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Although my company competes with AIG, it is sad to see the state they are in. While they made their own bed, someone else lit the fire. Now, the ratings agencies are stoking the fire by creating a self-fulfilling prophesy.
Rating Agency: They will have trouble raising cash. We will reduce their ratings.
AIG: Because their ratings dropped, they need MORE money and it is hard to get.
Great system: Who designed it? Torquemada?
IMHO – rating agencies are just about worthless. In good times, they give the illusion of safety by telling the investing public what they want to hear. In bad times, they make bad things worse by identifying what everyone already knows.
For example, AIG has been the 900 pound gorilla of the insurance industry for years. With a gold plated balance sheet, they were a money making machine for shareholders. After being forced to replace its dynamic CEO, Hank Greenberg, AIG suffered a series of management miscues and losses in the credit markets. Nevertheless, it should not have been fatal, but the ratings agencies are making things worse.
After AIG stock plummeted (and I mean plummeted), S&P decided to notice that a low stock price might make it hard to raise capital and placed them on ratings watch. Their action, of course, caused AIG stocks to plummet even more and made it more difficult for them to raise capital. Basically, they are like a weatherman who only reports what has already occurred.
Over the past few weeks, I sold some excess stuff on eBay and ended up with approximately $300.00 sitting in my paypal account. Originally, I planned to spend the money on myself; however, I have decided to drop it into savings.
What do my friends in the Blogosphere do with their eBay revenues?
According to the WSJ, the Lehman bailout is in trouble. If so, it will be a long day tomorrow on Wall Street. Although the depressed prices might look like a buying opportunity, I don't think the time is right. Look to 2009 to move into stocks.
According to news reports VP candidate Joe Biden's made a $2.2million in the past 10 years (source: tax records). Total charitable contributions: $3,690!!! While charitable giving has not been my strongsuit, even I managed to beat his total.
IMHO – there is not a credit crunch. In many ways, large financials are subject to a credit freeze. If not, why would a company like AIG plummet again because it cannot access the capital markets.
Until this shakes out, no financials are safe.
Republican or Democrats, one has to notice the incredible impact Sarah Palin has had on the McCain campaign. Love her or hate her, the days of all-male presidential tickets appear over. As the drama over the "Lipstick on a Pig" comment illustrates, female voters are an enormous voting block and they appear unwilling to take abuse from male politicians anymore.
According to news reports, Obama wants to prevent the ousted executives at Fannie/Freddie from collecting on their severance packages. Although they are likely to walk away with large packages per their contract, there doesn't appear to be evidence of illegal behavior by them. Absent such evidence, the government doesn't have the power to abrogate their employment contracts.
Having said that, I expect we will learn they are walking away with millions of dollars. While CEO pay is often obscene, it is not yet illegal and Obama knows it.
Bottom line, I need a nice, wool winter coat. Should I buy early in the season when there are a lot of choices or late in the year when the retailers are struggling to move out ? Still relatively new to the northeast, not sure when the best time to buy is.
Simply put, Annuities are Loans to Insurance companies by their customers. Right now, I think it is a mistake to purchase an annuity (variable or fixed) from any insurance company. When you purchase an annuity, you transfer funds to the carrier in return for a promise from the company to pay you in the future according to the terms of the contract.
Key Concepts about Your Loan to your Insurance Carrier:
Although the insurer has a good reputation and solid rating from AM Best, it would have a significant problem if those assets became impaired.
While great ratings (AM Best, Fitch, and S&P) matter, they are not perfect. If you don't believe me, ask someone who bought AAA rated mortgage backed securities in 2006.
Flying to see family for Christmas can be very expensive. While talking to my sister, she mentioned flying on Christmas day to save money. Since I was planning on using AA points (I want to use them up and stop using American Airlines forever), I wasn't paying that much attention. When I went to book my flight, I discovered AA doubled the number of airmiles needed to fly out on Christmas Eve Day compared to Christmas Day. Basically, they want people to pay first class prices for coach seats. As a result, I am flying home at 7am on Christmas Day with my lovely wife.
Thanks American Airlines. Each time I deal with you, you lose what little goodwill you may have left.
We plan on using the "saved" points for a trip to Florida in February.
While there are certainly some issues with the United States health care system, the British "Universal" Health plan is not perfect. If it was, would they try this:
http://www.businessinsurance.com/cgi-bin/article.pl?articleId=25756
According to my wife's employer, I was added to her plan effective 9/1/08. Nevertheless, the carrier doesn't have a record of the change; however, they say it normally will take a few weeks to get me an insurance card and it will be retroactive.
Since my employer is about to cancel my health insurance, I am nervous about the situation. Until I get the card in hand, I will worry about being "naked" with respect to health insurance. As I learned from emergency appendix surgery earlier this year, you never know when you might need it.
