from sellers.

All in, I support the change. A few years ago, I had a problem with a seller who's posting was misleading with respect to how he took PayPal. I wanted to give him a negative feedback; however, I gave him a neutral review. Of course, he retaliated with a neutral. This guy sells 100's of items per month. If I give him a negative rating, his overall rating will go down by less than 1 percent. If he retaliates, my rating goes down by almost 5 percent.

Since seller feedback is incredibly important, eBay was right to give people the opportunity to comment on sellar behavior without fear of retaliation.

DealBreaker.com - Funny site

Check out: http://www.dealbreaker.com/. Satire and Wall Street are a great combination. In particular, the fictional Goldman Sach trader "Thad" is a riot. See his "FAKE" Post at: http://www.dealbreaker.com/2008/01/post_684.php

NOTE - some readers may be offended by Thad's view of the world, and you would be right. Finance Guy does not condone or otherwide endorse "Thad's" view of the world, race, money, or class. Unfortunately, guys like "Thad" do exist.

Free Tax Software - State Farm

http://www.statefarm.com/main/tax.asp

We used this software for my fiance's tax return. It worked like a charm.

Greed is Good!!!

Anyone who watched Wall Street remembers the great, "Greed is Good" line by Gordo Gecko. Whether you believe it or not, you must understand ALL companies are money making entities and are looking to make money. When you deal with anyone in the business world, assume they have the same attitude. Once you make this assumption, it is easy to adopt the right strategy for dealing with "them."

Thoughts on Gambling

Like many people, I put a few bucks on my office Super Bowl pool. Luckily, I hit the number (Pats 7 and Giants 3) for 2 quarters and got a nice check out of it.

Despite my good fortune, a key moment drove home the “pain” suffered by serious gamblers. At the end of the first quarter, it looked like I was in the money as the Pats moved towards a score. Unfortunately, they stopped with ONE INCH to go and allowed the quarter to run out. Bottom line – one inch stood between a payday and me

For me, any winnings were “found” money and it was all fun and games. For the degenerate gambler, that one-inch could change his/her life. Imagine betting $10K on the Pats, because it is a sure thing. $50K on the over because nobody can stop Moss and Brady.

Out there, some poor man/woman lost rent/food/mortgage money on the game. For them and their affliction, I say a prayer.

IRS Delays Accepting Tax Filings – For EVERYONE

If you read the press releases, the IRS announcement that it will not accept tax filings until February 11 for people with complicated returns. From my experience helping a friend, I suspect just about everyone is impacted by the delay.

My friend’s return was extremely simple with the standard deductions and education credits. With the exception of the eductation credits, he could have filed a 1040 EZ return.

If his got rejected, just about everyone's will be.

Giants 3, Patriots 7 - I need the number

In the Superbowl office pool, I got two decent numbers for a change (My poor buddy got 5 and 8). Hopefully, luck will shine on my fiance and I and drop $400 into my pocket. 10% of a Roth IRA contribution would be a nice.

Go Giants!!! Normally, I hate the Giants (I am a Cowboys and Steelers fan); however, I don't want the cheat'n Patriots to have a perfect season. It might spoil the greatness of the Steelers 4 in 6 dynasty.

Valentine's Day - Money Savings Tip

Being frugal isn't just about not spending money. It is about getting the most value from the money you do spend. For example, going out for dinner on Valentine's Day is a poor use of money.
1. Restaurants rush to turnover seatings. Basically, they rush you in/out as fast as possible.
2. They may have a special V-Day menu where they tell you what your are going to have. At most, you get the fish or beef option.

My fiance and I avoid the problem by always celebrating V-Day on the Saturday following the actual holiday.
1. We can get a reservation at any restaurant in town.
2. We can select anything we want from the menu.
3. We are never forced into an overpriced, fixed price menu.
4. When we have kids, it will be easier to get a babysitter.

Bonus Time - Waiting for the News

Like many people, I am now waiting to find out how the 2007 Bonus will turn out. With the performance review in the bag, it all comes down to the size of the pool. It is going to be a long month and a half.