After we wrote a letter complaining about Marriot's abysmal service and condition on our wedding night, they thought it would be appropriate to send us a voucher for a free night at the exact same hotel. Since the Marriott in question is less than 1 mile from our house, the voucher is basically worthless. Who wants to stay in a hotel down the street? (Especially one with bad memories).
The only reason we had a room in the first place was because it was our wedding night. My wife and I have decided to send the voucher back with a cc to head of Marriott hotels.
Because of an identity theft incident, I subscribe to Equifax's credit monitoring services. While reviewing my credit report for any problem entries, I noticed Equifax is offering Scorewatch free for 30 days. Well – I haven't hit my target of 800, but things aren't bad.
Has anyone made it to 800?
As my wife and I continue the process of merging various financial affairs, I noticed an interesting item on our bill from State Farm. For some reason that cannot be justified by any sanity or financial data, State Farm is charging us 50% more to insure her older Corolla than it is charging to insure my nearly new Highlander.
Things I know:
Comparing the before/after pricing quotes from other carriers, I think State Farm's price on the Highlander is significantly better than the competition.
According to a document provided by my wife's employer, I will be added to her insurance effective September 1, 2008. Until I get an insurance card from Blue Cross, I won't feel completely comfortable with my situation. As a result, I won't forward the "proof of other insurance" to my employer until after I talk with the new insurer
Do you pay extra for "branded" gas from companies like Exxon, Mobil, or BP? IMHO – Gas from any reputable company is gas.
The other day, I paid $3.61 per gallon at my local BJ's Club. On the way home, I saw prices as high as $3.84. In my area, the Citgo consistently has the lowest prices and the Shell has the highest. At some point, one would expect the Shell customers to switch to Citgo; however, they do not.
Why not? Despite all the protestations about gas prices, I think most people are lazy and not sensitive to gas prices. They just fill up in the most convenient spot without even considering the cheaper gas one block away.
Your theories?
This weekend, my bride and I started the process to merge our finances. First step, we merged two of our checking and savings accounts (we used the same bank) at TD Banknorth. In the joint savings account, we will keep $1-2K for emergencies. The joint checking will be for ATM use and for the rare times we have to write a check.
Most of our money will be direct deposited in ING Checking and Savings accounts. Unless a check is required, we will pay everything using online bill pay.
If the bride/groom reserved a block of 10 rooms for the weekend, would you give them a decent room? At our local Marriott, they had other plans.
Because most of my family was from out of state, I decided it would be nice if everyone stayed at the same hotel and took a block of ten rooms. In addition, my bride and I reserved a room for the night of the rehearsal dinner and our wedding night. What did we get?
During the rest of the honeymoon, we stayed in an airport Sheraton (using Starpoints) and a Hyatt (honeymoon). Both of them provided clean, quite rooms and great service. Next time we travel, we will remember.
Back from the honeymoon and still adding up the damage. It was worth it. In the following weeks, I will be posting on some of the highlights – the Hyatt and the lowlights - the Marriott.
Tomorrow is the big day. I am marrying a wonderful woman in a beautiful church with a dinner in a great restaurant (and view) to follow. Today, we are doing a few last things, but it looks like we managed not to bankrupt ourselves. On to the honeymoon. Next posting in 2 weeks.
Although I would not be the farm on it, I am starting to see signs the housing market (in Connecticut) is starting to harden. Currently, I work with two new employees looking to buy homes. According to them, the supply is now limited to the "dregs." From what they see, the only people who are willing to sell at the depressed prices are the people who have no choice. Everyone else is holding on to their houses.
Since Connecticut did not have the massive housing developments of California and Florida, one would expect us to be "leaders" in the recovery due our limited supply of housing.
Having already put a large amount on my Citibank card to pay for the honeymoon, next week I have to pay for the wedding and the reception. Although I had enough money in savings to pay for all of it, paying it off seemed risky. Instead, I did a balance transfer to move the money from Citi to Discover. At a cost of $75, I get to use their money for 12 months free. For the reception, it is going directly on the Discover card and I get 5% back since it is a reception.
When we get back, my wife will be back to work (she is a teacher) and our cash flow will really pick up. While we cannot quite live on my income alone, it is close enough to bank a large portion of her paycheck. We should have enough cash in the bank to pay everything off by Christmas.
Only one week until the spending orgy of the year, the wedding cake, tux, hotel rooms, reception, limo, flowers, rehearsal dinner, and on and on. If I ever become dictator for life, my first dictate:
Once it is over, back to saving!!
This morning, I paid less than $4 per gallon for fuel for the week. Will we get to $3 per gallon before 2008 is over?
After I threatened to turn off my phone line and go with DSL, SBC (now ATT) offered to double my DSL speed for free. While I don't need a landline, I will enjoy having faster download speeds.
Carpooling with my fiancé in our Toyota Corolla, we spotted a "Smartcar" at a stoplight. Although interesting to look at, the idea behind it is idiotic:
Bottom Line: The SmartCar is a vanity purchase for most people and almost always a bad idea.
A few days ago, I bought a GPS unit for my fiancé at BJ's Wholesale club. Today, Quicken picked up the charge; however, it was $150 less than it should have been. Should I go to the store to correct the error?
If I notice the mistake and I am still in a store, I always do my best to correct the error. Honesty is important to me. In this case, I am torn. Going back to the original store would be impossible (I bought it out of state) and working with the local store to fix it would be a huge hassle. My time is valuable and wasting an hour in the store to correct their mistake seems excessive.
Thoughts?
When I got home today, Quizo's sub was running an add touting the amount of meat in their sandwich for the amount charged. As part of the ad, they show a guy trying to eat a roll of coins. For some reason, they feel the need to inform watchers not to try it at home. IMHO – anyone who would try to eat a roll of coins is not smart enough to live.
Driving down the highway, I saw a convoy of SIX Toyota Priuses cutting in and out of traffic. They do seem to be everywhere. Indeed, one of my friends is waiting to take delivery of a new Prius. My dream car, an Accord sized hatchback with hybrid technology – 40+mpg. Very different from my – I want a Mustang days.
Thankfully, it looks like the days of massive increases in oil prices are over (for the short term). With consumers cutting back, the demand curve has shifted to the left enough to stabilize prices. Nevertheless, long term supply increases are unlikely (even at the high prices) and consumers need to make "savings" permanent:
At the pump today, I realized my Amex Blue Cash card was saving me over 20 cents per gallon. Unless the gas stations have a larger markup than I think, this cannot last long.
Biggest Winners in 2008:
ARLP – Coal is king with an 18% appreciation. A relatively large position, kept the portfolio on track.
HAL – Oil Services – paid off with a 19% positive move;
Cash – Dividends and Interest consisted of almost 40% of my semi-annual earnings.
Do not forget dividends and income. In a down market, they can provide a nice cushion during tough times. For the first 6 months of 2008, dividends and interest received has kept my losses to reasonable levels. Furthermore, they provide a source of cash for opportunistic purchases as discounted prices.
Six months into 2008, my biggest losers are:
AIG – minus 38%
CIT - minus 60% (luckily, I sold off most of my holdings for a profit on the trade. Unfortunately, I didn't sell it all)
My employer – down almost 40% for the year, it is also my largest loss in total dollars.
Learnings: Diversification works. Despite these losses, my portfolio is off a total of 3% in a down market. I
Although getting outstanding mileage could seem like a great idea, AAA warns of the dangers of extreme tactics.
http://www.courant.com/news/local/hc-hypermiling.artjun29,0,355595.story
When Murdoch took over the Wall Street Journal, I knew things would change. Unfortunately, they have decided to make subscribers view a full page ad – that requires a click through to get to content. If it was free content (see NYPost.com), I would understand. Since I pay for my subscription, I am not going to tolerate it. Unless the ads stop, they are going to lose a subscriber.
With the wedding just weeks away, it is time to raise money fast from the blogosphere. With only $22 in adsense earnings, I am asking the blogosphere to show your power by clicking on my adsense links en masse. Can we raise $20 in June? How many clicks would that be?
Actually, this post is mostly in jest; however, I strongly recommend both books on Amazon. Anyone interested in the business world should give them a read.
According to news reports, Kodak won a $581 million tax refund from the IRS. Instead of blowing it on a big screen TV, they are using it to fund a stock buyback program. Of course the Kodak execs and lawyers who won the refunds, they will be using their bonus money for ENORMOUS screen TV's.
Do it yourself is a good way to injure yourself if you don't know what you are doing or don't have the right equipment. Today, I am getting a quote to have my gutters cleaned out. A few days ago, I looked up and realized I was growing things in my gutters. J It looks like a garden. Although I can get to the gutters on the lower levels, I have one gutter 2 stories up that I don't have a good ladder to reach. Thus – outsourcing to someone who knows what they are doing. They get paid and I stay safe.
A few months ago, I decided to invest some of my IRA money in Budweiser. Even in a downturn, I expected the parent company of the King of Beer would continue to generate nice cash flows. It was intended as a long term investment. Luckily, it turned out to be buyout target and the stock shot up in value. Friday, I closed out the position and moved the proceeds to cash.
While the people who stay in through the buyout will probably make a little more money, I didn't want to be greedy and decided to take profe,its now.
Of course, the investment in AIG has not turned out so well, but that's another story.
An easy, inexpensive way to save electricitcy is to look for appliances that are "always on." For example, my printer did not come with an off switch. Although it goes into sleep mode, there is no reason it should draw any power when I am not using it. To stop this, I have it hooked up to an extra powerstrip I had laying around.
Although alternative energy sources (solar and wind) can and should be exploited, the simple fact is they will not be able to provide enough energy to power the US for quite some time (if ever). Although hydroelectric power provides clean energy, blocking rivers to provide power is no longer considered a good environmental practice. Bottom line, we need to build nuclear power plants all over the country to replace oil plants.
Sending billions of dollars a year to the Saudis and the Russians is fundamentally a bad plan.
How many people bring their own food and/or drinks to the movies? Because I prefer Coke Zero to Diet Coke, I snuck a 20oz bottle in a few months ago. Although we don't go to the movies often (1 time per month at most), we always take our drinks with us.
We do, however, buy popcorn if we are in the mood.
BTW – if you have a drive in theater near you, we recommend the experience. Two lawn chairs, a radio, and an ice chest and you get to see two movies for the price of one.
When I bought my home, it came with a ginormous Viking grill complete with marble countertops. At 8 feet long, it takes two people to take the cover off it. Furthermore, it was not in poor shape and needed a significant amount of work to bring it back to "like new" status. Because of the problems, I have used it exactly TWO times in almost three years.
Today, I made a trade with a neighbor who happens to be a handyman. He is going to buy us a new Weber gas grill and I am going to give him the old grill. Furthermore, he is going to use a Bobcat he rented to clear some brush from the back of my property.
Everybody wins. With a large family and plans to entertain, it fits his lifestyle. For us, grilling is normally a 2 person (at most 4 person) experience. Instead of a full blown outdoor kitchen we never used (and actually hated), we will have a something that fits our needs. In the summer, we can leave it on the deck and enjoy it often and easily. In the winter, it is small enough to clean off quickly and clear any snow around it.
I cannot wait to fire it up next week.
According to recent sales data, gas guzzling SUV's are no longer selling worth a flip. The top 4 models are listed below. The only SUVs selling reasonably well are small CR-V and Escape sized vehicles.
Personally, I would like to see the return of the hatchback to prominence in the US. Popular all over the world, they offer a ton of practical space in a compact, fuel efficient vehicle. My dream vehicle – a Honda Civic sized hatchback – possibly a hybrid – certainly a 4 cylinder.
Honda Civic / Hybrid | 53,299 |
Toyota Corolla / Matrix | 52,826 |
Toyota Camry / Hybrid | 51,291 |
Honda Accord / Hybrid | 43,728 |
My fiancé and I noticed Linens & Things was having a going out of business sale. Simply put, it was the worst sale ever. Because they were unwilling to accept their own 20% off coupons, many items were more expensive than the pre-sale prices.
After booking our honeymoon at a non-Starwoods property, I had to decide what to do with some of the points I have been hoarding for years.
Option 1: Transfer to American Airlines. At Christmas, we were planning to visit Dallas for the holidays. If I understand the program correctly, it will take 50,000 miles to save $800 on a flight for a savings of about $.02 per point.
Option 2: Get a gift card. Starwoods offers $50 gift cards to various merchants for 5,000 points. At $.01 per point, a very bad deal.
Option 3: Using 16,000 points, I was able to reserve a room at a Manhattan Sheraton during the holiday season. At $679 room rate for a Saturday, I am getting $.03 per point.
Discussion:
Option 1: 1. We really need to go home at least once per year and the cost cannot really be avoided. At Christmas time, two tickets are a tough nut to swallow. Hopefully, I will be able to get better fares on other carriers if I don't go this route. Although the savings per point is 50% of the savings of options 2, option 2 is a luxury and can be avoided.
Option 2: When we typically visit the city, we get up early and drive home at night. Because the cost of the hotel room can be avoided for free (don't stay overnight), is this really a savings? Yes. The trip will be part of our holiday/birthday celebrations and we really enjoy ourselves. Although there are cheaper hotels available, we like the amenities and the location.
In the age of internet reservations, I saved significant money using a travel agent for my honeymoon. Because of problems in the economy, our trip to Hawaii is a definite luxury. Today, she called to let me know she cancelled my original trip and rebooked it at a significantly lower cost. While I might have been able to pull it off myself, I really doubt it. Including booking the airline reservations at the right time (and avoiding the idiotic checked luggage fee), I figure she saved us $1,000-1,200 on the trip.
With my fiancé and I able to carpool approximately 2.5 x per week, I expect to save $400-500 in commuting costs during the remainder of 2008 at current gas prices. While many people are upset about the price of gasoline, I am worried about enormous heating bills come winter. While we have a wood stove (for when we are home and awake), I am expecting a massive increase in my heating bill come winter.
Listening to reports on the news, they are touting the fact US demand for oil is down. Unfortunately, these reports do not tell the entire story. As anyone who has studied basic economics understands, higher prices (caused by a shift in the supply curve to the left) will cause quantity to go down – even if the demand curve remains unchanged. I want to see is a shift in the demand curve to the left, it would lead to dramatically lower prices. Hopefully, it will happen.
In an age of $4 per gallon gas, it was nice to get a price break on something. By getting my prescription filled at Target, my prescription was filled for $0.78 which represents a 20% co-pay on a $4.00 cost. When the cashier showed me the price, I thought it was a mistake. If you use common generics, the $4.00 prescriptions may be the best deal in America on anything.
After reviewing our TV watching habits, we realized we don't really watch Shotime (unless Dexter is on) and decided to drop it. When I called to cancelled, the imbecile who answered the phone initiated a conversation that went something like this:
Comcast: You have the preferred Digital Plan with Shotime. Did you want to cancel the other channels as well?
Me: What are the other channels?
Comcast: Some of the one's over 100?
Me: Could you be more specific?
Comcast: Not really.
Me: Look, I just want to get rid of Shotime and save a few bucks?
Comcast: OK. I will cancel Shotime and the preferred plan.
Me: Did I stutter? I said cancel Shotime.
Comcast: OK. I will cancel Shotime only.
$5 says he F's up the order.
Bottom line: All I want are all the HD channels, ESPN, the Golf Channel, vs, and Spike. Every year, my cable bill goes up as I get "more channels" I don't want or need. If this continues, I am going to drop it completely and go with DirectTV.
Oops. I learned the hard way that HSA plans can be tricky. When I get married later this year, I planned on joining my fiancé's health plan. It offers comprehensive benefits and my employer will pay me a bribe to reject health insurance under our plan. When I spoke with HR about making the switch from my current plan (HSA), I learned there are possible "tax consequences" for moving from an HAS in the middle of the year. Definitely not in the plan. Rather than switch in September like I planned, I am going to wait until January, 2009. While the penalties may not be severe (I think they are 10% of my contribution), I don't feel like making my return any more complicated than it already is.
While ta
lking about high gas prices at work, we got into a discussion about commuting costs. A few years ago, all of us fit the profile of the large SUV buyer (young, professionals with growing families). Although some of us have SUVs and don't plan on selling them, we wouldn't consider buying something like a Tahoe or Expedition in a million years.
All of us are taking steps to reduce gasoline consumption. In my case, I figure I can carpool 2-3 times per week with my fiance.
According to news reports, American Airlines has decided to add a $15 charge for carry on luggage. This is in addition to a new $25 charge for a 2nd piece of checked luggage. Months ago, my fiancé and I purchased tickets on American to Maui for our honeymoon. Who wants to bet they won't try to charge us an extra $220 for my flights ((2 carry ons ($30) + 2 checked luggage ($50)X 2 ways)?
As I understand Department of Transportation rules, retroactive fees are illegal; however, I anticipate an argument coming on.
http://www.msnbc.msn.com/id/24761262/
Yesterday, I received a letter from BOA indicating it had severed its relationship with LL Bean. Because I like their jeans, golf shirts, and chinos, I was able to order my clothes online and get free shipping. Although BOA offered a replacement card (with different benefits), it wasn't worth keeping the line of credit open and I cancelled the card.
In the days of $1 gas, a short trip to save a few bucks was worth the effort. Now that gas is $4 per gallon, I find myself calculating mileage into the price of merchandise. Basically, every 20 miles costs about $6 with wear and tear.
A few months ago, I posted an analysis on the cost of commuting by car or commuting by bus. Because the bus only cut 9 miles each way off my commute, the car was the clear winner. Now that gas is at $4.00 per gallon and I get 18mpg, they are a wash. Nevertheless, the bus is a clear winner when one figures in wear and tear. While I won't take the bus every day, I will take it every week.
During the Hank Greenberg era, AIG was the ultimate money making machine in the P&C world. Thinking I could get some "value" by picking up $1,000 a few months ago, I blew it. Last week, it announced it was raising $12.5 billion in additional capital after posting a $7.8 billion loss during the quarter. Needless to say, the stock didn't move up.
From what I can tell, the new CEO is not up to running the a company like AIG. While I won't sell my stake, I am not going to add to it.
Good news, my blog revenue has reached a whopping $20. My goal is to make enough money by Christmas to pay for airfare to see my folks. If you like my blog, please support my advertisers.
BTW – ING Direct really is a good deal.
Today, the Tropicana Casino's parent filed for Chapter 11 bankruptcy protection. While this is probably not the correct time to invest in casino stocks, it does signal a key investment strategy: Buy on Bad News.
Frankly, it amazes me how many people want to buy into the hot markets when profits are gushing and P/E ratios are outrageous.
My philosophy for individual stocks or other targeted investments, buy on things that have been beaten down and have the potential to bounce back.
Good Example: The Gaming industry is probably to take a beating in the short run. Now is the time to start shopping for that "good buy" at a "good price" at the right time.
Bad Example: Landline phone companies. Every US phone company will tell you they are losing landline customers by the boatload. They are all investing in their wireless and internet platforms and disinvesting in landline businesses. Do not invest in the modern version of the buggy whip company. While landlines will be around for another 50 years or more, they are unlikely to ever "bounce back."
Looking to beef up its results, Merrill has agreed to pay former Goldman Sachs trading guru Thomas Montag a staggering $39.4 guaranteed. Keep in mind, this is the minimum he will be paid.
All I can say, it is good to be wanted.
If you read the WSJ and other financial press, there are many stories about bottom of the subprime mess. While I don't think we are there yet, I figure it we are within 6-9 months of the bottom.
My strategy: strategic buyer of equities. I am buying on days when the market is down as I move my portfolio back into the market.
Sample story: http://online.wsj.com/article/SB120976475747763607.html?mod=hps_us_whats_news
Weeks after my surgery, the bills are starting to arrive. What has amazed me is the incredible discounts (60-80%) my health insurer was able to negotiate with the providers. Even if I had a 100% of the adjusted balance, my health insurance appears to have saved me thousands of dollars.
While I am glad I received the discount, it is unconscionable that the uninsured get hit with inflated charges. In today's WSJ, they have a story on how cancer centers are charging the uninsured thousands of dollars more than the insured. http://online.wsj.com/article/SB120934207044648511.html?mod=hps_us_pageone
Ok, everyone has had some bad moments at work. But to losing billions of dollars in a rogue trading scheme shouldn't prevent you for getting a new job. According to the WSJ, Jerome Kerviel of Soc Gen infamy managed to land a job in computer services. Let look at key resume points he had going for him:
This guy should set up a company for helping people find jobs.
Because different services have different co-insurance percentages, you can often save a few dollars by ordering the submission of claims to your health insurer.
Example: You have a $1,000 with 20% co-insurance for medical care and 30% for prescriptions. You incur $1,000 in medical expenses and $1,000 in prescription bills.
Example 1: Submit medical expenses before the prescriptions. You pay $1,000 towards your deductible and $300 towards your prescriptions.
Example 2: Submit the prescriptions first. You pay $1,000 towards your deductible and $200 towards your medical expenses. In this case, ordering saves you $100 in after tax dollars.
General Rule of Thumb: Any Non-Generic, Non-Formulary drug expenses should be submitted first. Although you will get stuck paying 100% of the charges, you avoid paying the typical 40-50% co-pay they have.
One year after transferring my 401k (from my prior employer) to a self directed IRA, my IRA has declined in value by 0.88%. While certainly not a great performance, it beats the minus 5.3% it would have declined had I not moved to a defensive posture in August, 2007. In a down market, avoiding a big loss can be a big win.
Current Asset Allocation:
Cash = 63%
ST Treas Fund = 7%
Index Fund = 10%
International = 10%
Ind Stocks = Remaining Amount
Goal for the next 12 months: plus 5% as I move cash back into the market.
As an experiment, I tried executing a 0% balance transfer arbitrage using a Discover Card. In 12 months, I made $75 in miles rewards + approximately $300 in interest. While the experiment worked, I didn't find the after-tax profit worth the time to manage the process or the worry it caused me. I won't be doing it again.
For couples, a family plan is a great way to save money on cell phone services. Last month, my fiancé cancelled her account with Sprint and got a phone through Verizon. Since most of our calls are to each other (and the minutes don't count), we share a 700 minute plan for a total of $100 per month with unlimited texting. Over the course of a year, we will save about $240 in after tax dollars with this arrangement.
BTW – Verizon has been very easy to work with.
According to the WSJ. the LIBOR is likely to shoot up in relation to other money rates. Apparently, there is some concern banks were lying about their rates causing the LIBOR to be artificially low. Now, my HELOC rate is likely to go up again.
PS – I wonder how long it will take Class Action attorneys to file lawsuits on behalf of borrows getting the shaft.
Let's say you have a choice of buying a FDIC insured CD paying 4% and an Auction Rate Security paying 4.25%, you must understand the 25 basis points premium is to compensate you for taking some risk. If you are unwilling to take that risk, you must give up the 25 basis points.
Now that the bubble is bursting, we are seeing more and more companies going under and investors are losing money on investments in everything from SIVs, Auction Rate Securities, MBS, or even uninsured investments in banks. Although there were certainly instances of fraud, many lawsuits/complaints involve people who fail to accept the fact they were compensated for additional risk.
Rules to Live By:
Last week, I placed an order for a $100 4-week T-bill as an experiment. The only problem I have had with the site is trying to swap out my local bank for ING Direct. According to the Treasury Department, a notarized change of bank form is not good enough. For some reason, they want a bank official to witness my signature. At this point, I am waiting for them to respond to my inquiry on how to make that happen.
While checking with American Express about another matter, the representative mentioned there were two accounts using my SSN open with different names. Needless to say, it was disturbing. A few days earlier, HR informed some of us that a laptop with our personal data had gone missing. PANIC!!!
My Strategy:
Based upon my review of my credit reports, things are not out of control; however, I will be vigilant until I am sure.
Visiting my Citi to check an online balance, I noticed an offer to enter a sweepstakes for a hybrid vehicle by doing a balance transfer. If you are interested in the sweepstakes, check out the rules because they offer other ways to participate.
By Mail: To enter without engaging in any of the above banking actions, hand print your name, address, day and evening phone numbers, email address (if any), and age on a 3" x 5" piece of paper and mail it with proper postage to: "Citi EcoSweepstakes," c/o ePrize, LLC, P.O. Box 8070, Royal Oak, MI 48068-8070. You will earn three (3) entries into the Sweepstakes per 3" x 5" piece of paper. Limit: One (1) 3" x 5" piece of paper per envelope. Nine (9) entries total. All mail-in entries must be handwritten. All mail-in entries must be postmarked by May 16, 2008 and received by May 23, 2008. All entries become the exclusive property of Sponsor, and none will be acknowledged or returned. Proof of sending or submission will not be deemed to be proof of receipt by Sponsor. Sponsor is not responsible for lost, late, incomplete, invalid, unintelligible, illegible, misdirected or postage-due entries, which will be disqualified. Use of any automated system to participate is prohibited and will result in disqualification.
My company allows us to rent vehicles for business trips. Much to my surprise, today's vehicle was a new Altima Hybrid. What did I think? As per my prior posts, I don't think hybrids are a good economic or environmental choice. Today, I covered 270 miles including a significant amount of time stuck in Manhattan traffic. Gallons used = 9.02. Although pretty good, my fiancé's 3 year old Toyota Corolla would have had similar results over the same course. Economically, the Corolla is a no brains winner over the Altima.
What about size? In a pinch, the Altima could probably seat 5 while the Corolla can only seat 4 (with less overall room). With respect to trunk space, the Corolla probably has 75-100% more space than the Altima. IMHO – a hybrid with reasonable trunk space would likely need to be a wagon or hatchback.
Below: I have posted a link to a review by Car and Driver. For some reason, they got horrible mileage with the Altima.
http://www.caranddriver.com/reviews/hot_lists/car_shopping/green_machines/2007_nissan_altima_hybrid_short_take_road_test
After the upstairs TV finally kicked the bucket, we bought a nice 32" HDTV on sale. After CrapCast Cable said it would be an additional $15 per month to get a HDTV cable box, I decided to do a little research. From the web, I learned my TV should be able to pick up network HD signals for network programming without a box. Sure enough, I can get all four networks in HD.
Although I don't get some of my favorite channels in HD upstairs, I get enough channels to enjoy saving $180 per year.
If you have not heard, the idiots in Congress are looking to pass a bill giving homebuilders over $6 Billion (yes, BILLION) of our hard earned tax dollars as a bailout. If we want housing prices to go back up, the best idea would be to stop increasing supply. Bankrupt homebuilders would lead to less supply and higher prices on existing housing stock.
Please call you congressman and complain!!
If you have brokerage or netbenefits account with Fidelity, they have an online link entitling you to a 25% discount on TurboTax products. Not bad.
Although I would love to fire Comcast, they occasionally do something right/nice. Thanks to a free preview of MLB League Pass, I am watching my beloved Texas Rangers on opening day. It almost makes me forget the high prices and bad service I am forced to endure.
The other day, I found my bride cooking eggs in a pan instead of the nice, Calphalon griddle we have. When I asked why, she said the eggs run to the sides. It turns out it was bowed up in the middle.
After checking out Calphalon's website, I called the warranty line to find out what to do as I no longer had the receipt. After my experience with Citibank, I was pleasantly surprised to get quickly connected to a pleasant CSR. During our conversation, he quickly determined it was probably a warranty related issue and asked me to mail it back to them. When I said it didn't make since to spend $10 to pack and ship a $27 item, he offered to pay for postage. Nevertheless, I asked if I could take it back to the retailer, Bed Bath Beyond, instead. Although he couldn't speak for them, he said BBB had great return policies and would probably take care of me.
To make a long story short, BBB took care of me, no questions asked. Makes us glad we are registering with them for most of our wedding gifts.
In today's mail, I received an incredibly unprofessional letter from my friends at Citibank. According to the notorious customer service representative "S. Larsen," they "would like to assist me; however, your request is not clear. Please send a signed letter detailing how we may help you." With the exception of my account number, the letter contained no other information. It doesn't say what prompted their letter or what or even how I requested their assistance.
With no information to go on and having little idea what the letter was about, I was forced to contact customer service (Thankfully, I had my card with me because S. Larsen didn't think providing a contact number was a good idea).
When I finally reached a CSR, I was informed the letter was generated after my request to transfer available credit limits from my American Airlines Card (which I rarely use) to my Driver's Edge Card (which I often use) had been rejected. When I asked how my request was "not clear," she admitted my request was quite clear and the letter was not an appropriate response to my request.
When I asked why my request was rejected, she informed me that the Driver's Edge account had an available 0% balance transfer on it and "company policy" precluded making my requested change. Of course, I responded by saying I did not request, need or plan to use the balance transfer and asked that it be removed. After she gave me an idiotic story about how it was impossible to remove the balance transfer offer and do what I asked, I got a supervisor on the line and got the request completed.
Bottom Line:
Wonder why my stock price has gone down?
BTW = professional correspondence from a top-notch company is often mailed in an envelope addressed by hand and with the return addressed affixed by a stick on label created on a dot matrix printer. My plow guy sends correspondence on more professionally prepared envelopes.
Often (for good reason) health insurers are the focus of criticisms from policyholders. As I work my way through paying for my medical procedure, I certainly expect problems with things like what is covered, co-insurance, deductible, and in/out of network providers.
Having returned from the hospital, I called CIGNA to find out what is necessary to file a claim under my HSA-style health plan and to find out my deductible/co-insurance performance.
Having dealt with the hassle of dealing with a knee surgery, I was expecting the worst. Nevertheless, I have to give the CIGNA CSR a thumbs up. When I explained what happened, she verified the surgeon and the hospital were "in network." With respect to other professional services, she warned me that they might charge me the "out of network" deductible for the anesthesiologist; however, she said I should appeal the charge. Under the circumstances, they usually waive the "out of network" charge since I was at an "in network" hospital.
Later this year, I am getting married. Once we are married, I will cancel my health insurance and go onto my wife's plan. Overall, this will give us the best combination of benefits and cost.
Since I did not expect any large healthcare charges before the marriage, I elected to sign up for my company's HSA instead of the traditional plan. By combining my contributions with my company's funding of the HSA balance, I expected to save money on premiums and end up with a small balance in my HSA when I switch plans.
Unfortunately, I had an unexpected trip to the hospital for emergency surgery and even had to spend the night in the place. In terms of cost – that is gonna leave a mark. I figure I will have to come up with the entire deductible (I think $1,200) + 20% of everything above that up to $2,400.
Despite my bad outcome, I still think a HSA is a good choice for many single people. Had I been in the plan a few years, I would certainly have had enough money saved in my HSA account to pay off the entire deductible.
If you have an HSA, I would recommend the following strategy:
A few weeks ago, we received a letter from the Boston Globe indicating the paper was now available for home delivery in our area. With weekend only delivery available at good price, we called the subscription office and signed up.
Three weeks later, we have received exactly ZERO papers. We have, however, been hit with two charges against our credit card. When I called to complain last week after the first charge hit our credit card, the customer service rep promised us home delivery was available and promised to refund our account. She even promised to call the delivery department to find out what went wrong.
Of course, this weekend came and went with no paper and another charge against our credit card. Because their customer service department is closed on weekends, I was forced to send an e-mail about our problems. To date, they have not responded with an e-mail or with a phone call.
And newspaper management wonders why traditional newspapers are losing money.
As a Mutual company, State Farm is owned by its policyholders. Earlier this month, they announced a $614m dividend for many of their life insurance customers/owners.
Unfortunately, it looks like P&C customers won't get big dividends we got last year. According to their news release, the combined companies had a net income of $5.46 billion. Although the press release is not clear, it looks like they will be investing the profits in growing their loss reserves. Given the decline in underwriting profit on their large auto book and the uncertainty in the investment market, it is probably a good strategy.
Cite: http://www.statefarm.com/about/media/media_releases/sf_net_income.asp
According to wsj.com, the idiots in Washington have come up with a plan to save us all. They are considering a tax credit for buyers of new home construction and foreclosed homes.
If your home is not in foreclosure and you want to sell it, you will have to compete against banks and homebuilders who have a "tax credit" in their pocket. In order to compete, you will have to lower your price by the amount of the tax credit.
Genius!!
Citation: http://online.wsj.com/article/SB120614866511156783.html?mod=hpp_us_whats_news
A little dark humor from the guys and gals and Dealbreaker.com. Sick, twisted, and funny.
http://dealbreaker.com/2008/03/how_to_think_about_how_a_potsm.php
Despite the market bounce, I am going to keep my portfolio's bear bias in place for another 6 months. Nevertheless, I will do a little strategic buying on down days.
If you work for a large company, check your intranet site before you purchase Microsoft Office for your home computer. Your company may participate in the some sort of discount program with them. I purchased a full version of Office Professional for only $20.
If your intranet site has a search function: Try "Home Use Program" or "Microsoft Discount"
In the Depression a "Run on the Bank" occurred when shareholders literally ran to the bank to take their money out before they got stuck holding the bag.
Yesterday, the Fed and JP Morgan worked to prevent the modern equivalent. Because of the perception of financial instability, Bear Stearns was perceived to be a risky trading partner. Because of the perceived counterparty risk in dealing with Bear, trading partners vanished and its ability to earn money evaporated.
Although the Fed sponsored bailout will buy them some time, they are unlikely to survive on their own. Unless someone buys the bank, they are likely to go away soon.
